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- [00:01]
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- [01:04]
Lauren Sherman
Hello and welcome to Fashion People. I'm Lauren Sherman, writer of Puck's Fashion and Beauty Memo Line Sheet, and today with me on the show is Rati Sahi Levesque, CEO of the Real Real. We're talking the rise of thrifting culture, the changing face of the luxury consumer, why everyone is obsessed with colorless Arman, Johnny Blazers, and so much more. Before we get going, I wanted to remind you that if you like this podcast, you'll definitely love Puck, where I send an email called Line Sheet. If you're a fashion person, you get that reference. It's an original look at what's really going on inside the fashion and beauty industries. Line Sheet is scoopy, analytical, and above all, fun. Along with me, a subscription to Puck gains you access to an unmatched roster of experts reporting on powerful people and companies in entertainment, media, sports, politics, finance, the art world, and much more. If you're interested, listeners of Fashion People get a discount. Just go to Puck News slash Fashion People to join Puck or start a free trial. Happy Friday everyone. Big week Online Sheet more Gap, more Versace, more Estee Lauder, more LVMH say the major news of the week after the Jonathan Anderson Low EV departure announcement was the threat of a 200% tariff on French wine, cognac and champagne imported into the US this actually happened last week, but it kind of ramped up this week when the Prime Minister of France admitted that they need to go back to the bargaining table and maybe not charge a 50% tax on American whiskey and other alcohols going into France, because obviously Trump didn't like that and threatened something way worse. If this actually happens to be really tough for lvmh, which owns a lot of wineries and, and facilities that produce champagne. And they sell a ton of that stuff, a ton of alcohol in the US it's the biggest market for alcohol. It's also going to be bad for pretty much everyone. Like thinking about the printemps at 1 Wall street, the new department store. There's going to be a wine shop there with, I think, all French wine, if not mostly French wine. So, like, what are they going to do? I guess it's not going to be like that if, if this happens. But speaking of printemps, I'm sure you've read all about it. There's been so much great coverage. I have to say, I did a hard hat tour a few weeks back and I'm pumped. I'm excited. It's wacky, it's extravagant. It's like unlike anything you've ever seen. Look up the architect interiors person, Laura Gonzalez, just to see what her vibe is. You can also look at tons of photos online of, of the store in place like wallpaper. But it's incredible. They 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. I've known her since the beginning of the RealReal and it was fun to discuss the company's transformation, but also hers. You know, she started as a merchant and now she's the CEO. And we had a good time. Rati Sahi Levesque. Welcome to Fashion People.
- [04:28]
Rati Sahi Levesque
Thanks, Lauren. I'm excited to chat with you.
- [04:30]
Lauren Sherman
I'm so happy to have you here. It's. We've known each other over for over 15 years or like almost 15 years, which is kind of crazy.
- [04:40]
Rati Sahi Levesque
That's kind of nuts. I do remember the first time I met you in New York. When do you remember that? We were in. We met at a cafe and we had just started the RealReal and we sat down and talked about it.
- [04:54]
Lauren Sherman
And I remember, I was just saying before we hopped on, I remember you coming to my house for a story. This is probably 2013 for a story. Probably for Elle.com, because I used to freelance for them a lot because my Friend Leah Chernikov ran it. And you did a closet clean out with me in my dumbo. Well, Vinegar Hill, let's be real, Vinegar Hill apartment. And there was this Balenciaga Nicolas Gaskerre puff sleeve shirt, this sailor shirt that. It was like a very basic shirt from his collections, but it was like everyone got it at the Barney Sample Center. And you really wanted me to sell it.
- [05:42]
Rati Sahi Levesque
Did I want to buy it? Is that why?
- [05:44]
Lauren Sherman
Yes. No, I think you just want. You were like, this will sell. You should sell this. And it's so funny, I've probably never worn it since. I still haven't.
- [05:53]
Rati Sahi Levesque
Did you?
- [05:54]
Lauren Sherman
Yeah. I can't give it up.
- [05:56]
Rati Sahi Levesque
Good clothes, Lauren. I was probably trying to buy that off you.
- [06:01]
Lauren Sherman
Thank you. Well. So before we get started, what did you have for breakfast?
