Traditionally, high-end luxury was scarce and was mainly a preserve of the high-income earners and hence making designer items such as Gucci became rare in the markets. The RealReal has become a market leader which is estimated to be worth about $6 billion. One of the features that set it apart from the other players in the sector is providing a platform where their clients can purchase pre-owned goods that are offered at a discount. Its consignment service has helped it to gain a good reputation over the years and due to the increasing number of customers, its value has gone up to the current $450 million. Many people have used the platform to dispose of some belongings that they no longer wear. The seller only pays a small cut of the sales price to the service provider. The number of members has increased consistently and now stands at 9 million.
More than 8 million luxury goods such as clothing and accessories have been delivered to their members. The delivery by The RealReal is mainly through platforms such as their official website and pop-ups. You can also access the services and make delivery arrangements via their stores which are located in New York and Los Angeles. The company was established in 2011. One of the founders is a businesswoman based in San Francisco known as Rati Levesque. She acquired her higher education where she specialized in Economics and the skills have been instrumental in her success in the industry. She is a prudent entrepreneur and that was displayed when she founded a high-end boutique. Rati Levesque believes that luxury has three cycles that include making and buying well and then reselling. According to her, more people are embracing luxury as they have discovered its worth a lot as you can get back 60% to 80% of the initial value after reselling the luxurious brands such as Gucci.
According to a research by the company, a majority of the consignors use the amount gained from the sale to purchase goods in the primary markets. The platform has offered valuable insights for the clients to make decisions on what is trending up or down, or when you should dispose or keep your items for the future market. The activities of the firm are mainly data-driven. The prices are based on the current conditions that reflect the value of the items. When the demand for certain commodities goes up, their value also goes up and the organization ensures that the adjustments are done accordingly. The sales team engages in the regular education of the customers and this mainly takes place in their homes. Some of the information that has been provided has helped people to make decisions such as disposing of the items that they are currently wearing as they could earn more at the moment.
The history of a certain item is also used in determining the appropriate price. If it takes a lot of time to sell an item, the sales team lowers the price indicated on it. The level could also change based on data derived from the changing market dynamics. The businesswoman disclosed that more people have been interested in buying the watches than any other goods for the last two years. The young generation also comprises a significant part of the buyers who have been purchasing the vintage watches which have leather straps. According to the sales statistics of the company, some of the most popular brands include Gucci, Rolex, Hermes, and Shinola. The latter is mainly preferred by the young buyers. According to her, one of the driving forces for the buyers is the desire to look different and to acquire unique items.
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