The RealReal (REAL) The 38th Annual Roth Conference summary

Market overview and business model

• Operating in a luxury resale market with a total addressable market exceeding $200 billion, growing 2–3x faster than primary luxury sales due to strong demographic and secular tailwinds.

• Growth is supply-driven, with a managed marketplace model focused on unlocking items from sellers' closets and achieving a 50% sell-through rate within 30 days.

• High buyer trust is established through expertise and authentication, with average order values above $600 and frequent high-value transactions.

Growth drivers and operational strategy

• Recent GMV growth reached 22% in Q4, with Q1 guidance at a 21% midpoint, attributed to improved execution in sales, marketing, and store operations.

• Sales team enhancements include hiring industry-experienced reps and revising compensation to prioritize value, increasing mid- and high-value item supply.

• Marketing investments, especially in social and referral programs, have improved ROI and driven growth in both consignors and buyers.

• Store openings amplify sales and marketing effectiveness, with new locations like Houston increasing new consignors by 75%.

Technology and AI implementation

• AI tools such as Smart Sales and price estimation enhance sales rep productivity by targeting high-potential consignors and providing real-time pricing guidance.

• Athena AI, implemented on 35% of items, automates intake, authentication, and pricing, reducing variable costs and planned for expansion into higher-value categories.

• AI-driven efficiencies are key to the margin expansion goal of reaching 15–20% adjusted EBITDA over five years.