- [06:05]
Rati Sahi Levesque
It's so funny, I was just thinking. I knew you were going to ask that question. I was just thinking about how it's the same thing every morning and it's a piece of toast with almond butter and a piece an over a hard egg. That's my same breakfast, which I grosses a lot of people out.
- [06:20]
Lauren Sherman
Look, I know about the quest for protein.
- [06:26]
Rati Sahi Levesque
Yeah. I, I just like the way it tastes. I love some almond butter and some eggs together.
- [06:31]
Lauren Sherman
Maybe I'll try that. I, I don't, I increasingly don't eat breakfast, but I will eat breakfast for lunch because I love eggs and avocados and all that stuff. So I'm, and toast so much. But I would say the thing with the hard egg with just eggs in general, I love them. They actually don't have that much protein. So you really. They only have six grams of protein.
- [06:58]
Rati Sahi Levesque
And so you have to eat two. Right?
- [07:00]
Lauren Sherman
You have to eat two. And also these doctors want us to eat like 140 grams of protein a day, which I personally think is impossible. In five years from now, it's going to turn out that that's like bad for your liver or something. So I'm not killing myself over that. But it, it is shocking to me because like a piece of chicken has like 30 grams of protein.
- [07:22]
Rati Sahi Levesque
Yeah, I, I, I like my, my dad's like the healthiest person I know and he has a little bit of protein with every meal. And I think that that seems, I think. Right.
- [07:33]
Lauren Sherman
I think that's the way to go. And I also think you're doubling up on almond butter and egg, even though it's just for taste, is a good idea. So back to meeting you all those years ago, probably in like 2012 or 2013. How did you end up at the. Starting the real reel with Julie, the first CEO? Tell us a little bit about your trajectory because I think it says a lot about how you ended up in this role becoming the CEO of the business and developing the business and the cultural impact the RealReal has had, which is what is exciting to me about it. Your previous experience prior to launch, it just says a lot about like the state of retail and the, the evolution of retail in the last 20 years.
- [08:32]
Rati Sahi Levesque
Yeah, it's been, it's been quite the journey. So Julie and I met back in 2010, 11 I think and we started in 2011 and it was through a mutual friend and it was actually the person that married my husband and I knew Julie and so we met and she had this idea to take resale online, luxury resale specific, specifically online. And she was looking for a merchant at the time, right. So someone to like handle like the brand and merchandising and styling and, and all of that. And I had a clothing store in San Francisco on. In Russian Hill that was doing fine, not great.
- [09:24]
Lauren Sherman
You know, what was it called?
- [09:25]
Rati Sahi Levesque
Anika. And it was a lot of like living paycheck to paycheck. Right. My rent was really high. 30 people walk in all day. It was, it was really hard. And to make ends meet what I was doing was I was going to thrift stores and finding all the special pieces and reselling them. So you know, like the Chloe shorts and the, you know, whatever I could find that was interesting and, and I had a friend even helping me do that at the time. So anyway, I knew that this wasn't going to work out longer term. So Julie came across, came knocking at the door at the right time and she was, you know, we, we met in person. We met at the Boulange and we hit it off right away. And I shut down my store two weeks later and we were in her house. Like I was driving around looking, you know, I had a, I obviously had a little bit of a black book having the store. So I had like a few thousand people in my Rolodex and so I drove around calling them, asking them if they had any luxury product and just picking up and you know, they were kind enough, I was telling them what I was, what I was doing. They were kind enough to kind of trust us with some of their luxury pieces. And so we, 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.
- [11:04]
Lauren Sherman
So back then. So when you, you launched in 2012, it's 2011.
- [11:10]
Rati Sahi Levesque
2011, yeah.
