Addison Duling

TheRealReal, Bringing Value To Luxury Consignment Shopping

On February 6, 2018, FutureStores held its annual conference in Miami, Florida and one of the speaker was, Allison Sommer, Director of Marketing for The Real Real. She discussed the relevance of proclaiming “2018 the year of the pop-up.” It’s relevant to extending the brand’s visibility, adding street cred to The RealReal and building on its unique merchandising concept. Sommer said, “Stores help to legitimize your brand and give [online brands like ours] a street-level presence.” This follows on the heels of the opening of the first actual retail location in Soho, New York in November 2017. That 2016 pop-up store, amassed $2 million in sales.

Pop-up stores allows The Real Real to test the luxury consignment market in a particular area before deciding on a permanent retail space. It’s a brilliant way to increase revenue and determine the store’s success potential. Thus far, everywhere The RealReal has ventured with a pop-up store has yielded pay dirt. As it turns out customers purchase six times more items in the retail store, than they do while shopping online. This means six times the value in sales volume. The RealReal plans to continue testing markets and opening retail locations, based on consumer’s initial responses to the pop-up stores.

The founder and CEO of The RealReal, Julie Wainwright was interviewed at an event in San Francisco. In line with her company’s marketing direction, Connie Loizos of TechCrunch asked about the venture funding aspect for luxury consignment stores. As a start-up consignment retailer, The RealReal was in competition six years ago with several other competitors for funding. Julie and her staff managed their brand to perfection and went on to secure start-up capital in the amount of $123 million. While the majority of the competitors failed. Fast forward to the present day, The RealReal is now on track to bring in $500 million in sales for merchandise paid at the point of purchase. Point of purchase sales are referred to as, “Gross Merchandise Value (GMV).” Nearly 50% of the GMV sales volume has occurred through The RealReal’s merchandising app.

 

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