What changed in this filing

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Item 1. Business

2023-02-28 compared with 2022-02-28 · 123 added, 99 removed, 119 unchanged (65% of the section changed)

The RealReal is the world’s largest online marketplace for authenticated, consigned luxury goods.

The RealReal is the world’s largest online marketplace for authenticated, resale luxury goods.

We are revolutionizing luxury resale by providing an end-to-end service that unlocks supply and creates a trusted, curated online marketplace for buyers globally.

Since inception, we have cultivated a loyal and engaged consignor and buyer base through continuous investment in our technology platform, logistics infrastructure and people.

Since our inception, we have cultivated a loyal and engaged consignor and buyer base through continuous investment in our technology platform, logistics infrastructure and people.

We offer a wide selection of authenticated, primarily pre-owned luxury goods on our online marketplace bearing the brands of thousands of luxury and premium designers.

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and Valentino.

We offer products across multiple categories including women’s, men’s, kids’, jewelry and watches, and home and art.

We offer products across multiple categories including women’s fashion, men’s fashion, jewelry and watches.

We have built a vibrant online marketplace that we believe expands the overall luxury market, promotes the recirculation of luxury goods and contributes to a more sustainable world.

A strong network effect drives the growth of our online marketplace.

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This, in turn, increases sales velocity and commissions for our consignors.

In addition, a meaningful share of our consignors become buyers and vice versa, which creates a differentiated flywheel that enhances the network effect of our online marketplace.

We also operate our larger footprint flagship retail stores, or Flagship Stores, in West Hollywood in Los Angeles, California, Union Square in San Francisco, California, SoHo and Upper East Side in New York, New York and in Chicago, Illinois.

In addition, a meaningful share of our consignors are buyers and vice versa, which creates a differentiated flywheel that enhances the network effect of our online marketplace.

We also operate retail stores, including our larger footprint flagship stores, or Flagship Stores, in Los Angeles, California and New York, New York.

Our Flagship Stores are typically 8,000 to 12,000 square feet with thousands of unique items for sale and are located in highly desirable, densely populated locations with strong foot traffic.

In addition, we operate smaller footprint neighborhood retail stores, or Neighborhood Stores, in twelve locations in New York, California, Texas, Georgia, Connecticut and Florida.

Our Neighborhood Stores are typically 1,800 to 3,500 square feet with items for sale reflecting a selection of the Company's online assortment and are located in an area with a large number of potential customers.

In addition, we operate several smaller footprint neighborhood retail stores, or Neighborhood Stores.

Our Neighborhood Stores are typically 1,800 to 3,500 square feet with items for sale reflecting a selection of the Company's online assortment and are located in areas we have identified as having a large amount of potential customers.

The existing luxury resale market is outdated, fragmented, difficult to access and laden with counterfeit goods.

Primarily due to these challenges, a vast quantity of consignable luxury goods languishes in homes, and buyers can be hesitant to purchase pre-owned luxury goods.

Primarily due to these challenges, a vast quantity of consignable luxury goods languishes in homes, and buyers can be

hesitant to purchase pre-owned luxury goods.

We are transforming the luxury resale experience by addressing these challenges.

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As a result, we unlock luxury supply from first-time consignors, convert consignors who typically consign at local brick-and-mortar shops to our online marketplace and drive high repeat consignment rates.

We leverage data from millions of previous transactions and current market data to optimize pricing and sales velocity for our consignors.

We leverage data from millions of transactions and current market data to optimize pricing and sales velocity for our consignors.

• We offer buyers a vast, yet curated supply of primarily pre-owned luxury goods and instill trust in the buying process.

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• We also operate Flagship and Neighborhood Store s.

Our stores are valuable to us in multiple ways as they help us acquire higher value buyers and consignors, increase lifetime value, i ncrease average order value, and lower return rates.

Our stores are valuable to us in multiple ways as they help us reach higher value buyers and consignors, increase lifetime value, i ncrease average order value, and lower return rates.

We also benefit from increased brand awareness that accelerates overall market growth.

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Our unique service model incentivizes consumers to consign by making the process easy.

Our sales and service organization is responsible for obtaining exclusive supply for our online marketplace.

Our sales and service organization is responsible for obtaining exclusive supply for our online marketplace and retail stores.

Our sales professionals generate a robust pipeline of new consignors and build lasting relationships, which cannot be easily replicated.