- [11:12]
Lauren Sherman
So back then there was. The first piece I ever wrote for Business of Fashion was about the online luxury space. And I remember talking to Julie for it and we should say Julie Wainwright was the founder and first CEO of the Real World. I remember talking to Julie for it and she was like, we raised the most money so we're going to be the most successful. And I didn't include her in the story. And because I was like this, I was like, I don't know, I talked to. This was when I would over report things and interview like 15 people for everything. And there were so many, many online consignment or online resale startups at that time. There was Byronesque, which I don't. I think that still exists in some form, but isn't the same thing. There was Vestier. There was. Vestier may have not even existed. There was a real, real. There were just. There was Thredup. There were so many of them. And, and I remember thinking at the time like, this is a really smart idea. There's so much secondhand stuff in these little secondhand shops and people want stuff. But I remember thinking there two of the kind of barriers to entry would be. People were still really freaked out about buying secondhand, especially things like shoes. And then the second point of like how would you get the product? And I'm just curious, in those early days you, you mentioned you kind of tapped your network to, to find stuff, but what, what was the sort of market reaction? And initially when you went to launch and you had those thousand pieces on.
- [12:55]
Rati Sahi Levesque
The end, I think that was the thing that blew us away was we got those thousand pieces on the site and everything sold through within a couple of days. And so we just couldn't believe the demand. We did curate up front a bit. Right. We didn't take everything. It had to be a certain brand. And we really were specific about playing in the luxury space that like mid to high value, you know, product. And so knowing. And then we looked at each other like, oh crap, we need to go get more product. And that's like still to this day how we think about it, like the demand is great, the buyer's resilient. Even in this macro we're seeing the buyer be very resilient. And so it's always about product and the Consigner.
- [13:45]
Lauren Sherman
Yeah, that's it. That's interesting. So in that way I'm sure the business has changed so dramatically, but in that way it's still about finding the.
- [13:54]
Rati Sahi Levesque
Right, the right stuff, 100%.
- [13:57]
Lauren Sherman
And, and that's kind of like from you owning a store and being a merchant, like it's a similar skill. Right. Is it's just a different way of finding it.
- [14:08]
Rati Sahi Levesque
Yeah. And it's nice not owning the product. Right. Because you're not squeezing your margins. But yes, 100%. And I think like, you know, and to your point at the time, it was this hush hush thing. Like I would see it in even our NPS scores. I'd see people say, yeah, we love you but we're not going to give you good scores. We don't want our friends to know about, about the company because we only had limited product and so we only had certain size 9 shoes that were Manolo slides at the time. You know, now our inventory, we've got millions of items. So it's different. But. Or they didn't want people to your point, they didn't want to tell people that they were buying used shoes. And now it's this badge of honor or the smart thing to do because people, even with the money, they, they think about the price and the resale value or the price in the secondary market. So now they call us and say what has better resale value? Like what should I be, Educate me on what has resale value. And I think that's the thing that's really shifted that even if you have the means to go buy unlimited luxury, it's the savvy thing to do to buy smart.
- [15:26]
Lauren Sherman
I agree. It feels like a decade earlier the sort of discount culture that pervaded American shopping that like buying something full price, even if you had the money, it probably wasn't the smartest thing to do and you didn't want to be impractical. And, and I think it's extended to secondhand where not only are you, if you're buying full price stuff, you're buying it with to know what the inherent resale value is or to make sure that you'll be able to sell it if you wanted to, but then also if you can buy something secondhand, you're almost like a watch, for instance. I feel like there's a, like you said, a badge of honor in sourcing a really cool vintage watch. Guy got a watch for my 40th birthday and we just bought a full price one. But I'm, I Always feel kind of gauche because, I mean, it's not like it was that expensive, but. But, you know, like, I just. I'm like, I should have probably just looked for this on the real real or. Or what have you. And there is.
- [16:31]
Rati Sahi Levesque
Well. But then you can consign it, right? And watches do hold their resale value, so that goes back to, like, people just buying smarter in the primary market again.
- [16:42]
Lauren Sherman
Yeah.
- [16:46]
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- [17:14]
Lauren Sherman
So early on, other than finding the right product, like, what were some of the big challenges you all faced? Because it. It became a big thing pretty fast. Like, in that way, Julie was right that you all raised a good amount of. I think, was it like $40 million up front?
- [17:31]
Rati Sahi Levesque
Right. Yeah.
- [17:32]
Lauren Sherman
So it's funny that I remember that, but. But. And so you were able to scale up more quickly than a lot of your competitors. And you last. You outlasted many of the entrants in that era. What were early on, like, other than finding the right product for people to buy, what were some of the other big challenges you faced as. As an online consigner that doesn't own the product, but that does hold the product and ship it and authenticate it and all that stuff.
