When The RealReal announced plans in February to open a store selling secondhand Gucci and Louis Vuitton steps away from those brands’ Magnificent Mile boutiques, it was yet another sign resale shopping, once stigmatized, had gone mainstream.
Less than a month later, the coronavirus pandemic brought dramatic changes to ways consumers live and shop. Retailers selling anything besides toilet paper, hand sanitizer and other essentials were hit hard, and resale shops weren’t immune. But while many say sales are down, some of the industry’s biggest players are betting the health crisis hasn’t shaken consumers’ enthusiasm for resale.
The company’s 12,000-square-foot store on Michigan Avenue isn’t your typical thrift shop, where customers hunt through haphazard racks in hopes of scoring a deal. There are retractable racks of clothing that can be pulled out from the walls, meant to keep the space from feeling crowded. Items are grouped by style, like the platform full of high-end sneakers topped with a stock ticker-style display with information on brands’ resale value. Everything is for sale, from the tables displaying merchandise to the art on the fitting room walls. Last year, the company’s average order was $455, but its website also lists $8,000 Jordan sneakers and Cartier watches for more than $50,000.
The RealReal’s total revenue dropped 21% during the second quarter compared with the same period last year, in part because of challenges getting and processing items to sell. Still, the company said in August demand for its goods “remained healthy,” and that it brought back a “substantial portion” of furloughed employees. The RealReal had more than 2,300 employees at the end of last year and said the Chicago store would create 50 local jobs.
CEO Julie Wainwright said in a news release announcing the company’s second-quarter results that the company has “never been more optimistic about our long-term opportunity” and was confident supply would ramp up in the coming months.
Consumers still care about sustainability, one of the factors driving resale’s pre-pandemic growth, and the idea of saving money could be even more appealing now that many consumers are dealing with economic uncertainty, said Neil Saunders, managing director of GlobalData Retail. “This year has been very disruptive for everyone in apparel and fashion, but long-term, this doesn’t change the trajectory for resale,” he said.
Even The RealReal could still benefit from a focus on value if consumers decide to buy less clothing but invest in higher-quality items that can be resold when they do, Kahler said. While online sales are driving much of the industry’s growth, even resale companies that started online have seen value in giving customers ways to shop in person, Saunders said. ThredUp has partnered with retailers like Macy’s and J.C. Penney that carry its merchandise in certain stores. Walmart carries ThredUp’s apparel and accessories online.
A bricks-and-mortar presence could be particularly important for The RealReal, with its focus on luxury goods, said Milton Pedraza, CEO of the Luxury Institute, a research and consulting firm. Not everyone is comfortable buying a luxury handbag or watch sight unseen. “People need to see and try things,” he said. “They’re buying something of value.” Even when the goods are more budget-friendly, several Chicago-area secondhand and consignment shops said people still like to try items on before buying or simply relish the thrill of stumbling across a great deal.
For full article by Lauren Zumbach – October 29, 2020 – CHICAGO TRIBUNE – visit link: