Good day and thank you for standing by and welcome to the RealReal Second Quarter 2021 Financial Results Conference Call. At this time, all participants' lines are in a listen only mode. After the speakers' presentation, there will be a question and answer I would now like to hand the call over to your speaker today, Mr. Paul Bieber, Head of Investor Relations. Please go ahead.
Thank you. Good afternoon and welcome to The RealReal's earnings call for the quarter ended June 30, 2021. I'm Paul Bieber, Head of Investor Relations at The RealReal. Joining me today to discuss our results are Founder and CEO, Julie Wainwright and Chief Financial Officer, Matt Gutzke. Hopefully, you've had a chance to read our press release and stockholder letter that we distributed earlier today, both of which are available on our Investor Relations website.
Before we begin, I'd like to remind you that we will make forward looking statements during the course of this call. These forward looking statements involve known and unknown risks and uncertainties and our actual results could differ materially. You can find more information about these risks, uncertainties and other factors that could affect our operating results In our most recent periodic report on Form 10 ks, subsequent quarterly reports on Form 10 Q and in our earnings release from earlier today. In addition, our presentation will include certain non GAAP financial measures for which we have provided reconciliations to the most comparable GAAP measures and our earnings press release. With that, I'll hand the call over to Julie for introductory remarks and then we'll go straight to Q and A.
Julie?
Thanks, Paul, And thank you all for joining us to discuss our 2nd quarter results. We are pleased to report another quarter of strong growth, driven by at home And our continued retail momentum. We achieved our highest numbers of both new and repeat consignors this quarter. As a supply driven marketplace, this has resulted in Q2 GMV increasing 91% year on year and 53% compared to the same period in 2019. Q2 year on year GMV growth also accelerated So quarter on quarter when compared to both 2020 2019.
We achieved these strong growth rates while also driving a $94 a $9 quarter on quarter improvement. Q2 was a very busy quarter for us, and we made significant Progress with our top priorities, specifically getting back at home. Our at home consignments are increasing as a percent of total consignments and contributed 38% of total units in June. Our Arizona facility. We accelerated the move to our large Authentication center in Phoenix to accommodate future growth, and I'm happy to say that's going very well.
Our neighborhood store We added Austin, Dallas and Atlanta during Q2. Our retail stores generated 30% of new consignments in the quarter. We plan to open about 2 more stores this year. And lastly, our technology innovation. Our investments in technology continue to differentiate our business, drive efficiencies in our operations and enable significant future scale.
In Q2, we released the next generation of our authentication and pricing engine. The current trends in our business are strong. We believe they will continue this year and next. Beyond their GMV growth, we made progress with gross profit per order and efficiencies in operations and marketing. All of these elements are key to our path to profitability.
The investments we have made in neighborhood stores and our Arizona facility not only support our growth, but also create the potential for meaningful We are focused on achieving profitability and expect to make significant progress over the coming quarters. As always, I'd like to thank the entire TRR team for their hard work in delivering these strong Q2 results. It is their dedication and commitment that drives our business every day. And with that, operator, we are ready for questions.
Your first question is from Oliver Chen of Cowen. Your line is now open.
Thank you very
much. On profitability and the opportunity ahead, what do you see as the key drivers And managing that gross profit per order. And also just love your thought on the evolution of LA and New York And these markets in terms of supply growth and capabilities. Thank you.
I'm going to start with the last part and then I'm going to turn it over to Matt to discuss the key drivers to pass to profitability. So interestingly enough, both LA and New York, Our older stores are continue both in driving new consignors and new buyers and Are performing phenomenally well. We are expanding the New York store below, we're going to be reconfiguring the bottom part of the bottom of the New York store to allow us to take in even more consignment there. The stores are a little bit more mature, I mean, especially SoHo. And they're doing well, they're Achieving plan or better than plan for us.
So we're we are committed. There are flagship stores. Obviously, we are expanding not the flagship stores, we're expanding the neighborhood stores and those are also
Okay. And I'll go to the first question. So I think your Focus was really on gross profit for word drivers and within the context of overall profitability. So I'll emphasize that, but I'm going to kind of cover the overall framework for how we're thinking about profitability. First of all, we're very focused on it.