- [18:06]
Rati Sahi Levesque
Yeah, and that's exactly right. Like, Julie's vision was, I think her thesis and the vision was exactly right. Like, you have. You focus on acquisition, focus on marketing, go hard in acquiring the right product, the right consigners. You know, we did a lot of direct mail and even TV early on just to get the word out there and awareness. And so it did grow pretty quickly, but while still focusing on that core consumer and that core fashion consigner was really important too, and kind of being able to talk to them like, they are fashionable, they change over their wardrobe every season. And that is important. Right. But the biggest challenge at the time, besides the supply piece, was the logistics of all of it. There was. I mean, now we're taking in millions of items a year. Right. And so. And unique skus. And at the beginning. And now it's. Now it's a machine. And we've invested so much and so much is powered by AI. Now, we're not new to AI, even though it's such a buzzword right now. And we knew at the time that that's where we were going to have to invest in the logistics, because it was so hard at the beginning and processing those items. We're going 30, 40%, you know, like a million unique SKUs every month, going through our facilities and maybe even growing too quickly at the time. And we were growing up in the spotlight in a lot of ways and making mistakes and all of that. And so it was an interesting time, but I think we looked at each other and really invested our tech team in that area as well. But it took some time to kind of get ahead of that as well.
- [20:01]
Lauren Sherman
Yeah, it's interesting because so many retailers put too much money into tech in ways that don't make sense. Like, a great example is glossier raising a bunch of money to start an app that was supposed to be some sort of, like, social network and then never launching it and wasting that money. You know, it's every. There's. There's stories like every single retailer. Nordstrom, not. Well, I don't know about Nordstrom, but Neiman Marcus, whatever, replatforming, investing, Barney's replatforming, investing, and, and sort of that all imploding. But in this instance, in this situation, it actually really benefited you to invest in tech and probably being in the Bay Area and understanding and having access to engineers and things. Things. Because the fact, like, you're talking about AI and also just automating so much of what you do, because there is also has to be human touch for certain things. It. It probably was like one of the smartest things you all did was putting more money into that side of it instead of, you know, I know you've opened many stores, but not opening like 8 million stores or whatever.
- [21:15]
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- [21:15]
Rati Sahi Levesque
Yeah, we'll never have 500 stores, right? Like, we have. We have 18 now. Maybe we'll have 20, 30. But it's that we're digital first. And I think that so much of the logistics is a lot of our secret sauce. And the data that we have of now 40 million unique items. We have pictures, attribution. We have pictures on a pixel level of a handbag. So, like, all of our handbags now are. 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. What leathers, what combinations they didn't use with what hardware, with what zippers and. And that data is just so rich. And then also another place besides authentication that we've invested, so handbags, even diamonds, we. I don't remember if I've talked to you about this before, but we've patent technology with the University of Arizona to count the melee on the stone and it's much more consistent and faster. So it just empowers our teams to look at more and see more and get through more and not not be such like a manual process that is so expensive. And then pricing is the last place. Like all that attribution, like the personal, the external signals and the internal signals that we get around pricing. Like, we always talk about how the market sets the price and the consumer tells us how much they're going to pay for something at the end of the day.
- [22:56]
Lauren Sherman
Yeah, that's so interesting. The pricing part of it is always fascinating to me because of the fact that, like, I can hear what people are talking about in the market and there's a feeling of like, when this whole sort of corporate cosplay thing started happening, I was like, I gotta buy Armani blazers because they. Before they get too expensive.
- [23:17]
Rati Sahi Levesque
Yeah.
- [23:18]
Lauren Sherman
And so you're sort of like trying to get in there before something like starts to heat up because it isn't, it isn't about it being new, so it's the most expensive. It's about it being in the most demand. It's kind of exciting.
- [23:32]
Rati Sahi Levesque
It is true. Like, it's so funny because. So our customer showed us that Armani, like colorless blazers were going to be a thing last summer actually, like, that's when we started to see it pop up. And this summer is really where the prices have risen for that hip heritage.
