Called It! Why Oscar de la Renta’s Embrace of Luxury Resale Won’t Be the Last

The New Year habit of making year-ahead predictions, not unlike the business of forecasting the weather, is fraught with risk and a high probability that the prognosticator will be wrong.

In a world where crystal balls are still largely confined to their role as New Age tools that emit positive energy, rare is the occasion that one’s prediction gets proven right almost as soon as it was made.

This, as Tuesday’s (Jan. 25) news that iconic fashion and design house Oscar de la Renta was getting deep into the resale of its gowns and other high-priced apparel as a “valuable tool” to gain new customers and keep existing ones came just two weeks after PYMNTS CEO and ConnectedEconomy savant Karen Webster predicted it.

“2022 will be the year that luxury brands strike back and use payments to help them reinvent the reCommerce experience,” Webster wrote in her 10-point digital transformation outlook that was published Jan. 10.

Read the Full Report: 10 Things Will Define the Digital Transformation in 2022

Pointing to an explosion of sales and a thirst for luxury, the Webster resale call not only references the trailing growth of the category, as seen in the results and repeat customer visits being experienced by reCommerce players such The RealReal, but also outlines the way forward to future gains, as slicker commerce, connectivity and payments processing elevate this niche corner of retail.

“[The RealReal] also reported that 84 percent of those shoppers were repeat buyers — shoppers lured by the opportunity to buy someone else’s gently used Chanel, Dior, Hermes, Givenchy or Christian Louboutin’s from what they describe as the world’s largest authenticated luxury resale marketplace,” Webster said, noting that “smart luxury retailers will set aside their disdain” for the democratization of their brands and instead use it as an entry point for new, young next-gen customers.

The Way Forward

With Oscar de la Renta diving in, it can’t be long before other rivals follow suit, and to do so, Webster said, they’ll need to create their own “closed-loop marketplaces” that will change the shopping dynamic and frequency of how people buy couture clothes.

“Buying pricey couture clothes in their stores could be done using a one-time payment plus installment plan where they get a one-time credit towards the purchase of the next pricey couture jacket at the end of a year or even two,” the look-ahead piece suggests.

Not unlike the buying blitz the broader retail and apparel categories are experiencing through the uptick and consumer embrace of installment payment plans that put pricey purchases in reach, so too will buy now, pay later (BNPL) serve as the fuel that powers luxury reCommerce to its next and rightful level. Add in the merchandising muscle of subscriptions, perks and special privileges for top spenders and the designer do-over category is set to soar.

“As more brands reclaim their luxury status in this way, someone will reinvent the entire experience and aggregate all of them into a single marketplace of luxury brands, with the distinction that these products are in great condition and new,” Webster forecasts, noting that reCommerce marketplaces will become more like discounters than luxury resale sites over time as brand-owned properties get first dibs on re-selling their own unsold stuff.

One Down, Nine to Go

With the luxury reCommerce forecast in the books, that leaves nine other digital transformation predictions to check off in the next 11 months, and perhaps also the makings for an office pool on which one might be next.

Will it be the heightened role that logistical excellence will play in determining the ConnectedEconomy’s next winners, or FinTech’s rising share of small banking financial services that they are chipping away from traditional lenders?

Only time will tell, of course, but while we watch and wait for trends to emerge and gel within the digital economy, the team at PYMNTS is also taking a little time for a brief victory lap in the wake of the prescient call on luxury reCommerce.

Stay tuned.