Luxury consignment is a thriving niche within the fashion industry, offering a sustainable and cost-effective way for consumers to access high-end, designer products at more affordable prices.
While the brick-and-mortar approach to luxury consignment has its advantages of personalization and in-store experience, it often lacks the technological infrastructure that larger companies can provide for guaranteeing product authenticity and scaling their operations. This presents a challenge for luxury consignment businesses, as they strive to bridge the gap between the traditional and the modern.
In an interview with PYMNTS, Erika Schrieber, CEO and co-founder of Season 2 Consign, tells PYMNTS CEO Karen Webster, “We found that there was a void in the industry for something that combined really the best of both worlds, and we used technology to really fuel the growth of Season 2.”
The move is intriguing, especially considering that luxury resale platforms like The RealReal have followed a different strategy, lacking support for small independent businesses, and despite 12 years in operation, the company still hasn’t achieved profitability.
According to Schrieber, Season 2’s business model revolves around the online luxury resale sector. It runs an online marketplace dedicated to genuine fashion items, and this platform is driven by franchise owners.
It has a presence in five cities, and with its headquarters included, operates from six locations. Its aim is to expand and establish a presence in seven locations by the year’s end.
Although Season 2 primarily operates as an online luxury resale marketplace, it recognizes the importance of maintaining a physical presence to facilitate in-person connections. According to Schrieber, this approach is designed to offer a more traditional, face-to-face interaction with customers, emphasizing a personal touch.
However, Schrieber also points out that Season 2’s focus remains on serving its online customers. To achieve this, its franchise owners have the capability to access and showcase products within their respective territories, enabling them to cater to a global marketplace through the online platform.
“Our franchise owners were existing customers — consigners and shoppers” Schrieber said.
Season 2 saw the opportunity to partner with these individuals who were eager to establish franchise locations in their cities, believing that the concept would thrive in those markets.
To remain competitive and empower a team of aspiring entrepreneurs, Season 2 places an emphasis on consignment while providing enticing commission structures, Schrieber said, surpassing those offered by industry leaders.
Schrieber also highlighted Season 2’s diverse supply mix, comprising around 50% from consignment and the rest from resale channels, achieved through wholesale partnerships and direct purchases from private consignors, offering a dual supply strategy.
At Season 2 “all sales final.” This policy not only supports their franchise owners but is also enabled by their authenticity guarantee, providing protection against counterfeit items for both customers and the platform. Their commitment to countering counterfeiting can be seens on social media.
“If you follow us on a social media platform, you’ll see us sometimes destroying fakes and making a really big deal about that,” Schrieber said.
To ensure authenticity, Schrieber said every franchise owner takes the responsibility of authenticating the merchandise they handle. They accomplish this through software partner Entrupy, which harnesses artificial intelligence (AI) technology and specialized hardware to scan the item’s exterior and interior.
Not only do franchise owners at Season 2 have access to the Entrupy authentication software, they also have access to a consignment management system that integrates with their online store. This system aims to simplify the process of loading products and managing consignors, reducing manual work and the potential for errors.
Schrieber noted the inclusion of a price database within its consignment software. This ensures consistent pricing throughout all franchise locations by continuously scanning the internet for real-time fair market values. This allows franchise owners to assess the market value of their products.
Schrieber said franchise owners have the freedom to set prices, enabling them to make decisions aligned with their strategies and objectives. However, there is a specific threshold within which they must operate. While they have some discretion in pricing, they are required to adhere to fair market value.
“We are in the business of selling handbags, not showing them,” Schrieber said.
One distinctive aspect of Season 2’s platform is the use of live shopping streams.
In these livestreams, Schrieber said customers worldwide can partake in a shopping experience reminiscent of QVC. What sets Season 2 apart is that it allows customers to make purchases seamlessly during the live streaming event.
Moreover, these livestreams, offer thorough, up-close views of each item, including close-ups of corners, interiors, stains and pen markings. Their commitment to transparency extends to providing detailed information about each piece, even if it involves disclosing imperfections. This openness reinforces the “all sales final” policy.
In terms of popular brands and items that attract customers, Season 2 acknowledges the timeless appeal of Chanel. However, there are other brands that have been gaining attention, including vintage Louis Vuitton. This renewed interest in vintage items is linked to a broader Y2K fashion movement, where classic designs from the past are making a comeback.
“What we are seeing is that our customers come to us for the items that are brand new and maybe they’re six, seven, eight thousand dollars in the boutique, and they can get the vintage version that’s very close, sometimes better quality, for a fraction of the price,” Schrieber said.
“I think in 2020 people were like, most of us were spending because we didn’t know what tomorrow was going to bring,” Schrieber said.
However, today Schrieber said that while Season 2 has noticed shifts in consumer spending in response to the economic climate, the dynamics within the handbag resale market remain relatively steady.
She compares handbag prices to the real estate market, seeing both as cyclical and intrinsic to the business landscape. With this perspective, Season 2 is confident in its adaptability to these fluctuations.