Many luxury companies have seen far better days, thanks to consumers pulling back on spending. Rather than lose out to brands and retailers offering more affordability, two resale companies are newly investing in initiatives aimed at appealing to budget-conscious shoppers. This week, a look at Rebag’s new paid membership program, Rebag+, and Vestiaire Collective’s new cost-per-wear-focused marketing campaign.
Rebag’s new membership program facilitates budgeting for Birkins
With its new membership program, allowing shoppers to pay off purchases in payments, luxury resale company Rebag is taking the opposite approach of Affirm, Klarna and traditional credit cards, according to founder and CEO Charles Gorra.
“This isn’t buy-now, pay-later. This is fund-now, buy-later,” he said. “You’re not putting a $1,000 bag on a card to eventually pay 20% more, or $1,200. Instead, we’re paying you 20% — if you can be disciplined and plan. And you’re only going to pay $800.”
The program, dubbed Rebag+, centers on members making monthly contributions of $50 or $500 to an R+ Credit account for future Rebag purchases. On top of each personal monthly contribution, Rebag adds 2% worth of credit, thus boosting a member’s annual contributions by up to 27% per year. In addition, Rebag+ members receive perks including discounts of up to 10%, a once-yearly promo code providing an additional 10% off and 5% higher earnings on items sold. They also gain exclusive access to new releases and sales, and free shipping and returns on their purchases. Members can skip monthly contributions, withdraw their personal contributions or cancel their membership at any time.
According to Gorra, 10-year-old Rebag has earned an active, engaged community and has reached a scale befitting a sophisticated loyalty program. Increasing retention and customers’ purchasing patterns are Rebag+’s main goals.
“This is a very big investment for us, but we want to capture a large wallet share from these customers,” he said. “And we believe this will [pay off].” No additional hires were made to run the new program.
Rebag’s existing membership program, Rebag Rewards, is being discontinued. A complimentary feature for all Rebag shoppers, it offered tiered perks based on points earned from purchases.
Gorra’s description of how the program may benefit a shopper calls to mind a TikToker’s “girl math” justification for making a purchase. He, however, labeled it “smart math”: “Our entry point purchase is $500-$600, which is still steep for most people,” he said. “But $50 a month is one-tenth of that. When you break it down, that’s $12 a week — or two or three cappuccinos or frappuccinos at Starbucks. Skip those, and you can get your Louis Vuitton.”
Gorra anticipates that Rebag customers who buy a Celine or Chanel bag every year will save toward a Birkin, for example. And those accustomed to shopping Louis Vuitton styles will level up to a Chanel by leveraging their R+ Credit. Rebag’s average order value is $2,000, according to the company.
“We’re well aware of the world we live in — there’s inflation, and everything’s become more expensive,” Gorra said. “Putting $2,000-$3,000 on a credit card has a higher bar these days — and this way, you don’t have to.”
Informing the details of the new membership program were Rebag customer surveys and interviews, among other tests. Gorra said the Rebag+ program will likely evolve based on member activity.
“Direct-to-consumer companies tend to focus on growth through customer acquisition,” Gorra said. “But, for us, the next generation of growth is about leveraging the relationships we already have. We want to influence and disproportionately reward the users who are committing to a more engaged [Rebag] journey.”
Along with “smart math,” Gorra used various comparisons and labels when describing the components of Rebag+. Among them: buying a car and “reverse layaway.” Like Restoration Hardware’s membership model, products being sold on Rebag will now have a member price and a non-member price. Unlike Netflix’s model, “where you can not watch TV for a month and pay for no reason,” there is no fee to take part in the program, he said.
Rebag has a history of experimenting with revenue streams and features, as well as embracing technological innovations, as evident in its AI pricing tool, Clair. In 2022, it launched on-site auctions, though the concept didn’t stick. The same year it launched Rebag Wallet, incentivizing sellers to spend their earnings on the platform. And in late 2023, it introduced a consignment model, which now drives “a reasonable share of the business,” Gorra said. Formerly Rebag exclusively bought the items it sold. Handbags make up 70-75% of the company’s sales, with jewelry and watches rounding out the rest.
