By Alexander Otto, Head of Corporate Relations at Tradebyte

Fashion was the worst-performing sector in e-commerce in 2023 according to industry figures. According to data from Wunderkind, 64% of UK consumers admitted to cutting back on non-essential items last year. As the UKs cost of living crisis continues to curb shoppers spending, the rise in material prices, energy and transportation has negatively impacted profits for retailers across the broad. One area of the fashion market, however, has fared far better than its counterparts. Despite global economic and geopolitical headwinds, luxury fashion remained resilient, particularly compared to mid-market and budget brands which experienced significant year-on-year losses. Not hampered by the threat (and reality) of recession, IMRG data reveals how premium fashion retailers accelerated their growth during this period, seeing a 5.5% increase in February compared to last year. IMRG also notes that the average basket value for premium clothing retailers has increased since last year. Indeed, in January 2023 it was £93.38, rising this year to £126.75, while last February was £99.41, and in 2024, £135.02. But whats behind this accelerated growth from luxury retailers and what can we learn from it? We look at the year ahead for luxury fashion, exploring the strategies and factors contributing to its success, as well as emerging trends within the sector.

Rising interest in second-hand luxury products

The growing interest in second-hand luxury products “ a direct response to consumers increased demands for sustainability “ is one factor accounting for the markets accelerated growth. According to Bain & Company, the second-hand market could end up accounting for as much as 20% of luxury brand revenue by 2030. This has, and will continue, to offer new possibilities for retailers to collect and resell pre-worn luxury items, bringing a plethora of benefits. Although the market for second-hand luxury products has grown, valued at more than ‚¬30 billion in 2022, many luxury brands have yet to fully enter the space. As a result, we suspect more will embrace the trend for pre-owned premium products in 2024, complementing their efforts to achieve more sustainable sourcing. This popularity offers new possibilities for retailers to collect and resell pre-worn luxury items, with more e-commerce retailers incorporating sales of second-hand products on marketplaces.

Luxury and premium brands move online and enhance digital strategies