Online start-up and San Francisco-based The RealReal has only been around for the last seven years, but this luxury consignment with a penchant and promise for authentic products is leading the charge in changing the way we shop and buy luxury items. As The RealReal continues to establish its physical presence – its first brick-and-mortar opened in NYC’s Soho neighborhood in 2017 and the L.A. store launched this summer – the emerging e-comm brand is leading the industry in consignment sales, as the lines between the primary market and secondhand continue to blur. Julie Wainwright’s vision for authenticated luxury and the idea of sustainability in fashion have taken hold, joining online brands across industries that are “disruptors,” making their way to the top with direct-to-consumer marketing and selling while outdoing more established brands in their categories. A 2018 Resale Report has estimated that the resale market will reach a staggering $41 billion by 2022, while resale “disruptors” (like The RealReal) grew at a pace of +49 percent 2017-18 versus +9 percent for traditional resale and only +2 percent for all retail. The report goes on to specify that secondhand buys will occupy one third of closets by 2027. The game has changed: consumers want to view products from the comfort found behind a bright screen, and if the shoe (virtually) fits, we’d like to have it at our front door in an inexpensive, standard, quick ship. Leading in luxury consignment, The RealReal has surpassed its competitors in funding, planning to use its excess of $280 million in private equity capital to open more stores and revolutionize the way the industry buys and sells secondhand. Just this year, the company announced RealReal 360, an innovative commerce solution that offers a unified, real-time view of inventory, product, and customer activity across platforms in a business where one-of-a-kind trumps mass-made with consumers both online and in-store.
The RealReal’s focus on sustainability has made the world of luxury fashion take note. In an industry that just five years ago snubbed its nose at the thought of secondhand, sustainability is rising to be more in demand from consumers, and the industry is moving forward to meet The RealReal at the top. Known as one of the worst-polluting sectors, the fashion industry as a whole has shifted toward sustainability as the new trend, the hot topic being the key discussion point at this year’s WWD Apparel + Retail CEO Summit that concluded last Wednesday in New York. As part of The RealReal’s mission statement and one of its top driving factors since its inception (and, inherently tied to the notion of consignment), sustainability remains a main focus for the brand, promoting the “circular economy” – the trading, re-selling and borrowing of apparel and accessories that have previously been worn by someone else. While neither the garments nor the ideas are entirely new, the willing and excited participation from luxury brands sure is. Not only because of the wholehearted “buzzyness” of the sustainability conversation, but because of the shift in the idea of secondhand. Resale has lost its stigma and brands are eager to tap into a $20 billion goldmine.
Another area where The RealReal leads is in the ever-changing world of trend reporting. With a finger on the pulse of current buyers, the industry-leading consignment company can report on trends for both the primary and secondhand markets. Due to the massive success of the brand and the new acceptance of sustainable resale, the metrics reported from The RealReal can look at trends across brands as what’s hot and what’s not are perfectly reflected with statistics from over 8 million items sold. With this unique vantage point on the emerging directions luxury buying and selling is taking, The RealReal uses data to drive revelations about what’s happening in the growing resale market and how much of that carries over into the primary. From fastest-growing brands among millennials to the most popular sneakers from coast-to-coast, preferred designers from the biggest fashion houses to the brands making the biggest comebacks – the devil is in the data and reports from The RealReal are curated to give the best insight on what’s selling, what to buy, and what’s next.
Celine vs. Céline: How Hedi Slimane’s New Vision for the Iconic Fashion House has Stacked Up Against Phoebe Philo’s Legacy
The fashion world has been abuzz around the new direction of beloved brand Celine. A decade-long stint as Céline’s creative director cemented Phoebe Philo’s icon status in the industry, and The RealReal reports that Philo-era Céline is hotter than ever. Philo was famously private, frequently declining to give post-show interviews and major releases, adding to her allure and cult following, and fans of the iconic Philo looks have stayed truer than ever to the designer since she left the house in late 2017.