Rebag is facing increasing competition, as other resale companies scoop up smaller players and new companies enter the market. What’s more, as Gorra pointed out, gaining access to capital in order to grow has become more challenging. Rebag has raised $103 million, to date, “You need a bigger asset base to sustain an economic entity,” he said. “Thankfully, we’re one of the larger companies in this space, and I do believe we’re going to see a survival of the fittest.”
As for Rebag+. Gorra expects that the member pricing on the site will help to fuel interest among shoppers. Also marketing the program are social media and influencer posts, and a landing page on rebag.com explaining the benefits. Meanwhile, emails and one-on-one conversations are serving to update top customers. The marketing’s messaging primarily focuses on the concept of “saving toward” a goal product and backtracking to define what membership best fits various customers.
“We are trying to turn customers into investors,” he said. ”This is not about consumption. It’s about building an asset.”
Vestiaire Collective’s “swap this for that” campaign pits resale against fast fashion
On Monday, timed with Earth Day, luxury resale company Vestiaire Collective published its third annual Circularity Report spotlighting its commitment to circularity and the general issue of overconsumption. This year’s report zeroed in on the concept of cost-per-wear to debunk the common belief that fast-fashion purchases are more affordable than resale finds, based on its research showing otherwise.
Conducted with the environmental impact software company Vaayu, Vestiaire surveyed over 13,000 shoppers in five markets about their buying habits. In short, the consumers reported wearing the items they bought at resale far more often than their fast-fashion purchases, equating to a lower cost-per-wear for the former category. For example, they said they wear their dresses bought at resale at least eight-times more than their dresses purchased at fast-fashion retailers, with the cost per wear for each averaging $1.72 and $4.82, respectively.
Corresponding with the report, Vestiaire rolled out a marketing campaign highlighting the cost differences and suggesting that consumers “swap this” fast-fashion buy “for that” resale version of a similar style.
In November, Vestiaire Collective banned the sale of 30 fast-fashion brands, including H&M and Zara, on its peer-to-peer shopping platform.
“When I was young, my dad would say, ‘I’m too poor to buy cheap, shitty stuff,’” said Dounia Wone, Vestiaire Collective’s chief impact officer. “The narrative around fast fashion is always about getting more — and the cheaper it is, the more likely you’ll spend money on it. … But, as we’ve found, second-hand pieces are better investments.”
She added, “You have people on social media talking about ‘girl math’ and saying this much is true, but we needed proof. … We’re not saying people who are buying Zara will tomorrow buy an Hermès bag — we’re [instead] saying that you’re spending more on fast fashion and you can find an alternative on the second-hand market.”
Rather than sustainability, the top reason customers shop Vestiaire Collective is affordability followed by trust, Wone said, citing company data. But sustainability is becoming a more significant driver each year. “They’re realizing there is another way to consume that’s good for their finances, the planet and the people in the supply chain,” she said.
Vestiaire Collective has historically compared the resale and retail prices of the items it sells. But regardless of the price, when people buy high-quality items, they’re more inclined to take care of them and resell them, Wone said.
Moving forward, Vestiaire Collective hopes to launch its own loyalty program, of sorts, allowing members to add earned money to a “wallet” from which they could donate or invest in any second-hand items, even those Vestiaire doesn’t sell, like furniture. “When people embrace circularity in any industry, they are likely to explore circular consumption in other parts of their life,” Wone said.
With France set to implement a fast-fashion ban soon, Wone noted that potentially affected brands, including Zara, are starting to raise their prices — for example, she recently saw a Zara jacket selling for $700.
“It doesn’t matter if they increase their prices if they’re not changing their supply chain, slowing the pace of their production, offering [workers] better wages and making better quality pieces,” she said. “But if a brand does change, we will of course welcome them back onto our platform.”
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