What I didn’t appreciate in 2010, but am fully aware of now, is the importance of recirculating luxury goods for sustainability. The fifth pillar has become very important in the last few years. Our buyers and consignors are motivated by the awareness that recirculating luxury products (and recouping some of their original investment) is not just good for them personally but good for the planet. Proprietary technology developed over eight years to manage the complexity of operating a marketplace with up to 14,000 single-SKU items per day and 1.6 million transactions in 2018 is an important part of our competitive strength. Unique data insights combined with artificial intelligence and our expert analysts’ judgment results in price optimization, increased sales velocity and business model efficiencies. The trust engendered by our investment in authentication is the force that attracts buyers and keeps them coming back. We infuse the consignment process with exceptional service, ease of use, pricing transparency and regular payments that keep consignors returning to us consistently. In the intervening years, the five basic pillars upon which we have built our business are set forth below: The enthusiastic reception we received from both consignors and buyers quickly made it clear to me that we had a massive worldwide opportunity with significant competitive advantages. We opened the virtual doors of The RealReal on June 23, 2011, as the first marketplace solely offering authenticated luxury goods for buyers and full-service consultation and pick-up for consignors. I set out to create a business by injecting trust and service into the equation for consignors and buyers and leveraging data and technology to transform the luxury resale market. Even more staggering was the cumulative value of under-utilized luxury items in good condition accumulating in people’s homes. That market was expected to reach global annual sales of nearly $300 billion in 2018 with the United States accounting for less than a third of that total. My research confirmed the immensity of the primary luxury market. This is when I realized that there was a unique opportunity to bring luxury consignment online. Further, she had never consigned and felt it required too much work. She said she would not shop for pre-owned luxury goods at traditional consignment stores or online as she did not trust that they were real. She loved that she was finding great value on luxury products from designers she loved like Chanel, Louis Vuitton and Gucci. When asked about her purchase decision, she explained that she trusted the shop owner who curated the goods meticulously. Much to my surprise, my friend bought the luxury consignment items- something I had never seen her do before. I was shopping with a friend at an upscale boutique that carried full-priced designer shoes, jewelry and clothing in the front of the store, and offered beautifully merchandised designer goods on consignment in the back of the store. I created a map of the strengths of leading online companies and was looking for a market opportunity that would require a unique set of operational competencies to “unlock” its online potential. When I conceived of The RealReal, I was mindful of the competitive dynamics online. As a result, we are constantly optimizing our business to build the foundation for long-term sustainable growth and profitability. We are addressing an enormous market with a disruptive business model that relies on deep data insights and rigorous analysis to drive consignor and buyer engagement. My years of leading companies seeking to transport old business models into the digital age informed the key tenets and values that drive The RealReal today.
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