Philophiles have criticized Hedi Slimane’s controversial takeover as creative director of the house, which he has since revamped into “Celine” – note, removing the acute accent from the brand’s iconic logo – and according to the Business of Fashion, fans are buying Philo pieces at higher rates than ever. Last month, the backlash hit its peak as Slimane debuted a widely criticized collection of 96 unisex looks, the nail in the coffin for Phoebe fans who remember Celine’s legacy of being not only for women but being about women, from women. This bold move put Slimane’s agenda on display for the world, all the while turning Philo’s designs into collectors’ items overnight, with The RealReal reporting a 52 percent increase in searches for Celine on the weekend directly following Slimane’s show, while metrics for the month of October continued to show the brand being searched at a steady 29 percent increase. To follow suit, prices for Philo-era pieces have also risen, ranging anywhere from 7 percent higher all the way up to 30 percent. “We are finding people to be extremely loyal to her,” said Rati Levesque, The RealReal’s chief merchant to BoF, adding that they are highlighting the Philo-era with a new collection that pays homage to the iconic designer. “We speak to Philo’s work often and even more so after she announced her departure as we are finding revenue has spiked for her pieces,” Levesque said, adding that The RealReal has used the spike in interest for classic pieces to use in marketing pushes and home page advertising on the site. “Customers are stocking up on the collection they can no longer get, therefore resale value has increased … I think she designed for women taking comfort into consideration. It’s the way women want to dress, and she intuitively understood this. Women feel good in her clothes.”
Another luxury consignment e-comm site reported searches for Celine began to increase starting in mid-August, continuing a trudge uphill as Slimane started releasing sneak peaks into designs for his debut, hinting the future of the brand could mirror the rock ’n’ roll direction he’d made famous for Saint Laurent. After Slimane debuted his inaugural collection for the “new” Celine, it was quickly and wholly viewed as a catastrophe for the brand. Fans and critics of the acclaimed French fashion house lamented Slimane’s overused, somewhat tired designs – more than reminiscent of his collections for YSL – as rock ‘n’ roll ballerina silhouettes and skinny black suits replaced the structural simplicity and grace for which the brand had become synonymous throughout the last decade. In the six-day period preceding and immediately following Hedi Slimane’s debut of the new Celine, visits to Celine pages jumped up to 275 percent, while sales for Celine products – and Philo’s classic designs – jumped 43 percent from the previous year. On eBay, searches for “Phoebe Philo” increased by 225 percent the day after Slimane’s show and jumped to 700 in the days that followed.
Three short weeks after Slimane debuted his new collection during Paris Fashion Week, the Instagram account @oldceline founded by Toronto-based fashion student Gabrielle Boucinha racked up nearly 100k followers. The page, dedicated to Philo’s classic designs for Céline – and highlighting that very controversial accent – from the designer’s inaugural year in 2008 through her retirement in 2017 and featuring the spring ’18 collection. Boucinha features some of Céline’s most famous campaigns, chronicling Philo’s designs from past runways and serving as a dissident voice toward Celine’s new direction that speaks for an overwhelming collection of fans and buyers.
The State of Luxury, 2018: Gucci Gang
The RealReal has moved millions of products – over 8 million, it says, to be exact – and the sizable data gathered on what customers are searching and shopping for gives an accurate barometer of the state of fashion overall. In the very guarded land of luxury goods, tracking changes in search and spending habits is proving to be a reliable indicator, reacting in real-time to the “buzz” and fluctuations in the market.
Exclusive data from The RealReal charting marketplace trends, bestselling brands and emerging designers in luxury fashion resale was recently released by the e-comm giant, highlighting developing trends across the industry. Of these, the massive spike in popularity for the brand Gucci is higher than ever. The RealReal reports that search volume for Gucci bumped both Chanel and Louis Vuitton from the top of their charts this year for the first time ever, reportedly growing 48 percent faster among millennials than in any other age groups – (Louis Vuitton is the second-most searched, Chanel, Christian Louboutin and Hermès round out the top five). Gucci topped The RealReal’s charts for overall website search ranking (#1), sales growth in year-over-year (#1 – up 62 percent), buying & consigning from millennial women (#4), top brands bought by men ages 18 to 34 (#2) and top brands consigned by men in the same age range (#1).
The report also goes on to note that for the shift in consignment resale value, Gucci is up 12 percent as Alessandro Michele’s new vision for the house reigns supreme. Also trending: iconic, logo-centric handbag styles by heritage brands (like Gucci) are seeing rising resale value, and Gucci’s famous logo web design bag is up 51 percent in resale value, topped only by the it-bag of the moment – Dior’s saddle bag – which has risen 89 percent in resale value.
