thredUP: Secondhand clothing with a first class experience

james reinhart

Right in our own backyard, the need for clothes sparked the idea for thredUP. James Reinhart, during his time at Harvard in Cambridge, MA (after his undergrad at BC), was looking in his closet for a shirt to wear. Unable to find one, this experience inspired James Reinhart to create a peer to peer clothing platform in 2009 where men could buy and sell specifically men’s dress shirts. However, they ended up transitioning next to include women’s clothes, as well, mostly due to the simple fact that there is not as much variation within men’s clothes as in women’s. And eventually, the company transitioned entirely away from men’s clothing to include women’s and children’s clothing. Children’s and women’s clothing include the most diverse array of clothes, due to continuous changes of trends and styles for women and constant growth for children. During this time, thredUP also decided to make the switch from a peer to peer marketplace to an augmented marketplace. Taking away the hassle of having to photograph your items, ship to the correct address, and keep track of how your item is doing on the marketplace is a huge draw for potential sellers because it makes the selling experience extremely easier than a peer to peer marketplace, such as eBay.

Seeing this opportunity for success in a highly competitive and coveted field of clothing, Reed Hastings, CEO and founder of Netflix, along with Brian Swette, former CEO of eBay, hopped on board to advise thredUP while Redpoint Ventures, Trinity Ventures, Goldman Sachs and others decided to invest. With all of their help, thredUP is now based in San Francisco and remains the largest online consignment store with 1000+ new items added hourly.

Missions

Screen Shot 2018-02-06 at 1.04.45 PMthredUP is based on the philosophy of styleUP, saveUP, and liveUP. These are three mottos that fuel their company. StyleUP involves giving everyone access to trendy styles, otherwise not affordable, that will give them an extra boost of confidence and empowerment. SaveUP involves saving both time and money through a convenient and affordable marketplace, giving you the ability to use those resources elsewhere and on things more important to you. LiveUP involves the positive impact trading secondhand clothing has on the environment. By not having to manufacture new clothing when so many clothes are already not being used and sitting in people’s closets, the earth reaps its benefits from the negative impacts of manufacturing on the air and Earth’s natural resources.

Target Audience: The Mom

thredUP’s target audience is the mother. Because the company’s sole focus is women’s and children’s clothing, they hone in on what the mother wants. thredUP focuses on the three things moms want when it comes to clothing: inexpensive, quick, and easy. By creating a platform that addresses all of these issues, thredUP has become a one stop shop for many mothers across the country. It is easy to replenish clothing for both herself and her children in an inexpensive, quick, and easy fashion.

The Process

By allowing customers the ease of simply filling a Clean-Out bag, shipping it back to a thredUP warehouse, and letting thredUP take care of the rest, sellers are drawn to this accessibility and simplicity. On the reverse side of the purchasing/selling experience, by not having to dig through a brick and mortar for a certain size or style, customers are able to narrow down their browsing to their specific size – creating a much more efficient shopping experience. thredUP’s goal is to make you feel like you are shopping in real life or even better due to their quality and highly-functional sleek website.

simple smart good

Additionally, the clothes that are available for sale are items that customers can trust are high quality and without flaws. Employees, while sorting through their warehouses of shipments from sellers from across the country, search each garment to make sure it’s flaw free, functional, and fashionable. thredUP’s goal is to gather clothing that is on-trend to be sure to deliver clothing that consumers can not only afford, but want.

Integrating technology

Data is thredUp’s main advantage in the resale world. By tracking what consumers have both previously searched for and purchased, thredUP can use this information to its advantage in numerous ways.

The first is that they can be sure to stock items previously searched for that they did not carry priorly, especially if they had been previously denying certain items. Luxe, a component of thredUP’s website that specifically sells designer high-end brands, came about because thredUP had tracked that a multitude of customers were coming to their website specifically shopping and searching for second-hand designer clothing. thredUP therefore is attempting to be a one-stop shop by providing both low-end and high-end clothing all at one place.

The second is that thredUP can utilize its data to start incredibly specific and targeted brick and mortar thrift shops. Most brick and mortar thrift shops rely on local customers to provide their inventory. thredUP, in comparison, can gather clothing from across the country and tailor it to that specific local taste. Whatever has been trending on their website in a specific area, such as their store in San Marcos, Texas, thredUP can make sure that they stock their store accordingly, especially with access to goods from coast to coast. This accessibility gives the thredUP brick and mortar store a huge advantage over local thrift stores because they have a larger range of clothing from which to select.