- [23:49]
Lauren Sherman
I'm glad I, I got in there because I got some for really affordable. I have like full suits. I have. I think I've bought four Armani, one suit and three blazers from you over the last like two years. And probably actually other. I have like a lot of zoron or like all that stuff. I'm. Yeah, it's so fun to have that really quickly on the authentication. And the one thing I'm curious because this job is interesting because I am a trade reporter still and writing to people like you in the industry. But then I am also getting a lot of feedback from, as they love to call them, marketing prosumers. So like consumers who are just interested in what I write about. And so I get a lot of feedback about consumer experiences, most of them in recent Years in the recent months have been about Saks and I actually got one this week about Nordstrom because Sarah Shapiro, our retail reporter, who. I don't know if you met her yet, but you totally should, she's in the Bay Area, she wrote about Nordstrom and I got this like thousand word email about a Nordstrom experience that wasn't great, which, like happens, but has. I know you had to deal with a lot of like back and forth with customers and every retailer does, but I think because of every item being individual, my assumption is that maybe this, the amount of feedback or complaints or whatever is the same as other people, but it's probably a little more personal because every item is more personal. As you've been able to build this data out and build out your infrastructure and all that stuff, has that all sort of streamlined too? Because I know I emailed you before being like, roddy, this got messed up, which is inappropriate.
- [25:50]
Rati Sahi Levesque
I did that. Lauren.
- [25:51]
Lauren Sherman
No, I felt that, you know.
- [25:53]
Rati Sahi Levesque
No, but no, I was able to. No, I see. I love that because then can kind of obsess over service and really use that as an example to see what happened. And. And we do make mistakes sometimes and we need. We own it. Right? Yeah. And so, yeah, I think like a couple things, you know, like I think I said when we were going 30, 40% and our logistics weren't as sophisticated, I think that was a hard time for us. Yeah. And there were things, we were opening stores and there were just things happening that weren't kind of the best experience. And I think now as we've made all the changes to get to profitability last year and slowed down our growth to just profitable growth, we're able to really. I keep saying this, one of our pillars is obsessing over service and really listening to the consigner, the buyer and delivering product that resonates with them. And I think that's the thing that gets me most excited. So our NPS is much higher than it was back then. Right. Our net promoter score, our sentiment, our trust sentiment. And. But yeah, of course stuff comes up and of course we handle it and it is emotional for people because it's their one item and it's a luxury item and pricing is the thing that I think we still have a lot of work to do on. And what I mean by that is educating people because this is new. 50% of our sellers have never consigned anything before. Not just with the real real, but just. So it's a new. We think it's mainstream, but it's not quite mainstream yet and so we really have to educate people on pricing. It's like these shoes maybe don't hold their resale value and here's where why outerwear does or the handbags do. And items like maybe contemporary items sometimes don't. And so again, just really making sure that people understand we're not trying to pull a fast one, but we are telling you up front and you decide, you decide if you want to consign in or not at that point where the place to go for mid and high value product. If this is items, if the item is going to be priced under $100 in the resale space, maybe we're not the best place if that's what you're if you're looking to get the best dollar for it, right? So just be more transparent.
- [28:20]
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- [28:50]
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- [29:22]
Lauren Sherman
How do you determine what brands are listed on your dropdown? When someone's consigning and they sign up and they say item is a pair of shoes for women and this is the brand and there's a dropdown list and if your brand isn't on there you can try to sneak it in. But I don't think that usually works. How what's the sort of rubric you use to, to put brands in And I'm sure sometimes you take brands out.
- [29:52]
Rati Sahi Levesque
Yeah, yeah we do. It's based on again what the market will pay for things and you know what holds its resale value. And we do take things off. You know when we first started we weren't taking theory. It wasn't, it wasn't selling well in the rec in the secondary space and now it's selling really well, in the second space or Armani is another one. The resale value was a lot lower when we first started, and now it's having a moment. Right. And so we, we look at just the pricing in the resale space, the experience for the consigner. If things are going to be priced too low, it's probably not the right place because it makes the consigner unhappy and we. We're losing money right on those items. So trying not to be everything to everyone and just really focused on luxury product as well.
