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Selling to thred up11/7/2023 “Management highlights it is more difficult to get someone to consign for the first time,” he explains, but adds that after their first consignment, The RealReal customers typically return two-to-three times a year. “The biggest obstacle to growth for REAL is acquiring the right level and types of supply,” writes Cowen’s Oliver Chen, in a report on a recent meeting with The RealReal’s CEO Julia Wainwright and CFO Matt Gustke. for the resale market as its greatest market opportunity, as well its most critical challenge. The RealReal identifies unlocking the ~$200 billion of luxury goods available in the U.S. Getting real is The RealReal’s key consignment strategy As a result, each player’s consignment strategies are critical to their future success. It’s getting their hands on enough stuff that their customers will want. It isn’t consumer demand that could hold the fashion resalers back. Mid-priced fashion (Gap, J.Crew) that comprises 20% share of closet today may go for ThredUp or Poshmark, but not The RealReal. Instead, the stuff consumers are most likely to want to buy in resale is department store (14% share of closet in 2018) and other specialty retail (13%) brands, which they also may want to hold onto longer. However, the linchpin for resale’s future is getting inside people’s closets and convincing them to turn over enough good-old stuff that online buyers will want.Īfter all, they have been filling their closets with off-price (Marshalls, TJ Maxx), fast fashion (Zara, H&M), value chain (Walmart, Target) clothing at an aggressive pace, but this isn’t the stuff that a vibrant resale market is made on. The ThredUp study, supplemented with data from Credit Suisse, estimates that about 35% of consumers’ closets in 2018 are accounted for by clothing from these three sources and their share has grown from 28% since 2008.
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