“It is reported that thirty-three percent of women have shopped secondhand in 2017, competing with mainstream new apparel. Further, upwards to seventy percent of secondhand shoppers are new to this marketing phenomena. This transformative shopping of woman’s clothing will not be found in stores like Value World or The Salvation Army. It is estimated that the general resale market for all items by 2022, will be valued at forty-one billion dollars. Of that amount, almost fifty percent of the market is secondhand apparel with a tiny percentage, about two percent, in deep-discounting new apparel.
The RealReal secondhand apparel online merchandising business which sells only luxury clothing with present funding of $173 million with the hopes of an IPO. RealReal, which was launched seven years ago, is referred to as a managed marketplace. Julie Wainwright, the CEO, is the RealReal Founder. RealReal only markets secondhand clothing such as Gucci and Louis Vuitton.
She is seeking an additional $100 million in private investment because there is the opportunity to seek a larger market share in luxury secondhand apparel. RealReal receives goods from sellers on consignment and then authenticates the apparel. This authentication develops trust, and the buyer is comfortably wearing an authenticated designer product. Upon selling the apparel, RealReal and the seller shares the profits.
RealReal has branched out to a brick and mortar facility and now sells men’s apparel, including jewelry, Rolex watches, home decor, and art. Branching out to other products satisfies RealReal’s consignor base that wants to place their goods with RealReal. Further, consigning with RealReal upgrades any negative aspects associated with Pawn Shops. The upgrade is accomplished by RealReal establishing valuation offices across the United States which have their gemologists and watch experts.
The manufactures of luxury brands no longer see RealReal as an unworthy competitor because secondhand sellers of luxury drive up the market of all sellers of luxury, both new apparel and secondhand. The success of RealReal is measured by the fact that it has sold items, on a regular basis, for $30,000, $40,000 and $50,000.”