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We remove friction from the consignment process by providing multiple consignment methods.

We offer concierge at-home consultation and pickup, subject to safety requirements related to the COVID pandemic, and meetings with consignors via online face-to-face platforms, or Virtual Consultations.

We offer concierge at-home consultation and pickup, and virtual consultations with consignors via online face-to-face platforms.

Consignors may also drop off items at our luxury consignment offices.

Our Flagship and Neighborhood Stores provide an alternative location to drop off consigned items and an opportunity to interact with our experts.

Our Flagship and Neighborhood Stores provide an alternative location to drop off consigned items and an opportunity to interact with our authentication experts.

Consignors may also utilize our complimentary shipping directly to our authentication centers.

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Our scale and global reach combined with our technology-driven online marketplace and proprietary data enable consignors to realize optimal value for their pre-owned luxury goods.

Our consignors earn up to 85% in commissions and achieved an average commission rate of approximately 65% in 2021.

In November 2022, we launched a pricing tool for our consignors that provides transparency and detail on commission rates for specific categories and other aspects of the take rate structure.

Our consignors can earn up to 90% of the proceeds from the sale of their consigned items in commissions and achieved an overall commission rate of approximately 64% in 2022.

• We offer a range of payment options for consignors and businesses.

Consignors are generally paid after an item has sold, however, we also offer trade-in terms and “Get Paid Now” options to both businesses and individuals.

“Get Paid Now” is a program whereby a consignor’s items are evaluated, authenticated and priced and the consignor receives payment based on this process in advance of the sale of the item.

Our consignors are generally paid after an item has sold, however, we also offer trade-in terms and “Get Paid Now” options to both businesses we purchase items directly from and individuals who consign their items with us.

“Get Paid Now” is a program whereby items are evaluated, authenticated and priced and the business or consignor receives payment based on this process in advance of the sale of the item.

• We drive rapid monetization.

Our online marketplace efficiently matches supply with demand resulting in exceptional sales velocity.

In 2021 and 2020, approximately 59% and 60% of the products on our online marketplace sold within 30 days, respectively.

In addition to sales velocity, we measure the ratio

of demand versus supply in a given period, which we refer to as our online marketplace sell-through ratio.

Sell-through ratio is defined as GMV in the period divided by the aggregate initial value of items added to our online marketplace in that period.

Our online marketplace efficiently matches supply with demand resulting in sales velocity of approximately 58% and 59% of the products on our online marketplace sold within 30 days, in 2022 and 2021 respectively.

In addition to sales velocity, we measure the ratio of demand versus supply in a given period, which we refer to as our online marketplace sell-through ratio.

Sell-through ratio is defined as GMV in the measurement period divided by the aggregate initial value of

items added to our online marketplace in that period.

In 2022 and 2021, our online marketplace sell-through ratios were 91% and 94%, respectively.

In addition to consignments from individuals, we also make direct purchases from business sellers such as resellers, wholesalers, brands, retailers, or Vendors, which helps to drive supply and expand our product offerings.

We make it easy for buyers to shop our vast, yet curated selection of authenticated, primarily pre-owned luxury goods.

In 2021, we had approximately 797,000 active buyers and approximately 84% of our GMV came from repeat buyers.

In 2022, we had approximately 1 million active buyers and approximately 84% of our GMV came from repeat buyers.

As we continue to unlock exclusive luxury supply, we aim to attract new buyers and drive repeat purchases from our existing buyers.

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Buyers access our omni-channel online marketplace through our website, mobile app and retail stores, enabling them to purchase anytime, anywhere.

Our Flagship and Neighborhood Stores also offer our buyers sophisticated service, surrounded by a beautifully designed space, where they can shop our dynamic curation of authenticated pre-owned luxury goods across all of our categories.

• We build trust by putting every item through our authentication process.

We continue to invest and innovate in authentication.

We believe we have the most rigorous authentication process in the marketplace.

Our Flagship and Neighborhood Stores also offer our buyers a sophisticated shopping experience, in a beautifully designed space, where they can shop our dynamic curation of authenticated pre-owned luxury goods across all of our categories.

• We build trust through our authentication process.

We continue to invest and innovate in authentication, both in our people and our technology.

We believe we have the most rigorous authentication process in the resale luxury goods marketplace.

We have highly trained gemologists, horologists, brand experts and art curators who collectively inspect thousands of items each day.

All items pass through a rigorous brand-specific authentication process before they are accepted for consignment.

