Retail

‘reCommerce’ Marketplaces Eye Sustainability, Partnerships

‘reCommerce’ Marketplaces Eye Sustainability

Luxury fashion resale platforms are gaining traction as they focus on sustainability and partnerships, with The RealReal’s third-quarter earnings serving as the latest example of growth in the space. The authenticated consigned luxury goods marketplace reported that its active buyers for the trailing 12 months was up 43 percent year over year to 542,987, while its orders were up 41 percent year over year to 577,421 for the third quarter.

The RealReal Founder and CEO Julie Wainwright said on a call with analysts on Monday (Nov. 4) that “Q3 was a strong quarter across the board.” She noted that the platform had 14 million members as of Sept. 30, and that it added approximately 51,000 new buyers quarter on quarter, which she said was “a record for us.” She also noted that automation “accelerates and facilitates our ability to scale efficiently and improve our unit economics.”

Wainwright noted that the first step in automating its inbound operations involved pricing. The company exited the second quarter with pricing automation up 52 percent of total unit volume, and pricing automation had increased to 61 percent of unit volume by the end of the third quarter. While the company made much progress on pricing automation, Wainwright noted that it also exercises human oversight to ensure that it capitalizes on market opportunities.

The company exited the third quarter automating 17 percent of copywriting, including product and title and descriptions, and 15 percent of photo retouching. Wainwright noted that the company expects to see steady increases in the share of items that have automated copy and retouching, which will support improvements in inbound operations unit cost and increase the scalability of its operations. She also noted that a core value of the company is sustainability.

Wainwright said the company’s value proposition represents “strongly with the millennial and Gen Z consumers” who are powering the growth of luxury sales globally. The company’s survey data indicates that approximately 32 percent of buyers shop The RealReal as a replacement for fast fashion. At the same time, 56 percent of the company’s consigner base and 64 percent of its millennial consigner base cite environmental impact or extending the life of luxury items as important motivators for consigning with the company.

Retail Partnerships

The RealReal also partners with luxury brands that care deeply about improving the fashion industry’s impact on the environment. It has a longstanding partnership with Stella McCartney and recently announced one with Burberry. “We look forward to working with others who share our goal” of making fashion and luxury more sustainable, Wainwright said.

Beyond The RealReal, other retail innovators are adding to their sustainability efforts by bringing pre-owned merchandise into their stores.

News recently surfaced that Madewell is teaming with thredUP for an offering called “The Madewell Archive,” which is described as a collection of its own branded jeans sourced from the reCommerce platform, and follows other recycling efforts from the company. Each pair of jeans was reportedly chosen by hand, washed, refurbished and sold in some of the retailer’s stores for $50 per pair.

In addition to Madewell, other retailers have collaborated with thredUP. During the summer, news surfaced that Macy’s also began its pilot with the reCommerce platform. At the time, Macy’s CEO Jeff Gennette described the company as “the world’s largest fashion resale marketplace.” Many shoppers are passionate about sustainable fashion and shopping resale, he said. The partnership “gives us the opportunity to reach a new customer and keep them coming back to shop an ever-changing selection of styles and brands” that it doesn’t typically have, Gennette said.

With the help of brick-and-mortar retailers and through the growth of their own user bases, online platforms are bringing sustainability to fashion through reCommerce innovation.

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