The RealReal, founded in 2011 by Julie Wainwright, is a luxury consignment start-up application with two storefronts in New York City and West Hollywood. The founder, Julie Wainwright, has a robust history in the tech industry with over 20 years of experience. The e-commerce consignment start-up has had one of the biggest track records of growth and shifts in the retail industry in the last few years. Sites like The RealReal are becoming the new go-to for fashionistas, savvy shoppers and buying resale is basically the new black. The consignment shop is focused on sustainability, authenticity and the life cycle for luxury items.
Shoppers are sharper than ever opting for secondhand buys over the brand new. Online retailers make it easier and easier to buy, rent, purchase, subscribe and resell items than ever before. Along with this, consumers preferences have changed. The option to buy and resell later creates new life cycles for luxury or vintage items and gives them new life every time they resell.
The resale industry reportedly grew 49% in term of “industry disruptors” from 2017-2018, moving out its closest competitor by +40% and completely demolishing all apparel retail by 24x faster. The number is only looking to continue to grow in the upcoming years as the resale market is expected to hit $41 billion by 2022.
The RealReal is ultimately redefining resale. There are around 25,000 “new with tags” items on the site. While brands have not disclosed working with The RealReal, off-loading unsold off season items is not unheard of. Big names like Gucci, Saint Laurent and Balenciaga have revealed they have done some collaborating with The RealReal in the past.
The demise of brick-and-mortar stores like H&M and Forever21 may be imminent because of how the industry is moving. The idea of giving items new life by giving items new homes is sustainable and has a massive environmental impact. The eco-conscious millennial consumers are keeping this alive and company’s like The RealReal are allowing us to shop like never before.
To really see how dominant a force Amazon has been for these past few years, we have to look at a only one statistic. Amazon commands an incredible 20 percent of sales in the e-commerce world of women’s apparel. Although they sit comfortably at the top, there seems to be some rumblings off is the distance that is getting a lot of attention this year. Kate Hudson’s Fabletics has gone from nowhere to $250 million is the sale of women’s apparel in only three years, and they could easily catch Amazon if they keep up this blistering pace.
When Hudson commented on the success of her athleisure brand, it seems to come down to a few simple basics. The concept of reverse showrooming and her unique membership are simple in premise, but the overall concept is really turning heads. Looking at how the process works in real-time, we see women of all ages at the Fabletics store in the mall grabbing their free membership, trying on all the latest releases of workout apparel, even taking the Fabletics Lifestyle Quiz. What is surprising to some is that many of these shoppers don’t buy anything in the retail store.
How can a company do $250 million in sales and not sell hard at the retail stores?
To see how the Fabletics company is pulling such big numbers, we have to see how these women shop once they are home in a comfortable setting. Since they already tried on the active-wear in the store, they know exactly what size outfits they need to buy. Online, they can search other styles and new arrivals, and buy more than they originally planned. Those items they wore at the local store are all saved in the online profile, so shopping for a exact fit is easy. Rather than pick up a piece of active-wear at the mall, these women shop for hours online, buying hundreds of dollars of apparel in one order.
As part of the membership package, customers receive lower pricing, free shipping on orders online, and the help of a personal shopping assistant who selects one item each month based on the quiz answers. Kate Hudson’s Fabletics has discovered a way to offer women high-quality merchandise with the added convenience of shopping from home without concern of the apparel not fitting. At this rate, the gap between Amazon and Fabletics will be nothing very soon.