If The Real Real continues its trajectory, the luxury consignment web site could achieve elusive “unicorn” status in a few years. The Real Real is expected to report $400 million in gross merchandise value this year, which is double 2015’s $200 million and quadruple 2014’s $100 million.
After opening four fine jewelry and watch valuation centers in New York, Chicago, Los Angeles and San Francisco — four more are planned for next year — The Real Real is going further off-line with a pop-up shop planned for Manhattan for Dec. 1 to Dec. 15. It’s a precursor to permanent store, which could bow in the next 15 months, according to Julie Wainwright, chief executive officer of The Real Real.
“We’ll create a concept store,” she said. “There may only be one in the U.S., but it could be used for expansion overseas.”
Asked how The Real Real would translate to brick-and-mortar, Wainwright said, “We’re selling the most beautiful things in the world. We created an environment online to keep the brands’ image intact. If you walked into a valuation center you’d see a beautiful environment. The store will look like any of the centers with a very high-end aesthetic, a high service level and underlying technology.”
Wainwright said she plans to work with Courtney Applebaum, the interior designer who helped Ashley and Mary-Kate Olsen with their first store, which opened in 2014 on Melrose Place in Los Angeles.
“The Real Real is the leader in the circular economy for luxury goods,” Wainwright said. “With five million members and four million products sold, The Real Real has leverage because consignors tend to be buyers and buyers tend to be consignors.
“You’ll make three times more if you sell with us,” Wainwright said. “We’re removing the friction of getting the goods and selling them.”
The Real Real has sales associates in 26 cities who visit consignors’ homes, advise them on what to sell, pack it up and ship it to one of two warehouses where it’s authenticated, cataloged, photographed and loaded onto the web site.
With women’s and men’s apparel, fine jewelry, watches, art, furniture and other products for the home, The Real Real is adding kids to the mix.
About one-third of the site’s consumers are Millennials. “We’re their gateway drug,” said Wainwright, adding that the majority of Millennials are working women, two times more likely to have a net worth of $2 million or more, and living on one of the coasts. “They love quality, luxury and value,” Wainwright said.
“If you have the supply, we have the product depth,” Wainwright said, adding that 98 percent of the products on the site sell within 90 days. The Real Real showcases trends and provides editorial for its 20 million U.S. customers, and conducts surveys several times a year to better understand why they shop.
“We’re sustainable,” Wainwright said, explaining that sustainability “is becoming more and more important in consumers’ thinking. They said they’re moving away from fast fashion.”
Wainwright said The Real Real has changed the way consumers shop, with 77 percent of shoppers and consignors saying they tend to consider an item’s resale value more when they buy at retail. Many, in fact have become “fast flippers,” buying more and selling more quickly since a product’s value starts declining after a year.
Where The Real Real historically worked with brands mainly on overstocks, Wainwright said, “We’re working with some brands and thinking about how we can work together.”
The Real Real can be a barometer of brands’ ups and downs. “We know which brands are gaining or losing momentum,” Wainwright said. For example, three years ago, the site was getting flooded with Gucci merchandise. Today, a Gucci product can sell for 70 to 80 percent of its original retail price.
The company works to identify and remove counterfeit items. About 95 percent of the products it sells come from people’s homes, so that leaves only 5 percent that may be questionable.
When consignors get a check for products they sold on The Real Real, they shop. Wainwright said 84 percent of consignors shop for luxury brands and 90 percent prefer to do their shopping in physical stores. “They treat our payouts as open-to-buys,” she said. “This year, we’ll pay out $200 million. Next year it will be $300 million or $350 million.”
More from the WWD CEO Summit: