Luxury Resale Needs The Tech Stamp 

Experts believe only 20 per cent of items go through a second round of authentication in its lifecycle. Technological investments such as blockchain, artificial intelligence, and data analytics in luxury resale are essential.

With the Kardashians and Bollywood star Deepika Padukone endorsing pre-owned luxury items, the hesitation towards buying second-hand goods is rapidly fading.

Meet Mira. She loves her high-end clothes, with a sustainability badge stuck on them. Her wardrobe might not be extensive, but it has several items purchased from luxury resale platforms.

Sustainability is the buzzword in the luxury industry, and with digitisation and eCommerce, experts believe the circular economy is fueling the resale growth. ThredUp Resale report indicated that the second-hand apparel market has grown 21 times faster than the retail market in the last few years, 52 per cent of customers bought or sold a pre-owned luxury item in the last one year.

The global luxury resale business is booming with platforms such as Vestiaire Collective, Chorono24, Watchfinder & Co and Fashionphile. Farfetch is expanding its handbag luxury resale programme by their recent entry to the UAE, Kuwait, and Saudi Arabia. On par with its 2030 sustainability goals, the platform is also allowing customers to use a fashion footprint tool to identify and understand the environmental impact of their wardrobe, and they can also use a Fix service, to repair their luxury items.

According to Luxe Digital, 34 per cent of luxury consumers sell second-hand products, and 26 per cent buy pre-owned items. Nevertheless, the most critical factor that has the potential to impact the numbers and end the resale game is authentication.

The Authentication Factor

Counterfeit fake goods have rocketed the digital luxury marketplace. Fake Gucci, Prada and Louis Vuitton handbags and other accessories are sold in the market every day. A Forbes report revealed that many resale platform’s authentication processes are dependent on human expertise, which is susceptible to errors.

For a long time, many resale platforms marketed themselves with claims of strong authentication processes. For instance, TheRealReal gained massive popularity as they claimed to have trained gemologists, horologists, and art experts handling the authentication, but when it was later revealed that the so-called experts were just overworked copywriters, there was panic.

Chanel filed a lawsuit in late 2018 against The RealReal for selling counterfeit products on its platform. While the legal battle continues today, the question of the authenticity of the resale market is glaring. According to Harvard Business Review, the global market for counterfeit goods crossed $3 trillion a few years ago, and the numbers are only higher in recent times.

Experts believe only 20 per cent of items go through a second round of authentication in its lifecycle. Who is to say products haven’t been switched somewhere in the time?

So, how do other resale marketers make their case for customer trust? Customers are no longer gullible enough to take an employee’s word that yes, the discoloured Prada is real. 

Authentication is key.

Chanel tried introducing serial-numbered cards but they could easily be stolen, lost, or faked. Luxury resale marketers are often tying loose ends, but it’s a lost cause without technology. Artificial intelligence, data analytics, and blockchain can detect counterfeit goods.

Also Read: The Blockchain Backstory


Non-reproducible and highly secure digital blocks might be the end of the counterfeit industry. LVMH launched its first global luxury blockchain this year to provide a holistic solution for consumers to verify the authenticity and sustainability of their luxury items. Called the Aura Blockchain Consortium, the application hopes to achieve the highest quality of transparency and traceability across the journey of the product.

Both resellers and consumers can compare product ID with the client ID, and have access to product history till the time they were just raw materials in a warehouse. Currently, the Aura consortium includes luxury brands such as Bvlgari, Prada, Hublot, Cartier, and Louis Vuitton.

Leading diamond company DeBeers recently launched Tracr, a blockchain solution that creates a permanent digital record for every diamond produced and sold.  Additionally, DeBeers hopes to gain customer trust by using blockchain to prove that the diamonds do not originate from conflict zones.


Non-fungible tokens (NFTs) are getting both customers and brands excited. For instance, Nike has added a digital version for every pair of sneakers. Upon purchase, the ownership of both the physical and digital sneakers is transferred to the customer, and details are stored in a cryptocurrency wallet called the digital locker. So, even if the sneakers end up in the resale market, the next owner can authenticate the product and know its history through the stored digital information.

Additionally, resale marketers can use NFT to provide royalties to the original brand that created the product. As the terms of reselling an NFT can be encoded in the blockchain, brands can receive a predetermined royalty with each resale.

Also Read: Small Is The New Big

Artificial Intelligence (AI) and Data Analytics

AI, always to the rescue. A new solution in the market can reveal a luxury item’s true resale value with just an image of the item in the closet, shown on television, or a random picture chosen off of the Internet. Powered by Machine Learning (ML), Clair AI has six years of data and a million image references making it the first image recognition technology for luxury resale. Developed by Rebag, it has the potential to account for the resale value of handbags of over 50 brands. The most prominent use case of Clare AI is to push customers to make a purchase, knowing that they can sell it for at least 80 per cent of the selling price.

It’s not a foolproof solution, but 90 per cent is good enough when Rebag offers to buy the product from your closet with a quick QR scan. While a great way to recycle your wardrobe, the image recognition technology also allows consumers to scan bags while shopping in any store to know the resale value of the product in advance. Rebag hopes to turn the luxury resale consumption market into an investment market.

Entrupy, takes authentication a step further with automation. Using AI and ML, the brand leverages data of over 100,000 real and fake designer bags to analyse several fed-in photographs of the product. The brand also launched an authenticity tool prototype called LTC that has over six cameras at different angles. It takes several photographs of the product and runs it by a large database that checks around 100 data points to provide authenticity.

Tech investments on the horizon

It’s a luxury resale arms race, and marketers must anchor on technology to help consumers make their pick. Resellers are laser-focused on scaling and they are eyeing technological investments that can allow them to be all-powerful in authentication and algorithm curation. Luxury resale platform Tradesy recently invested in a personalisation algorithm that presents relevant items to consumers based on data analytics and lays out insights from customer purchase and search history.

Additionally, social marketplace Poshmark recently acquired Suede One, a platform that combines ML and computer vision to virtually authenticate sneakers. The technology will help analyse luxury product images, run algorithms on consistencies to identify whether the item is real or a counterfeit. For popular sneakers such as Jordan 1s and Yeezy 350s, Suede One can automatically authenticate the majority of submissions with over 99 per cent accuracy, only based on internal testing.

While strategic investments to accelerate growth in high-growth resale categories are surging, increased use of data analytics along with blockchain and 5G for better customer engagement will perhaps be the next collective movement in the luxury resale market. Data about bestsellers, price indices, and regional discrepancies will be invaluable for resale marketers to create enhanced customer experiences.