The RealReal’s CEO Shares From Platform’s ‘Growth Playbook’ After Strong Q3
For Rati Sahi Levesque, newly appointed CEO at secondhand luxury goods marketplace The RealReal, her first week at the company’s helm was a promising one.
In a marketplace driven by value-conscious consumers, The RealReal reported third-quarter earnings Monday (Nov. 4) that exceeded expectations. Levesque succeeded John Koryl, who left the company and no longer serves on the Board of Directors.
“I am pleased to report strong results for the third quarter, and I am encouraged by the continued strength in supply trends as we enter the fourth quarter,” Levesque said in the release. Total revenue increased 11%, to $148 million, driven by a 14% increase in consignment revenue. The RealReal processed 829,000 orders during the quarter, reflecting a 4% year-over-year rise, while the average order value (AOV) rose 2% to $522.
“I’m honored to speak to you today as the new CEO of The RealReal,” Levesque told analysts during the earnings call. “Our teams are executing well against the company’s vision to change the way people shop for the better. We’re obsessing over service, operation excellence and escalating the business through our growth playbook.”
That term, “growth playbook,” was referenced multiple times during the call and involves the company’s sales, marketing and retail stores working together toward a common goal, Levesque noted.
“Our growth playbook focuses on generating supply,” Levesque said. “We’re pivoting to focus more on our consignment business. Supply is quite healthy right now, and that’s really important. Sales, marketing and retail are working together nicely. Sales is seeing all-time highs on retention as we expand to other key markets. With marketing, personalization is targeting mid- and high-value consignors.
“There is a lot of confidence in supply right now,” she added. “Return to growth is a big talking point for us internally and will continue to change the way people shop. The intersection between value and luxury is really resonating with our consumer. As we enter the final quarter of the year, we’re encouraged by the momentum we’re seeing in the business. It’s clear that our growth playbook is working.”
One of the keys to growth, Levesque noted, was leveraging TikTok and Instagram to engage customers and potential consignors.
“We realized some of our highest engagement rates,” Levesque said. “Perception and awareness are important, but there is more work to do.”
Currently, Levesque said, the company has 16 retail locations and plans to open one to three stores per year in key markets, including Miami and Houston, later this year.
“We position stores in areas where consignors live,” she added. “Our business has been quite resilient. Demand is also strong. We’re going in heavy with making people understand we are a value play.”
Thanks to its third-quarter performance, The RealReal raised its guidance for the fourth quarter and full year, including revenue projections of $158 million-$165 million and $595 million-$602 million, respectively.
Chief Financial Officer Ajay Gopal is encouraged by the company’s topline growth and its increased guidance for the fourth quarter.
“I’m encouraged by the topline growth in Q3,” he said. “The growth playbook is focused on unlocking supply, and that’s the power of our business model. Across the organization, we are executing on our growth playbook, obsessing over service and reducing friction in the consignment process … We feel good with how the quarter played out.”
The post The RealReal’s CEO Shares From Platform’s ‘Growth Playbook’ After Strong Q3 appeared first on PYMNTS.com.