Boston Consulting Group (BCG) analysts have published a report titled Secondhand Opportunity in Hard Luxury, which looks at how the secondhand market for luxury goods is changing.
There is certainly some meat in their findings! We have been seeing growth in this sector for a number of years, and the coronavirus has only spurred it on. The report focuses on the luxury watch and jewelry market (watch sales account for 75% of this market) BCG estimated the value of the entire global market at 21 billion euro, with a projected annual growth of 8%.
These estimates have allowed the experts to posit that this area of sales is growing faster than the conventional hard luxury goods market. This change has been driven by greater consumer interest in secondhand luxury goods, which has stimulated growth in online sales, which are now deemed trustworthy.
The established virtual platforms were the first to experience growth, which the luxury goods manufacturers have taken note of themselves. Now they want a slice of the pie too. Consumers are also pleased about this!
The analysts took a separate look at how luxury watch manufacturers can enter the market. The main route is of course via the internet. This is where different types of platforms sell pre-owned watches. These include marketplaces along the lines of the eBay model and resellers like Jomashop, as well as niche platforms which have been successfully retailing watches for many years (e.g. Watchbox, Crown & Caliber, Watchfinder etc.).
How can manufacturers compete with them? Boston Consulting Group lists some of the options. The first possibility is to acquire these platforms or retailers. The Richemont group went down this road when it purchased the secondhand watch portal Watchfinder in 2018, set up back in 2002.
Some multi-brand retailers are also considering this strategy as a stage in growing their businesses. For example, last September news broke that the Watches of Switzerland Group had acquired vintage watch dealer Analog Shift. The second option is to enter into a partnership or joint venture.
The third is for manufacturers to sell watches on their own websites. Many are proponents of the last option, including both independent watchmakers and subsidiary watch brands. There is a Certified Pre-Owned section on the websites of watch manufacturers such as MB&F, H. Moser & Cie. and De Bethune. Retailers who had previously not show interest in the secondhand market are also moving in this direction, such as Bucherer.
Experts are confident that consumers will respond positively to the arrival of luxury watch brands on the secondhand market. In total, 70% of survey respondents said that they would prefer to buy secondhand watches directly from the manufacturer, while 74% would be delighted to see manufacturers provide certification for pre-owned watches sold on through resellers.
Demand is set to grow, so there'll be enough room for everyone in the market. Furthermore, 62% of consumers said that they're thinking about purchasing a luxury item, and 25% said they had already made a luxury purchase at some stage last year. What kind of people are most interested in watches that have already been owned?
The majority of them are men (55%) from Gen Z (born in 2000-2009) as well as millennials. These buyers love a bargain, and are prepared to hunt for the best offers. They view watches that don't belong to the latest collection as investments which will not fall in price, unlike newer models that have only recently moved out of the display case to find a new home in someone's personal collection.