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The RealReal’s Rati Levesque on Why ‘Re-Commerce’ Is the Future of Retail

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Inside The RealReal’s newly opened Los Angeles store / The RealReal

ONE37pm watermark
October 22, 2018

When The RealReal launched in 2011 as a digital-only luxury consignment store for women, it seemed innocent enough. It only makes sense that an entrepreneur would think to bring the brick-and-mortar consignment experience online, right? If you’ve been read anything about the resale or “re-commerce” market recently, or knew anything about The RealReal’s fearless founder, Julie Wainwright, you know there was nothing small-minded about the move. The industry is estimated to be worth $41 billion by 2022 and is poised to beat out fast fashion by 2027.

 

The RealReal recently raised $115 million from PWP Growth Equity, bringing the total sum of private equity capital raised to a cool $288 million. With the money The RealReal opened its second brick-and-mortar location; a sprawling 12,000-square-foot store on Melrose Avenue steps away from a slew of other startup shops; Glossier, Reformation, and Away Luggage, to name a few. And half of the space is dedicated to menswear and men’s accessories.

 

To learn about the new space and The RealReal’s ever-growing young, male customer base, we tapped Rati Levesque, a brick-and-mortar veteran who Wainwright brought on from day one to help her define the brand and what it buys. Levesque serves as The RealReal’s Chief Merchant, which means she knows more about grails than all the kids standing on Fairfax Avenue on Saturday morning, combined. Here’s what she had to say.

 

First, I would love to hear a little bit about your background and how you came to work for The RealReal. What is your training?

 

Rati Levesque: In 2011, I was running a boutique in San Francisco and found that my customers were becoming increasingly interested in the consignment pieces I was carrying versus new items, even though they were often priced higher. Julie [Wainwright] approached me with her idea—The RealReal—and a couple weeks later I was shutting down my store and working with Julie out of her house, full-time.

 

What does your position as chief merchant entail? Tell us about your typical day at the company.

 

Levesque: Every day is different but today, for example, started off with a leadership meeting. I'm looking at weekly, monthly and year-over-year metrics—are we short or ahead of the plan? Where do we need to focus the team?

 

Later, I’m going to interview talent for our leadership team and cultural initiatives. I also often meet with potential partners. Our most recent partnership is with Stella McCartney and brings greater awareness to the circular economy for luxury fashion. We are giving consumers who consign Stella McCartney at The RealReal $100 to shop at Stella in the primary market.

 

By midday I am usually checking numbers and touching base with the leadership team throughout the country. This afternoon I will meet with our broker to discuss the new-location surveys we are conducting to help us plan future stores!

 

Tonight I’ll be flying down to LA to see our awesome team there. We'll be walking through how we test new initiatives. And, in between all of that, it's catching up on email! Always.

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What are some things you've learned about the resale business from your time at The RealReal?

 

Levesque: It’s been incredible to learn what items have resale value and what factors contribute to that. For example, I’ve learned how designer shake-ups impact resale value quickly. When Phoebe Philo announced her departure from Celine we saw a 45 percent increase in demand that day, and when Kim Jones announced his departure from LVMH, sales increased by 87 percent that day. Similarly, when Virgil Abloh of Off-White was named Louis Vuitton menswear designer, we saw a 600 percent increase in demand that day.

 

The re-commerce industry is really booming right now. Why is it a game-changer for consumers—and investors?

 

Levesque: It's certainly a game-changer for consumers. With re-commerce, we're seeing consumers thinking of purchases now more as investments. The mindset has changed; they will purchase something knowing they will eventually consign it and make 50 to 70 percent back on the original cost.

 

Re-commerce is also sustainable. It allows consumers to extend the life cycle of items, whether they are selling or buying. Consumers are becoming more eco-conscious and gravitating towards companies and practices that share those values—especially the younger generations. I think the business is attractive to investors for the same reasons.

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Who is your typical male customer and what does he love to buy? Is your male demo changing at all?  

 

Levesque: Our male customer is continuing to grow, especially among millennials. Top designers are Gucci, Louis Vuitton, Hermes, Saint Laurent and Rolex. Sneakers, outerwear and bags are our top-selling items. We’re seeing that our male customer is taking to streetwear, sneakers and logos—all of which continue to show increase in demand. Certain collaborations have been incredibly popular for us, such as Louis Vuitton x Supreme. We call this shopper our “hype-luxe customer”; he is our savvy shopper who understands the value of both street and luxury.

 

Tell us about the Los Angeles store. Why LA and why give menswear such a big moment in the space?

 

Levesque: Menswear is a big part of our business, especially streetwear and sneakers. When we picked our space and knew we had 12,000 square feet to work with, we thought we could really build out men’s. We ended up dedicating half of the store to menswear!

 

How did The RealReal make the shopping experience at the LA store special?

 

Levesque: We wanted to play up the laid-back lifestyle of LA with the interior design and curate various themed collections—we like to call them “stories”—that speak to men, especially the Southern California guy. It’s our take on the modern department store.

 

The store is staffed with experts, many with specialties, to help customers with fittings, explain the resale market, provide designer information, and more. The experts are there to provide value, not sell you on something.

 

We also host a handful of workshops in-store each month. Topics range from “How to Spot a Real Cartier Watch” to panels on sustainability or the history of legendary designers.

 

And then we do in-store repairs, alterations, authentication and valuations to make the store a one-stop-shop for reselling. There’s also a cafe!

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What are some special men's pieces you sourced for the LA store? Why did you think they would resonate?

 

Levesque: We did a lot of research to understand what our LA guy has historically purchased from us and localized our assortment for him based on that intel. All of that has paid off—the store has been incredibly successful right off the bat. We review daily what is selling and what our customer is asking for and are able to quickly meet those needs. For example, when we saw that Balmain was one of our top requested designers the first week we opened, we adjusted and sent a collection of Balmain pieces to the store the next day.

 

Our “Locals-Only” collection, which is grounded in denim, includes Amiri, Chrome Hearts, 424, Fear of God, Saint Laurent (lots of jackets). We’re finding LA guys can’t get enough Saint Laurent! We have a “Future Surf” story, which features a mix of Japanese designers and cult favorites including Margiela, Comme, Valentino and JW Anderson. We also have a “Hype Luxe-Streetwear” story with features Off-White, Louis Vuitton, Heron Preston, Gucci and Junya alongside Hermes.

 

Any tips out there for guys buying vintage or pre-owned items for the first time?

 

Levesque: Always look at the measurements of an item versus just the size. Sometimes pre-owned items may have been altered professionally and, for vintage-standard, fits can change over time, so measurements are key.

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What should our guys never, ever get rid of in their closets?

 

Levesque: An heirloom watch is a good piece to keep and you can switch out the straps and keep it fresh as the years go on. That said, with our new watch trade-in program, you can now upgrade that too!

 

Rati, do you have a side hustle or side passion? What is it?

 

Levesque: Baking! I have to admit I am not great at it but love to do it. It’s therapeutic after a long day.

 

What motivates you to crush it every day in your career and otherwise?  

 

Levesque: The RealReal, our employees, and what the brand has become. Thinking about how The RealReal is changing the way people shop and promotes sustainability motivates me every day.