This process includes inspecting the item for attributes such as appropriate brand markings, date codes, serial tags and hologram stickers.

Our gemologists and horologists authenticate and inspect our fine jewelry and watches, and each piece comes with an authentication certificate.

We utilize sophisticated gemological devices to assist our experts and continue to innovate in this area.

In 2021, we developed a proprietary technology with the University of Arizona to inspect gemstones faster and more accurately, without unmounting the stone.

In addition, our team of fine art curators and specialists research and validate art pieces for authenticity.

In 2021, we augmented our authentication process with proprietary item and consignor risk scoring algorithms.

This process includes, among other things, inspecting the item for attributes such as appropriate brand markings, date codes, serial tags and hologram stickers.

In 2022, we implemented proprietary AI microphotography to assist in authenticating high-end handbags.

Our gemologists and horologists inspect and authenticate fine jewelry and watches, and each piece we sell comes with an authentication certificate.

We utilize state-of-the-art gemological devices, including proprietary gemstone technology, to assist these experts.

Additionally, across all of our categories, our experts leverage proprietary item and consignor risk scoring algorithms to assist in authentication.

We have a zero-tolerance policy when it comes to counterfeit goods.

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We believe we are expanding the overall market for both new and pre-owned luxury goods, as the ability to experience and engage with luxury brands through our online marketplace results in an earlier appreciation for high-quality, well-crafted items, and inspires consumers to purchase new luxury items.

As of December 31, 2021, we had partnerships with Stella McCartney, Burberry, Nanushka, Saks Fifth Avenue, and Mytheresa, and we believe our online marketplace cultivates customer relationships for luxury brands.

As of December 31, 2022, we have partnerships with Stella McCartney, Jimmy Choo, Nanushka, 11Honore and Beckett Collectibles, and we believe our online marketplace cultivates customer relationships for luxury brands.

Our Technology

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Our supply comes from thousands of individual consignors and businesses across the United States.

Each item we sell is a truly unique, individual stock keeping unit (“single-SKU”) and is exclusively available on our online marketplace.

Given the complexity of our inventory model, we developed and continuously innovate specialized, proprietary applications to optimize inbound processes, such as authentication, copywriting, photography and photo-editing.

Each item we sell is a unique, individual stock keeping unit (“single-SKU”) and is exclusively available on our online marketplace or in our retail stores.

Given the complexity of our inventory model, we developed specialized, proprietary applications to optimize inbound processes, such as authentication, copywriting, photography and photo-editing.

We increasingly use our technology platform to automate pricing, copywriting and photo retouching for goods sold through our online marketplace.

Our powerful data analytics capabilities enable us to improve both consignor and buyer experiences.

Our online marketplace generates and aggregates hundreds of millions of unique data points, including data from approximately 865 million views of items on our online marketplace in 2021 by potential buyers, which we refer to as item views, and

approximately 23.0 million item sales since inception.

Our online marketplace generates and aggregates hundreds of millions of unique data points, including data from approximately 1.1 billion views of items by potential buyers on our online marketplace in 2022, which we refer to as item views, and approximately 30.9 million item sales since our inception.

Each consigned item also has up to 50 unique attributes.

Informed by this data, we have developed proprietary algorithms and business processes to optimize our operations, including supply sourcing, merchandising, authentication, pricing and marketing.

Informed by this data, we have developed proprietary machine learning technology and business processes to optimize our operations, including supply sourcing, merchandising, authentication, pricing and marketing.

Environmental, Social and Governance

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We aspire to operate our business with positive social and environmental impact.

We have taken steps in human capital initiatives that drive equality through equal pay and equal opportunity.

Our board of directors and its committees provide oversight on certain human capital matters, including our diversity and inclusion programs and initiatives.

As noted in its charter, our Compensation, Diversity and Inclusion Committee is responsible for reviewing and recommending to our board of directors compensation plans, policies and programs intended to attract, retain and appropriately reward employees, as well as provide oversight of the Company’s policies, programs, and initiatives focusing on leadership and workforce diversity and inclusion.

Our Corporate Governance and Nominating Committee provides oversight of the Company’s policies, programs and initiatives focusing on social responsibility, including environmental and sustainability and social and human rights matters.

Our Audit Committee works closely with our management to discuss current and emerging risks related to our workforce and what steps management is taking to manage and reduce the Company’s exposure to risk.