- [30:44]
Lauren Sherman
That's. Yeah, that's interesting and, and makes. It makes a lot. It's interesting about theory in particular. I love. I love my Olivier Tayskins for theory suit. When did you. Was there a light bulb moment when you realized that the real real was becoming like a big part of shopping culture and also just a part of culture in general? Because I'd say a couple of years ago. First of all, everyone I know uses the app, which I think is a tremendous accomplishment on your part, because no one uses anybody's app. People are into using the RealReal app and also sharing their pics, their lists, their sort of alerts, all that kind of stuff. I have all these different alerts on product, Margiela for Hermes, Zoron, like, all of that stuff. When did you realize it was becoming like a piece of pop culture and not just a selling platform or a buying platform?
- [31:51]
Rati Sahi Levesque
Yeah, there was a couple of moments. I think one of them was I went out, was at Barney's, you know, many years ago, and two girlfriends were talking. And, you know, I was. I just overheard them in the shoe, in the shoe section. And she was deciding on. I don't even remember what shoes they were, but she was deciding on buying shoes and her girlfriend said, just buy them and real, real them after. And that kind of shift of the real real becoming the verb, I think was a light bulb moment for me. Um, and then the gamification, I think, of the product or the gamification of the app, like going back to the app for. During COVID we realized that people were spending more time on our app. They wanted to spend more time on our app than social or the news. Scrolling the news, because it was this thrill of the hunt and they would obsess something and they would decide if they were going to buy it or wait for it to go on sale, you know, and so playing that kind of game with themselves on that and just scrolling. I think it's something like now, 40 hours a year on our site. Is what people are scrolling. I think that was the piece that kind of hit me. And then I'd say one other thing. I think, like, when people come to you and say you've changed the way I've shopped, I think that that is a piece or the education. It's the place where you can. It's the only place where you can see all of these archival pieces all in one place.
- [33:25]
Lauren Sherman
Right.
- [33:25]
Rati Sahi Levesque
That discovery of the items, one of a kind. And so people come in and they're really discovering new things and then researching and geeking out on kind of the history of these items. So I think just that. Just the discovery of everything from Mugler to Ralph Lauren and how they shop for it and the Armani example kind of see that throwback style and discovering their kind of style in a lot of ways.
- [33:57]
Lauren Sherman
Do you think from the data that you have, like, I'd say 2016 or 2017, the RealReal was about getting, like, Gucci loafer slides. Like, that was. It was like getting new stuff, like a season old or something. And now it feels like it's about finding your, like, 1989 Alaia jacket or Saint Laurent Reeve gauche or whatever. Like finding an era of fashion that is interesting to you and sort of going deep on it.
- [34:33]
Rati Sahi Levesque
Yeah.
- [34:33]
Lauren Sherman
Would you say that the, like, general consumer is still looking for those, like, main fashion items, or have you seen a larger shift in people, in the sort of things that people want becoming much broader and less concentrated?
- [34:49]
Rati Sahi Levesque
I think it's both. I think that the more, you know, even. Even that customer that was only buying, like, the Louis Vuitton shoulder bag, but not maybe buying luxury in the past, like, as far as ready to wear goes. But their one purchase was that handbag. We're seeing them kind of shift over and, like, even buy cashmere for work now and just. It just feels like a little easier. Right, to try some of these trends and kind of buy into it. But it's. It's. Yeah, it is interesting. I think that there is this kind of yearning to look unique and not buy into all the trends right now. And so I always feel like when you're buying something from a past season or past decade and then trying, you know, buying it and then making it look relevant for now, you do have to have some kind of confidence in your style. Right. And know how to wear it. And I think that people are kind of in the space where they're just oversaturated with trends and they're just wanting to look a little bit more independent. From all of that.
- [36:00]
Lauren Sherman
Right, yeah. What we meant you mentioned the Armani colorless blazers. What other items have been sort of top of mind for people in the last few months?
- [36:12]
Rati Sahi Levesque
Ralph Lauren, obviously.
- [36:15]
Lauren Sherman
That's interesting. So are they going for like polo stuff or is it western? The western gear wood, A lot of.
