Demand for secondhand goods is booming right now, and online luxury reseller The RealReal is looking to cash in.
So it’s taking an approach to boost supply that isn’t typical in an industry where a bulk of sales are happening online: it’s opening up more stores in the hopes of attracting people who want to resell the luxury items in their closets.
The RealReal, whose ecommerce marketplace has over 20 million members, has opened five new stores since November, in locations such as Palo Alto, Brooklyn and Greenwich, Connecticut.
The goal is to open a total of 10 stores by the end of the second quarter this year.
The company is taking a different approach with the new stores. Unlike its existing flagship stores in cities like New York, San Francisco, Los Angeles and Chicago, which are 6,000 to 12,000 square feet in size, these stores are significantly smaller — around 2,000 square feet.
The company has also scouted specific neighborhoods where it thinks it has the best shot of reaching people who want to consign items.
The RealReal is customizing each new “neighborhood store” to match the spirit of the community they’re based in. This is being done through both the decor and the merchandise, Courtney Hawkins, vice president of retail at The RealReal, said in an interview.
A store in Brooklyn, for instance, captures the New York City borough’s vibrant art scene, she said. “We commissioned a handpainted mural by a local artist for the store,” she said.
A store in Palo Alto features a black and white collage depicting the evolution of technology, while one in Newport Beach has a 1960s-’70s “SoCal modern aesthetic vibe.”
Secondhand clothing has been a hotspot, with estimates for it to grow to $64 billion in sales by 2024 from current sales of $28 billion.
As demand surges, The RealReal is looking for ways to boost its own supply. One way isto make the consigning process easier.
The company conducted a study in 2020 that showed sellers liked the option of bringing in their merchandise to a store for evaluation and drop off. In fact, as much as 30% of new consignors came from its retail locations in December, said Hawkins.
“They were doing this as they did errands, or a quick grocery run,” she said.