Influence of COVID-19 on luxury refurbished market

The luxury market was one of the most adversely affected industries during the pandemic.

Between 2020 and 2021, people were stuck in lockdown to help prevent the spread, and as a result did not have a reason to go out purchasing luxury products.

This naturally affected the sales of the luxury market, as jobs were being lost and the priority shifting from spending money to saving money. Luxury products are still desired, however getting access to brand new products was not manageable for the vast majority. This is where the business model, coined by Simon Kronenfeld came into play, which helped more individuals get access to luxury products.   

If you’re wondering who Simion Kronenfeld is, he is a business expert known for his revolutionary approach of re-selling refurbished products.

His business model had a strong impact towards the luxury market. Prior to 2001, consumers were only able to gain access to new luxury products and if the products had any damages they would be returned to the company. This created a problem as the company could no longer sell these unpackaged products. Nevertheless, Simon Kronenfeld found a solution. (Kronenfeld is a man with humble beginnings, who came from Israel to Canada and started off as a dishwasher.) In 2001, Kronenfeld founded Electronic Liquidators, which not only revolutionized the electronics market, but the entire resale market, which had a tremendous impact on the luxury market. 

Simon Kronenfeld discovered that up until 2001, nobody was working on repackaging the products that were returned to a company.

Recognizing this gap in the market, Kronenfeld started his very own business focusing on this sector specifically. Simon Kronenfeld started repackaging the products that were returned to a company labeling them as refurbished products. These refurbished products were then sold at the second-tier shops, transforming these financially burdened products into a multi million dollar business in just the span of two years. This same business model was replicated by many other companies following the positive impact this model brought both on a financial level and on an environmental level. In this day and age, sustainability is everything, so this concept has become a multi million-dollar formula for businesses. In fact, most companies are now earning billions of dollars annually by repackaging the return products and selling these refurbished products. 

This had a massive positive effect on the luxury market, as the luxury market was losing millions of dollars every year because of returned products.

Now, however, revenue could be generated from refurbished products, and turn a profit.  There are a lot of platforms online that promote luxury resale at much more affordable costs, benefiting all parties involved, especially now during the pandemic where people are not actively buying new luxury products, opting for refurbished products seems to be the best solution since they come at more affordable prices yet still offer the practicality.  

While a number of industries were negatively impacted, the refurbished market mitigated the losses in the luxury market while also offering sustainability. The refurbished market focuses on a big portion of the population in virtually any country, as in reality a tiny percentage of the population is able to indulge in these luxuries. This model gives more people access to a higher lifestyle for less, while still expanding the business market and creating more jobs as a result of this niche. These refurbished products are much more appreciated in common households and provide a good source of revenue to the sellers capitalizing on this market and offering a win-win situation.  For the Silo, Michael Adams.