What Can China Learn From the West About Secondhand Fashion?
Plus: The business of co-branded experiential hotels, Pfizer's cinematic turn, and our TikTok Take.
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Long before sustainability became a central concern among socially conscious global citizens, Gen Z and millennial consumers in the West were relying on secondhand apparel as a badge of authenticity.
Emma Davidson, fashion features editor for style magazine Dazed, told CCI, “When I think back to going to charity shops [as a teenager], it was to supplement my wardrobe with cool pieces, rather than build a wardrobe in a sustainable way.”
According to Deloitte, the current love for thrifting among Gen Z youth derived partly as a result of the Great Recession more than a decade ago, when the oldest members of that demographic were in their formative early teen years. For them, part of growing up with financial hardship meant learning to save by shopping secondhand.
In contrast, China’s Gen Zers came of age during an astonishingly rapid rise in affluence, reaching adolescence as the nation saw the greatest annual GDP growth among the world’s major economies. As they reached adulthood, they have come to be known as the “moonlight clan” for their ability to spend an entire month’s salary over the course of a single lunar cycle, boasting an average monthly purchasing power of RMB 3,501 ($507).
For these Chinese consumers, the cheapest finds are less important, and the secondhand luxury market may hold greater appeal. Yet resale only accounts for around 5% of the overall luxury market in China, whereas in the United States it represents 31% of total sales, according to a 2020 report by China's University of International Business and Economics and Isheyipai.
China’s demand for luxury goods, coupled with a cultural superstition that used clothing is unlucky, meant that the potential market for used apparel was largely ignored until recent years, a period during which secondhand sales boomed in the West — according to ThredUp, the resale sector is set to be larger than the fast-fashion market by 2029.
Alibaba launched its re-commerce platform Idle Fish in 2012, with China’s Poizon, Plum, and Ponhu arriving on the scene a few years later in 2015, followed by luxury livestreaming platform Feiyu’s move into secondhand sales in 2018. In the West, leading luxury resale platforms Vestiaire Collective and The RealReal launched in 2009 and 2011, respectively, focusing on the promotion of a circular fashion economy while also capitalizing on consumer interest in archival pieces.
Vestiaire Collective has developed a high-end editorial brand image with a green conscience, which has been enhanced by its work with A-list influencers including Chloe Sevigny, Olivia Palermo, and, more recently, fashion activist Nicola Cheung Young. The retailer’s marketing consistently focuses on sharing the stories behind items offered for sale in order to elevate the perception of secondhand fashion, such as through a YouTube series of interviews with expert vintage sellers or a 2019 Selfridges pop-up featuring rare pieces by the likes of Versace, Paco Rabanne, and Maison Margiela.
As its name implies, e-commerce platform TheRealReal prides itself on professionally authenticated pre-loved art and designer fashion. Sasha Skoda, women’s category director at The RealReal, told CCI that, “By taking possession of all items and handling the entire process for the consumer – authenticating, merchandising, photographing and shipping – we established newfound trust and ease that I think helped set a real precedent in resale.”
The introduction of brick-and-mortar spaces has helped TheRealReal combat any lingering concerns from buyers about product authenticity (an issue that China is all too familiar with). “We opened Luxury Consignment Offices and stores where people could come in, engage with our experts, understand resale value, and touch and feel a Birkin or try on a Rolex,” explained Skoda. “These physical locations played a big part in introducing luxury consignment to those who weren’t quite comfortable shopping online for more high-value items.”
Opulent pieces with a history are central to TheRealReal. Chief Operating Officer Rati Levesque said, “We’ve seen more consumers adopt a heightened value consciousness and appreciation for sustainability. We’re seeing them shop with an investment mindset.” The top consumer trends at TheRealReal are investment pieces, new capsule wardrobe essentials, and vintage styles from the late 1990s to early 2000s.
Founded in 2011, trailblazing resale app Depop also aims to satisfy the appetite for fashion from the turn of the millennium, though at a lower price point, as some 55.7% of its users are teenagers. The platform has succeeded in fostering community around a shared affinity for cool style (rather than what’s seen on the runway) and places sellers at the center of its marketing strategy. Apart from appearing in every campaign, Depop sellers have also been scouted to join the head office in London, becoming an instrumental part of how the company brands individuality.
Depop’s pop-up at Selfridges in 2019 further cemented its status as an epicenter for the production of social capital around subcultures and style. According to Dazed magazine’s Davidson, “Given the homogenization of the high street and behemoths like PLT, Boohoo, et cetera, dominating the scene with the same line-up of clothes, Depop offers an opportunity to cultivate something different from the masses.”
Francesca Manton, vice president of fashion at trend forecasting firm WGSN, added that “Secondhand marketplaces like Depop have introduced a social selling element to resale.” By incorporating features such as creative product photography and direct messaging, Depop highlights how sales and social media can be merged on one platform.