As you saw, gross profit per order increased $9 quarter over quarter, getting into the mid-90s. From here forward, Further improvements can be expected from a full quarter benefit from lower buyer incentives, which exited Q2 at pre COVID levels. And then beyond that, we do expect over time to see incremental shipping improvements and continuing benefits from high AOV. So those are really the key pieces that kind of get you from where we are now $100 neighborhood and then going forward, it's just small incremental benefits from there. Then the broader context of profitability, That's just one element.
So 1st and foremost is top line growth. GMV is growing well. In July, I think you saw we put a release out that We're still growing 53% versus 2019, which the comps actually are getting more difficult in Q3 as we're lapping our post IPO quarter. We're comfortable saying that we can sustain 30 plus percent top line growth for the foreseeable future. That combined with gross profit order increasing to the $100 neighborhood and getting variable expense efficiencies, which we have been doing consistently over time and expect to continue to do so, Get us to the point where we're seeing contribution margin per quarter in the $35 to $40 range.
And then what remains is the controlling of fixed costs. And our fixed costs from this point forward are really not going to increase very much at all, which will lead to profitability. Arizona is the last big step up. We've got 2 small stores to come. And after that, you're going to see very minimal fixed cost increases going forward.
So the leverage in the top line compounded by the gross profit piece And variable marketing efficiencies and other variable expense efficiencies will carry us to the finish line.
Thank you so much. That's very helpful. Last question on the 30% annual GMV growth that you called out on the letter. What are some underlying drivers that give you confidence there? And any further details would be helpful.
Thank you. Best regards.
Yes. Thanks, Oliver. So I'll start maybe Mike both want to chime in on this. But overall, we're feeling very about where we are, not only coming out of COVID, but just overall. Keep in mind that where we are now It's just a rounding error in terms of penetration to the overall TAM with significant tailwinds in the resale market overall.
We're very well positioned to continue growing well and taking our unfair share of market growth going forward. On top of that, I think we've derisked some of those assumptions over the course of COVID and still now with more diversified supply coming from more places That just gives us incremental confidence that committing to something like that is reasonable at this point.
And of course, we are always looking at our cohorts And seeing if there's any change in the cohorts and in fact, we are in very good shape with our assumptions for repeat versus And also on the consignors and buyers side. So consequently, we do feel confident About next year, and we do recognize we're this year and next year, we do recognize the delta variant is the wildcard. But assuming there are no complete shutdowns again, which we don't foresee, we feel good about our future here.
Thank you very much. Best regards.
Thanks, Oliver.
Your next question is from Erinn Murphy of Piper Sandler. Your line is open.
Great. Thanks. Good afternoon. I've got 2 for Julie and just a quick clarification for Matt. Julie, on the next generation of authentication and pricing capabilities that you're adding, can you share a little bit more about what that should permit you to And how are you measuring returns there?
And then if you could share on the second quarter, what you saw in apparel and footwear And then I've got just one clarification for Matt.
Sure. So first of all, I'm going to start with the lab because apparel is actually up Again, so we're very excited about that. In fact, it's actually exceeding our overall growth. So apparel is coming back and Footwear is still not as high, but it's still doing well. And actually, there is it's no longer a drag on the business.
So we're very excited about that. We're seeing Similar trends in July, so this is all good news. Now when it comes to Yes. In fact, I can even give you the exact numbers that someone just personal to me. They are up apparel was ready to wear was up 70% Year versus year on year and footwear was also up roughly 70% versus year ago, same period year ago.
So that's Really good news and bodes well for the balance of the year. In terms of our easing technology, we use A lot of technology, we've been using it for pricing. When we talk about pricing optimization, our goal is to get the absolute highest price without a fall off in velocity of sales. And we've seen in general an over a $10 a unit Price increased by using our across the board by using both machine learning and computer vision to help us And then with human oversight. So that continues to show improvement and obviously the consignor wins that the prices are higher and certainly we get Our fair share of that.
So we're excited about the progress there, and that's how we measure that. For authentication, it's really two levels. And first of all, it actually allows us to change the workflow for our team. So we measure it both on effectiveness of keeping face off the market and efficiency of that team On processing units and our technology solutions continue to improve. We still are a human driven Business, especially on that side, but it actually is making us more efficient and even more effective.
And then the other thing is we are going to arrange an ops tour if depending on the delta variant sometime this year in our new Phoenix So you can anyone who comes will be able to see it firsthand what we're doing and we can even talk about the Changes visually then because I think you'll see a huge impact.
Got it. Thanks. And then, Matt, my clarification for you, just on the gross profit per order, You talked in the shareholder letter about obviously getting to that 100 plus level. Should we take the language around that to be over the next 18 months of the exit rate for next year or is that still potentially in the cards for this year? Just trying to understand the way it was laid out in the shareholder letter as kind of this 18 month guide.
Thanks.
Sure. Yes, we're trying to put very specific time frames in any of this, but by no means are we walking back from anything we've said previously. So I do see the potential to approach the $100 kind of milestone at the end of this year and certainly with Comfort kind of getting down on a full year basis next year.
Thanks so much.
Your next question is from Michael Binetti of Credit Suisse, your line is now open.
Hey guys, thanks for taking our questions here. Can you I'll connect a few comments on the variable expenses here. I think you noted the variable expenses at the end of the shareholder letter were $79 per order in 20.20. So we can see it move around in 2018 2019, but maybe you could walk us to where you see the apples to apples equivalent of that number this year and What are the inputs that get you there and then maybe rank order the inputs for next year as you push towards the I think the apples to apples number will be $60 to 65 dollars per order to get to EBITDA profitability from the $79,000,000 in 2020. I'm just trying to understand the gap there since we've been over Gross profit per order quite a bit.
Sure, sure. I think I tracked all of the parts of your question. So let's start with the definition. First of all, our variable expenses are. So they include The 3 big ones are the cost of our marketing, the cost of our variable operations, that's both inbound and pick back and ship And the cost of the sales team.
And then sort of second tier is our retail our variable retail operating expenses. To get from here to there, I think 2019 It's kind of the most recent good kind of benchmark to work from. So we need to see all those costs in aggregate improve by about 10% to 10% on a per unit or per quarter basis to get to the profitability milestone. The biggest drivers are going to be the first ones I mentioned. That's marketing and our operations variable unit extensions.
Marketing efficiency, We have a long standing track record of driving marketing efficiency. That starts with really strong cohorts and really strong buyer engagement or retention. See no reason to think that, that won't continue. And then on top of that, we compound that with improving buyer acquisition costs over time. On the variable operation side, that's really the product Stentor has really leveraged the investments that we've made in automation that we continue to make.
So we are seeing those benefits now. We expect to continue seeing them going forward. And then as you know, we're kind of we're just about then opening retail stores for that for the time being. So that too will start to generate numbers going forward. So that all adds up to 10% to 15%.
I guess to follow that, Where
do you see the customer acquisition costs going by 'twenty two, if we should think about it in those terms? And then one other follow-up on that. I think you said the direct gross margin was down about 5.70 basis points, driven by the sale of aged inventory lower margins. Can you just help us think about what's embedded as we think about 3Q or second half, please?
Yes. Sure. Let me start with that one while I remember your first question. So the direct margin, you're right, was down 4 or 5 percentage points On a year over year basis, that's really a function of us deemphasizing the purposeful purchase of inventory As our supply channels across the board have rebounded strongly, so we just don't utilize that as much. So the higher mix of the direct business is coming from the traditional have late returns, which is the lowest margin piece.
That's important to dimensionalize this thing. So the direct piece of the business is less than 10% of overall GMV. So small changes on a small base have a pretty significant impact on the surface. Overall, Gross profit per order is the metric to look at. That increased $9 quarter over quarter and we continue to see the opportunity for that to go up.
What was the other question?
Marketing back.
Marketing back. Yes, I'm not going to provide any long term guidance on where we see that heading other than to say that we Have historically been very nimble and have been very effective at driving back improvements just about every year except for 2020, And I'm confident we can continue being efficient. Okay. Thanks a lot guys.
Your next question is from Mark Altschwager of Baird. Your line is now open.
