“It was incredible how fast brand paid off”: How The RealReal’s NYC pop-up store drove awareness (and revenue!)

Online luxury goods marketplace The RealReal took a leap of faith and invested in brand to create genuine conversations around the importance of authenticity, which led to huge organic social impressions, a significant uptick in brand health metrics, and ultimately, drove revenue after converting the demand that brand building had created.

The RealRealOpens in new tab is USA’s largest luxury provider of authenticated goods: a resell marketplace for long-lasting clothing, bags, and jewelry. By taking in the things that people no longer use, authenticating, and selling these high-quality pieces on the platform, The RealReal creates a circular economy and gives unwanted goods new lives. Having started in 2011, The RealReal has seen an incredible amount of growth, now boasting 37 million members.

For the past two years, The RealReal has been on a pathway to profitability – and particularly looking at efficiencies in the marketing funnel. Typically, companies tend to view performance marketing in silo as the answer to “solve” the funnel; investing in social media, SEO optimization and other performance marketing strategies are often the first port of call for trying to get people in the door and then converting them down.

“But if you think about The RealReal, we’re running two funnels. On one side, we’re trying to bring those goods in. But then on the other side, we have to sell those goods. And what that means is, efficiency at the bottom really depends on the top,” Caroline Gardner, Head of Integrated Brand Marketing & Experience at The RealReal, said.

What The RealReal recognized in 2023 was that the cost cutting and efficiency work it was doing, including performance marketing, had increased revenue, but it still struggled to break through to profitability. “What is that next step? We recognized that within our marketing efficiency, we weren’t going to be able to do that if we were only focusing on the bottom of the funnel – this performance efficiency that was created. And so we took this leap of faith, like many marketers do, and thought about creating that change from brand.”

The pop-up that blew up 💥

The RealReal set up a pop up store on Canal St in New York City, the global epicenter of dupe culture and unauthenticated luxury goods. On the outside, the activation looked like a beautiful retail store selling high-end bags and designer items: Kelly bags from Hermès and Cleos from Prada. In reality, everything in the store was fake.

The campaign, “Ask Us What’s Real”, tapped into a real fear within the cultural zeitgeist, and created societal conversations around the importance of authenticity – not just in fashion, but in our daily lives.

It blew up.

“We expected it to be this very New York-centric conversation around Canal St and luxury goods,” Caroline said. “And what we saw was this explosion in social. We did not pay for those impressions.”

There were 3.25 million organic conversations on social media that increased positive brand sentiment by 73%.

In addition, this brand-building activity also drove key funnel metrics. Tracksuit data showed that brand awareness increased 9%, Consideration surged by 6% and Usage had a 7% uptick.

All of this happened amongst a small 2% growth for the rest of the luxury resale market category.

“That 9% awareness increase was huge for us, because it brought us into new markets where performance marketing can then sneak underneath the ramp and capture all of this new demand and interest in the upper funnel from both the buyer and seller side of the marketplace,” Caroline said.

When the rest of the market was seeing 3-11% declines, The RealReal saw an 11% increase in revenue year-on-year. Revenue increased by $15M, bringing total Q3 revenue to $148M.

The RealReal also saw wins across the board in active buyers, number of orders, and average order values, with a 6% increase year-on-year in Gross Merchandise Value (GMV).

These efforts have nudged the brand closer to its guidance for full year profitability.

“Thanks to Tracksuit’s insights, we can now prove the impact of brand activations like our Canal Street campaign in the boardroom,” Caroline says. “Tracksuit’s data showed that our bold investment in the brand translated directly to a substantial increase in positive brand sentiment, awareness, consideration, and usage – something elusive in the luxury market this year.”

Brand and performance marketing are BFFs 🤝

The RealReal’s boost in revenue due to this brand-performance teamwork perfectly lines up with the findings in Tracksuit and TikTok’s joint study, The Awareness Advantage: that brand awareness is a controlling factor for the performance in performance marketing. As brand awareness increases, conversion rates of performance marketing also increases.

“We attribute a lot of that [revenue increase] to the efficiencies that we built across our marketing funnel, but much of it we attribute to this step change we created by investing in top of funnel brand. At the end of the day, what became really critical for us was recognizing the funnel velocity that brand could drive from the upper to the lower – and how quickly it happened. We launched Canal St in June and saw these results in Q3,” Caroline said.

“It was a really incredible and unexpected story of how fast the investment in brand paid off. So for the same spend that we had in Q3 2023, we saw in Q3 2024 a multiple of X – a very high amount – on that actual spend. That tracked almost exactly to the data that the Tracksuit team had found in their partnership with TikTok.”

The study found that high brand awareness advertisers drove 2.86x higher conversion rates than low awareness advertisers.

For example, a brand known by 4 out of 10 consumers is 43% more efficient in driving performance marketing outcomes on TIkTok than a brand known by 3 out of 10 consumers.

“This became valuable to us because it created a growth efficiency playbook,” Caroline expanded.

As a result of this commercial success, Caroline and the team are changing how they’re thinking about their marketing and media plans for 2025.

Investing in brand and positioning themselves as a thought leader in the world of authenticity has led to other new opportunities for The RealReal outside of increased revenue, too: it has been invited to join the National Crime Prevention Council and are now working with the United Nations to platform sustainability and reduce counterfeiting in fashion.