Event Recap
On the last day of New York Fashion Week, ON_Discourse convened a breakfast event around our recent ON_Fashion release: The Secondary Market Issue. Let’s recap…
Overlooking Governor’s Island from the elegant confines of Casa Cipriani, fifteen C-suite experts, investors, and ON_Discourse members engaged in rigorous dialogue about the technology and platforms that are redefining the concepts of ownership in the fashion industry.
Toby Daniels and Michael Treff served as primary provokers representing ON_Discourse. Toby stopped me in the hallway before the session to tell me his game plan: “Fashion Week is underway and I want to redirect all of that attention away from design trends and into the technology advancements that are opening up new markets for this industry. On top of that, I want to get real opinions from the group,” he said, a fire in his eyes, “more finger pointing and less head nodding.”
I was in the room and can testify that Toby’s game plan was successful. By the end of the session, several people were trying to double-dutch their final word before starting their business day. I saw more than a few notable head shakes and heard enough sighs to tell me that this room experienced some heat. And like clean-up time in preschool, there was an undeniable disappointment that our time together had ended. This has always been our goal at ON_Discourse. Check out the key takeaways and moments from this morning and let me know if anything here makes you want to push this thinking forward. And members, the good news is that we are still here, ready and willing to hear your follow up arguments and positions on this matter. The Secondary Market Issue is always open for a follow up.
As always the pull-quotes are not and will never be attributed.
Key
Provocations:
The fashion industry has a strange relationship with technology (strong backend innovation, and unnecessary hype around CX).
The fast fashion industry wants to destroy what you own.
A brand has no right to your resale revenue.
Discourse
Rating
Disagreeable — there were productive moments of low boiling and some unresolvable ambiguity in the room. We believe that these moments are the strongest opportunity to develop original insights that can help you make better decisions.
Key Takeaways, Quotes,
and Moments:
In the fashion industry, the backend always powers the next innovation.
- The fashion industry is fundamentally design-driven. This explains the curious relationship it has with technology - on one hand the industry is introducing cutting edge technology to advance item tracking and authentication, while on the other hand, every year we see it chasing a new CX trend like NFTs or AR items. The design ethos cannot sustain new tech forces beyond a single seasonal trend cycle.
The secondary market is creeping up on the luxury market.
- Luxury brands don’t have to think about the secondary market because the ultra-net-worth buyer is never going away. Their reliable purchase activity is a certainty that keeps the luxury market viable.. Nevertheless, the secondary market is inadvertently expanding luxury brands into wider audience segments. The implications of this expansion are not yet known.
Brands have a right to authenticate their products.
- The implications of authentication quickly segmented the room into two opposing opinions. There were strong objections to adding extra costs added to newly authenticated items. These costs amounted to a new vig to fund a brand’s expansion into the secondary market. This concept led the group to question the very notion of ownership, prompting one participant to say “If you make money on my resale, I don’t fully own the product.”
“But I don’t think you should pay rent on authenticity.”
- The implications of authentication quickly segmented the room into two opposing opinions. There were strong objections to any extra costs added to newly authenticated items. These costs amounted to a new vig that powers the secondary market.
- On the other hand, the marketing, design, and manufacturing effort that accumulates into brand value is the primary source of resale value; there were several advocates for this fact in the room who were comfortable shooting down these defensive claims about rent.
Brands have to earn the right to secondary market revenue.
- The discourse concluded on a crescendo; the secondary market represents a new dimension in the relationship between brands and their customers. This dimension will drive immense and growing value for both sides but the path to revenue requires transparency and shared values. It is not enough to pad retail prices with authentication taxes that can cover resale value; the primary path to resolution involves a deeper level of community and communication between brands and their customers. The brands that will succeed in this space will earn the trust from their customers that will shape and define a more mature version of the secondary market. The one thing the room agreed on was that the secondary market is not going anywhere.
How do you react to the takeaways from the event? What have you been thinking about in this issue? Let us know and join the discourse. Reach out to me at chmiel@ondiscourse.com and we can keep the discourse flowing.
