Demand for secondhand items is booming right now, and online luxurious reseller The RealReal is wanting to cash in.
So it is taking an method to increase provide that is not typical in an business the place a bulk of gross sales are taking place online: it is opening up extra shops in the hopes of attracting individuals who need to resell the posh gadgets in their closets.
The aim is to open a complete of 10 shops by the top of the second quarter this yr.
The firm is taking a special method with the brand new shops. Unlike its present flagship shops in cities like New York, San Francisco, Los Angeles and Chicago, that are 6,000 to 12,000 sq. ft in measurement, these shops are considerably smaller — round 2,000 sq. ft.
The firm has additionally scouted particular neighborhoods the place it thinks it has the very best shot of reaching individuals who need to consign gadgets.
The RealReal is customizing every new “neighborhood store” to match the spirit of the group they’re based mostly in. This is being achieved by each the decor and the merchandise, Courtney Hawkins, vice chairman of retail at The RealReal, stated in an interview.
A store in Brooklyn, for example, captures the New York City borough’s vibrant artwork scene, she stated. “We commissioned a handpainted mural by a local artist for the store,” she stated.
A store in Palo Alto incorporates a black and white collage depicting the evolution of expertise, whereas one in Newport Beach has a Nineteen Sixties-70s “SoCal modern aesthetic vibe.”
As demand surges, The RealReal is in search of methods to increase its personal provide. One manner is to make the consigning course of simpler.
The firm carried out a examine in 2020 that confirmed sellers appreciated the choice of bringing in their merchandise to a store for analysis and drop off. In truth, as a lot as 30% of latest consignors got here from its retail places in December, stated Hawkins.
“They were doing this as they did errands, or a quick grocery run,” she stated.
Not your common thrift store
Items in every store are curated to meet the style and preferences of native customers, stated Sasha Skoda, head of ladies’s merchandise at The RealReal.
“Our team of data analysts look at things like designer, price and style preferences of shoppers,” stated Skoda.
While classic and bohemian items, and designers like Isabel Marant are well-liked at its store in Brooklyn, Skoda stated the Newport Beach store is stocked with merchandise in daring colours and logo-heavy merchandise.
“The Bay Area isn’t known for fashion in the same way as New York or LA. The brands that do well at the Palo Alto store cater to comfort and the outdoors, like Canada Goose,” she stated.
As customers filter out their closets of high-end manufacturers they now not want, they create them to be evaluated by The RealReal’s in-house group.
Once the consigned merchandise is authenticated, The RealReal’s group decides if a specific merchandise ought to be despatched to considered one of its shops based mostly on the way it suits into the merchandising technique, and all in-store merchandise are additionally shoppable online.
Hawkins stated the shops additionally present providers like free value determinations on consignment gadgets, cleanings, repairs and bespoke alterations.
“This is really an opportunity to change the perception of resale by creating an elevated luxury experience,” stated Hawkins.
Will it work?
“The reason [landlords] are willing to talk to us is that we are able to draw foot traffic, and they see the value in that,” she stated.
Retail analysts are bullish on the RealReal’s store growth as a manner to refill on stock.
“Historically, The RealReal has been supply constrained, not buyer constrained, as the company sells nearly everything that it lists,” stated Aaron Kessler, analyst with Raymond James. “We believe having stores in key neighborhoods close to their client base (e.g. Palo Alto, Brooklyn, etc) can provide a more efficient way to obtain supply versus the company’s White Glove service of sending luxury managers to peoples’ home [for product evaluation].”
The firm’s White Glove service entails considered one of its luxurious managers going to an individual’s house, consulting with them on what to consign, providing an estimated worth for the gadgets and amassing them.
The RealReal quickly suspended the service final yr due to the pandemic and is providing at-home appointments once more in choose markets with security measures in place.
The firm’s transfer to open extra shops additionally units The RealReal other than its opponents as most do not function bodily shops to complement their online companies, stated Neil Saunders, retail business analyst and managing director of GlobalData. Other resellers reminiscent of Poshmark, OfferUp and Mercari haven’t got bodily shops, whereas ThredUp does function a few shops.
“Having extra bodily shops will assist The RealReal pull in extra customers and differentiate itself from an more and more crowded house of resellers, a lot of whom are ecommerce-only companies, stated Saunders.