Luxury items used to be about high prices and scarcity. This made these items a rare investment. The RealReal is a leader in a global luxury resale market worth $6 billion. It intends to turn the industry on its head by encouraging people to buy pre-used goods for a discount.
About the Company
The RealReal is a luxury consignment service that is valued at $450 million. It offers its clients the opportunity to resell the items from brands like Gucci that they do not need anymore. It gives them a per cent of the sale. This company has a consignment of more than eight million pieces of luxury clothes, home goods, and accessories through its site, stores in LA, NY, and pop-ups. It has more than nine million members thus far. The company’s San Francisco-based chief merchant, Rati Levesque, ran a high-end boutique and studied economic before launching RealReal in 2011.
What Rati Levesque Had to Say
According to her, fast fashion is not holding the retail value. However, luxury items such as Gucci bags are. Right now, luxury is doing great. Part of the reason might be that people consider it an investment as opposed to just another purchase. In some cases, you can earn 60-80 per cent back on the item. The mindset is shifting and the data supports this. She said that about 80 per cent of their consignors would use the commission to shop in the primary market. Thus, resale was great for the luxury market.
It is all About Education
At the RealReal, they were all about educating people. They needed to know what was in vogue, what was going out of style, what they should consign or keep. They knew this well since all their data was based on supply and demand. This data is then given to the sales team who educate the clients.
They look at the history of an item. For instance, if the item has not sold well in the past and has been lying around for long, then it might be that the price is too high. The company will price it lower and see if it moves. This is how they keep real-time updates of the data.
The in-store stylists have also undergone a lot of training. This way, they do not just hold meaningless conversations with customers. Instead, they will give meaningful facts during the conversation that can be of use to you.
In the past two and a half years, they have seen watches do quite well. They have seen a growth in demand from the millennial. Even Generation Z is buying some vintage watches that feature leather straps. The top brands such as Hermes and Rolex do quite well. However, they have noticed that Shinola does well with the younger generation.
All heritage pieces and luxury brands like Gucci are doing quite well. However, other brands available at the RealReal are doing well too. People have a desire to have a unique look. This is especially so due to social media where major brands are always being flashed around.
The Use of Pop-ups
The company tested pop-ups early on. This was before they went into brick and mortar stores. They found that their business accelerated with this model. They would see a jump in sales of about 40.
The RealReal stores are all pick-pack-and-ship centers. They are like small warehouses. This is because all that you see in the store can also be accessed online. They also have an RFID system, which means there is a tag in each store that makes it easy to locate items. It is quite useful in helping to tell where an item is located and leveraging the data to boost sales.