The RealReal is an online luxury consignment company. You send them your unwanted luxury goods, they inspect them, price them, sell them and take a cut. Like so many disruptive tech firms, TRR isn’t making money. But they are selling a lot of pre-owned watches. And generating some interesting if potentially misleading data points. For example . . .
According to The Real Real’s Resale Report 2019, “While watches saw 132% growth in overall demand YoY [Year-on-Year], Apple Watches fell to the bottom of the pack and high-value watches soared to the top.”
See what I mean about misleading? Apple and its retail partners are busy discounting the beJesus out their smart watch in anticipation of September’s Gen5 release. And TRR is reporting searches, not sales. What does that tell you? Not a lot.
This graphic tells you even less. Assuming a watch can’t obsess (being an inanimate object and all), did TRR’s marketing mavens mean the “most obsessed over by visitors to the site”? As in most searched? Dunno. But TRR’s “head watchmaker” Laif Anderson has this to say about that:
“Many parts of modern luxury watches are crafted from rare materials and made and assembled by hand. That’s what sets them apart from smart watches. Savvy buyers are latching onto high-end watches as ultimate statement pieces that are also one of the smartest luxury investments.”
Luxury goods aren’t an investment, any more than government spending is an “investment.” Less, in fact. Luxury goods are an indulgence. Anyone who tells you otherwise has a luxury good to sell. Obviously.
As far as high-end watches being an “ultimate statement piece,” there’s more than a modicum of truth to that. You can’t bring your AMG or Bugatti into a board room. In terms of actual pre-owned, high-end watch sales data . . .
Sales, not searches — although no absolute numbers to work with. Anyway, ignore the growth numbers and focus on their relative relationship.
To my eyes, the chart indicates that The Real Real has found a really sweet spot in at the middle of the top end of the pre-owned watch market. A place where customers were getting raped by dealers.
The internet enables instant searches for the lowest going price for a pre-owned watch. All things being equal — a high-end watch from a reputable dealer is the same as any other high-end watch from any other reputable dealer — people buy on price.
The Real Real’s success in this rarified air is bound to reduce the prices — and thus margins — for pre-owned watches in this segment. Unless The Real Real’s head watchmaker falls down on the job and the site loses its cred for authentic, reliable watches.
I’m not sure what that image is telling us. See no evil, but go ahead and speak it? I’m equally unsure what to make of the data. Sales of $5k+ watches are up by 50 percent, but that’s kinda useless without knowing the actual number of watches sold, which would yield a more illuminating demographic breakdown.
While it’s interesting that TRR high-end watch sales are up for both the 18 – 34 and 35 – 44, what the sales split between the two groups? I assume it skews heavily to the post-mid-life crisis, post-career success, pre-college tuition (for the kids) demo.
I suspect TRR doesn’t want to provide actionable data on the pre-owned watch business because it’s competing against the established players in the pre-owned watch business. Still, these guys are ones to watch. I’m gonna reach out. Watch this space. So to speak.