The actions of these committees and the work of our board of directors and management seek to attract, retain and develop a diverse and inclusive workforce that is motivated to achieving the Company’s business objectives.

Our Sustainability Program

Sustainability is woven into the fabric of our business.

We believe a growing awareness of the environmental impact of recirculating luxury goods significantly contributes to the appeal of consigning and purchasing on our online marketplace.

We are committed to extending the lifecycle of luxury goods by promoting their recirculation, rather than creating waste.

Our sustainability efforts include:

• Carbon Neutral Pledge.

In November 2019, we were the first company to take the pledge in the CEO Carbon Neutral Challenge issued by Gucci CEO, Marco Bizzarri.

We pledged to be carbon neutral in 2021, and we reached that goal in 2020 (Scope 1, Scope 2 and certain Scope 3 emissions (downstream transportation and distribution, employee travel, purchased goods and services (corrugate), and capital goods (paper))).

The RealReal engaged an independent third-party to measure The RealReal’s total greenhouse gas (GHG) emissions.

Our path to carbon neutrality included implementing reductions and annually offsetting emissions that cannot be eliminated.

In this way, sustainability is woven into the fabric of our business, and we hope to create a more sustainable future for fashion.

Additionally, we believe a growing awareness of the reduced environmental impact of recirculating luxury goods compared to the production of new products significantly contributes to the appeal of consigning and purchasing on our online marketplace.

As we move forward, we strive to continuously review our sustainability commitments, strategies and priorities.

Recent sustainability efforts include:

• Fair Condition Program.

This new program has enabled us to offer more secondhand, luxury items and has the effect of increasing the total number of consigned items in the circular economy.

To aid buyers in assessing the condition of items in our online marketplace, we assign items a condition level.

In the first quarter of 2022, we began accepting items in “fair” condition, which tend to be listed at more accessible price points given their level of wear.

In light of recent inflation and macroeconomic uncertainties, demand for items in fair condition is strong.

• Sustainability Task Force.

In 2020, we formed a cross-functional Sustainability Task Force to identify projects throughout the organization that have the potential to reduce our environmental impact.

The Sustainability Task Force prioritizes high impact projects, meets bi-weekly and aims to embed a focus on sustainability across the organization.

In early 2022, we reorganized the Sustainability Task Force into several individual working groups so we could concentrate our efforts on specific, meaningful projects, including preferred materials, transportation optimization, employee travel, employee experience and waste.

Throughout 2022, we provided periodic updates to our executives and the Corporate Governance and Nominating Committee of the Board of Directors on our progress toward achieving our goals and initiatives.

• Sustainability Calculator.

In 2018, we launched our Sustainability Calculator on National Consignment Day as a tool to quantify the positive impact consignment has on the planet.

• Circular Resource Lab and ReCollection 02.

In 2021, we launched our 64-piece apparel collection, which reimagined the unwearable or damaged into unique and premium luxury items.

ReCollection 02, the first project from our new Circular ReSource Lab that works to create impactful solutions to the fashion waste crisis, gives new life to clothing that would otherwise likely end up in a landfill.

Circular ReSource Lab is a hub for us to test, learn and share to create impactful solutions to the fashion waste crisis.

• National Consignment Date.

We developed the Sustainability Calculator to measure the greenhouse gas emissions and water footprint reduction of consignment as compared to producing new products.

• National Consignment Day.

We founded National Consignment Day as a national recognition day that occurs on the first Monday of October.

National Consignment Day celebrates the positive impact consigning has on the environment.

We expect to create a National Consignment Day campaign as an opportunity to encourage people to consign.

• Environmental Management System.

In 2020, we formed a cross-functional Environmental Management System (also known as our Sustainability Taskforce) to identify projects throughout the organization that have the potential to reduce our environmental impact.

The Sustainability Taskforce prioritizes high impact projects, meets bi-weekly and aims to embed a focus on sustainability across the organization.

Throughout 2021, we provided regular updates to our executive steering committee on progress toward achieving our goals and initiatives.

• Carbon Neutral Pledge.

In November 2019, we were the first company to take the pledge in the CEO Carbon Neutral Challenge issued by the CEO of Gucci.

We pledged to be carbon neutral in 2021, and we reached that goal in 2020 (Scope 1, Scope 2 and certain Scope 3 emissions).

Our path to carbon neutrality included implementing reductions and annually offsetting emissions that cannot be eliminated.