“Resale is no longer about buying or selling something cheaply,” said Manton. “It’s now allowing consumer demand to set the price based on what is arguably a better representation of its true value.”
Whether that value is a socially-constructed obsession with streetwear, or archival fashion that was last seen on a catwalk in the 1990s, successful secondhand retailers share common ground in their understanding of the power of storytelling, a strategy that can be incorporated to both appeal to China’s Gen Z and millennial shoppers and glamorize the concept of used clothing for older generations who may still be unsure of participating in the fast-growing, sustainable industry.
- by Sadie Bargeron
Mentioned in today’s newsletter: Alibaba, Amazon, American Airlines, Boohoo, Cartoon Network, Depop, Disney, Idle Fish, JetBlue, KFC, Maison Margiela, National Geographic, Nickelodeon, P&G, Paco Rabanne, Pfizer, Poizon, REI, Selfridges, The RealReal, Unilever, Versace, Vestiaire Collective, YouTube.
CollaBrands: The Co-Branded Experience, Part Two
As noted in last week’s CollaBrands column, co-branded experiences are set to see significant growth post-pandemic as vaccinated consumers finally feel safe to get back out into the world at large and express their pent-up demand for social experiences and travel. Co-branded experiences reinforce the emotional trust that well-known brands communicate to consumers. While co-branded experiences were already on the rise over the past decade, the post-Covid era will see an explosion of new activity. Brands seeking new ways to reach customers and develop their audiences should take note.
Last week we looked at co-branded travel tours and experiences. This week we turn to the business of co-branded experiential hotels.
Co-Branded Hotel Experiences
Hotel collaborations are a relatively new phenomenon that taps into consumer needs for differentiation and brand recognition while creating a special emotional connection. The first co-branded hotels were meant for families and were launched by entertainment companies such as Disney, Nickelodeon, and Cartoon Network.
Brands focused on content for children have long understood the concept of extending their reach into hotels and resorts. The OG in this area is Disney, of course, which maintains ownership of all its hotels and resorts (with the exception of its joint venture in China). Other children’s entertainment brands license their IP to independent hotel chains or operators under strict branding guidelines.
Naturally, if the concept of branded hotels works for kids, why not extend it to adults?
What’s in a Name?
In the heyday of American air travel, the now-defunct carrier TWA had its own terminal in New York City’s John F. Kennedy International Airport. Built in 1962 by renowned architect Eero Saarinen, the iconic structure was later designated a historic landmark. The TWA Flight Center lay dormant for 14 years after the airline was acquired by American Airlines and its brand name retired. But it made a major comeback in 2019, after JetBlue, which had expanded into the terminal, partnered with a hotel developer to transform parts of the complex into a 500-room, TWA-branded hotel with a retro 1960’s “Mad Men'' vibe.
Lifestyle for Grownups
Founded in 1972, Atari was a pioneer of game systems, creating groundbreaking arcade games, consoles, and home computers. Nowadays, the Atari brand is wholly focused on licensing its name and IP for lifestyle categories. In January 2020, Atari announced a deal with the Arizona-based GSD Group to build Atari Hotels, with the first set for construction in Phoenix. Future hotels are planned for major cities across the United States, including Las Vegas, San Francisco, Chicago, Austin, and Seattle, offering immersive AR and VR experiences that can be enjoyed by all ages.
Several leading luxury brands have expanded into hotels, most notably the Italian jeweler Bulgari and the French fine crystal producer Baccarat.
Bulgari Hotels & Resorts invoke the distinctive, bold, and contemporary style of the Italian firm through a unique hotel design concept. Comprising a few select properties in major cities and high-end resort destinations, each incorporates references to the local culture through a blend of traditional design and dramatic Italian contemporary architecture.
The Baccarat Hotel In New York City has been recognized by Forbes Travel Guide as a five-star hotel and by Condé Nast Traveler as one of the best hotels in the world, and is included in its list of preferred hotels.
Luxe, American Style
Shinola, the Detroit-based based premium watch, leather goods, and bicycle manufacturer, recently opened a 129-room boutique hotel in its home city, not far from its factory and flagship store. Other American brands with hotel projects in the works include the Williams-Sonoma-owned furniture retailer West Elm and RH, the luxury home goods brand formerly known as Restoration Hardware, which plans to debut its RH Guesthouse next year in New York City’s Meatpacking District, near its successful flagship store and rooftop restaurant.
As the examples above illustrate, the combination of hospitality and well-loved consumer brands is a marketer’s dream. In addition to delighting the brand’s core consumers, hotels can serve as a testament to a brand’s stature, attracting new fans while producing additional revenue streams through royalty payments.
Next week, our series on experiential co-branding continues as we explore real estate, pop-ups and experiential retail environments.
