Luxury resale hits airports and cruise lines. Can it scale?

To receive the Vogue Business newsletter, sign up here. Before the pandemic, the idea of travel retailers allocating valuable real estate — be it in airports or on cruise lines — to vintage luxury pieces was virtually unthinkable. But, as the travel retail sector struggles to rebound, pre-owned luxury goods are becoming a necessary play to keep price-conscious customers spending and offer more options, including rare collectibles, to travellers. Rising to the demand, travel retailer ARI is poised to open a pre-owned luxury boutique at Lisbon Airport by the end of the year, and has ambitions to expand the concept to airports around the world. Harding+, which operates cruise liner retail businesses, is expanding its preloved offer from 32 to 40 ships in 2024, and will debut a new vintage lounge concept called ‘Reloved’. The concept will be visually different, setting itself apart from the existing fashion brands on board cruise lines. The global market for pre-owned luxury goods rose 28 per cent year-on-year to €43 billion in 2022, according to the Bain-Altagamma Luxury Goods Worldwide Market Study. “Resale is here and it’s here to stay,” says Achim Berg, senior partner at McKinsey & Company. A key motivation is sustainability, he explains, in addition to two very clear driving forces. One is the aspirational consumer seeking more affordable luxury. The other is the esteemed collector paying a premium to acquire that timeless piece. In travel retail, sales of luxury goods grew by 40 per cent year-on-year in 2022 but remain far below pre-pandemic levels, the Bain-Altagamma study reports. With recovery proving challenging, travel retail is staking a claim in the pre-owned space. ARI was a pioneer in introducing pre-owned luxury to airport retailing when it opened its Reloved store at Montréal Duty Free in 2021. “Since then, preloved has been the best performer within the fashion category,” reveals Richard Maynes, the global head of fashion and accessories at ARI. “The move towards a more conscious consumer who aims to shop more sustainably is without doubt the most significant shift we are seeing.” The launch served a dual purpose — expanding ARI’s sustainability credentials while also enhancing its luxury leather assortment to be more accessible. “The preloved concept is still a relatively new one in travel retail, but it is going to significantly influence and shape the way people shop in the coming years,” Maynes predicts. Last November, digital luxury resale platform Hewi (Hardly Ever Worn It), teamed up with Heathrow Airport to host a pop-up in its elite Terminal Five lounge. “The idea was to educate a captive audience about the value and quality of pre-owned luxury items,” says Rachel Reavley, advisor to Hewi. Highlights included the sale of a Birkin, an Hermès pillow and Prada Re-Nylon trainers. The average order value was £1,800, demonstrating just how aligned the retail travel sector is with the luxury shopping customer, according to Reavley. Nevertheless, the partnership with Hewi was a modest one. “We would like to do more in the preloved space, but at the moment the industry is struggling to find a business model and in travel retail the volumes make it difficult,” says Heathrow retail director Fraser Brown. The resale industry is notorious for its spatial constraints and narrow profit margins. How can it capitalise on the burgeoning demand? Experts say the answer lies in travel retail’s unique value proposition — offering travellers an enticing mix of exclusivity, duty-free prices (which offer savings of between 30 to 70 per cent) and often, access to rare gems. Why leather goods and hard luxury reign Compared to airports, the pre-owned luxury offer on cruise ships has significantly accelerated in the past year. Industry leaders like LVMH’s retail-at-sea subsidiary, Starboard Cruise Services, have struck gold. The formula? A captive audience onboard, tax-free price tags and an eco-conscious traveller with a vacation mindset. “On cruise ship retail, shopping has become part of the entertainment. By removing the negative connotation of secondhand, placing it in the right environment and curating an offering that has storytelling at its core, pre-owned can be part of that ultimate entertainment,” says McKinsey’s Berg. From one ship in November 2022, Starboard’s luxury vintage assortment has spread across nine cruise lines and 73 ships in collaboration with supplier What Goes Around Comes Around. Leather goods, watches and jewellery are the best performers in pre-owned, with rare finds, one-of-a-kind and limited-edition collections proving bestsellers. “Any piece purchased at our shops at sea has been carefully selected, inspected and is guaranteed authentic. Each bag has a QR code where our guests can find more information on the style of the bag as well as a digital certificate of authenticity,” explains Sherrie Day, Starboard’s vice president of merchandising. Leather goods, watches and jewellery have dominated the pre-owned offer onboard, Day explains, as these categories offer more versatility and size-independence to guests compared to clothing or shoes, which need to cater to various sizes. “Furthermore, consumers exhibit a greater willingness to invest in luxury vintage items in the leather goods, watches and jewellery categories, as they recognise the enduring value and longevity of these items in contrast to fashion items such as clothing or shoes.” With prices starting at $1,200, Starboard’s offer appeals to a wide audience with high spending customers finding rare pieces at much higher price points, adds Day. The itinerary and destination-specific nature of cruising also supports this trend, says Sue Gosling, chief brand and culture officer at Harding+. “We wouldn’t sell a Max Mara teddy [coat] in Caribbean season, for example. It doesn’t mean this can’t be a focus for us, but leather goods and watches are where both the interest and practicality sit right now.” Curation within a shared space In the travel retail environment, where space is limited, curation is vital. Working closely with preloved vendors including LXR and Reklaim, Harding+ combines its passenger data with their global demographic data to curate each assortment individually from ship to ship. Destination, itinerary and demographic also have an influence here. For example, a six-star ship headed for Alaska will have a 40 per cent focus on Chanel, but when it switches to the Caribbean this drops off to 10 per cent and Louis Vuitton increases to 40 per cent, Gosling notes. “Consumers can acquire iconic products that are no longer sold elsewhere, adding value to their investment and unique style. For instance, we curated a luxury vintage selection for one of our luxury cruise line partners that featured a rare collectors Hermès Birkin bag, which was successful,” says Starboard’s Day. With the limited space at sea, Harding+’s Gosling says the multi-brand retail model — where preloved Louis Vuitton sits side by side with Chanel, for example — will continue to lead the way in travel retail. “It’s about the preloved aspect rather than building on the individual brand story; we want the product to come through. Shared space is the norm: it allows for a better shopping flow for the customer; and it’s easier for them to mix their purchases from different brands and price points, choosing a Paradis dress but pairing it with a Gucci crossbody and wandering round the corner to grab some Pilgrim earrings.” Some of the most coveted luxury brands, such as Hermès and Chanel, have long waiting lists. Pre-owned is democratising this, and dream purchases are becoming a reality for more consumers, all while preserving the aura of exclusivity, Gosling points out. Laura Swan, co-CEO of luxury resale vendor LXR, which sources authentic inventory for Harding+ and ARI, echoes this sentiment: “Typically, customers onboard look for unique items, which is what we strive to provide. High-end pieces, especially Chanel, are popular. Louis Vuitton — Speedy 30, Neverfull and Keepall in particular — and monogrammed items are in demand, both on ships and on land.” Swan believes the continued growth in travel post-lockdown is an irresistible lure for preloved in travel retail. “Airports are bustling, cruise ships are operating at full capacity, and there’s talk of launching even more ships to meet the demand,” she says. “Being present in these high-footfall areas offers a unique opportunity to reach consumers who might not have encountered preloved luxury before. The potential of the market, combined with its global reach, makes it an enticing venture for those looking to expand beyond traditional bricks-and-mortar establishments.” Comments, questions or feedback? Email us at feedback@voguebusiness.com. More on this topic: Fashion is popping up at hotels as summer travel surges How luxury hotels tapped the fashion set – and why it’s good for business Gen Z will drive explosive growth in secondhand sales, says Thredup

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