Director-Category Marketing The RealReal
The RealReal has certainly grown big, both in terms of say the number of employees and multiple locations across the US. Did you expect the venture to turn out to be this big? Has it been bigger than you thought it might be?
It was always the plan to be a billion dollar business, as the opportunity was right there with the volume of luxury goods being sold worldwide.
How big is the luxury consignment business in the US? Both in terms of money, as well as the number of items that are sold annually? How have you seen this sector boom in the last few years? Any particular contributing factors?
$60 billion go into the US every year in personal luxury products. We estimate that in the US alone, there's about $70 billion worth of luxury items in people's closets. There are numerous reasons for this sector booming in the last few years. For starters, the consumer mindset has changed. Luxury buyers are making purchases knowing they can earn back 60-80 per cent of the original cost when they are done with them. They have learned they can leverage the ROI (return on investment) on their luxury purchases, and take those earnings to purchase the newest styles in the primary market. Our job is to educate consignors on what brands hold resale value (which can shift from season-toseason or year-to-year) so they are well-informed when shopping brands in the primary market. It's the new luxury life cycle and a key driver of the circular economy for fashion, particularly for millennials and GenZ. Consumers are also becoming more ecoconscious and gravitating toward companies and practices that share those values. Consigning and/ or shopping resale is good for the planet, and more and more consumers are taking to it-especially younger generations. Essentially, people are becoming mindful about their purchases. That's why The RealReal has become so popular-you can buy from us and resell it the next season and make up to 85 per cent back. We hear from our customers and consignors all the time that we are really changing the way they shop. Consignors will often consult with us when choosing between a Louis Vuitton or Gucci handbag as their next investment piece-because they want to know which one will earn them more when they decide to consign down the line.
The world has a consumption problem. How do you, at your end, encourage end-buyers to consume less, and fill in that missing link in the circular economy?
Many consignors have 'graduated' from shopping fast-fashion, which is harmful to the environment and doesn't hold resale value in comparison to buying designer fashion that is well made, more sustainable and earns you cash back.
Could you also tell us more about your collaboration with Stella McCartney?
We partnered with Stella McCartney-in an unprecedented partnership-to champion a circular economy campaign, whereby The RealReal shoppers who consign Stella McCartney will receive $100 to shop at Stella McCartney in the primary market. It's an incredibly collaborative and cooperative relationship. The campaign was announced on Earth Day, though the partnership continues beyond. Sustainability is a core part of who we are and what we do every day (as with Stella McCartney), so we wanted to harness the spirit and relevance of Earth Day to really shine a light on the importance of a circular economy and its positive impact on the environment. We're encouraging people to extend the life of luxury items so that we can keep them out of landfills and put them in the hands of new owners. Brands are realising the benefits of the secondary market-not just in helping extend the reach and covet-ability of their brands, but also the sustainability benefits. We're hoping that this partnership and campaign will give rise to more like it-whether that involves us or others.
And, also about being a member of Ellen MacArthur Foundation's CE100 USA?
The RealReal was the first luxury consignment company to join the Ellen MacArthur Foundation, the global thought leader in the circular economy. We recognised the inherent nature of circularity in our business, and we wanted to be an active participant in developing initiatives and spreading the word.
Fashion itself is global, and you ship worldwide too. Any plans of going global with your brick-and-mortar outlets? Or plans to collaborate with others elsewhere?
Introducing and building out brick-and-mortar was a big (and exciting) change for us. It's been an important extension of the brand and allows us to expand our service offerings. The stores have been an excellent way to introduce luxury consignment to those who aren't quite comfortable shopping online for more high-value items. To date, roughly half of the people who walk into one of our locations have never heard of us before and half the people have never consigned before-they are more comfortable doing business in a physical location. We have a team of experts in the store, and customers are able to get items authenticated, tailored, repaired, and valued all at the store-not to mention the store hosts a number of expert workshops open to the public each month. This element of our omnichannel business establishes a sense of trust and community that cannot be communicated in the same way online. We'll be looking into expanding our brick-and-mortar footprint in the near future given how integral it's been for the business
Fibre2Fashion has a diverse global readership, and delivers unique, authoritative and relevant content. Drawing on the expertise and credibility that we have built over the years and contextualising them with our in-depth research studies, we produce authentic news, articles, reports, interviews and interactive explainers through the F2F Magazine and compendiums, among others, which help readers stay abreast with the industry trends.