• United Nations Climate Change’s Fashion Industry Charter for Climate Action.

In April 2019, we became the first company in the resale industry to join the United Nations Climate Change’s Fashion Industry Charter for Climate Action, which aims to limit global warming within the fashion industry and inspire climate action.

inspire climate action.

The charter endeavors to achieve a 50% reduction in carbon emissions in the fashion industry by 2030 and net zero emissions by 2050.

We are currently developing a detailed plan to meet our target of reducing our total GHG emissions (Scope 1, Scope 2 and Scope 3) 50% by 2030, from our 2019 emissions baseline.

• Repair Program.

We have several repair and alteration programs that put our brand’s mission into practice, further extending the life cycle of luxury goods.

The repair services help reduce the number of condition-based rejections and create a streamlined process to help keep items in circulation.

• ReCollection 03 and 04.

Through our ReCollection program, we transform unwearable or damaged items into unique, premium luxury upcycled items.

Building on prior years, we released two more ReCollections in 2022.

Our four ReCollections have put approximately 1,000 damaged items back into circulation.

Human Capital Resources

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We believe diversity and inclusion foster a collaborative culture, which fuels our ability to innovate as we work to create a more sustainable future.

We proactively seek feedback and guidance from our employees, whom we see as our partners in building a strong organizational culture.

We proactively seek feedback and guidance from our employees, who we see as our partners in building a strong organizational culture.

As of December 31, 2022, we had 3,468 full-time equivalent employees.

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We support and celebrate diversity, and are committed to providing an equal employment opportunity regardless of race, color, ancestry, religion, sex, national origin, sexual orientation, age, citizenship, marital status, disability, gender identity or expression, or veteran status.

Below is a breakdown of how our team self-identifies as of December 31, 2021 (table does not reflect, of the total individuals surveyed, approximately 3% who chose not to self-identify, approximately 4% who self-identified as two or more races, and approximately 1% who self-identified as Native American):

Below is a breakdown of how our team self-identifies as of December 31, 2022 (table does not reflect, of the total individuals surveyed, approximately 3% who chose not to self-identify and approximately 1% who identified as Native American):

All Corporate Management Executives Board

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Asian 8 % 15 % 12 % 15 % 0 %

Two or More Races 4 % 6 % 5 % 3 % 0 %

White 33 % 40 % 52 % 70 % 86 %

Female 66 % 65 % 61 % 52 % 57 %

In 2021, we developed and launched our current DEI vision and strategy.

We aspire to be designers of an equitable future.

Creating a more sustainable future by growing the circular economy requires us to bring different perspectives together to solve problems in new, meaningful ways.

We believe that a culture of trust, safety and belonging is key to unlocking the power of differences, leading to creative problem solving and high performing teams in order to fuel our purpose and impact.

In order to deepen visibility into our workforce data, in 2021 we expanded employee self-reporting options to include gender identity, LGBTQ, veteran, and disability status.

In 2021, we continued to develop and grow our six Employee Resource Groups (ERGs) by developing clear missions, introducing a new leadership structure, and amplifying diverse voices across our company.

ERG membership grew to over 1,000 employees, or 20% of our workforce, since launching one year ago.

In partnership with the DEI team, ERGs led initiatives and programs focused on education, awareness, career development, and social connection.

We also enabled pronoun features across our technologies to enhance inclusion of trans and non-binary employees and normalize pronoun sharing.

We provide training on managing bias to managers of people and have invested in a DEI learning curriculum to empower employees at all levels with the knowledge and resources to practice inclusion.

We implemented a tool that encourages employees to report bias, discrimination and harassment, or behavior that does not reflect our values and policies, and provide feedback on culture.

In 2021, we formed several new recruiting partnerships to strengthen access to diverse talent communities, including the Black in Jewelry Coalition, Jopwell and the National Sales Network.

We participated in both the Black in Fashion Council and Racial Equality Project benchmarking surveys to uncover opportunities to advance equity.

We implemented a diverse slate requirement for all roles Director and above requiring at least one underrepresented candidate to be interviewed before filling a role, which has been 100% met to date.

This summer, we hosted our first internship class as part of our work to build a diverse talent pipeline, 67% of whom identified as women, and 67% as Black, Indigenous, and people of color ("BIPOC").

We are also investing in the growth and retention of our diverse talent through differentiated leadership development, including by launching a six month coaching and development pilot for 100 BIPOC women.

