Fashion People: RealReal Talk – A Deep Dive with CEO Rati Sahi Levesque
Episode Release Date: March 21, 2025
Host: Lauren Sherman, Puck Correspondent
Introduction
In the March 21, 2025 episode of Fashion People, host Lauren Sherman engages in an insightful conversation with Rati Sahi Levesque, the CEO of The RealReal, a leading luxury consignment and resale platform. The discussion delves into the evolution of thrifting culture, the transformation of luxury consumer behavior, and the strategic moves that have positioned The RealReal at the forefront of the multi-trillion-dollar fashion industry.
Founding and Early Growth of The RealReal
Lauren Sherman reminisces about her longstanding relationship with Rati, highlighting their first collaboration in 2013 involving a Balenciaga puff sleeve shirt. This initial interaction laid the groundwork for a deeper partnership as Rati transitioned from a merchant to the CEO of The RealReal.
Rati shares the genesis of The RealReal, recounting how she and Julie Wainwright founded the company in 2011. Initially running a modest clothing store named Anika in San Francisco, Rati found herself struggling with low foot traffic and high rent. This challenge led her to explore the resale market, sourcing luxury items from thrift stores to sustain her business. When Julie approached her with the vision of an online luxury resale platform, Rati saw the potential and pivoted completely, shutting down her physical store to focus on The RealReal.
Quote:
"Once we got a thousand pieces, that was our goal. We're like we're going to go get, we're going to go drive around, find a thousand pieces and obviously Julie had, you know, a lot of friends that had some of the luxury goods as well. And that's when we kind of launched the site."
— Rati Sahi Levesque [09:23]
The platform's launch was met with overwhelming demand. Rati recalls their initial inventory of a thousand pieces selling out within days, underscoring the latent appetite for luxury consignment. This early success affirmed Julie's strategy of focusing on high-quality, mid to high-value products tailored to discerning consumers.
Overcoming Challenges: Logistics and Technology
As The RealReal rapidly scaled, Rati highlights the significant logistical challenges they faced. Managing millions of unique SKUs and ensuring seamless operations required a robust technological backbone. Recognizing this, The RealReal invested heavily in Artificial Intelligence (AI) and automation to streamline authentication, inventory management, and pricing.
Rati emphasizes the importance of tech investment, contrasting their strategic approach with other retailers who often misallocate resources. By prioritizing logistics and AI, The RealReal not only enhanced operational efficiency but also maintained a high standard of authenticity and customer trust.
Quote:
"We spared no expense and I look forward to taking full advantage when I'm in New York in a few weeks because the Puck offices are close by, so I might do some coffees there. In the meantime, I hope you enjoy this interview with Rati."
— Lauren Sherman [06:00]
Further illustrating their technological advancements, Rati shares insights into their AI-driven authentication processes. The RealReal employs machine learning to analyze items at a pixel level, ensuring precise verification of luxury goods. Additionally, their collaboration with the University of Arizona led to patented technology for efficiently counting melee in diamonds, enhancing the consistency and speed of their authentication process.
Quote:
"All of our handbags now are authenticated via AI. It's just a piece of hardware that can look at an item on a pixel level. But we know the combinations of things like what leather companies or brands use 10 years ago, what leathers, what combinations they didn't use with what hardware, with what zippers."
— Rati Sahi Levesque [21:15]
Customer Experience and Service Excellence
A cornerstone of The RealReal's success is its commitment to exceptional customer service. Rati discusses the evolution of their Net Promoter Score (NPS) and sentiment, attributing the improvement to a relentless focus on meeting consigner and buyer needs. By creating a frictionless consignment process—whether through app-based pickups or convenient drop-off locations—the RealReal ensures that consigners receive the highest value for their items with minimal hassle.
Rati highlights the significance of educating consigners on pricing, recognizing that many are new to the consignment process. By providing transparent pricing guidelines and fostering trust, The RealReal empowers sellers to make informed decisions, enhancing their overall experience.
Quote:
"Almost 80% of our product sells within 90 days. So it's. You also get that fast-turner turnover so you get paid quickly too."
— Rati Sahi Levesque [40:38]
Lauren Sherman shares her personal positive experiences with consigning through The RealReal, praising the platform's efficiency and reliability. This firsthand endorsement underscores the platform's user-friendly approach and the tangible benefits it offers to its community.
