The RealReal Turns Real Profits By Combining Pop-Up Experiences With Online Sales

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The RealReal

It’s a question that every luxury good enthusiast who shops online will ask themselves at some point or another: “How can I assure that the products I’m buying are authentic?” For online luxury consignment giant The RealReal, authentication is a two-step verification process that combines expert analysis with in-store customer experience that encapsulates the feelings of quality and craftsmanship that has long been a cornerstone of the world of luxury goods.

The RealReal, the largest online luxury consignment retailer in the United States, is shaking up the world of retail by opening a series of pop-up stores in 2018 that will allow consumers to translate the shopping process from scrolling on a computer to a physical location offering a comprehensive high-end experience. The company’s plan for a pop-up series was inspired by the massive success of their opulent SoHo pop-up which reportedly brought in about $2 million in sales of curated collections of ready-to-wear and cocktail attire, handbags, shoes, and jewelry. The physical location in New York saw purchases that were an average of six times the values as those made on their online store. The team at The RealReal believe that this is a result of the two-step verification process that allows the consumers to feel firsthand the finish, stitching, and quality materials that set high-end brands apart from everyday clothing, shoes, and accessories- eliminating the doubt from their mind that may creep in when shopping requires an online cart.

The RealReal is no stranger to the potential pitfalls of luxury consignment. The company understands that offering a number of physical locations will allow potential consumers to differentiate for themselves the quality in luxury vs. standard goods- hooking them for life should the store close or the pop-up change locations. While speaking at the FutureStores conference in Miami, the company’s director of marketing Allison Sommer stated that the importance of physical stores lies in their ability to “legitimize your brand and give [online stores like The RealReal] a street-level presence.” And legitimize they do- The RealReal employs a team of in-house gemologists and authentication experts to help consumers rest with the peace of mind that their new Louis Vuitton clutch or Rag and Bone denim is the real deal. They also focus their hiring process around finding sales associates with experience in the luxury goods realm of retail to better understand the key characteristics of the brands that consumers come in searching for.

Still, The RealReal knows that the allure of luxury goods will only go so far in today’s market. In a world largely dominated by social media, consumers are placing more and more emphasis on the value of the shopping experience, rather than just the products at hand. The RealReal’s New York location, which was complimented with a cafe and a floral shop, held VIP shopping sessions that allowed the most devout of The RealReal shoppers to get a private first-look at new items in stock before the public. This perk, which is limited to members of The RealReal’s subscription VIP service, effectively creates both hype and an air of exclusivity which surrounded the store, leading to a larger opening day. Educational workshops with titled like “How to Value a Diamond” and “The History of Chanel” got the fashion-conscious into the door and alerted them to the concept that shopping in department and specialty stores isn’t the only way one can get their hands on the finer things in life.

“Once somebody walks in and gets sucked into the cool features and values of the brand, they become loyalists,” insists Sommer. Data from the company’s experimental San Francisco pop-up (which followed the one stationed in SoHo) supports this notion. Even after the pop-up location closed, The RealReal has seen nearly a 500% increase in traffic and purchases from the Bay area.

So what does the future hold for the team at The Real Real? The company has declared 2018 the year of the pop-up shop, and they plan to mimic the success of their New York and San Francisco stores with locations across the United States, starting with Las Vegas. The goal of the pop-up series is to introduce smaller urban hubs to the frenzy of the pop-up that shoppers in New York City and Los Angeles have grown to love, and to create a sense of brand loyalty that will translate into increased online sales once the store has moved on.

Having an in-store presence has been show to increase consumer interaction and involvement, but will physical locations help to increase the number of consigners looking to sell off their goods? The Real Real’s future locations are interested in finding out- though the store has 7 million registered members, it is unclear how this number breaks down into sellers and buyers. For now, however, the message seems to be working- according to Sommer, most of The RealReal’s consigners have “never consigned before.”

Only time will tell how planned pop-ups will affect the culture of consignment, but the future currently looks as bright as a sparkling Morimoto pearl necklace for The RealReal.

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