The RealReal Booms Despite Luxury Stall

Shoppers are cutting back on purchases of designer handbags and shoes. For luxury resale website The RealReal, that is a good thing.

- JENNIFER WILLIAMS

The RealReal's sales have grown for three straight quarters as shoppers look to the secondhand market to save on high-end wares.

The company sells 75% of everything on its resale platform within 90 days, while luxury brands have lost millions of customers over the past couple of years and are selling fewer items.

The RealReal is working to keep items selling, and fast, by investing heavily in technology developed in-house that cuts down the time and cost it takes to prepare products, including Chanel bags, Rolex watches and Gucci shoes, for sale.

"We're constantly pushing the envelope on what we could use technology for to drive efficiencies in our business," Chief Financial Officer Ajay Gopal said. "We have a real advantage in how we can benefit from the advancements in [artificial intelligence]."

One way The RealReal saves time and money is by using AI to authenticate the products it sells. For example, before listing one of Chanel's quilted bags on The RealReal, an employee takes photos of everything from the quilting to the metal hardware and chain strap. They press tiny cameras against the bag, taking high-resolution photos.

Previously, employees would manually compare the photos with those in The RealReal's image archive, which has data from each of the more than 40 million items sold, looking at attributes including the logo, coloring and metal used in the zippers, to determine whether an item is authentic.