There are plenty of places to buy a used Chanel bag online. The RealReal, a luxury consignment site that generated $100 million in sales last year, is one of those places. The San Francisco Bay Area company prides itself on authenticating luxury goods and weeding out the fakes, which has proven a valuable service, particularly online where it is difficult to trust even the most legitimate-looking websites.
In furtherance of its goal to provide consumers with a place to shop authentic consigned goods and trust that they are getting the real thing, The RealReal has a rigorous authentication process. But a strict "no-fake" policy is not the only factor to thank for The RealReal’s rapid growth. Unlike most other online marketplaces, the company takes control of its inventory. According to Fortune, "It provides high-touch services for its sellers, sending drivers to their homes to pick up items for consignment. (The company once returned a pair of $100,000 diamond earrings a seller had inadvertently left in a purse she wanted to sell.) It’s an elaborate process—every item in The RealReal’s warehouses is different. The company turns over its inventory very quickly, with most items selling within 30 days."
Just four years in, The RealReal is actually impacting the way consumers shop. If an individual knows that she can resell her luxury purchases, she is more likely to make the investment in the first place. Beyond that, if she is going to spend a lot on something, she’s more likely to trade up to brands with the highest resale value. Secondhand items from Chanel, Hermès, Christian Louboutin, and Cartier are worth a lot. Marc Jacobs, Versace, and Givenchy goods? Not so much.
Julie Wainwright, CEO and founder of The RealReal, says this shift in shopping habits is why luxury retailers like Saks Fifth Avenue and Neiman Marcus have embraced The RealReal by offering gift cards in exchange for consignment on the site. By boosting the value of secondhand luxury goods, shoppers see more value in buying them firsthand.