The RealReal has been literally everywhere lately and with the amount of money that have raised along with the prospects of going public, their talk of sustainability (which I applaud) and yet another pop-up is just another notch in their belt.
The Real Real, which is expected to reach $1 billion in gross merchandise value in the next few years, has stayed true to its premium positioning while promoting sustainability and authenticity. Since unveiling in November its first bricks-and-mortar store in Manhattan’s SoHo — another unit is bowing on Melrose Avenue in Los Angeles this summer — the online luxury consignment site has achieved a measure of omichannel congruity.
Chief merchant Rati Levesque discussed The Real Real’s clicks-to-bricks journey, which included finding more ways to interact with consumers, both online and off, and the need for a flexible mobile platform that could weather the rapid changes roiling the industry.
“We’re a single stockkeeping unit business,” Levesque said. “When you walk into the store, all the inventory you see is also available online. To make sure an item isn’t purchased both online and in the store, we developed proprietary technology around making sure the item is very dynamic and we’re pick, pack and shipping in real-time. When a customer tries on something in the store, it automatically goes on hold on the web site. A lot of this was done internally as well as through RFID.”
The store doubles as a fulfillment center where employees pick, pack and ship. “If you come in on a Tuesday and come back the following Wednesday, the store will be totally different and the inventory will have changed completely,” Levesque said.
“We’re taking in millions of items — even just this year — and we wanted to make sure we were giving customers the full 360-degree view of our inventory in our digital space, warehouses and brick and mortar locations,” Levesque said.
The Real Real captures information about members who visit the web site, such as product preferences. “By the time a consumer enters the store, we know what they’ve obsessed over, we know if they’ve ever consigned or if they’ve purchased. We’re able to give them a more personalized experience when they walk in the door. We can also send a push notification when they’ve obsessed over a watch they really like and bring them to the store.”
The Real Real, which counts 9 million members worldwide, has sold 8 million items since its launch seven years ago. Many of those items were acquired via white glove pickup service, where luxury managers visit consignors’ homes to consult on their products’ resale value. “They’ll say, ‘Keep these Manolos, you’ll get more for them later,’ or ‘Sell this coat in the winter when it will be worth more,’” said Levesque of the service, which is available in 60 U.S. cities.
The Real Real uses an algorithm to price products, based on supply and demand, with velocity also taken into consideration. “We make sure we are pricing items to move quickly,” Levesque said. “We’re always testing higher prices. When Phoebe Philo was leaving Céline, we were able to increase prices by 30 percent and we still saw the same velocity of items moving quickly.”
To critics who say The Real Real is siphoning sales from the full-price market, Levesque said that’s not the case. “What we’re finding is that people are taking the money they’re earning with us and spending it in the primary market,” she said. “They’re going out and buying the new Chanel item, the new Gucci item. Over the next couple years, we’re going to be putting $1 billion into consumers’ hands from [commission on] items they’ve sold with us and they’ll spend that in the primary market.
The SoHo store on Wooster Street leverages many of the The Real Real’s capabilities. Clients can drop off items for consignment and have watches and jewelry authenticated. A luxury repair service extends the life of products “even if you didn’t buy a handbag or pair of Louboutins from us,” Levesque said. “You can get a watch or piece of jewelry repaired. Expert workshops are held about three times a week. A gemologist might talk about the history of Cartier or a [handbag] expert could explain how to tell if your Chanel bag is the real deal. There’s great attendance for those events, anywhere from 20 to 100 people at each one.
“You’re not going to find salespeople on our sales floor,” Levesque said. “You’re going to find the gemologists and watchmakers and fashion historians. They’re not only going to tell you that something looks nice on you, they’ll say, ‘You should buy this because you’re going to make 80 percent back of the cost back when you’re done with it.’ Those are the kinds of conversations that are happening.”
Originally posted on WWD
Just a side note, until they get their authentication issues under control, this is going to be a huge issue for them in moving forward.