Gucci Wallets, Handbags and More offered at The RealReal
The RealReal has become a worldwide success by turning fashion into a profitable investment for millions of consumers. In the past, luxury items and clothes with high-end designer labels might have been left to gather dust in closets around the world, but owners of those items can now resell them through this high-end consignment service. New consumers can buy the previously own garments at a discount, while the original owners receive a share of the profits from the sale.
Rati Levesque, who studied economics and previously owned a boutique, helped to launch the company in 2011. Today, she works out of San Francisco, where she serves as the consignment business’ chief merchant. She says the business works so well, because it works for consumers on both ends of each transaction. For the seller, their luxury purchases are no longer just indulgences. When they buy the latest Gucci handbag, for instance, they know they can resell it later and make back as much as 80% of their purchase price.
For consumers, the service, which is now valued at $450 million, offers an opportunity to buy top name brands at enticing discounts. It also gives them an opportunity to sample a designer’s products, before investing in more clothing and accessories from the same designer. If they like Gucci handbags, for example, they may return and look through The RealReal’s inventory for garments bearing that designer’s name.
Ms. Levesque adds that the company is ever evolving, as well. They stay up on the latest trends and pay attention to the new rising stars in the world of fashion design, so they can be aware of consumer needs. The consignment service wants to do more than simply supply brand name products. They want to remain on the cutting edge of fashion and offer consumers discounts on the items they really want.
The RealReal makes use of data analytics, as well. They comb through sales data to determine which products are in high demand. This helps them let consignors know when it’s the right time to sell specific items, which they may no longer want. Selling an item, just when consumers are clamoring for them, can earn consignors the highest profit on their items.
The system works well for consumers, as well. The company examines how well items sell to determine how to price them in future offerings. For instance, if Gucci wallets haven’t sold well in the past, consumers will likely see future wallets priced at a discount. The business operates strictly on the premise of supply and demand, so items that aren’t as sought after will be priced lower than those items that sell more quickly.
Rati says that the best part about the business is that each customer will eventually become a consignor. When they no longer use their purchases, they can return to the store as a consignor and earn back between 60-70% of their original purchase price. The RealReal executive stresses that each consumer has the opportunity to turn any purchase into an investment by consigning it back to the sales team.
Since its beginnings, The RealReal’s growth has been unstoppable with stores in New York City, Los Angeles, and San Francisco doing particularly well. Ms. Levesque says customers and consignors are selling and reselling their items at an increase of 40%, compared to past years. Additionally, many people walk in off the street, curious to see what the business is all about, and often leave as new customers. Between word of mouth and random walk-ins, the business almost advertises itself. More and more consumers are interested in this service, because it offers them the opportunity to enjoy a luxury item for as long as they like and turn it into a real investment.