Thanks. Good afternoon. Appreciate you taking my question. So another follow-up just on the path to profitability, but maybe from a little bit of a different angle here. So appreciate that the backdrop makes the forecasting difficult, but as we kind of put the pieces together that you are kind of guiding to GMV to Frank this year, expectations at least 30%.
Next year, it would seem that you're going to be knocking on the door of about a $2,000,000,000 GMV run rate By kind of later part of next year, gross profit per order has bounced back nicely, as you outlined, and there's some room for that to improve. It sounds like you're pleased with some of the efficiency initiatives, especially Arizona. So I guess, as I put that together, I guess, which components On the path to kind of bear the most risk here, because it seems like you've given us all of the components, that are kind of moving And the direction, but you kind of call out not wanting to put a timeline on some of these things at this point. So just any further clarity there would be great.
I can start. So we would obviously, I think you're hearing loud and clear our commitment to Simultaneously continuing to drive top line growth and driving to profitability. We'd love to be definitive about the time frame that we're going to get there, But the current environment oriented doesn't seem like the prudent thing to do. But we are putting out monthly disclosures, which Our pretty good proxy for providing short term guidance and the incremental benefit in the short term is sort of negligible. So That's how we're going to approach it and provide as much transparent more transparency, not less, on our path.
Fair enough. And just a quick follow-up, Matt, on just the inventory line. It looks like the direct gross margin was Weighed down a bit by some working through of aged inventory, just any more context there. And I think you're guiding to Some kind of further inventory build through the remainder of the year. So just, any thoughts on how you're kind of managing the opportunities with the direct side with some potential Margin risks.
Thank you.
Yes. So let me start with that. Last part is not what we're saying. So inventory At the end of Q2, it was about $60,000,000 That should be the apex of our inventory balance, at least for the balance of this year. We're not doing that with nearly the emphasis that we were a couple of quarters ago.
So that's point number 1. Point number 2, We the aged inventory part of the comment means older supply that we have from late returns. And if that stays with us over a period of time, then we do end up bringing the price down to sell through ultimately. It is not new. That is forever been that's been pattern forever, and the late Part of inventory has always been the lowest margin piece of the direct line and the overall business.
So there's nothing really new to comment on other than
Your next question is from Edward Yruma of KeyBanc. Your line is now open.
Hey guys, thanks for taking the questions. I guess first,
any more metrics you can give?
I know it's still early days on customer acquisition costs to neighborhood stores. And I know you guys indicate you're going to kind of pause expansion once you've completed this last, but any particular hurdles you're hoping to meet?
And then as a follow-up, we noted that you guys seem to
be testing other categories like electronics and sporting goods.
Hannah, any sense as to how we should think about those tests thus far
and kind of how are you obtaining the initial set of inventory? Thanks.
All right. So it's Julie.
So hi, Ed. How are you? So I think We're good. We're good. We're good.
So the interesting thing, I'm going to just start with the category plans and we're pretty excited about it. Early, early days, so we're not going to make any predictions, but we are going into the collectibles, in particular, the very large To get into these categories, we researched it for a while. It felt like it was actually being a net add to us. So we just Started back in almost the 3rd week of July. So it's very, very new for us.
But I would expect it It expands our TAM. It actually extends our service level. So we feel really great about that. And then do you want to talk about the first part now?
Yes, sure. So just to add on to that one as well. So I think you also asked them like how does that change, how Not really at all. It leverages our existing sales infrastructure and our existing authentication infrastructure and our retail footprint. It's just making better utilization out of those things.
And then the retail stores.
Retail stores, yes. So there's kind of a lot in there. So you're We're not disclosing specific numbers in terms of store acquisition costs. We have said and remains the case that the Acquisition of new consignors through retail is more efficient than through our marketing efforts alone. That remains the case.
It's a very surgical effective way to fire new consignors. It's frankly the tool that we didn't really have previously. And you're right, we're about to pause. We're doing exactly what we said we were going to do, get to around 10 stores and then give them some time to mature. We're going to learn some things, we're going to optimize them and we'll come back and reassess what we do going forward.
Keep in mind that the majority of these stores have been open Not even at all, yes, there's a couple more to go or less than 3 months. So it's going to take a little bit of time to gather data and come back. We talked in the past that early signs from the stores are
quite good.
