Founded in 2011, The RealReal, that makes consignment (resale) of luxury items online possible by, among other things, independently verifying the items for the buyers before putting them up, has raised $123 million in venture funding to date and is on track to make $500 million in GMV this year.
In an interview with Techcrunch, The RealReal CEO Julie Wainwright provided a lot of insights into how the marketplace is doing.
TC: Back to your best-selling items . . .
JW: For men, it’s Rolex. For women, there are three across all age groups: Chanel, Hermes and Louis Vuitton. […]
JW: Apparel is our number-one product in unit and dollars.
The RealReal counts four buyers for every cosigner (seller). Half of the consigners also buy on the marketplace.
On the order sizes:
TC: How much do items sell for on average?
JW: We don’t give that out, but Net-a-Porter just announced that its average basket is $430, and ours is bigger. The highest sale we’ve had is $100,000, and we’ve done it a couple of times. […]
we do sell $30,000, $40,000 and $50,000 items on a regular basis.
Like almost all online retailers with mobile apps, The RealReal is increasingly a mobile business:
our app generated about $100 million in GMV this year and it accounts for the majority of visits to the site. It’s still not half our sales, but it’s getting there.
The RealReal is one of very few online retailers where a (sensible) retail store strategy might make sense..:
We now have about 75 people who are gemologists, watch experts, art curators or brand authenticators and in December, we decided to put a handful of them into a pop-up store in [New York’s] Soho for two weeks to showcase merchandise leading in to the holidays. We did more than $2 million in revenue. Half the shoppers were new to The RealReal. Some had heard of us but they hadn’t shopped because they didn’t understand the quality. So now we’re opening our first real store in Soho. It’ll have a valuation office, but it will really be selling.
..But I would add that a focus on pop-up stores makes far more sense for The RealReal than opening permanent stores. Flagship stores in, say, New York and similar cities might make sense. But pop-up stores allow the brand of The RealReal itself to reach far more people and thus diminish reservations people have regarding buying used expensive luxury items this way.
Going further, one could even see an events-driven approach work particularly well here.
What could work well with events: The membership model The RealReal is already running:
In April of last year, The RealReal raised $40 million. The company said it will use this money mainly for international expansion. Besides supporting also other currencies than US dollars, it appears this internationalization has not happened yet.
More on this topic:
* Why Farfetch’s ‘Store of the Future’ Platform Will Be an Uphill Battle
* „Black Friday“ & „Cyberweek“: Imagine a More Events Oriented E-Commerce Industry
* Who Will Be the First Online Fashion Retailer With a Mobile-Fueled Events Strategy?
* The 3 Rules on How to Expand Marketplaces