In addition, when searching for new directors, the Board actively seeks out women and individuals from minority groups to include in the pool from which Board nominees are chosen.

DEI Vision and Strategy.

We believe that creating a more sustainable future by growing the circular economy requires us to bring different perspectives together to solve problems in new and meaningful ways.

Furthermore, we believe that a culture of trust, safety and belonging is key to unlocking the power of differences, and leads to creative problem solving and high performing teams.

In 2022, we built on our diversity, equity and inclusion (“DEI”) vision and strategy that was launched in 2021.

We aspire to be designers of an equitable future through our four-pillar strategy:

People, Culture, Commerce and Community.

We continue to assess self-reporting options that reflect our diverse workforce.

Where appropriate, we encourage our employees to share how they self-identify, including gender identity, LGBTQ identity, veteran status, and disability status.

Recently, we introduced the ability for our employees to share preferred pronouns across our technologies, and approximately 62% of our total employee population as of December 31, 2022 has chosen to share their pronouns.

Employee Resource Groups .

Since 2020, our six Employee Resource Groups (“ERGs”) have continued to grow and evolve.

We believe the ERGs help to engage employees and advance inclusion and belonging through education, awareness, career development, and social connection.

In 2022, ERG membership remained strong with over 1,000 employees participating in programs focused on career equity, leadership, cultural competence, financial and physical well-being, destigmatizing mental health, and disability inclusion.

In addition, ERG leaders participated in a leadership development program focused on critical success factors such as ERG Deployment & Engagement, Governance & Leadership, Sponsorship & Support, Career & Community, and Alignment + Impact.

Many of the groups have

implemented learnings by building new committees, improving member recruitment and participation in strategic locations, and hosting impactful first-time volunteer initiatives.

Our ERG groups are leveraging the frameworks from the leadership development program to help shape their 2023 strategic priorities.

In 2022, we conducted our annual employee engagement survey to better understand employees’ sentiment across a range of topics, including DEI, employment satisfaction, level of engagement, and sense of belonging.

There were no significant changes from the prior year.

Based on the 2021 survey results, in 2022 our engagement efforts focused on well-being, leadership, and communication.

In addition, we continued to provide managers with tools and training for mitigating bias in 2022.

We have begun to introduce a platform that provides employees with learning and resources for building awareness of DEI topics (including bias, race, microaggressions, and mental health) and developing inclusive leadership skills.

As part of our work to build a culture of trust, we encourage employees to share real-time feedback on culture, bias, discrimination and harassment, or behavior that does not reflect our values and policies through our company-wide employee reporting tool.

Professional Development and Partnerships.

In 2022, we invested in developing a gender- and racially-diverse leadership pipeline.

For example, we introduced a leadership development and coaching program for high performing women.

For our first cohort, we focused on black, indigenous, and people of color ("BIPOC") women in individual contributor and manager roles.

The six-month experience addressed five elements commonly found to impact women’s advancement in leadership (clarity, courage, conviction, commitment, and community) through accessible, self-paced microlearnings and virtual coaching.

Participant assessment scores showed positive scores across all elements.

We also hosted our second summer internship program as part of our work to build a diverse talent pathway, with 76% of participants identifying as women and 84% as BIPOC.

The RealReal, Inc.

Foundation was founded at the time of our initial public offering in 2019 with the aim of advancing equity in the communities in which we operate through access to education.

Since its formation, the foundation has supported numerous community organizations, including the Success Bound Youth Leadership Academy, the Secaucus Youth Alliance, Enterprise for Youth, and Friendly House.

Following designer Virgil Abloh’s passing in 2022, and as part of our commitment to racial equity, we sponsored the Virgil Abloh™ "Post-Modern" Scholarship Fund, which aims to preserve his vision for a more diverse and equitable fashion industry.

Director Refreshment.

When searching for new directors, our board of directors has committed to including in any pool of director candidates for consideration highly qualified candidates who would bring racial, ethnic, and/or gender diversity our board of directors if chosen.

Talent Development and Training

We believe that the training and development of our employees is critical to our long-term success.

We believe that the training and developm ent of our employees is critical to our long-term success.

We offer a variety of employee training programs in addition to the DEI programs discussed above, including onboarding, technical skills training, product and services training, and managerial soft skills training.

These programs include training specific to each of our business functions, enabling us to provide our consignors and buyers with a consistent luxury experience.