Steven Ekstract is Managing Director of Global Licensing Advisors, a consultancy that provides companies with insight and strategic direction to succeed in the $300 billion a year licensing business. Ekstract is the founder and former Publisher of License Global magazine, the leading information source for the consumer licensing business. He can be reached at Steven@globallicensingadvisors.com.
Pfizer Film Gives Covid-19 Vaccine Race the Cinematic Treatment
by Avery Booker
Brand films have become a popular (and relatively subtle) way for companies to embed their values — and more often their products — into long-form documentary or feature films, and as CCI recently noted, oftentimes a viewer will get through an entire film with only the faintest realization of the brand’s hand in production until the closing credits.
The rise of brand-funded content is no fluke. Consumers have become increasingly hard to reach through traditional advertising such as TV commercials, which don’t play as well in today’s culture of on-demand video. By providing a measure of entertainment along with their marketing, brands that communicate through film are able to retain viewer attention for significantly longer periods of time. According to producer Marcus Peterzell, “There's no one perfect formula, but it's exploded as a new medium to utilize."
This explosion has led to a diverse array of branded content such as KFC’s tongue-in-cheek Lifetime film “A Recipe For Seduction” and REI’s feature-length drama “The Dark Divide.” But the trend is also starting to spread among companies that are less known for their consumer-facing marketing efforts.
Last month, Samantha Glynne, global senior vice president of branded entertainment at Fremantle, told Advanced Television that brands “that have had a story to tell during Covid times, about their place in the community for example, can really benefit from branded entertainment now. That could be Unilever, P&G, Amazon, or other e-commerce brands.”
Glynne’s comments were validated by this week’s news of an upcoming documentary from Pfizer that was produced with National Geographic. “Mission Possible,” traces the journey of the pharmaceutical giant’s Covid-19 vaccine, from research to market, with National Geographic’s film crew enjoying “unprecedented access” to the vaccine’s development.
TikTok Take: Southeast Asia Moves and the Beautiful Algorithm
TikTok’s foray into fashion hits Southeast Asia: Bangkok Post reports on a partnership with Thai fashion brand Pomelo to collaborate on a 13-piece streetwear collection, marking the app’s first-ever fashion collaboration for the Southeast Asian market.
Bytedance names first senior R&D position for TikTok: Bytedance has announced that it will be moving the chief of its Chinese news aggregator Jinri Toutiao, Zhu Wenjia, to Singapore to head global research and development for TikTok. Read more on Reuters.
TikTok Indonesia starts e-commerce hiring spree: The short-video platform has kicked off hiring for its e-commerce service in Indonesia and Singapore, TechInAsia reports.
Bytedance settles in the United States: TikTok’s parent agreed to pay $92 million in a federal class-action lawsuit alleging that it violated state privacy laws by unlawfully collecting the data of teenage users.
Shopify partnership means business: TikTok and Shopify have launched a new partnership to help U.K. companies, allowing merchants to seamlessly create and run ad campaigns for the short-video platform without leaving their Shopify dashboard. Adweek has more.
Users spending up by 400% in January: TechDigest dissects the booming popularity of TikTok over the year so far. Just one month in, TikTok was the second most-downloaded mobile app, with 62 million installs, while user spending saw a fourfold year-on-year increase.
German museums offered cash for content: Artnet reports that TikTok will offer 50 cultural institutions €5 million ($6 million) to produce eight videos a month for six months, with an emphasis on diversity and inclusion.
How TikTok has changed our relationship with food: The Evening Standard delves into the impact of TikTok and Instagram on our eating habits, from viral food trends to popular chef-creators.
Deep-diving into the beautiful algorithm: Abby Ohlheiser at the MIT Technology Review has a long-read out on TikTok’s signature For You Page, the magical element that sets the app apart from other social media platforms.
TikTok Transparency Report (2020 part two): TikTok’s report for the second half of the year provided an update on the operation of the platform’s current policies. A total of 6,144,040 accounts and 89,132,938 videos worldwide were removed for violating community guidelines, though certain videos were restored after appeals.
Fanatics, the world’s biggest retailer of licensed sports merchandise, is expanding into China through a venture with private equity firm Hillhouse Capital Group. Reuters
DC Comics is joining forces with Spotify to tell superhero stories via podcast series centered on characters such as Wonder Woman, Batgirl, and Superman and Lois Lane. The Verge
Long favored in China, the humble QR code is finally gaining traction among American consumers thanks to the coronavirus pandemic. Adweek
Chess has surpassed video gaming heavyweights such as League of Legends and Fortnite to become the most-watched category on Twitch. Protocol
Chanel launched an AI-powered tool that lets users point their phone cameras to find lipstick shades that match. Engadget
Nickelodeon is reimagining the concept of “upfronts” for advertisers by turning its programming showcase into something its core audience — kids — can enjoy as well. Variety