Go Inside The RealReal: The Largest Luxury Reseller in the World
I’ve been shopping for a long time. My friends know it’s sort-of a sport for me.
But I pride myself on being a smart shopper.
I remember when buying resale was not considered chic. It wasn’t that long ago.
Times have changed. Big time.
And The RealReal is a big reason why.
Forbes calls The RealReal the largest marketplace for authenticated luxury resale items in the world.
The company is worth roughly one billion dollars.
Founder and CEO Julie Wainwright is a woman bursting with energy and big ideas.
Photo courtesy: Julie Wainwright
We sat down recently to chat about her success and what comes next.
THE BIG IDEA
ALINA CHO: Let’s talk about how you came up with the idea in the first place.
JULIE WAINWRIGHT: First of all, I wanted to do a commerce-built business, and I didn't want something that Amazon could compete with.
ALINA CHO: Right.
JULIE WAINWRIGHT: I had no ideas. And then I saw a girlfriend shopping in a beautiful boutique in Menlo Park. She’s self-made, lots of money. Can do whatever she wants. She went to the back of the store and shopped the consignment edit in the back of the store, and it blew me away.
ALINA CHO: So, what'd you think and what'd you say to her?
JULIE WAINWRIGHT: I'm like, "What just happened here? You just bought consignment." And she's like, "Julie, who cares? I got Louis Vuitton, Gucci, Prada at such a good deal. Everyone wants a deal." And I said, "But would you walk in a consignment store?" I already knew the answer to this. And she's like, "Never. I don't want to sort through things.”
ALINA CHO: Right.
JULIE WAINWRIGHT: And I said, "Okay, would you ever shop eBay?" She said, "Never. And who wants to go wait for someone to ship stuff from their home?" I knew that moment. I literally knew that moment. I rushed home and started researching the luxury market.
ALINA CHO: Wow.
JULIE WAINWRIGHT: I pulled out everything I had in my closet that I hadn't worn that could be monetized. And I was surprised how much I had that was just sitting back there. And then, I wrote a business plan.
ALINA CHO: Tell me how you came up with the name, The RealReal.
Source: The RealReal
JULIE WAINWRIGHT: I’ll tell you what — I’m really bad at naming. But I'm really good at setting objectives. So, the objective from the beginning was to have authenticated goods. I kept saying, "It has to be real. It has to be real.
It'll add trust to the buyer, and it will help eliminate fakes." So, I’m sitting in a bar [with friends] and we're typing in potential ideas into a URL. And [my friend] says, "Okay, you can't get The Real, just check and see if you can get The RealReal," and sure enough, boom.
ALINA CHO: Oh my God, isn't that crazy?
JULIE WAINWRIGHT: I think I got it for $100. And I'm like, "That's it. The RealReal."
WHAT TO BUY, WHAT TO SELL
ALINA CHO: I think many people reading this will want to know, what brands have you found hold the best value, sell the quickest? And what is your advice for both consigners and buyers?
JULIE WAINWRIGHT: First of all, handbags, branded fine jewelry and sneakers hold the most value.
Apparel does not. So, when you start thinking about [which brands hold] the most, well Hermès, no surprise. Cartier, no surprise. Rolex appreciates. Chanel, Gucci, Louis Vuitton, Dior. So, the big luxury houses.
ALINA CHO: The usual suspects.
JULIE WAINWRIGHT: And then, the interesting thing about the next tier, which is high-end contemporary, apparel there doesn't devalue as much as maybe other luxury businesses.
ALINA CHO: So interesting.
JULIE WAINWRIGHT: [Having said that], Chanel still maintains its value on apparel. Not as much as handbags. Gucci retains its value on apparel. But other than that, apparel's just not what I would call an investment. Handbags can be an investment. Rolexes can be.
Source: The RealReal
Any high-end watch can be an investment. And sneakers, if you know what you're looking for, can be an investment.
ALINA CHO: What are people buying right now?
JULIE WAINWRIGHT: So, during COVID, oddly enough, people were buying fine jewelry and handbags more than anything else.
Source: The RealReal
ALINA CHO: Because they couldn't travel.
JULIE WAINWRIGHT: Yeah. Now, we're seeing that didn't really go away. So, fine jewelry and handbags are strong, but what's come up is apparel again. And even gowns. Some people are going out and they're like, "We need gowns."
Source: The RealReal
We're like, "Gowns? Oh my God. We haven't heard about gowns in so long," but apparel's back.
ALINA CHO: Good to hear.
JULIE WAINWRIGHT: I always say our consigners and our buyers are so smart, they do the math. They do the math when they buy new. And they look at our site to see what's the resale value. They’ll buy on our site and say, "Okay, I can wear this for a year-and-a-half and sell it and I'll get maybe 50%, maybe 60% or maybe 80% of what I paid for it back." That's a big deal.
ALINA CHO: And do consigners say, "When it's been in my closet for a year and I haven't worn it, I consign”? Is it a year-and-a-half? Is it two years?
JULIE WAINWRIGHT: Usually two years. Handbags can be a little longer. But then, we get people who fast flip. They know if they get the “it” handbag and sell it fast, they're going to get almost all the value.
ALINA CHO: Oh, that's so interesting.
JULIE WAINWRIGHT: But it makes sense. If you've got a really hot color and a really great handbag style and you're like, “Will that color be hot next year? Maybe, maybe not,” [maybe you sell it].
WHY SHOP RESALE? THE PLANET WINS
JULIE WAINWRIGHT: Any recirculation is better. It's just better than buying new. It's not even recycling because that requires energy, it’s recirculating. And it's amazing how good it is for the planet. All these new studies have come out saying, "If we just swapped out something like 20% of our wardrobe with resale, it would drop the temperature by one-and-a-half degrees."
Source: Nancy Dilts
ALINA CHO: One-and-a-half degrees is a lot.
JULIE WAINWRIGHT: It really requires this huge mind shift. And so, our whole thing is we've got to let more people know this.
ALINA CHO: You’re right.
JULIE WAINWRIGHT: Honestly, I don't care what business you frequent, whether it's us or another resale site, we have to get people thinking this way because it is so good for the planet. And there's no stigma. Most of our items are one off. You're going to look unique. And it’s good for the planet. And then you can resell it again.
ALINA CHO: That's the greatest part, right?
JULIE WAINWRIGHT: Whatever we can do to get people supplementing their buys with resale, the world wins. I think the planet wins. We need the planet to win.