- [36:25]
Rati Sahi Levesque
The western sweaters and like the logo kind of cashmere and button ups. Terry Mugler. Like they're, they're going after those pieces and discovering it for the first time. Yeah, it's ladonna Karen.
- [36:43]
Lauren Sherman
Oh, interesting.
- [36:44]
Rati Sahi Levesque
Some of the kind of heritage for sure. Brands that like have and like a lot of them having even that provenance, you know, and understanding like what collection to your point, like is it the western collection? Is it. And they're searching that like we can see it. The way they've searched it has changed too. Like much more specific.
- [37:07]
Lauren Sherman
That's so interesting. How do you source stuff now? I mean obviously you have a lot of inbound from people who've been doing it for years or from people who are suddenly just want to lighten their load. But I'm. I assume you still need to be proactive in some ways.
- [37:28]
Rati Sahi Levesque
We do. Yeah. And I think for us it's you know, really going back to the basics of creating a frictionless experience for the consigner where they can earn the most in that mid to high value product. Right. And so I think that that's that frictionless experience of now. You can go to your app and get an on demand appointment today for someone to pick up or on your way to work next week you can drop off at a retail location.
- [38:01]
Lauren Sherman
Yeah.
- [38:01]
Rati Sahi Levesque
And you can meet with a gemologist or a handbag expert or you can just meet with your luxury manager and get everything done pretty quickly. And the diversification of our taxon, our product offering makes it a one stop shop for people that just don't have the time. So creating that frictionless experience and then get. Making sure that you know, people do earn the most with us in that mid to high value product where, where again where we really kind of shine right. In our product offering and what makes sense for our business because we do authenticate and we do take possession. And so the. And then what we find is, you know, a lot of those consigners that have the high low and have it across like more of a variety of categories where the easy spot for them, we make it so easy for them that they keep coming back.
- [38:58]
Lauren Sherman
Yeah. My, my experience is I always consign with you because it's just, I know how to, it's easy. You just. I, I don't go into the store. I just do a box and print out the form and print out the shipping label and send it and the stuff you don't want you send back. And it very neatly, always folded really nicely, better than I would have done myself. So it feels like the simplest way. And even if you know certain items like I had a pair of, I bought a pair of those Hermes clogs during the pandemic in a complete crazy person situation where I would like got a personal shopper to buy them for me in Portugal and I was just being insane and they were a size too big and I just never wore them. And also I'm not a clogs person. They're very cool and I, I really wanted them but I was like why did I do this? And I tried to sell them like through another thing and I was like this is just because I was like maybe I'll get more money for it because they're like if I do it direct or whatever. And the reality was I just didn't want the hassle of that and it was much better for me to.
- [40:19]
Rati Sahi Levesque
Work.
- [40:20]
Lauren Sherman
With the RealReal on it and just have the realreal manage it and like the price, the time, time is money type thing. I think the RealReal makes that, that's the best A. You do get a good value and you get like you sell things that you may have never sold anywhere else.
- [40:38]
Rati Sahi Levesque
Yeah.
- [40:38]
Lauren Sherman
But, but the, the bigger thing is that like it, you do make it so easy.
- [40:49]
Rati Sahi Levesque
Yeah. And it helps that we have the like 40 million luxury shoppers too because they, they know what they're looking for. Right. And so, and they do understand what they're paying for. So they're more likely to pay as a consigner like if you're selling your things more of that top dollar for something because you know it's, it's. They've been wanting it for a while. They maybe have been looking for those clogs for three years and so it's worth more to them. So yeah, it is, it is interesting. But yeah creating that frictionless experience and just. And you know all of our product mostly sells within 90 days. 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. And I do think that that what we find in our studies like because we've tested different time frames of sell through and slowed it down and sped it up but that that's kind of the sweet spot like that 30 to 60 days. And it gets people to change the way they shop. Right? Because now they get that first paycheck, they take it to the primary market or and are very purposeful about their next purchase or they spend it on her site, whatever it is, and then they book another appointment to consign again. Because it's real money, right?
