FASHIONPHILE: Forging a New Frontier in Luxury Recommerce
By December 10, 2020
When you think about buying luxury goods, pristine, minimalistic showrooms with sky-high price tags typically come to mind. But today, there’s a new way to purchase these high-end goods that’s quickly gaining momentum with consumers – online recommerce.
Online recommerce is the process of selling used or previously owned goods to a new owner via the web. It is an emerging trend that is driven by a growing acceptance among consumers to purchase products second hand and innovative technology that provides buyers and sellers with confidence and convenience when doing so. Today, online recommerce is being used to facilitate the buying and selling of luxury goods, and there are a number of factors that make these products a perfect fit for this business model.
While the concept of buying and selling secondhand luxury goods is not new, the introduction of online recommerce is causing consumers to reconsider their collection of luxury products and how to acquire new items – similar to the resale value of pre-owned cars. With secondhand goods carrying lower price tags, a whole new demographic of buyers is brought into the market. Also driving consumers toward second-hand luxury goods is the rising demand for sustainable fashion, a movement defined by consumers’ desire to buy products with greater ecological integrity.
The total addressable market for pre-owned personal luxury goods stands at $38 billion in the U.S. today and is expected to grow to $49 billion by 2022.
The total addressable market for pre-owned personal luxury goods stands at $38 billion in the U.S. today and is expected to grow to $49 billion by 2022. As a diversified technology investor in software, tech-enabled services, and ecommerce companies, we saw a major opportunity to partner with a company who could capitalize on these favorable trends in the luxury goods recommerce market. Our latest investment in FASHIONPHILE – a company with not only a deep understanding of luxury goods, but an innovative technology platform to take on much of the heavy lifting when it comes to authenticating, appraising, and pricing these specialized products – is the result.
Bringing luxury goods to the masses through powerful technology
FASHIONPHILE is a leading buyer and seller of ultra-luxury pre-owned handbags, watches, fine jewelry, and accessories. It is a bootstrapped company with strong underlying fundamental economics and a long history of buying and selling luxury goods since its founding in 1999. Today, the company utilizes its proprietary technology, data, and industry expertise to curate sought-after luxury products. The company is growing fast by increasing the affordability and accessibility of luxury products to a wider audience of interested buyers.
The driving factor behind the company’s success is this incredible technology platform, which is leveraged at every step of the buying and selling process. FASHIONPHILE’s propriety platform is able to connect directly with a high volume of sellers, authenticate products with image recognition AI technology, appraise them, and set a price for the goods based on market demand, availability, and other key factors. By using technology throughout the entire process, FASHIONPHILE is able to considerably increase margins, speed buying/selling timelines, and create meaningful and profitable scale.
The company is run by exactly the type of growth-oriented leadership NewSpring seeks in a partner. With our investment and ongoing support, FASHIONPHILE will look to drive operational and geographic scale and continue to bolster its suite of enhanced automation and AI to ensure product authenticity and operational scale in the business model.
By leveraging AI, its technology is getting smarter with every transaction, and the potential for further margin expansion and scale is vast.
We’re excited by this business and what it can do. By leveraging AI, its technology is getting smarter with every transaction, and the potential for further margin expansion and scale is vast. Together with the company’s management team, we’re eager to get to work refining this offering and bringing even more individuals into the luxury goods lifestyle.
You can view the entire NewSpring Growth portfolio or learn more about NewSpring Growth’s investment criteria here.