Will consumers one day shop for designer apparel and accessories with the same due diligence as they would for, say, a house? Or a car? Some already are, according to Rati Levesque, chief merchant of The Real Real, a leader in authenticated luxury consignment.
At WWD’s Retail 20/20 conference Wednesday, Levesque explained how the digital native company is helping shake off the stigma of shopping consignment, and in the process, supporting the traditional luxury market.
An item’s resale price adds value
Torn between a Chanel bag and a Louis Vuitton bag, Levesque said luxury consumers are calling The Real Real to understand the resale value of the items before they make a final purchase.
“That has been a big game changer and disruption in the space. Now they are thinking about their closet as this rotating closet and thinking about what the resale looks like before they are buying from the primary market,” she said.
This behavior shift, Levesque said, is a win-win for both consignment and the traditional luxury sector. Over the next couple of years, the company will give $1 billion back to consumers from the items they’ve consigned with The Real Real.
“People are taking the money they are earning with us at The Real Real and spending it in the primary market. They are going out and buying the new Chanel item, the new Gucci item. It’s adding value to the items in the primary market,” she explained.
Cleaning up consignment
The Real Real launched seven years ago as an online marketplace for used luxury goods. The company set out to extend the lifecycle of luxury goods, while offering consumers a trusted source for authenticated luxury accessories, apparel and jewelry.
“The main difference between us and another marketplace like an eBay is that we take possession of our goods, and that’s really important to us,” Levesque said. The company believes an item cannot be authenticated and a piece of jewelry cannot be fairly appraised without having it in the hands of an expert.
Consigners can send in products for appraisal or book an appointment at one of The Real Real’s seven consignment offices across the U.S. The company’s 90-plus luxury experts—gemologists, watchmakers, fashion historians and curators—work out of The Real Real’s warehouse and with customers at its locations. That defining proposition has helped The Real Real build trust with consumers and shed the shady reputation consignment has suffered from in the past, particularly with young consumers.
In The Real Real’s flagship store in New York City, which opened in November 2017, Levesque said the company has created stress-free atmosphere, where consumers can meet with a luxury expert in person and get a written appraisal that holds in a beautiful environment. This, Levesque said, allows them to think about the appraisal for weeks without the pressure of having to make a decision on the spot.
Recreating the consignment store
When The Real Real transitioned into brick-and-mortar, the company examined how it could recreate the best aspects of its digital space for a physical shopping space, while adopting the experimental retail qualities that consumers are hungry for. “We’re thinking of ourselves as the new department store,” Levesque said.
First and foremost, the company wanted to maintain the level of trust it created with consumers through its authentication process. “You’re not going to find sales people on the floor at the store,” she said. Rather the luxury experts are on hand to share what percentage the customer can make when they sell it back.
The company reinforces the sense of community it’s built online by holding expert workshops in the New York City store. The highly-attended workshops, which takes place about three times a week, cover topics like the history of Cartier and to how to tell if a Chanel bag is the real deal.
The store also offer a luxury repair services—an aspect that goes back to The Real Real’s original mission of extending the lifecycle of luxury goods. “Even if you didn’t buy the luxury handbag from us… you can bring them in and get them refurbished at our stores. You can get a watch repaired. You can get a piece of jewelry repaired,” she said.
And these moves are paying off. Levesque said customers are spending 40 percent more in the New York store than online. The store, she add, has become a “big play” for brand awareness, marketing spend and reducing returns. In August, The Real Real will open a store in Los Angeles.
Capturing the millennials and Gen Z consumer
Whereas in the past consumers were perhaps embarrassed to use The Real Real’s referral program because they didn’t want friends to know they shopped consignment, Levesques said efforts made by The Real Real to refine and elevate the consignment experience are taking hold.
More than 70 percent of The Real Real’s consigners are new to consignment and upwards of 60 percent have never bought consignment before, she said.
This experience-driven retail concept resonates with millennials and Gen Z, which already have a natural inclination to shop thrifty and with circularity in mind. Now, they are beginning to warm up to the idea of luxury consignment and influencing what’s hot and what’s not on the second-hand circuit.
When Phoebe Philo announced in December she was exiting Céline, Levesque said prices for the French label’s goods rose 30 percent on The Real Real.
Gucci is the No. 1 searched term on The Real Real, even above timeless Chanel and Louis Vuitton, driven by younger generations’ discovery of the glammed-up brand, Levesque said. The company’s mid-year resale report, which will be released later this month, indicates that searches are up for Saint Laurent, Balenciaga and Stella McCartney, and down for Oscar de la Renta, Burberry and Tory Burch.
Then there are the discontinued items like Louis Vuitton’s multi-colored creations with Takashi Murakami and one-off collaborations between street and designer labels that have become a part of the pop culture vault and cannot be purchased anywhere else but through consignment. The Dior saddle bag, Fendi baguette and Prada’s basic nylon bags are among the Y2K-era items falling back into fashion with millennials and Gen Z. Consignment is a saving grace for these consumers, unless they have a fashionable (and hoarding) elder in their lives to poach accessories from.
Plus, by shopping consignment, young consumers can see if a brand is for them. “We think of ourselves as the gateway to luxury goods, because it really is the millennials and Gen Z testing their affinity to luxury,” Levesque said.