Creative endeavors

thredUP manages to win at its game by creating innovative ways to attract consumers.

First, thredUP manages a blog on its website. The blog posts mainly consist of fashion, but there are also various lifestyle pieces revolving around fitness, health, and well-being. This was a creative way to draw potential customers into the website by featuring intriguing blogs. Not only do readers get drawn to the website in general, additionally, thredUP embeds specific items for sale in the blog. When you click on the item, it redirects you right to that item to purchase. This was an ingenious design because thredUP indirectly hypes you up about that item in the blog. Then, after reading about it why you need it, you have easy access to purchase it. I think if thredUP leverages its branding and expands their blog, this could be an exceptionally powerful competitive advantage.

Second, thredUP initiated a platform entitled Shop Her Closet. This campaign gathers garments from a certain celebrity and offers them for sale on the thredUP website. The proceeds go towards a charity of the celebrity’s choice. The first celebrity to be featured was Rachel Lindsay, the former star of ABC’s The Bachelorette and her charity of choice was the ACLU. Rachel chose various pieces that she wore on the show to sell at reasonable prices. She also wrote a short synopsis for each piece that gives a story and background behind it, compelling customers to purchase it because of its importance to Rachel Lindsay. This is a brilliant marketing strategy on thredUP’s behalf because there is both a celebrity and charity draw to pull in customers. Once they visit the site, they might be tempted to browse and purchase non-celebrity items as well.

screen-shot-2018-02-06-at-3-01-28-pm.png

Products listed on the thredUP website

Third, thredUP rolled out the Goody Boxes, its own version of a curated assortment of clothing chosen just for you. This program sets thredUP apart. Although there are a multitude of various types of personal packages for fashion, thredUP’s is different because it’s secondhand and therefore, cheaper. The idea is that you take a quiz and give thredUP your sizes, style preferences, and budget. Based on these choices, thredUP stylists will package a box filled with clothing they think you will like. For $20, thredUP ships you this box and then you choose what you would like to keep. The $20 goes towards whatever you choose to end up purchasing. Afterwards, you ship everything back free of charge. Compared to other monthly subscription boxes, thredUP’s is cheap and easy, especially because there is zero commitment. You can order a box whenever you want, while most other Goody Box-type products require a monthly subscription. By providing a product where you literally do not even have to shop, thredUP attracts customers who either do not like to shop or have no time to browse online for an inexpensive price.

Possible Issues and Solutions

The possible issues thredUP may run into are the problem of scale. If thredUP grows much larger, they will encounter problems with being able to process their items quickly and efficiently enough. For an employee to fully examine each garment that enters their warehouse, that is a crazy amount of both money and time. They must find a better way to manage their large intake of clothing from sellers in order to make sure the best products are being placed on their site ASAP. In order to solve this problem, thredUP might develop various machinery to inspect the clothing rather than humans manually inspecting each piece. Another possible solution is to prioritize shipments from previously trusted sellers. For example, if a person who has sent thredUP high-quality and on-trend clothing in the past sends another shipment a couple weeks later, thredUP should move their box to the front of the line to be inspected because it is most likely that it will contain quality clothes.

Another issue that thredUP must address is the fact that there are no switching costs. thredUP must lock in customers somehow. Otherwise, customers will easily gravitate to eBay or Amazon. I think adding a rewards program would help thredUP immensely by helping customers come back for more to use their earned rewards. Additionally, I think thredUP would benefit greatly from making the site even more personal. Although you can plug in your size, taste, and budget, I think thredUP could expand by predicting what you want before you want it – what major tech companies know how to do best. Lastly,, if thredUP could set itself apart even more by its variety, that would lock in more customers. I think if thredUP expanded to a more international scale and attracted secondhand clothing from around the world, they could create an even more unique platform with such a diverse inventory.

Wrap Up

All in all, researching thredUP has made me more than excited to visit thredUP in March. I cannot wait to see how this innovative company makes it all happen. By truly dedicating itself to its mission and using its data to its greatest benefit, I think thredUP has ginormous potential, as it has already proven.