The RealReal's Impact on Luxury Retail and Consumer Behavior
The conversation shifts to the broader impact of The RealReal on the luxury retail landscape. Rati observes a paradigm shift in consumer behavior, where secondhand luxury has transitioned from a niche market to a mainstream phenomenon. This transformation is evident in the evolving attitudes toward resale, with consumers now viewing consignment as a smart, sustainable choice rather than a second-rate option.
Rati recounts pivotal moments that signaled The RealReal's cultural integration, such as overhearing consumers using "real real" as a verb in everyday conversations. Additionally, the platform's engaging app, which fosters a "thrill of the hunt," has become a significant aspect of user interaction, with users spending substantial time browsing and discovering unique items.
Quote:
"I think the real real becoming the verb, I think was a light bulb moment for me."
— Rati Sahi Levesque [31:51]
Moreover, The RealReal has influenced luxury brands to embrace circular fashion. Partnerships with prominent brands like Gucci and Stella McCartney illustrate how resale adds value to primary markets, fostering a symbiotic relationship between new and pre-owned luxury goods. Rati emphasizes that resale has become an integral part of the customer journey, from research to eventual resale, enhancing brand longevity and consumer loyalty.
Quote:
"Luxury brands are starting to see that resale is here to stay. But I also think that they're starting to realize that it adds value to their product in the primary market."
— Rati Sahi Levesque [44:08]
Future Outlook and Cultural Integration
Looking ahead, Rati envisions continued growth and deeper integration of resale into mainstream shopping habits. The RealReal aims to expand its technological capabilities, further enhancing the consignment experience through AI and machine learning. Additionally, the platform plans to diversify its product offerings, catering to a broader range of luxury categories while maintaining a focus on high-value items.
Rati also touches on the burgeoning trend of consumers seeking unique, one-of-a-kind pieces that allow them to express individuality amidst an oversaturated trend landscape. This drive for uniqueness fuels demand for vintage and rare items, positioning The RealReal as the go-to destination for discerning shoppers.
Quote:
"We are the gateway into luxury in a lot of ways. Like, we see the girls in the office, a lot of them were mostly female, and a lot of the girls, you know, right outside of school, one of their first, second jobs, they came in wearing Zara and they leave wearing Givenchy."
— Rati Sahi Levesque [45:43]
Rati concludes by reflecting on the passionate community surrounding The RealReal. The platform not only facilitates transactions but also fosters a community of enthusiasts who are deeply invested in the sustainability and heritage of luxury fashion.
Conclusion
The March 21, 2025 episode of Fashion People offers a comprehensive exploration of The RealReal's journey under Rati Sahi Levesque's leadership. From overcoming initial challenges to revolutionizing luxury consignment through technology and exceptional service, The RealReal exemplifies innovation and resilience in the fashion industry. Rati's insights underscore the platform's pivotal role in shaping contemporary luxury consumption, promoting sustainability, and fostering a culture that values both heritage and uniqueness.
For those interested in the intersection of fashion, technology, and sustainable consumer practices, this episode provides a valuable perspective on how The RealReal is redefining the future of luxury retail.
Notable Quotes:
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Rati Sahi Levesque [09:23]: "Once we got a thousand pieces, that was our goal. We're like we're going to go get, we're going to go drive around, find a thousand pieces and obviously Julie had, you know, a lot of friends that had some of the luxury goods as well. And that's when we kind of launched the site."
-
Rati Sahi Levesque [21:15]: "All of our handbags now are authenticated via AI. It's just a piece of hardware that can look at an item on a pixel level. But we know the combinations of things like what leather companies or brands use 10 years ago, what leathers, what combinations they didn't use with what hardware, with what zippers."
-
Rati Sahi Levesque [31:51]: "I think the real real becoming the verb, I think was a light bulb moment for me."
-
Rati Sahi Levesque [44:08]: "Luxury brands are starting to see that resale is here to stay. But I also think that they're starting to realize that it adds value to their product in the primary market."
About Fashion People:
Fashion People, hosted by Lauren Sherman, is an extension of Puck's private email “Line Sheet,” offering an insider’s view of the fashion, beauty, and media industries. Featuring interviews with industry leaders and experts, the podcast provides a deep dive into the conversations shaping the multi-trillion-dollar fashion business.