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The RealReal took over a decade to reach profitability, due in part to the hugely complex intake process involved in receiving, authenticating, pricing, listing, and delivering millions of unique items.

Fortune’s Phil Wahba goes behind the scenes at The RealReal’s authentication center in New Jersey to see how its new AI-powered intake tools are transforming the secondhand clothing industry.

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Tech
Transcript
00:00Authentication has long been a challenge for the RealReal.
00:03In 2018, Chanel sued the company for selling counterfeit Chanel products.
00:08And a few years later, the RealReal settled a class-action lawsuit
00:11accusing the company of using under-trained staff to help meet high authentication quotas.
00:17Today, the RealReal's AI-powered intake system, Athena,
00:21helps workers price and authenticate SKUs in seconds.
00:24The company plans for Athena to process half of all new items by the end of 2026,
00:29up from about 20% a year earlier.
00:32We've actually built proprietary technology for our gemologists, our watchmakers,
00:37our handbag experts to count the melee on every stone, the weight of our diamonds.
00:43It utilizes a highly magnified camera to help us take a high-resolution picture.
00:48And it's able to come up with the carat weight in a moment, just one or two seconds.
00:53And so now, actually, our humans don't need to so much look at that.
00:57They're going to be focusing more on grading the actual diamond, which is where their expertise lies.
01:02Does this speed up the process? Does it make it more accurate or both?
01:06It's both. It adds consistency, of course, and speeds up the process where we can process items much faster
01:12for the consignor so it gets on the site faster, but also the technology behind the scenes,
01:18making sure that each individual item is authentic, but also that the consigner is valid, too.
01:25We'll see you in the next video.
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