- [42:12]
Lauren Sherman
Yeah, for sure. So I guess one other question for you is you've, as you've been building this, you have seen the explosion of luxury goods as a item that people consume and not just super wealthy people. Obviously there is like the high net worth people buying $10,000 handbags and without blinking. But then there are also just like a lot of middle class and upper middle class people buying luxury goods in a way that they never have before. In the last 15 years, as you've been building this, that market also exploded. And I'd say the two things have really fed off each other. And in some ways a lot of luxury brands didn't realize how powerful you were and now are starting to understand it more and realize like this is the most marketing wonky thing I ever talk about. But I really think that like secondhand has become a part of the customer shopping journey. Like it is just when you're looking for something, you're the, it's, it's part of it. Not, it's either at the end of the journey when you eventually sell it, or it's at the beginning of the journey when you're, when you start researching. And so I'm curious what you think about what's happening in the luxury industry right now where, you know, pretty much no one other than Hermes and Laura Piana is performing right now. And so, and even at multibrand retail. And then you look at the realreal and the, you're like you said your customer is still around because these people, it's not like just because the economy is not great or like the stock market's going well. It's not like these people have lost all their money. They still have money. They're just being more careful about how they spend it. What are your observations about the greater luxury industry and where do you think it's moving now?
- [44:08]
Rati Sahi Levesque
Yeah, yeah. I mean, I think like I said, it's becoming much more mainstream. It's such a, it's still such a nascent industry and I think that that's what we forget. Like if I, if I have told you like how many, you know, consigners we had in New York And LA and some of these major markets, I think you'd be surprised. Right. And we're. So it is still like a new behavior for people. And I do think that the luxury brands are starting to see that and 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. And so, you know, I'm sure you saw we had partnerships in the past with like, Gucci and Stella McCartney and Jimmy Choo and even Neiman's and, and that, like, circularity of, of the product. You know, they, they, they buy the Gucci item, they consign it six months, eight months later, and they take that money and they buy it. They go back into Gucci and we, you know, yeah, that. And that customer is a little bit younger, but we are that kind of gateway into luxury in a lot of ways. Like, we see the girls in the office, you know, 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. Like, they, they realize kind of that as well.
- [45:44]
Lauren Sherman
Right.
- [45:44]
Rati Sahi Levesque
It's, it's becoming. They. They're thinking about it a lot differently too.
- [45:50]
Lauren Sherman
Yeah, it's, it's. It must be so fun to witness that all firsthand.
- [45:57]
Rati Sahi Levesque
It is fun. It is a lot.
- [45:59]
Lauren Sherman
Did you ever think you'd become the CEO of the business?
- [46:04]
Rati Sahi Levesque
Did I ever think I would become the ceremony CEO? You know, it's not what I was thinking about when we started the company.
- [46:11]
Lauren Sherman
Let's just say it's really amazing. I mean, you've really seen it through good times and bad and, and you're right, like, because you all raised a lot in the beginning and you went public pretty early. All of your challenges were exposed and the resilience to kind of get through it and, and keep investing and keep doing the right thing to the point, point of that. It is just like a big part of culture is. I mean, it's amazing.
- [46:40]
Rati Sahi Levesque
Yeah, it's been a lot of fun. I think the thing that is so exciting too is just, you know, seeing how the consumer is reacting to it as well. And there's, and how passionate people are about the product and the company. Like, even if they have, they have a great experience, we hear about, if they have a bad experience, they're upset and they will tell us, you know, and, but that it's coming because they're just so passionate about the product and the company, right? And they want to see us succeed. So I think that's been really cool to watch.
- [47:17]
Lauren Sherman
It's awesome. Rachi, thank you for being on Fashion People. I'm so glad we got to catch up and I'm so nice. I'm so glad I met you all those years ago.
- [47:26]
Rati Sahi Levesque
Ditto. Lauren, so nice to see you.
- [47:29]
Lauren Sherman
We'll talk soon, I'm sure. Fashion People is a presentation of Odyssey in partnership with Puck. This show was produced and edited by Molly Nugent. Special thanks to our executive producers, Puck Co Founder John Kelly, Executive Editor Ben Landy and Director of Editorial Operations Gabby Grossman. An additional thanks to the team at Odyssey, JD Crowley, Jenna Weiss Berman and Bob Tabador.
- [47:57]
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