Resale is Growing Faster than Retail

A luxury handbag doesn’t necessarily become less valuable once it leaves the boutique. Sometimes, the exact opposite happens. A bag bought years ago can return to the market at a much higher price, carried into a completely different customer’s wardrobe and, in many cases, become harder to find than when it was originally sold. That is one reason why the resale market has become so difficult for luxury to ignore.

Why Resale Is Becoming How Consumers Discover Luxury Brands

According to The Business of Fashion and McKinsey’s State of Fashion 2026, the global resale fashion and luxury market is expected to grow two to three times faster than the new retail market through 2027. The report also estimates that the global resale apparel market could reach $317 billion by 2027. But the growth itself isn’t the most interesting part. The bigger question here is what really happens to a luxury brand once its product is no longer being sold by the brand itself.

Resale was initially treated as something that happened after the real fashion transaction was over. A customer bought a product, used it and eventually decided to sell it. Today, that relationship is becoming much more tense. Resale is becoming a part of how consumers discover luxury brands in the first place. Research conducted by McKinsey & Company found that 85% of the US consumers surveyed use resale to explore aspirational brands for future purchases. The figure was 77% in China and 66% in the United Kingdom. This shows that a resale purchase doesn’t necessarily replace a new purchase. It can act like a starting point. A consumer might first come across a luxury house through a pre-owned bag or jacket, for example, and eventually become a direct customer later on.

For brands built around aspiration, that matters significantly. The issue is that the same market that creates this new exposure also takes some control away from the brand. At the original point of sale, a luxury house decides almost everything,, including the price, the setting, the presentation, the distribution, and the overall purchase experience. Once the customer owns the product, that control becomes less certain comparatively. 

Five years later, the same handbag might be listed on a resale platform by someone the brand has never even interacted with. The seller decides the asking price and the platform decides how the product is photographed and described. Additionally, algorithms can affect who sees the listing. There’s a chance the buyer may never step inside one of the brand’s boutiques. Yet the brand name remains attached to every part of that transaction.

Authentication: The New Gatekeeper in Luxury Resale

This is where authentication becomes more concerning. It has become one of the most important forms of trust in the resale economy. Authenticity is largely taken for granted when a customer buys directly from a luxury house. On resale, it becomes part of the transaction itself. Various platforms have consistently built extensive systems around verification. For example, The RealReal uses specialist expertise alongside technology and machine learning in its authentication process. Similarly, Vestiaire Collective places expert authentication at the centre of its marketplace. 

The main concern is that counterfeit products are not always easy to identify. The RealReal has also publicly displayed counterfeit luxury goods intercepted through its authentication process, including the pieces that were difficult to distinguish from genuine products simply by looking at them. That makes authentication commercially significant. A resale platform not only provides a place for sellers and buyers to meet, but also judges whether the product can be trusted. 

Once a platform says that an item has been authenticated, that assurance becomes part of what the customer is paying for. This makes the platform a new gatekeeper between the luxury house and its future customer. Luxury brands have started finding ways to get back into that relationship. 

How Balenciaga Is Reclaiming Control Over Its Resale Market

Balenciaga’s resale programme, developed with Reflaunt, allows customers to submit pre-owned Balenciaga products for resale. The process includes evaluation, photography, descriptions and pricing, while sellers can choose to receive cash or Balenciaga Credit, with an additional 20% incentive attached to the voucher option.

On a surface level, this looks like another example of luxury responding to the circular fashion movement. But there is a flip side to it. By remaining involved in the resale process, the brand doesn’t have to completely disappear after the first sale. This gives the brand another opportunity to influence how its older products are presented and valued. It can also possibly bring the customer back into the brand’s own ecosystem through incentives such as store credit.

However, it is also important to keep in mind that a brand’s legal rights and its commercial influence are not necessarily the same thing. A luxury house may not be able to stop the resale of a genuine product simply because it carries its trademark, but it can still try to influence the resale ecosystem through authentication partnerships, official resale programmes, trade-in schemes, etc., to remain relevant after the original transaction has ended. 

This is perhaps the major reason why the resale boom is more complicated than a simple shift from new fashion to pre-owned fashion. So, in a nutshell, the consumer owns the product, the resale platform may control the transaction, and the authentication process determines whether the product can be trusted. The brand still owns the name, reputation and identity attached to it. Resale is therefore creating a second market, but it’s also creating a second layer of control. It is no longer about whether a luxury product can have a life after its first sale because it clearly can. It’s about who actually gets to shape that life. 

Traditionally, luxury has depended on controlling scarcity, distribution and access. Resale disrupts each of those ideas. A house can decide how a product enters the market, but it cannot decide where that product goes afterwards. Therefore, the real competition isn’t between new retail and resale. It may be between the brand, the consumer and the platform over what a luxury product is worth once it is no longer being sold by the house that originally made it.

Author: Revaa Pasupulati

Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the views of Fashion Law Journal