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Brands are pressing go on the resale market and I’ve been closely following the tech infrastructure that makes it all happen. I believe that the future implications for building digital twins for physical products will be an impetus for brands to roll out their digital strategies and supply chains. As the resale market continues to grow and outpace traditional retail, it’s imperative that brands are able to leverage resale as a sustainability initiative and revenue driver. Brands are entering this market from both web2 and decentralized web3 approaches and it will be interesting to watch the trajectory of adoption and the likely merge between web2/3 infrastructure.
The resale market is composed of two channels: direct-to-consumer resale and brand-enabled peer-to-peer platforms. The opportunities for brands to build in brand-enabled peer-to-peer platforms is critical in order to retain value in the secondary market. Naturally, I find web3 infrastructure, digital twinning and NFC technology as a key solution to maintaining direct correlation to a product’s overall value as it changes hands from one consumer to the next.
Below I’ll break out some of the major resale players in web2 and how I see web3 infrastructure as a means to shape future advancements in fashion and the circular economy.
Web 2 Resale Players & Overview
Balenciaga has partnered with a white label resale platform called Reflaunt. Customers can sell their pre-owned Balenciaga clothing and accessories in return for store credit. Balenciaga items can be dropped off at select stores, which are sent to Reflaunt to be authenticated, professionally photographed and priced. The pieces are then listed on Refalunt’s global network of 25+ secondary marketplaces such as Vestiaire Collective, Tradesy, etc. Reflaunt’s customers currently include brands such as Net-a-porter, Ganni, and Axel Arigato.
Gucci Vault is a perfect example of a brand maintaining control and driving demand for rare vintage products. The online concept store’s name “evokes the search for ideas that go beyond the confines of time and space; a testament to the belief that the past, present, and future can co-exist through the power of imagination”. Every vintage vault item is selected by the creative director and Gucci archivists for its particularity and character, and then reconditioned by in-house artisans. This vault strives for exclusivity with vintage items that are one-of-a-kind, only available once and numbered to coincide with the year of the drop. Gucci is a brand that is well versed in the digital space and represents a strong web3 presence with drops such as the SUPERGUCCI collaboration with SUPER PLASTIC as well as 10KTF. They are clearly making web3 a priority as Robert Triefus is now CEO of Gucci Vault and Metaverse Ventures.
Why Gucci Web3 team (Gucci Vault) blew my mind yesterday… a 🧵 👇— giacastyle.eth 🍌 🦁 (@giacastyle) October 8, 2022
Valentino also entered the fashion circular economy with a vintage buy-back program called Valentino Vintage. The initiative allows consumers to bring their old Valentino to select boutiques and store credit will be offered in exchange for anything accepted by the appraiser. Valentino customers can also access a dedicated Valentino Vintage section of the website to submit items online for store credit.
Additional web2 resale marketplaces that I find interesting are Recurate and Archive:
Unlike independent marketplaces, Recurate focuses on brand integration which I believe is critical for a frictionless user experience. Customers can also place new and used items in the same shopping cart rather than navigating to a separate site for the resale platform. Recurate also integrates with the shopify app which places it in a position for mainstream adoption across retailers.
With archive, consumers can buy and sell second hand items directly from a brand on their e-commerce site. The major differentiating factor with Archive is inventory management – their data integration pulls in original product information to make listing a seamless experience. Archive also builds the site tailored to a brand’s aesthetic, regardless of their e-commerce platform.
Ultimately, I see the winners of the resale category emerging from brand enabled peer-to-peer platforms because they are revolutionizing a transfer of power back to the brand and maintaining trust through authentication and seamless payouts to consumers.
Web3 Supply Chain Technology & Overview
In the web3 landscape, NFC technology and in some cases vaults are incredible levers for brands to begin integrating as part of their e-commerce and supply chain strategies. These will not only further the authenticity of their products but enhance any future secondary tradeability as products enter the circular economy.
Near-field communication (NFC) allows two electronic devices to communicate over a short distance. It’s mainly used in smartphones, laptops, tablets, and other devices to share data within a close range. NFC is used in Apple and Google Pay as contactless cards.
In the fashion space, NFC has been utilized in clothing and other fashion accessories to prove authenticity and communicate with mobile devices. Gucci uses its own version of NFC technology in its products called Gucci Tags, which helps consumers identify counterfeit Gucci products. By placing your phone near a Gucci product, you can access a digital world that allows you to learn more about the items supply chain, care, materials, and personalized assistance from Gucci’s Client Advisors.
Bvlgari has also embedded NFC tags that activate different experiences when users tapped their phones to the objects. So many different products and use cases can be added to NFC and it’s great because just like software it can be upgraded.
Lastly, I believe that depending on the consumer product there are very viable opportunities for physically backed NFTs and vault storage. With vault storage, consumers’ physical items are stored for safe-keeping. This process is especially complementary for people who buy and sell collectibles as investments. Infrastructure for this is offered by a company called 4k vault and is also being offered by other companies such as StockX.
When I think of web3 fashion brands we’ve mostly seen companies innovate by pulling in portions of a complimentary tech stack. However, Gmoney, a prominent NFT figure, is launching what he calls the first crypto-native luxury brand, 9dcc. It aims to incorporate various capabilities of NFTs such as NFC, token-gated access, vaults, etc. Fashion brands have mostly explored these components of NFTs in bits and pieces, building them into the foundation rather than grafting them onto existing business.
Ultimately, when I think of the resale market I see synergies between web2 brand enabled peer-to-peer companies and web3 infrastructure. The advancements in web3 can only further the frictionless authentication and interoperability for resale market players. I see the future of decentralized web3 infrastructure as brand agnostic and spearheading autonomous commerce.
If you’re a brand looking to stay ahead of the curve, focus on digital twins and how they can revolutionize your customer experience. With an ironclad connection between brand and consumer, digital twins are key to the future of product ownership. And with blockchain technology shaping the way we exchange value and ownership in this new world, it’s more important than ever for brands to get on board. Ready to create a digital twin for your business? Let us know – we’d be happy to help!
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