The market for gently-used second-hand luxury fashion, or what is more accurately called authenticated luxury consignment,is estimated at $18b, with ecommerce resale reportedly the fastest growing segment in the fashion resale market, at 35% as compared with 4% overall.
Now The RealReal, one of the leaders in pre-owned luxury online founded by Julie Wainwright in 2011, is making the quantum leap from the online to the physical brick-and-mortar world. It started with a permanent store at 80 Wooster Street in NYC following a successful pop-up shop trial, then onto a pop-up shop in San Francisco Union Square and most recently in a pop-up shop at the Forum Shops at Caesars in Las Vegas.
Wainwright, who was named to Forbes 40 Women to Watch Over 40 list in 2017, explained to The Business of Fashion the strategy behind the companys move from the virtual to real store, saying, The store for us is a great branding opportunity.If it is a branding play, what better place for The RealReal to bring its real luxury-for-less proposition to than Las Vegas, a hub of luxury retail?
Up and down The Strip, luxury brands use their store fronts as billboards to advertise their brand, as much if not more than to sell. Louis Vuitton has 9 Las Vegas boutiques, Dior 6, Chanel 4, Gucci and Hermes 3. Add to that The RealReal store where shoppers can get their hands on products from each of those brands and many more at a substantial savings. Its real luxury at an unreal price, perfectly in tune with what consumers want today.
Place to sell, place to buy
For Wainwrights business, its physical stores are more than just a place to sell, though it does that superbly as the average order size is two-times larger than online, but also as a way to ensure a steady stream of new products come in through consignments. It is a marketing tactic and sales tactic and product acquisition tactic,Wainwright explains when we sat down to discuss the pop-up strategy. We find we get lots of high-quality consignments when we do pop-ups.
Having already attracted early-adopters that feel comfortable buying and selling goods online, The RealReals physical locations expose the concept to new customers that havent yet connected online. We get quite a few people who arent comfortable shopping online for more high-value items. Its a good way to introduce The RealReal to the next tier of people. So far 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. They are more comfortable doing business in a physical location,