Gucci leads the charts in resale value for men, too, as The RealReal reports that brands who have focused on logo revivals and strong sneaker and statement outerwear offerings saw major gains in 2018 for their resale value – Gucci up 21 percent, followed by Amiri and Balenciaga. The shift for men into the dad-style staples like Hawaiian shirts and boxy hats have also spiked, with searches for fanny packs jumping up 614 percent this year, among which Gucci rules supreme. In the coast-to-coast sneaker breakdown, The RealReal points to the city of brotherly love as Gucci’s famous low-top sneaker tops the charts for men’s sneakers in Philadelphia, while Dallas is home to the high-top as the number one pick.
CEO Julie Wainwright founded the company in 2011 after working in various sectors of e-comm. In a recent interview, Wainwright told Marketplace that the three top brands for The RealReal this year were Gucci, Louis Vuitton and Chanel, of which she noted, “That’s new, by the way. Gucci was not the No. 1 in demand before. So it really has risen through the ranks. Louis Vuitton’s always strong.”
According to Wainwright, most products that hit the site are sold in 90 days or less and inventory moves very quickly from the e-commerce center in Secaucus, New Jersey. In order to get each product in, authenticated and out for sale, The RealReal follows a strict step-by-step process to authenticate, price and sell – a model which Wainwright says is changing the landscape and leading the “circular economy.” Consignors are invited to send luxury cast-offs to a dedicated salesperson for The RealReal, who, after surveying and authenticating the items, will list them for sale online or at one of its two stores. Prices vary according to a brand’s desirability and the item’s condition – valued from “good” to “pristine” – and consignors leave with up to 85 percent of the item’s final sale price.
As with most e-commerce platforms, millennials have been a driving key in growth for the brand. Wainwright explains: “They’re really embracing us because of value, and they love brands, but also … the fact that it’s a circular economy. That message is not lost on them at all.” Wainwright says that millennials are leading the movement in embracing secondhand and the world of luxury is taking note. This younger generation of consumers has realized they can make money selling the things that no longer serve them, and in turn, pump the gains from consignment back into the primary market.
Managing One-of-a-Kind Inventory
In January of 2018, The RealReal announced the launch of their new proprietary software to help manage inventory online and throughout their brick-and-mortar retail spaces, called RealReal 360. This innovative commerce solution was uniquely developed to offer a unified, real-time view of inventory, product and customer activity across all platforms. Built by The RealReal from the ground up to scale with the company’s business needs, RealReal 360 provides a centralized view of The RealReal customer and inventory across desktop, mobile, stores, and warehouse.
Key features of the software include:
Unique Customer Profiling – the software supports the shopper across platforms while giving the business a single view of customer activity. Using in-store iPads, The RealReal offers its shoppers a holistic view of all product inventory across channels, helping them to quickly discover items whether in-store or online. This unified view enables talking to the shopper with one voice across all platforms, ensuring that the same message is heard regardless of the device while also making sure that any product is available to be viewed at all times, no matter where it is in the country.
Seamless Inventory Management – RealReal 360 offers a connected inventory view, scaling the full assortment of product offerings from two warehouses and stores. Real-time updates in the system allow inventory changes to immediately reflect all locations, providing the customer, and business, with an accurate view of what is available at all times. Radio-frequency identification (RFID) uses electromagnetic fields to automatically identify and track tags attached to items, allowing the store’s experts to easily locate pieces to better service customers and enhance control over The RealReal’s inventory.
Real-time Business Intelligence – the groundbreaking solution for The RealReal includes real-time sales visibility across all customer touch points, whether visiting the site on desktop or mobile, or in-store. This up-to-the-minute analytical tracking empowers The RealReal to gain insights through data for each customer and business lifecycle, and the ability to view sales by region, channel and customer type have empowered the business to better identify and address customer needs, all the while rising as a trusted source for industry insights and emerging trends, its hand on the pulse of the next big wave.
The RealReal’s CEO says that RealReal 360 is just the start to the puzzle that will continue to grow with the booming business. “We attribute our success and fast growth over the last 6 years to the fact that we are a technology company first and have leveraged our in-house technology and innovation to develop solutions that don’t exist in the market elsewhere,” said Wainwright. “Our focus on building a nimble platform has led to a business that can weather quickly-changing retail and tech environments.”