So of course, we're looking at overall value supply quantity and value supply coming in, Number of new consignors, the of course, the demand that's generated in the stores and then most importantly, the impact Of those stores on the market in which they operate, and that can be a small or large halo depending on the size of the store and location. But we've seen consistently A halo effect where the growth rate in that market accelerates with the opening of a store and then stays at that higher level and then continues to grow for a longer period of time. Access accelerant on a market by market basis. So we want to see that play out across this portfolio before committing to how many, where going forward.
Got it. Thanks, guys.
Your next question is from Michael McGovern of Bank of America, your line is now open.
Hey, thanks for taking my question. I just wanted to Ask about the metrics around the retail stores driving 30% of new consignors, then at home concierge appointments generating 38% of total units in June. Are you seeing that trend continue to improve in July as we've seen COVID cases kind of tick up a little bit nationwide? And then also secondly, I just wanted to ask about any other specific cost trends to call out for Q3. I think you gave some high level framework.
Is there anything specific to call out for Q3 that might cause some quarter on quarter, anything to point out?
So in terms of what are we seeing in July, actually we're seeing an increase in the number of units Coming from our in home experience, not a decrease. We, in fact, have not felt at this point any impact at all from the Delta variant. And I think it's also because we do tend to most of our business is urban centric And most of the urban areas also have a higher vaccination rate, I think, nationally. So we are an urban driven business And getting back at home, people are excited to have us come back in and we're seeing increasing units and that continues in August. And the second part?
Yes, the second part was around OpEx. So we do expect to see some OpEx increases on a quarter over quarter basis. And that's going to come from the general theme is investing ahead of anticipated Q4 volumes and growth. So where you're going to see growth is in our sales team, in our operations to support higher volumes of product coming in and higher volumes of To some extent with our marketing as we kind of invest into the strong seasonal period. And then Q3 specifically, we still have redundant Duplicative expenses for our California facility, which basically shut down at this point and the cost will be rolling off as we exit the quarter.
So that will be clean kind of coming into Q4. So you didn't ask what I'll give you. So Q4 OpEx given all those different dynamics should be pretty close to flat sequentially versus
Your next question is from Lauren Shanks of Morgan Stanley. Your line is now open. Great.
I just wanted to ask about Q3 and the fact that you didn't give a GMV guide that you typically did. So just Curious if that 30% plus comment in the shareholder letter should sort of be extrapolated as the general guide for the Q3 or if There's something else that you're seeing there. Thanks so much.
Okay. No, I wouldn't that's not the interpretation of that, Megan. Here's it, but We've replaced giving short term guidance with providing even more frequent disclosures of actual results on a monthly basis. July results are out. You're going to continue seeing those disclosures every month for the balance of the year.
So the incremental benefit in the short term of providing guidance, I think, is sort of de minimis. In terms of what we're seeing, as you saw from July, the year on year comp did not decelerate, but is the beginning of more difficult comps in 2019. Q3 2019 was one of our strongest quarters ever coming off of our IPO. August was the most difficult comp in that quarter And September was pretty much up there as well. But we're expecting to see continuing strong growth over the balance of this year, No doubt in excess of that 30% over the balance of this quarter.
Yes. And just in case you missed the press least for July, we did grow 53% versus same period in 2019. So that's 53%, not 30%.
Right. But there's I guess the reason for not giving the guidance is just sort of you're just going
to give short you're going
to give monthly updates rather than quarterly guidance going forward. Is
At least for the balance of the year, that's what we committed just because our business was so impacted last You're right, Tobin. We just thought it would be easier for us easier for you to follow the business and its recovery if we give actuals every single month on the top line.
Okay. Thank you. The question is from Ike Boruchow of Wells Fargo. Your line is now open.
Hey, good afternoon, everyone. I guess, Matt, I did want to dig into the direct business a little bit more. The consignment gross margin looks great. But I guess I'm trying to understand What exactly happened this quarter on direct margin? And I bring it up because I mean on 3 months ago, excuse me, 3 months ago, you had stated that you assumed that the margin would sequentially improve and there would be more purposeful direct revenue Buying inventory upfront, which gives you better margin, but now it sounds like you're saying you had less of that and the gross margin decelerated from Q1.
