Investing in your Clothes and Accessories? It’s Possible with The RealReal!

High-end items were always about how rare they were in the past, but the truth is that they actually make fantastic investments. Just ask Rati Levesque, the chief merchant of The RealReal, a luxury re-sale company with brick-and-mortar stores, online components, and its own pseudo warehouses of gently-used luxury goods. Considered a leader in the approximately $6 billion market, the company encourages first-time buyers of luxury goods to try consigned items as a way of testing the waters. Not only are they more affordable, but they can also be re-sold in the future at about 80% of the price paid.

Valued at $450 million, The RealReal is a basically a high-end consignment business, and has sold over 8 million pieces of high end accessories, clothing, home goods, and jewelry. This simply means that if you have a designer piece that you no longer use or wear, they will sell it for you and give you a cut of the profits. Levesque, based out of San Francisco, states that the organization retains over 9 million members, most which sell and buy via the company’s website or at the Los Angeles and New York retail store locations.

Levesque herself once owned a boutique that sold luxury goods and she also has the advantage of having studied economics. These experiences made her the perfect candidate to help launch The RealReal in 2011. She understands that the “life-cycle of luxury” is making well, buying well, and re-selling. She also believes that if luxury is holding its value in an economic climate where fast fashion is not able to, then that is a victory for the upscale market.

She opines that she believes that many buyers are not only buying high-end items as an indulgence, but also as future investments. For example, a nice set of Louis Vuitton luggage or Gucci bag is not just purchase made in the midst of a shopping spree, but rather a source of equity where, after personal use, a buyer can earn up to 4/5 of the value back at the time of re-sale. She also says that the company has research that states that approximately 80% of their consignors take their profit and re-invest it back into the primary goods market. As such, she feels that her business is not hurting the market, but, in essence, helping it.

Levesque says the company tested pop-ups in major cities first before experimenting with brick-and-mortar stores. Pop-ups in San Francisco and New York proved to be profitable, as both cities’ business with The RealReal grew, and the company’s growth accelerated. After opening the Los Angeles and New York stores, she saw a 40% increase in both the amount that customers bought and the amount that consignors sold. It was almost like having free advertising – new customers would walk in off the street not even having knowledge of the company beforehand.

The entire inventory of each store is also on the website, and the cool thing about these storefronts is that they are also pick/pack mini-warehouses, ready to ship. Each item contains an RFID chip so it is easy to find if it is purchased online, and it can be immediately mailed out. However, when a person is trying a piece on in the fitting room, it is suspended from the site, and if a member is going to be in the area of a brick-and-mortar store, he or she may receive a push notification relating to merchandise that he or she may be interested in.

The RealReal is especially open to educating customers about the current luxury market. The knowledgeable salespeople will let you know what is trending at the moment, and what has fallen out of favor. They will let you know what you should keep and what should be consigned. Remember, the consignor and the store have to work together in order to sell the item and make money, and the company takes that responsibility to the seller very seriously. Like stock analysts, the team at The RealReal pulls real-time data to adjust prices accordingly, based on supply and demand. The sales team then extends this knowledge to customers in their own homes via the business’s website.

They look at an item’s history and track whether or not it sold well in the recent past. Let’s say a person comes in with Manolo pumps, or a Gucci coat. They may advise a consignor to keep the item, or, if it is hot right now, and the potential consignor is not using it currently, to sell it at a decent price. Store stylists also attempt to educate buyers as they shop. They don’t just tell a prospective buyer that an item is a good fit for them, but also let them know the investment value of said item in the long run. This is based on statistical research and data.

In conclusion, Levesque states that vintage and heritage brands like Gucci and Chanel are popular right now among the younger generations that shop her business. She states that she believes that millennials, Generation Z, and future generations want to appear different, rather than dress like everyone else they see featured on social media. “People are looking for that unique item, and how to style it together, and the layers, and the mixed prints, and all of those things,” she opines, “It’s always nice when you can get the real thing.”

Melissa Thompson
Melissa Thompson writes about a wide range of topics, revealing interesting things we didn't know before. She is a freelance USA Today producer, and a Technorati contributor.