The RealReal: AI Tools Improve Sales, Operational Efficiency, Customer Service
Artificial intelligence (AI) tools are helping improve sales, operational efficiency and customer service at The RealReal, executives said Thursday (Feb. 20) during the company’s quarterly earnings call.
The online marketplace for resale luxury goods is either using or preparing to use AI to help identify potential consignors, authenticate items, determine optimal pricing, list items, improve search results and enhance customer service.
“Our rich data and tech capabilities enable us to benefit from recent advancements in AI,” The RealReal President and CEO Rati Levesque said in prepared remarks for the earnings call. “We’ve used these capabilities to drive efficiency and accelerate our path to profitability.”
In sales, the company’s Smart Sales AI uses customer data and external data to help its luxury managers assess which clients are most likely to consign and when they are likely to do so. The RealReal saw its value generated per sales rep increase 15% in 2024.
“Tools like Smart Sales allow our luxury managers to service more consignors and improve efficiency,” Leveque said. “Early results of this initiative have been very encouraging, and we are planning a broader rollout in 2025.”
AI tools also help The RealReal process luxury items like fashion, jewelry, watches, art and home goods, from authenticating them to adding them to its site. In 2025, the company is launching an Athena AI initiative that will use image recognition to authenticate items and pre-populate their key attributes for listing on its website. By the end of the year, Athena will touch about half the items moving through The RealReal’s authentication centers.
“Cost leverage from improvements in automation took hold in 2024, helping our teams to process units quickly and efficiently, cutting over one full day of processing time,” Levesque said.
The company also uses AI to price items. At the end of 2024, 85% of The RealReal’s items were launched with the help of its AI-driven pricing engine.
“This data-driven approach has been central to our efforts to improve pricing transparency, an important element in building further trust with our sellers,” Levesque said.
The RealReal achieved record-high quarterly revenue of $164 million in the fourth quarter, which was up 14% year over year, according to a Thursday earnings release. The company also saw its gross merchandise value (GMV) increase 12% to $504 million, its trailing three months active buyers rise 7% to 408,000, and its average order value (AOV) rise 6% to $579.
The company also delivered its first full year of profitable Adjusted EBITDA, Levesque said in the prepared remarks.
Looking ahead, The RealReal expects both its GMV and its total revenue to increase in the full year 2025. The company forecasts its GMV to increase between 7% and 9%, from $1.83 billion in the full year 2024 to between $1.96 billion and $1.99 billion in 2025, and its total revenue to rise between 7% and 10%, from $600 million in 2024 to between $645 million and $660 million in 2025, according to an earnings presentation released Thursday.
“Our results in 2024 reinforce our confidence that our growth playbook is working, and we are making progress in unlocking the $200 billion luxury resale [total addressable market (TAM0] in the U.S.,” The RealReal Chief Financial Officer Ajay Gopal said in the prepared remarks. “We believe our strategy can deliver high single-digit to low double-digit growth over the medium term.”
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