The RealReal was established in 2011 but its CEO Julie Wainwright. She has said that she wanted to modernize the consignment industry, particularly when it comes to luxury brands. Her company primarily sells consignment goods online but they recently also started to operate brick & mortar locations in a few cities. They have 9 million members as of September 2018 and annual revenues in excess of $500 million.
The items they sell are gently used luxury brands, although they do also sell some brand new items. In 60 cities across the United States, they can send a person out to the consigners home or office to pick up the item they want to sell via consignment. For people not in one of these cities, they are able to mail their luxury brand for free to one of The RealReal’s warehouses.
Once The RealReal has an item in hand they run it through an authentication process, removing any products that are not genuine. The product then has a photo taken of it and an expert assigns it a price. The consigning party gets 50% to 70% of what the item is sold for with the percentage going to them getting higher for more valuable items. The RealReal gets their cut of the sale and that is how they make money.
In order to get new members, The Real Real uses a number of marketing tactics. This includes hosting events, making effective use of social media, direct mailings, and targeted online advertising. They also now have two physical stores in Los Angeles and New York City. The pop-up stores have appeared in San Francisco, where this company is based, and in Las Vegas. These physical stores attract both customers and consignors to them and so serve as effective marketing tools.
CEO Julie Wainwright has her eyes on expanding The RealReal. This could include getting luxury goods from other businesses such as authorized retailers or even the brands themselves. It is also said that the executive team is looking at possibly doing an initial public offering.
Find out more about The RealReal: https://www.businessoffashion.com/articles/bits-bytes/bits-bytes-the-realreal-hunts-for-funding-robots-to-replace-humans-in-retail