So I guess I'm just trying to understand that something strategically happened in the second quarter and then is there a way we should think about the margins that revenue base, just because they used to be in the 20s and now they're closer to 10, and I think we're just having a little bit of trouble understanding how we should think about it.
Sure. So yes, something's changed since last quarter and that is that our in home we're back in home And our traditional business of sourcing supply on a consignment basis is growing very well. That takes pressure off to buy inventory to sustain our recovery and our growth. So we made the decision that that's not In isolation, that's not how we prefer to use our capital to purchase inventory. So we're just taking our foot off the gas on that For the time being.
So that's really what you're seeing there. But I think we can kind of get lost in some of these The distinctions between the different parts of the business, if you just look at overall the consignment business and gross profit That's trending well. The margin in the direct business is just like the overall size of the business is too small to really drive things. Over time, that should keep going up. There are in both parts of the business elements that are not purely variable.
They're sort of semi fixed, so they get some leverage As we grow, so I don't know if I guide to a specific percent, but we'll be very transparent if that part of the business is having an impact on our gross profit per quarter Trajectory, and it's not.
Got it. Thanks, Matt.
And part of that sorry, part of the follow-up is What we're seeing sell through there on the inventory side from vendor perspective, it's very high value things. There are lots of high value watches and handbags. Those carry inherently structurally lower take rates. So that you're seeing watches are a very strongly growing category recently. So part of that is just systemic in terms of our take rate structure.
So that's going to bounce around on a small base of GMV going forward.
Thanks, Kevin.
Your next question comes from the line of Susan Anderson. Your line is open.
Hi, it's Alex Legg on for Susan. Thanks for taking our question. Just a bigger overall picture On the path to profitability and assuming that 30% annual GMV growth, when would you likely need to make additional investments such Just opening a new facility or moving into a bigger one. And then what other type of investments do you think you would need to make to maintain that
It's a great question, and with a pretty simple answer. We will be well past the profitability milestone by the time we need a new Authentication Center. With Arizona, we have about 5 years of total growth capacity in front of us. And that obviously our warehouse network is a big part of our fixed cost base. But more abstractly, Fixed costs overall going forward should not grow very fast from the levels that they're at currently or will exit this year at, I should say.
So those fixed costs include our overhead functions, all of our real estate and including our store portfolios. That should be a very modest growth rate going
Hello, operator.
Yes. Your next question comes from the
line of Anna Andreeva, your line is open.
Great. Thanks. Thanks for taking our question and congrats guys. One question for Julie, I guess, and a follow-up for Matt. So to Julie, the number of new buyers increased nicely again this quarter.
Can you maybe talk about the behavior of some of these buyers compares to the previous cohorts? Just anything to call out that's different demographically or regionally. And Matt, I'm not sure if I missed this. I think you talked about $10,000,000 in the transient cost from the Arizona DC for this year. What should we expect for the Q3?
And just remind us when should we expect these costs to roll off?
Okay. Just start with
the second one? Yes.
Okay. Yes, you're right. About $10,000,000 for the full year in nonrecurring costs. That's made up of COVID expenses and Arizona inefficiency, so both overlapping rent as well as duplicative labor costs. The overlapping rent will be done by the exiting this quarter.
The duplicative labor also will be done as we exit this quarter. So what's left is COVID, and I wish I could say when those costs I'm going to roll off. But the COVID costs are $1,000,000 in change per quarter going forward until they're
not. Yes.
In terms of the buyers, we are actually seeing it's getting our base is getting younger and a little bit more male, but not Significantly. So we just our Gen X has been a little bit more engaged with our if you go millennial plus Gen X, it is the majority of our buyer base And our and then we are getting more mails. But having said that, their lifetime value is approaching As
far as
we can tell, it's the earliest ones is approaching pre COVID level. So on some level, it hasn't changed at all. On another level, it's getting younger, which we like.
Operator, we'll go to the next question.
Your next question comes from the line of Marvin Fong. Your line is open.
Great, thanks. Good evening. Thanks for taking all these questions. 2 for me. Most have been asked.
