The RealReal is incorporating artificial intelligence (AI) into various aspects of its business to improve efficiency and drive growth. The online luxury resale platform is leveraging AI for authentication, pricing, and customer engagement to enhance its operations. Executives discussed these technological advancements during the company’s latest earnings call, highlighting the role AI plays in increasing profitability and operational efficiency. The company aims to expand these initiatives further in 2025, with a broader rollout of its AI-driven solutions.
In earlier years, The RealReal primarily relied on traditional authentication and pricing methods, which required significant manual effort. Over time, the company has integrated more technology-driven approaches, particularly in pricing and authentication. Previously, AI-driven pricing tools were partially implemented, but by the end of 2024, 85% of items listed on the site were priced using AI. This represents a significant increase in reliance on automation compared to earlier adoption rates.
How Is AI Enhancing Sales Strategies?
The Smart Sales AI tool is utilized to analyze customer data and external factors to predict which clients are most likely to consign items and when they are likely to do so. This tool has contributed to a 15% increase in the value generated per sales representative in 2024. The company plans to expand this initiative in 2025 to further refine its sales strategy.
What Role Does AI Play in Authentication and Listing?
The RealReal is also integrating AI into the authentication process. The Athena AI initiative, set to launch in 2025, will use image recognition technology to verify luxury items and automatically populate key attributes for listing. By the end of the year, Athena AI is expected to be involved in verifying approximately half of the items processed through The RealReal’s authentication centers.
AI-driven pricing tools have also become a central part of the company’s operations. At the end of 2024, most items on the platform were priced using AI technology to enhance pricing accuracy and transparency. The company believes this approach helps build trust with sellers and ensures competitive pricing in the luxury resale market.
Financially, The RealReal reported a quarterly revenue of $164 million in the fourth quarter of 2024, reflecting a 14% increase year over year. Additionally, gross merchandise value (GMV) grew by 12% to $504 million, with active buyers rising by 7% to 408,000. The company also achieved its first full year of profitable adjusted EBITDA.
Looking ahead, The RealReal expects continued expansion in 2025, projecting a GMV increase of 7% to 9% and total revenue growth between 7% and 10%. Executives remain optimistic about AI’s role in driving efficiency and sustaining long-term growth.
“Our results in 2024 reinforce our confidence that our growth playbook is working,”
said Chief Financial Officer Ajay Gopal, emphasizing the company’s strategy for tapping into the $200 billion luxury resale market in the U.S.
The use of AI in resale platforms like The RealReal highlights an industry-wide shift toward automation in luxury goods authentication and pricing. AI’s role in streamlining operations can improve processing time and pricing consistency, benefiting both buyers and sellers. As The RealReal continues to refine and expand its AI-powered initiatives, its ability to scale operations while maintaining authentication accuracy will be crucial in shaping its competitive standing in the luxury resale market.
