Luxury consignment retailer The RealReal Inc. has had a busy 2018.
It opened its second-ever bricks-and-mortar location in Los Angeles, fired up its co-marketing initiatives and continues to grow. The RealReal now has 1,600 employees, has sold 8 million items and is on track to achieve $1 billion in lifetime sales within the next couple years, says Rati Levesque, chief merchant at The RealReal. The consignment retailer, No. 184 in the Internet Retailer 2018 Top 1000, had an Internet Retailer-estimated 31.0% growth in revenue from 2016 to 2017, with 2017 web sales in excess of $240 million. Additionally, it has raised $288 million in funding to date, according to Crunchbase.
In March of this year, The RealReal hired former Walmart Inc. executive Jun-Sheng Li as its chief operating officer and former Amazon.com Inc. executive Len Eschweiler as its chief revenue officer—two newly created positions at The RealReal. Walmart is No. 3 in the Top 1000. Amazon is No. 1.
Li was tasked to assist with opening new e-commerce fulfillment centers as the business grows. The RealReal now has three e-commerce centers, one in Secaucus, New Jersey, one in Brisbane, California, and a third it opened this year in Perth Amboy, New Jersey. Altogether, The RealReal has about 1 million square feet of e-commerce space, with the New Jersey center more than doubling its previous square footage, says Levesque, who added that “we’ll look to automate more of the work in the e-commerce centers as well.”
Retail footprint
The RealReal wants to expand its bricks-and-mortar footprint even more in the near future, says Levesque. After a successful pop-up shop experiment in New York City in December 2016, the retailer decided in November 2017 to open a permanent location in the SoHo area of New York City.
“We found that the in-store experience really crystallized the entire business and brought our brand to life,” Levesque says. “Shoppers had access to our in-store experts, they could drop off consignment, they could send items to the store to try on, and they could see—in person—the high-quality and beauty of the items. Something that’s often lost with shopping online.”
The physical location has helped The RealReal increase brand awareness and acquire more consignment items. Los Angeles was the next logical step for a store location, Levesque says, because it’s such a densely populated area and close to its Brisbane e-commerce center.
“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. But they are more comfortable doing business in a physical location,” Levesque says.
Sustainability efforts
Earlier this year, The RealReal worked with fashion brand Stella McCartney for a sustainability campaign that launched on Earth Day and continues today across its marketing channels, including social media, television ads and direct mail. Shoppers are encouraged to “extend the life of luxury items to keep them out of landfills and put them in the hands of new owners,” Levesque says. Shoppers who consign any single or multiple Stella McCartney items with The RealReal receive a one-time credit of $100 to spend on Stella McCartney items at Stella McCartney stores and online.
National Consignment Day on Oct. 1 is its next big push in which The RealReal will promote sustainable shopping with a message of, “Be kind, consign.”
Following the Stella McCartney campaign, The RealReal launched a new tool to encourage sustainability beyond National Consignment Day called the Sustainability Calculator, initially focusing on the impact of consigning women’s apparel. Its objective in creating the calculator was to establish a “sound, science-based tool to quantify the positive impact of consignment,” the retailer says.
The RealReal worked with Portland, Oregon-based environmental consultancy Shift Advantage to develop the methodology quantifying greenhouse gas, energy and water saved from women’s clothing items consigned. The retailer measured women’s apparel’s impact in four ways: by materials; archetypes, such as jackets, dresses and knitwear; fabric composites, such as silk, cotton and wool; and product type composites in which The RealReal developed an average weight to measure this by.
The initial calculation measured the impact of 2.5 million women’s clothing items consigned to The RealReal since 2012, with results showing it has offset 65 million car miles and 246 million liters of water in greenhouse gasses and energy.
The RealReal also soon plans to give its consignors the ability to track the total impact of their consignments. On their consignor dashboard, they’ll be able to see—based on their consignment history—how many car miles they’ve offset and how much water they’ve saved.
“Brands are realizing the benefits of the secondary market—not just in helping extend the reach of their brands, but also the sustainability benefits,” Levesque says. “We’re hoping that this partnership and campaign will give rise to more like it, whether that involves us or others.”