But Just wanted to follow-up on what Anjo is bringing up that the new buyer growth was very strong. If I look back in history, I think you guys were doing even better numbers like 140,000 or better new customers a quarter. And I noted, Matt, that you said buyer incentives are about That pre COVID level. So just wanted your thoughts on for our models, should we think about your active buyer growth Staying about this level where you did in the Q2 or could we actually kind of reach those kind of 140, 150 levels? And then second question and just apologies if you addressed this elsewhere, but the AOV for July was down a little bit.
Just thought just interested in your comments What drove that? Is it some mix of apparel going up and just the total AOV trend there? That'd be great. Thank you.
I'll address the latter and then kick it over to Matt. So the AOV was it still was a record high for the month of July for us, but it did trend down versus June May just because we have more apparel and shoes mixed in. But it still was a record high AOV for July, which tends to be Before COVID hit, it tends to be one of our lowest AOV months, just because people are buying More apparel and the apparel is less expensive. It's more contemporary in that month. So we did see it mix down a little bit.
It's still at record high level. And then Matt? Yes. I think
and then your question broadly was around buyer growth generally. I think it's a basic function of the metric of active So you're going to you saw that it's a lagging indicator both on the deceleration during COVID And the reacceleration now that we're kind of pulling out of COVID, I think the most useful use of that metric is to look at GMV per active on a trailing 12 month basis. As you can see, this period, we're up to about $1700 just shy of $1700 Which is approaching where we were pre COVID. So overall, the buyer ecosystem, the folks that we have are very engaged. It's very, very healthy.
Over time, I don't think our new buyer growth active buyer growth should Basically, track the business. New buyer growth doesn't necessarily need to because we do tend to see a slightly increasing contribution from our base of buyers every year.
Got you. Thanks, Julie. Thanks, Matt. Appreciate it. Sure.
Hi, operator. We'll take the last question.
Your last question will be coming from Simeon Siegel. Your line is open.
Thanks. Good afternoon, everyone. Did you any way to quantify how much of the ASP increase was due to mix versus I think in the shareholder letter you mentioned you're already seeing benefits on ASP from the So we'd love to hear about that and then how you're thinking about that as a lever moving forward? Thanks guys.
So, yes, we've actually got $10 more than so we're excited about that overall in the business with our pricing Optimization. And here's how we literally and this is a key area of investing for us because obviously you can raise prices, we said it almost It's all great. Now having said that, the last thing you want to see is velocity of sales dropping. So it is an iterative process that's ongoing and we do expect it We continue to see benefits. Sometimes it's only $5 but like I said, overall, it's yielding $10 this year.
And hopefully, it will continue to It will continue to yield some benefits, but every dollar is important to us because it does drop a portion of it drops right to the bottom line. And it also enhances consignor satisfaction. So those things both benefits are really positive for us. And Matt?
That's great. Yes, and I think you basically covered it. So I think what we've covered in the I think the stockholder letter. So ASP was up 17 Year on year in Q2. Julie mentioned earlier in the call that in July, women's ready to wear and women shoes were up 70% year over year, so starting to mix up in the business.
So that implies that the like for like Prices are up as Julius was mentioning. Also, units per transaction are very high. So we're seeing a continuance of high value purchases. The strength there is sustaining, but the items per order has come up to different COVID levels as well. So that's the outcome of that are the record high AOBs that we've been seeing for 1.
Great.
Thank you. And then Matt, did you comment at all on in terms of the return cancellations, maybe what you're expecting there, the impact if there's an impact from mix and as apparel grows?
No, we didn't comment on it. But typically, what it should be pretty stable. I think the Abnormally low return rates during COVID have largely normalized at this point, but they're still a bit lower and that's just a function of category mix. So we don't frankly know exactly what category mix is going to trend over a multi quarter basis. So they are going to travel together return rates And AOB, frankly, but and then Q4 typically is a slightly higher return rate within the context of the year, but this quarter should be pretty consistent with what we saw in
Thanks a lot guys. Best of luck for the year. Thanks.
There are no
questions at this time. We'll now transfer it back to Ms. Julie Wainwright.
So thank you for joining our Call today. We appreciate your time. We appreciate your questions. And with that, we've got some work to do and I'm sure you do too. So have a great week and we'll Talk to you at Q3 results.
Thanks. Bye. Everyone else has left the call.