It’s a new fiscal year, and many investors are looking into ways they can diversify their portfolios and change up the way they invest. Investment experts are stressing that this year must be the year that investors take risks. Why? There are a few reasons, but the most important has to do with changes to the global market and to consumerism itself.
Over the past few years, consumers have been making significant changes in their spending habits. Among the top values of the current spending group are consciousness-driven purchases, purchases that promote health and wellness, and purchases that help them get a deal. So, how does The RealReal fit into this consumer mindset?
About The RealReal
The fast fashion industry has one of the most significant environmental impacts in the world. Each year, as much as 85% of textiles in the world make their way to landfills, and many of these textiles are entirely usable. Additionally, the process of creating fashion creates actual tons of liquid and solid waste that makes its way into rivers and oceans. This includes microfibers, which have been found all over the world – even in some of the most remote regions. Though not as much is known about microfibers as is known about plastic, microfibers do have the potential to poison animals if they are ingested frequently enough.
The environmental effects were enough to light a fire in Julie Wainwright, the CEO of The RealReal. The RealReal started as a one-woman show, with Julie Wainwright consigning luxury items from client to client and storing them in a U-Haul until their time of sale. Now, The RealReal is a worldwide company working hard to ensure that useful, useable clothing doesn’t find its way to the streets and that people get authentic upscale apparel and accessories at a fraction of the cost.
Why Put Money in Eco-Conscious Fashion Like The RealReal?
Fashion isn’t one of the stocks that is the most popular in which to invest. Technology, energy, and healthcare remain top choices for investors in all stages of their investments. Technology is still booming, and it remains one of the most critical consumer industries out there.
However, there are certain risks involved in investing in technology. As an industry that is changing at a rapid rate, it can be hard to tell which technology trends will stick around for a while and which ones will flop. The same can be said about entertainment – as the very nature of the entertainment industry changes before our eyes and fills with controversy over diversity, ecological impact, and more, investors must be wary of investing substantial amounts into something that could eventually become obsolete.
If there’s one thing that humans will always need, however, it is clothing. Fashion has been a staple in cultures since the dawn of civilization, and it’s unlikely that fashion will not be relevant. But rather than investing in just any clothing company, it helps to think broadly about the nature of the company compared to consumer interest. When we look at The RealReal, we realize the following:
- Consumers are growing more concerned about the environment as the effects of climate change become very real. Therefore, investors should be concerned about putting their money into sustainability, especially in a high-impact industry like the fashion industry.
- Each new generation has different spending habits from the one before, and baby boomers and generation-x no longer make up the most prominent global spenders. The largest consumer group currently, millennial-aged people, cannot afford to spend as much as previous generations but are also concerned about the origins of their products. Therefore, many focus on purchasing thrifted clothing as a way to ensure that they are not buying directly from sweatshops and are still able to afford quality clothing.
- Quality has become an essential buying factor among most consumers. A recent Nielsen poll indicated that consumers are more willing to buy something quality over something in mass quantity. We have seen the impact this shift in mindset has had on the restaurant industry, and it is now understood this also goes for high-end used goods like vintage clothing and resale designer clothing. This gives companies like The RealReal a distinct advantage.
“Playing Offense” Can Lead To Palatable Financial Gains
Many investors take the easy way out and invest at a low rate over time. This is a good long-term strategy, but stock experts will tell you that taking a little risk can come with a substantial reward. In the past year or two, The RealReal and other fashion brands took a small hit, sending their stock prices lower. However, Financial advisors, like Wells Fargo, estimate that the resale industry is poised to take off soon in the future. Therefore, it’s safe to say that now is the time to get the best profit out of stocks like The RealReal.
This is what investors refer to as “playing offense.” Sure, it means that you might need to spend a little money to make some money. However, as The RealReal only improves its stake in the eco-friendly fashion business, it’s a risk worth taking. Unlike many mainstream fashion retailers, The RealReal is consistently updating the way it does business to meet consumers on their wants. As one example, the luxury item authentication process goes through consistent upgrades as scammers get better at marketing their fakes. There may never be a way to rule out fakes getting onto the market entirely but updating authentication processes consistently is the best way to keep the number low.
This is not only an effort to meet the needs of consumers but also to ensure that luxury items keep their value over time. When fakes are introduced into the works, they lessen the value of the things they are imitating. Therefore, investing in companies like The RealReal not only helps consumers but also helps the economy as a whole.
In 2020, make it your resolution to play offense on the stock market by investing in innovative fashion companies like The RealReal. You’ll set yourself, and the global economy, up for success.
Up Next on Business Times:
Connected TV is a content internet-connected multimedia streaming on internet-capable devices and gadgets like televisions, video game consoles like Xbox, PlayStation, Blu-ray Disk Player, among…