This story is part of Glossy and Modern Retail’s series breaking down the big conversations at eTail West.
In the retail world, luxury resale company The RealReal has unique challenges. Along with selling single-SKU products, it must also contend with winning and retaining both consignors and traditional customers. According to Kerri-Ann Butcher, the company’s senior director of lifecycle, loyalty and retention marketing, ensuring the loyalty of each group requires individual strategies, which must evolve according to emerging technologies and group members’ behaviors.
“But, on both sides of the marketplace, the [strategies] are largely based on personalization,” Butcher said.
The loyalty program offered to customers, called First Look, is subscription-based and answers shoppers’ growing desire for exclusivity. For $12 per month, shoppers can gain 24-hour early access to the 20,000 new products that drop on The RealReal every day, according to the company. They also get to shop “secret sales,” browse exclusive product curations and receive a discount-based birthday perk.
“This is our most engaged shopper base,” Butcher said. “People see value in First Look because things are so one-of-a-kind and covetable on the site,” and speed matters.
For consignors, there’s a four-tier program called RealReal Rewards. In short, the more they sell, the more perks they earn. All RealReal Rewards members get access to the company’s Consignment Concierge services, offering support throughout the selling process, as well as a shopping offer on their birthday. Top sellers, called VIPs, earn 5% more in commission, plus complimentary access to the First Look program.
The work of Butcher and her team of six has proven successful for the 13-year-old company. In 2023, 82% of The RealReal’s gross merchandise volume came from repeat consignors, while 87% was driven by repeat buyers. The RealReal has more than 34 million registered shoppers. It does not share its loyalty member count, Butcher said.
The RealReal will report its full-year 2023 earnings on Thursday, following a third-quarter earnings report that resulted in renewed confidence among company investors. Under John Koryl, who became CEO in February 2023, the company announced an adjusted EBITDA loss of $7 million, compared to $28 million in the same quarter last year. The results proved its goal of profitability by 2024 was within reach.
The company’s personalization efforts extend beyond its loyalty program members: Regardless of the customer, data based on their behavior and activity across the company’s sales channels informs their shopping experiences. Considered are the products they view and “obsess,” or like by clicking a heart, as well as their search and purchase histories and their questionnaire answers during a welcome journey. This data is used to customize the shoppable categories and curations they view, whether in-app, on-site or in an email. For example, the New Arrivals one shopper sees will be different from that of another, across channels, and based on the items they’re most likely interested in.
“Some of our most engaged members look forward to getting that New Arrivals email every morning to see what’s new, then they often ‘obsess’ a few of the items and maybe check their [existing] obsessions. It’s a fun little flywheel,” Butcher said.
SMS subscribers are also among the company’s most engaged members, and, as such, they’re treated to loyalty-style perks. Those include secret sales, early access to select product curations and exclusive deals.
In addition, one-off emails and text messages are sent to members based on behaviors as they’re made. For example, after they’ve “obsessed” something, they’re served up an email featuring similar items. Butcher’s team works hand-in-hand with The RealReal’s product, tech and machine-learning teams, she said.
“We want to make sure that people are seeing what they want to see at the right time,” she said. She noted that the company also works with Salesforce Marketing Cloud to ensure customer-preferred email send times, for example. Butcher will be on a panel on “Standing out in a crowded inbox” at the eTail West conference on Monday.
As for consignors, personalization is provided through individualized impact reports showing the water and carbon they’ve saved the industry by extending the life cycle of the fashions they sell. There’s also the Concierge service providing them with 1-on-1 support.
In addition, The RealReal offers a growing box of tools to help sellers get the most bang for their buck. An on-site, analytics-driven Insights Center provides a snapshot of the items that are trending, in terms of sales. In addition, a new Handbag Estimator offers the estimated value of a handbag style at a given time. And Reconsign prompts those who have purchased an item through The RealReal to resell it when the piece is in demand.
The impact report has proven popular among young members, Butcher said. The same is true of the Obsessions feature and a newer Saved Searches tool allowing shoppers to revisit past searches to see newly added items.
But offering personalization does not come at the expense of offering discoverability, Butcher was sure to note. The RealReal’s merchant team partners in developing content based on what’s trending, including emerging brands. This shows up as on-site features including Editor’s Picks. There’s also Rare Finds, a new feature that pairs hard-to-find pieces with information about their history.
In addition, the company’s 15 stores — 12 of which are shoppable — also work to both reach new customers and engage existing customers and consignors.
“We’ve been ahead of the curve with being able to build out this machine learning and understand what people are looking for and serve up that unique item at the right time,” Butcher said. “And there’s even more we plan to do in personalization by further digging into our data.”
