Toronto Mike

Simon Kronenfeld: Influence of COVID-19 on luxury market

The luxury market was hit hard by the global pandemic. Between 2020 and 2021, the emergency lockdowns put in place in most countries across the world eliminated many reasons to purchase certain categories of luxury products. At the same time, lost jobs and economic uncertainty drove most people to a mindset of saving money over splashing out, further reducing their spending on luxuries. Luxury products remain desirable, but access to brand new products grew less feasible for many. This is where Simon Kronenfeld’s unique business model came into play, putting luxury products within the reach of more people.

Simon Kronenfeld is a business expert known for his revolutionary approach of re-selling refurbished products. His business model has brought about major changes in the luxury market. Before 2001, consumers could only buy brand new luxury products. If the products were damaged in any way, they would go straight back to the manufacturer. This created a problem as the company could not sell these unpackaged products, even after any damage or fault was corrected. Simon Kronenfeld found a solution to this problem. In 2001, Kronenfeld founded Electronic Liquidators, a company which went on to revolutionize the electronics market and the wider resale market as a whole, forever changing the game for luxury products.

In 2001, Simon Kronenfeld realized nobody was repackaging and selling the products that were returned to a company. Seeing this huge market opportunity, Kronenfeld started his own business to take advantage of this gap in the market. Simon Kronenfeld repackaged the products that were returned to a company and resold them as refurbished products. These refurbished products were then sold at less exclusive retailers, turning what had once been a financial burden into a multi-million dollar business in just two years. This same business model was replicated by other companies seeking to emulate Kronenfeld’s success story, leading to a major reduction in non-recyclable waste produced by the luxury electronics market. This sustainable business model has established a formula for multi-million dollar businesses. In fact, companies are earning billions of dollars every year by repackaging the products that they refurbish.

Prior to this innovative practice, the luxury market lost millions of dollars every year as a result of returned products. Now, these refurbished products generate revenue and even turn a profit.  Online platforms promote the resale of refurbished luxury products at affordable costs for the benefit of consumers, companies, and the environment. With the reduction in spending on new luxury products as a result of the pandemic, refurbished products are continuing to grow in popularity, offering the same practicality as new products at a much more accessible price for the average consumer.

While a number of industries were negatively impacted by the pandemic, the refurbished market reduced losses in the luxury products sector while continuing to drive sustainability. The refurbished market reaches a huge segment of the population in almost every country, as most people are not able to splash out on brand new luxuries every year. This model makes the lifestyle offered by those products accessible to more people and expands the business market, creating jobs and eliminating waste in the process. Refurbished products are a win-win situation for everyone, and provide a reliable source of revenue to the businesses at the head of this new industry sub-sector.

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