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Speaker 2: Now on the second hand luxury market, we're joined by
Speaker 2: Ratti Levet, the Real Real President and CEO The Real Real,
Speaker 2: of course, the world's largest online marketplace, were authenticated resale
Speaker 2: luxury goods. Well, Ratty, you've been doing extraordinarily well at
Speaker 2: the Real Real, you know, increasing margins, increasing, you know,
Speaker 2: just the amounts that you sell. How much have you
Speaker 2: been benefiting from things that are maybe a detriment to
Speaker 2: the economy like tariffs?
Speaker 3: Yeah, you know, it's interesting.
Speaker 1: So what we're seeing, we're seeing the buyer be quite
Speaker 1: resilient at the Real Reel. We're seeing consumer trends being
Speaker 1: quite strong around findelty, watches, handbags. We're definitely probably a
Speaker 1: tariff beneficiary, but at the same time, there's other things
Speaker 1: kind of impacting our business. Resales becoming more mainstream, that's
Speaker 1: number one, and definitely seeing that led by the gen
Speaker 1: Z and malen Old consumer.
Speaker 3: We're seeing fine jewelry and watches be very popular.
Speaker 1: Like I mentioned, gold pricing, silver pricing going up, and
Speaker 1: then we're also seeing gifting becoming less of a stigma
Speaker 1: on resale. So almost sixty percent of consumers now say
Speaker 1: they prefer the secondary market out right. So seeing luxury
Speaker 1: and seeing resale specifically becoming much more mainstream right now.
Speaker 2: Now you've been aggressively cost cutting, restructuring your commission model
Speaker 2: and so on, is there any danger that you will
Speaker 2: maybe not get in the supply that you need in
Speaker 2: order to keep supplying this market.
Speaker 3: Yeah, So, you know, it's interesting.
Speaker 1: I think that one of the things is that there's
Speaker 1: two hundred billion dollars trapped in people's closets. That's just
Speaker 1: in the US alone, and so we're it's such an
Speaker 1: untapped industry. At the end of the day, eighty billion
Speaker 1: dollars gets added to that every year, so so much good,
Speaker 1: so much luxury goods, just in the US alone, And
Speaker 1: so many of these people have never consigned any before.
Speaker 1: So we're seeing people become kind of introduced to luxury
Speaker 1: for the first time. So double digit new sellar growth
Speaker 1: for example, So people are really starting to change the
Speaker 1: way they shop, and they're checking the prices in the
Speaker 1: secondary market before they're even purchasing in the primary market.
Speaker 4: I wanted to talk about prices Rotti because our very
Speaker 4: own Amandamal Bloomberg wrote just a few days ago twenty nineteen,
Speaker 4: the price of a Chanelle flat bag five eight hundred dollars.
Speaker 4: Fast forward to right now, it's over eleven thousand dollars.
Speaker 4: I'm wondering just how much the growth of the real
Speaker 4: real is coming out of the fact that people feel
Speaker 4: like they just can't they can't stomach the prices in
Speaker 4: the luxury market.
Speaker 3: Yeah, so there's a couple of things happening.
Speaker 1: Anytime the price increases in the primary market, our pricing
Speaker 1: goes up to So for whatever reasons, whether it's tariffs,
Speaker 1: whether the pricing of a Chanel bag goes up for
Speaker 1: whatever reason, our prices go up as well.
Speaker 3: But like I said, what.
Speaker 1: We're also seeing is more volume coming through, so more
Speaker 1: people being introduced to luxury and testing it out, and
Speaker 1: then they get that first paycheck, right, they get that
Speaker 1: first paycheck for the bag, and then they go back
Speaker 1: into the primary market. What we're actually seeing is that
Speaker 1: circular economy. And so they'll go back into the primary
Speaker 1: market with their check and buy the newest trend or
Speaker 1: buy something that they've been eyeing, and then they'll consign
Speaker 1: two or three things instead.
Speaker 3: So we'll see that kind of trade up happening as well.
Speaker 4: And what are the consumers typically gravitating for on the
Speaker 4: real real Are they looking for a bargain on a
Speaker 4: classic luxury item or are they turning to secondhand markets
Speaker 4: when they want to buy something trendier.
Speaker 1: Yeah, so we're seeing that intersection between value and luxury.
Speaker 1: That's what we offer right at the end of the day.
Speaker 1: And then you've got very unique items.
Speaker 3: So most of our items you.
Speaker 1: Can't buy anywhere else, So they're looking for those one
Speaker 1: of a kind pieces. You know, they're kind of maybe
Speaker 1: done with the trends or everything's starting to look the same.
Speaker 3: It's the badge of.
Speaker 1: Honor to where something very unique from the real reel.
Speaker 1: So think of them like drops. Thousands of items get
Speaker 1: dropped every day that are very unique to the consumer consumer.
Speaker 3: So that's number one.
Speaker 1: Find jewelry, like I mentioned, watches, handbags, Vintage is a
Speaker 1: big one, as is condition. Again, seeing more of that
Speaker 1: value play come through. People are looking for that value.
Speaker 1: They'll take something that maybe is in fair condition instead
Speaker 1: of pristine condition, just so that it costs a little less.
Speaker 3: At the end of the day.
Speaker 2: You know, there are competitors out there now, fashion file,
Speaker 2: rebag and so on. How do you compete with them roalthy?
Speaker 1: Yeah, So you know, when I think about the real reel,
Speaker 1: it's really around. We offer for very depth in products,
Speaker 1: So we don't offer just one category, right, it's handbags,
Speaker 1: it's jewelry.
Speaker 3: Watches, fashion, textiles, sover where. All of that we're offering
Speaker 3: at the real reel.
Speaker 1: So there's a lot and then we give you cash
Speaker 1: upfront and that's really important, right, versus trade up or trading.
Speaker 1: And then you earn the most with us, And that's
Speaker 1: really important to say.
Speaker 3: And the reason why is.
Speaker 1: Because of the trust that we built with the consumer,
Speaker 1: because we know, because you can sign with us because
Speaker 1: we've got almost fifty million members now that we've built
Speaker 1: trust with because of our pricing algorithms, you can earn
Speaker 1: the most with us at the end of the day.
Speaker 2: I'm curious as well, how much are your physical stores contributing.
Speaker 2: Are they contributing to the bottom line? And you know,
Speaker 2: is it just a marketing play at the end of
Speaker 2: the day, And when does that bottom line, by the way,
Speaker 2: turn positive?
Speaker 3: Yeah, so the.
Speaker 1: Stores pay back very quickly actually, and what we see
Speaker 1: is a halo impact. So it's meeting the consigner where
Speaker 1: they are, whether they want to drop off in a
Speaker 1: store on their way to work, whether they want a
Speaker 1: van pickup at three pm this afternoon on demand. They
Speaker 1: can book that from their app, and we're seeing the consigner.
Speaker 3: The seller can sign more.
Speaker 1: Items when they inner act with the store, and more
Speaker 1: high value items because they're meeting with a gymologist and watchmaker.
Speaker 1: So yes, it's a place that people get introduced to
Speaker 1: our brand. A quarter of our new consigners come from
Speaker 1: the stores, from our retail locations, but we more see
Speaker 1: a halo impact, so from the consigner consigning more for
Speaker 1: us with us and then spending more.
Speaker 3: At the end of the day too.
Speaker 4: Brantie levec CEO of The Real Real, thank you for
Speaker 4: joining us.