Most fashionistas in New York City have heard of The RealReal. It is a consignment luxury fashion shop that used to operate only online. However, the owner did some local market research and decided to set up a pop-up store in the SoHo area. It was a huge success, and the company opened a permanent location soon after that. Gently used clothing was popular for several decades as thrift stores emerged in nearly every city in the United States. Savvy shoppers knew that they could often find high-quality clothes that were barely used or never used for a fraction of original retail prices. Eventually, the idea continued with online consignment shops and auction sites such as eBay. People also used online consignment stores to sell designer clothing and fashion accessories. The RealReal was one of the pioneering companies for selling luxury fashion products, and it became an authority figure to both shoppers and sellers.
The Luxury Resale Market Today
The market is hot, and The RealReal is taking advantage of many opportunities. One major resale company predicts that the resale market for retail items will grow to more than $40 billion by 2022. According to recent data, stores that sell used merchandise represent a fast-growing category with 7.6 percent growth during the first half of 2018 alone. Last year, the market saw a gain of more than 11.5 percent. However, it is likely higher since the research did not include luxury fashion resale companies such as The RealReal and its competitors. During its first year of business, The RealReal brought in $10 million in sales. In 2017, the company’s total sales exceeded $500 million. Also, the company has acquired funding of more than $288 million since its founding.
The RealReal’s Start
The company was founded in 2011 by Julie Wainwright. She operated the business online and then opened the New York City retail store. A second store recently opened as well on Melrose Avenue in Los Angeles. The street is famous for trendy stores, and many savvy fashionistas frequent the area. It is near Glossier and the Nordstrom Local concept store. One thing that it has in common with Glossier is its online origin. In the new store, there is a special section that is dedicated only to men’s fashion. The RealReal focused mostly on women’s apparel and accessories in the past. However, the company reported rapid growth in men’s fashion sales. The RealReal hopes to open additional stores in other parts of the country. Julie Wainwright is a good business strategist and tests popularity ahead of time by opening pop-up stores in various locations first. The company plans to open test stores in places such as Las Vegas and San Francisco.
Retail Stores Versus The Site
According to the owner, the retail stores help fulfill the needs of customers in areas where the name is popular. If everyone used the site, it would be much harder to fulfill each customer’s needs. Also, the stores help increase sales. The average order in a retail store is about two times as much as the average online order. Customers who shop in the retail stores can try on items as well. As one shopper said in an interview, she liked the privilege of shopping in the store because of the opportunity to see and feel the clothes. She said that the fabric may look different in a photo. Also, sizes are important to shoppers. However, each designer’s size standards may vary. While one designer sells a shirt that is a size 10, it may fit like another designer’s size 12. To help combat this problem, The RealReal divides its clothes up in estimated segments such as small, medium and large. Another reason why shoppers like going to a retail store is because they can determine a proper fit based on a size. For example, a shirt that is categorized as large may actually fit a person who usually wears a small size if it is meant to be loose or baggy.
Store shoppers also enjoy the overall experience at The RealReal. When they walk in, they are cordially greeted by an employee and are offered personalized customer service. They also get the feeling that they are a top priority since they have first pick of anything in the store. If a shopper picks up a garment, an attendant scans the tag. The scanner is connected to the online shopping system, which temporarily removes the garment from the inventory. If the shopper buys the item, the system removes it permanently. However, it becomes available again if the shopper chooses not to buy it. One customer said that the experience of shopping in the store was thrilling because she knew that any item could be gone by the next day. This sense of urgency causes many customers to purchase items immediately if they like them. Also, knowing that new merchandise is added daily makes frequent trips to The RealReal feel like a treasure hunt to fashion lovers who enjoy a good bargain.
When people shop at The RealReal in New York City’s trendy SoHo neighborhood, they can make a day of it and relax. There is a coffee shop in the building. Also, they can treat themselves to some fresh blooms from Fox Fodder Farm. Since The RealReal is an authority figure on gently used luxury fashion goods, it takes its responsibility to customers and to the public seriously. To demonstrate this, the company offers weekly lessons about luxury fashion. From fake handbag identification tips to care tips, it offers a variety of useful information to help customers enjoy their items longer. The store’s setup is also an attention-grabbing visual experience. At first glance, the store looks open and spacious. However, there are pull-out racks in wall cabinets, and they are filled with rows of clothes, handbags and other accessories. There is also a curated space for featured pieces and themes. This focal point changes frequently.
Sellers often like The RealReal experience just as much as buyers enjoy it. If they want to sell items on consignment, they can make an appointment to meet with a valuation specialist. The company’s trained specialists know how to research each item and how to verify authenticity. This is a process that the company never cuts corners on, and it offers authenticity assurance to its buyers. Sellers are welcome to visit the store, and there are comfortable sofas for them to relax on while they wait for their items to be appraised. The RealReal has a reputation for paying sellers quickly after their items sell. While most clothing sells fast, some items may stay on the site for a while.
For sellers who visit the Melrose location in Los Angeles, there is a convenient drop-off service. They still receive prompt service and appraisals. As it is with the SoHo store, valuations at the Melrose location are free. Sellers can simply book an appointment online or by phone. Since the owner knows that a unique part of the in-store experience is feeling like a VIP, the Melrose location offers a personal shopping perk for customers. If they see an item online and want to try it on in the store, they can reserve it. While the item is reserved, it is temporarily removed from the website’s inventory. Additionally, the new Los Angeles store has a refreshment bar with Sightglass coffee, and there is an outdoor patio with free Wi-Fi for customers who want to take a break. The Melrose store also offers workshops about authenticity.
The RealReal: Unique Fashion
As Julie Wainwright said in an interview, many people from older generations used to keep their consignment shopping a secret from people. However, younger people today often brag about finding a good deal on second-hand clothes. Since people have been more open about their love for bargain hunting, Julie knew it would be a good idea to open retail stores. Many shoppers who come to The RealReal say that they are tired of typical fashions and do not want to conform to what is popular today. They are often annoyed that trends change so quickly, and many people just want to wear what they like. For this reason, The RealReal is a good choice. People can buy unique modern styles or vintage items. They can wear a pair of vintage pants with a modern shirt to make their own style. For shoppers who want to build their own ensembles, The RealReal is the perfect place to visit.
According to The RealReal’s chief merchant, modern styles include a lot of layering and mixing. Although fusion looks produce some specific style trends such as athleisure, which blends athletic and casual fashion items, many people prefer to create their own elements of fusion fashion. Some people mix formal accessories with casual attire or wear a mixture of formal and casual garments in layers. While The RealReal’s price tags are not cheap, they are more affordable than full-price luxury designer goods. One shopper who visited the SoHo store said that the price tags were often around $300 or $1,200. Since some items were higher, she felt compelled to buy lower-priced items when she found them. The pricing gap adds to the sense of urgency that many customers feel when they find something that fits and is unique. As Julie Wainwright pointed out in an interview, many Americans today are value shoppers. Some buyers also become sellers and vice versa. She said that buyers often make a purchase after they sell something else on consignment.
Not all people who visit The RealReal like to wear what they buy. For some individuals, the treasure hunt is about collecting or archiving. Many people who come in there look for vintage handbags, dresses, shoes or other items from a specific designer. Once in a while, the store receives a rare item that is especially valuable to collectors. When The RealReal values and prices items, it considers this as well. It strives to give sellers the best value for their consignment items and shoppers the best price for each item. However, some people who love last season’s fashions or styles from a few years ago often like to look for gently used clothes. Although some fashions go out of style, a person may not get tired of them for many years. With individualism as a top trend, many younger people today do not have any reservations about wearing styles that are considered outdated. Some shoppers see items that they admired in the past and wanted to buy but decided not to at the time. If they find such items at The RealReal, they are excited to have a second chance to own them.
How Resale Retailers Help The Luxury Fashion Market
While some designers and luxury fashion stores may see The RealReal as a threat, it could actually be helping them. One of the reasons why the company is so important is because it introduces new customers to luxury fashion. When people who may not otherwise buy luxury fashion products purchase them from The RealReal, they get to experience the privilege of owning unique items and the benefits of buying high-quality merchandise. Many of these people develop a taste for luxury fashion and wind up buying new items from designers or from distributing companies.
The RealReal is essentially a champion for creating first-time luxury fashion customers. One of the common reasons why people buy from The RealReal for their first luxury fashion purchase is because they want to see what luxury items feel like or how long they last before they buy new items. Also, if shoppers know that they can put a new item that they buy on consignment later, they feel more confident about buying it. The purchase does not seem like a loss if they have some assurance that they may get 80 percent of its value back.
Julie Wainwright knows that customers are smarter today, and she said that no business should underestimate the intelligence of modern shoppers. With the availability of the internet and an endless stream of information, they are more educated and informed than ever. Julie and her expert team also pay attention to what fashion lovers crave the most from the new market and from the resale market. According to the company’s recent data, Gucci is the top-selling brand. Louis Vuitton is a close second, and Chanel ranks third in popularity. Cartier, Tiffany, Dolce & Gabanna, Saint Laurent, Tory Burch and Fendi are also gaining momentum. However, the Isabel Marant and Goyard labels are decreasing in popularity. For average popularity online and in stores, Prada, Burberry, Valentino and Christian Louboutin are a few of the names on the list of the top 10 designer labels. For men, Yeezy X Adidas shoes from Kanye West are especially popular. The company said that Hawaiian shirts, fanny packs and ball caps have been hot-selling items recently for men.
The RealReal: Online Popularity Grows
SimilarWeb data showed that The RealReal increased its online presence in 2018. During the past two years, the company saw an average of more than 2 million views each month. That figure included both mobile and PC traffic. This means that the company’s traffic increased by more than 30 percent from the prior year’s number. Although the overall average was in the lower 2 million range, the average for the first half of 2018 was 2.5 million views per month. In the first half of 2017, the monthly average was 1.9 million views. According to visitor data, the average visitor clicked through about 10 pages of content, and the bounce rate was 35 percent.
Research also shows that most site visitors know what they want. About 50 percent of the site’s current traffic comes from people who go directly to the online store. More than 20 percent of people find the site from an organic search. This is good news for The RealReal, and it does not have extensive advertising needs. Less than 10 percent of visitors come to the site from clicking paid advertisements. According to demographic data, most site visitors are between the ages of 24 and 34. However, nearly all of its visitors fall into the broader age range of 18 to 44. Since The RealReal has been around for several years, it has witnessed generational shifts. According to Julie Wainwright, millennials are the most powerful and most educated group of shoppers, and they are the key to the future success of The RealReal.
The RealReal keeps its commitment to take good care of its loyal customers. On its site, it offers special deals and discounts. For example, sellers who want to list a Stella McCartney consignment item with The RealReal currently receive a $100 gift card to shop sustainably for new merchandise. Also, people who come in and sell items on consignment may qualify for a same-day shopping credit if they want to browse The RealReal’s racks and shelves.