For example, we support our sales professionals by providing a 10-day virtual onboarding sequence conducted through peer-to-peer, facilitated and self-learning sessions, followed by continuous professional development programs.

Our authentication team receives training depending on one of five levels.

Entry level authenticators receive approximately 40 hours of training, and our expert authenticators receive additional and ongoing trainings to stay informed on the latest developments in brand authenticity.

In 2021, we also delivered a Manager Development Series that was open to all people managers across the organization, and we offered a Leadership Development Program for selected people managers at the director and above levels.

For example, we support our sales professionals by providing a three-week virtual onboarding sequence conducted through peer-to-peer, facilitated and self-learning sessions, followed by continuous professional development programs.

In 2022, we continued to provide a Manager Development Series open to all people managers across the organization as well as performance management training.

Our authentication teams receive training based on expertise level.

Entry-level authenticators receive approximately 40 to 80 hours of training depending on their specialty in fashion or fine jewelry.

Progression through the authentication training program is an additional minimum of 80 hours of training and at least three months per level.

Training hours and tenure increase with expertise, with a Graduate Gemologist certification from GIA required in the highest levels of specialty in fine jewelry.

In 2022, authentication managers received an additional 10 classroom hours of manager development training.

Each employee receives training appropriate to the scope and nature of their role.

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We encourage consultation and cooperation between management and employees in developing occupational health and safety mechanisms through ongoing dialogue.

We expect senior management to integrate health and safety mechanisms in all business activities and monitor the program’s effectiveness.

In response to the COVID-19 pandemic, we implemented changes that we consider to be in the best interest of our employees, as well as the communities in which we operate, and which comply with government regulations.

We have implemented additional safety measures for employees continuing critical on-site work.

We believe we have been able to preserve our business continuity without sacrificing our commitment to keeping our employees safe during the COVID-19 pandemic.

Importantly, we recognize the importance of supporting our employee’s overall well-being and invested in programs that support mental and emotional health.

We expect senior management to integrate health and safety mechanisms in business activities and monitor the program’s effectiveness.

In 2022, we implemented the REAL Respect program, which provides community guidelines for our employees, consignors and buyers aimed toward creating a positive and safe experience for all.

We continued to focus on employees’ overall well-being in 2022 through a range of programs that support access to care, along with resources and tools to address the following pillars of wellness:

physical, mental/emotional, financial, and community.

Historically, we have observed trends in seasonality of supply and demand in our business.

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As a result of this seasonality, we typically see stronger average order value (“AOV”), and more rapid sell-through in the fourth quarter.

We also incur higher operating expenses in the last four months of the year as we increase advertising spend to attract consignors and buyers and increase headcount in sales and operations to handle the higher volumes.

Additionally, we expect higher advertising spend and demand increases in the fourth quarter.

Intellectual Property

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Our principal executive offices are located at 55 Francisco Street, Suite 400, San Francisco, California 94133, and our telephone number is (855) 435-5893.

You may access our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and other reports (and amendments thereto) filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act with the Securities and Exchange Commission (“SEC”), as well as proxy statements filed by us, free of charge on our website at www.therealreal.com, as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC.

You may access our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and other reports (and amendments and exhibits thereto) filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act with the Securities and Exchange Commission (“SEC”), as well as proxy statements filed by us, free of charge on our website at www.therealreal.com, as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC.

Information contained on, or that can be accessed through, our website is not incorporated by reference into this or any other report we file with, or furnish to, the SEC , and you should not consider information on our website to be part of this or any other report we file with, or furnish to, the SEC .

Such periodic reports, proxy statements and other information are also available at the SEC’s website at http://www.sec.gov.

The RealReal, Obsessions and other trademarks or service marks of The RealReal, Inc.

The RealReal and other trademarks or service marks of The RealReal, Inc.

appearing in this Annual Report are the property of The RealReal, Inc.

This Annual Report contains additional trade names, trademarks and service marks of others, which are the property of their respective owners.

Solely for convenience, the trademarks, service marks, logos and trade names referred to in this Annual Report are without the ® and ™ symbols, but such references are not intended to indicate that we will not assert our rights in these trademarks, service marks and trade names.

Solely for convenience, the trademarks, service marks, logos and

trade names referred to in this Annual Report are without the ® and ™ symbols, but such references are not intended to indicate that we will not assert our rights in these trademarks, service marks and trade names.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business