The Real Real has entered into a strategic partnership with Neiman Marcus.
The luxury consignment e-commerce site and the retailer have formed a consignor gift-card program that will offer The Real Real’s consignors commission payment in Neiman Marcus gift cards with an additional 10 percent added to the value of the payout. The program encourages consignors to put their money back into the luxury retail market, and consign again with The Real Real once they’re done with those items, completing the full luxury life cycle.
“We’re going to pay out over $100 million to consignors in 2015,” said Julie Wainwright, founder and chief executive officer of The Real Real. “We found out that 40 percent of our base would prefer a gift card with an incentive. About $40 million will start flowing to Neiman Marcus.”
Earlier this year, The Real Real tested an in-store consignment program at six Neiman Marcus locations. The partnership expands the program to 34 Neiman’s stores across the country. Stores will have signage advertising The Real Real’s consignment services and sales associates will work with The Real Real’s luxury managers in each market to provide personalized consignment services and white-glove pickup for customers.
The Real Real, which aims to do $200 million in sales this year, is working to roll out similar programs with other luxury retailers. “We’re talking to all of them,” Wainwright said. “Neiman Marcus was absolutely the most progressive and understood this was something their customers wanted.”
“Neiman Marcus always puts a priority on enhancing our customer’s shopping experience and exceeding her expectations,” said Wanda Gierhart, chief marketing officer of Neiman Marcus. “Through our partnership with The Real Real, our customers can now schedule a private, in-home consignment with The Real Real through all Neiman Marcus stores. After seeing the increased demand for this service since its pilot program launched in February, we recognized the benefit of offering the service to our customers across the country.”
The Neiman’s deal gives The Real Real a direct pipeline to consignors who shop at one of the country’s top luxury retailers.
Wainwright said there’s been “a huge shift in luxury customers wanting to get maximum value for their products. Part of that is the after-market sale. This is about the shift in consumer behavior and expectation.”
Wainwright sees luxury products as investments. “You wouldn’t buy a car if you didn’t think you could resell it,” she said. “About 45 percent of people in the test had never consigned and didn’t understand how much value they had in their closets. Until we roll this out, we don’t know” how much merchandise there will be.
In addition to ready-to-wear, shoes and handbags, including Hermès’ Kellys and Birkens by the dozens, The Real Real sells fine jewelry by Van Cleef & Arpels, Chanel, Cartier and Bulgari, and watches from Rolex, Tiffany & Co. and Hermès. There is also fine art from famed painters such as Julian Schnabel and Robert Rauschenberg, to photographers Matthew Rolston and Annie Leibovitz.
The Real Real only accepts labels on its master list of brands. Top brands sold include Chanel, Hermès, Louis Vuitton, Christian Louboutin, Prada, Céline, Jimmy Choo, Gucci, Valentino and Burberry. Wainwright said there’s a 90 percent overlap in brands accepted by The Real Real and brands sold at Neiman Marcus.
“Originally, we took every brand that Neiman Marcus, Net-a-Porter, Saks Fifth Avenue and Barneys New York listed,” Wainwright said. “That became our master list. We review it every month to see which brands are rising and falling. My bet is that more people will spend on the higher-value brands at Neiman Marcus now.”