The RealReal has taken the luxury consignment world by storm, facilitating over $710 million transactions last year across nearly 9 million clients. At present, they are bringing in more than $500 million in estimated revenue. The company, which began at CEO Julie Wainwright's kitchen table, offers the perfect way to buy and sell luxury goods. Popular goods include designer clothing, bags, jewelry and watches, and shoes. The most highly sought after brands include Prada, Louis Vuitton, Chanel, Dior, and Alexander McQueen. The company claims that you can enjoy up to 90% off retail prices while sellers are given up to 70% of the sale price of their items.TRR was the first resale company to go public last July, and raised $300 million in its IPO.
The company fills an underserved niche, as the internet runs rampant with fake or knock off designer goods. The RealReal addresses buyers' concerns about buying a knockoff product; each piece is authenticated by a team member and they guarantee that you are buying an authentic good. The RealReal's website states that they employ over a hundred brand authenticators and gemologists who work with each piece to guarantee you are getting exactly what you've paid for. From start to finish, The RealReal seeks to market that luxury experience that is correlated with purchasing expensive goods. Down to the perfect photography of the items, there is no aspect of their process that has not garnered a serious amount of thought.
Their Instagram boasts over 400,000 followers and is highly active. Posts range from spotlights on particular pieces to valuable advice on how to care for your luxury pieces and extend its life as much as possible. They also have spotlights on TRR members who are enjoying their new pieces.
The RealReal excels in creating the luxury experience that is often expected when someone chooses to buy a luxury good, even if it is secondhand. In addition to their beautiful website, they maintain four retail stores in New York City, Los Angeles, and San Francisco. The San Francisco store, as an example, is referred to as the "Ritz Carlton" of luxury consignment. The store is 8,000 square feet and is the ultimate luxury experience, down to having iPads with interactive descriptions of the goods.
Their consignment services offer a luxury experience. They offer at home pickups, called "White Glove" pickup service. You are also able to visit a luxury consignment office where you will learn the value of your item. TRR reports that their store locations are hot spots for consigning, as the store offers high quality experiences that lure clients to consign their items. When you are not able to get to a store, they offer free direct shipping. Commission is based on their consignor loyalty program, and you will earn more for in demand items. Item commission rates depend on the value of your item and can be found here. At the top, you earn 70% of items that are valued at over $10,000 and 50% of items priced under $200. They do all of the work for you; they accept, photograph, authenticate, and list the item for you. When you sell, all orders shipped outside of the United States are Delivery Duty Unpaid. The recipient of the order is responsible for paying any duties and local taxes assessed by your local customs office. TRR currently offers international shipping to 61 different countries worldwide. They also claim that most items sell on the website within three days of their listing.
The RealReal also has a great app that brings the luxury experiences of the website or the store right to your phone. They have also updated the program given the current landscape of a COVID-19 society. You can schedule your virtual consignment appointments through the app and all potential shipping delays are clearly outlined when you are purchasing items on the app.
In looking to the future, TRR looks to find ways to grow brand partnerships without brands feeling as though second hand consignment devalues the luxury aspect of their goods. Rather than sell at a discount, brands such as Saint Laurent and Gucci are considering collaborations with The RealReal to expand their brand's reach and are recognizing the strong opportunity to reach more clients through the secondhand luxury market. As a powerful example, Burberry has vowed to stop burning millions of dollars of unsold stock each year in the attempt to prevent discounted or second hand selling and instead has partnered with The RealReal. TRR predicts that other designers will likely follow suit in the coming year.
In light of COVID-19, some of The RealReal's business practices have understandably changed. At the moment, San Francisco locations are closed due to the Bay Area's shelter in place requirements. If you would like to make a consignment appointment, you are able to do so online. After your appointment, there is complimentary UPS pickup that will get your item from your home to a TRR location. Online orders are proceeding as normal, although they do acknowledge that there is a probable shipping delay on items and overnight and 24 hours shipping are not available. They also say that your consignment process can be delayed up to seven weeks in light of the crisis.
In light of predictions for the future of the economy, TRR can actually expect to see consistent profits or even an increase. According to Forbes, a potential recession and its substitution effect could bring new clients into the secondhand luxury good market. Customers might decide that they do not want to spend full price on luxury designer goods, and people who have luxury fashion at home might want to list it on the site if they are looking for some extra fast cash.
They are also committed to the wellbeing of their team members, and all are being fully paid whether they are currently able to work in person or remotely for the duration of this pandemic.