 

Photos: courtesy of thredUP

 

10 thoughts on “thredUP: Secondhand clothing with a first class experience

  1. While I was reading this, I couldn’t help but think about the fact that all of the clothing sold on thredUP has been previously owned. As someone that gets all of their Hawaiian shirts from Goodwill, I am unfazed. However, I wonder if thredUP needs to dedicate more effort to marketing its clothing as “new”. The inbound marketing efforts the company has currently implemented are a great start. Yet, tapping into an older demographic could be the most effective way to continue scaling.

    Like

  2. Sorry, posted too early and cannot delete:

    While I was reading this, I couldn’t help but think about the fact that all the clothing sold on thredUP has been previously owned. As someone who gets all of their Hawaiian shirts from Goodwill, I am unfazed. However, I wonder if thredUP needs to dedicate more effort to marketing its clothing as “new”. The inbound marketing efforts the company has currently implemented are a great start. Yet, tapping into an older demographic could be the most effective way to continue scaling.

    Like

  3. Great post, Ellen! As someone who is an avid shopper at Plato’s Closet (upscale thrifting), thredUP provides a huge perk: I don’t have to spend hours sorting through varying brands and styles, because the website does it for us. While I agree they risk domination because of low switching costs, they could definitely use their ample data to further personalize suggested styles and promoted pieces for customers.

    All in all, I think they have great potential if they can make sorting processes more efficient and can increase awareness of their company (I had never heard of them!). Can’t wait to visit and learn more.

    Like

  4. I really enjoyed reading this and learning more about thredUP! For me, I know I go to thrift/second-hand stores mainly to find unique, “vintage” clothes that I wouldn’t be able to find elsewhere. It tends to be the story behind the item that draws me in– I wonder if that is something that is received through the webpage. Additionally, the fact that there is the Luxe department makes it a lot easier to find luxury brands for cheaper prices which is something appealing for many people.
    I do agree with @kippmilone ‘s comment about marketing their clothes more as “new”. A retro shirt or old school hat is something that people tend to brag about getting at second hand stores, however if the item doesn’t have a strong enough “story” behind it, I don’t know how compelling the idea of second hand is (aside from the cheaper prices of course). It’s almost as if the standard pieces should be advertised as new, and the pieces that have “character” should be advertised as second hand. It will be interesting to see how they continue to grow and scale!

    Liked by 1 person

  5. Thanks for the post and great presentation, Ellen! They really seem to care about their customers and have an awesome mission, so I think they will be around for a while. I read a great article about James Reinhart’s leadership style at thredUP and it seems like he creates a highly productive and enjoyable work environment. For example, he really cares about transparency as the CEO, so he makes coffees and cappuccinos for his employees on Friday mornings. The company does not have any offices, showing his employees that they are all in it together.

    Like

  6. Such an interesting post and presentation! It’s funny that the company started selling men’s shirts and then segued to women’s and children’s clothing. The most intriguing thing to me is the scale. When every single item is unique, it’s not just the sorting that might have trouble scaling, but posting the photo, writing the description, and seeking out that particular item in the warehouse once it’s ordered.
    I went to check out the website, and it’s odd to me that you are forced to put in your email before you can browse any items. I’m not a big fan of promotional emails, so I would’ve liked to see what is available before putting in my email. Any idea as to why this may be?

    Like

    • I also found that to be really weird and a turn-off! I complied because I was curious after Ellen’s presentation and I have since received a lot of emails from them. I think it must be a way for thredUP to secure contact with customers right away and begin engagement. The first two emails I received were a 20% off coupon and a “personal” note from Reinhart, both smart tactics to draw in customers for the first sale. I think this required email sign up can go either way- people will do it and be drawn in faster, or they will give up on the company right off the bat.

      Liked by 1 person

  7. Nice follow-up to a great presentation! I always found thredUP’s pivots to be interesting, and once we visited, it made sense why they had to fine-tune their focus. I think you’ll enjoy the tour of their warehouse!

    Like

  8. Great post on what I find to be a very interesting business. One additional question I have for ThreadUp is whether they see any way to improve their logistics both from an economic and sustainable standpoint. Given that these clothes are being transported all over the country, I’d be interested to see if they have a system of incentivizing clothes to be sold locally so that they can save on shipping costs and inefficiencies.

    Like

  9. Great, comprehensive post and presentation! I was very unfamiliar with thredUP before reading this, but I am very intrigued by the business model. In particular, the thredUP blog seems like a creative, innovative way to simultaneously attract new customers and market new products. I wonder what the inspiration for starting their fashion blog was! However, in terms of the company’s long-term future, I agree with what you described as the scaling issues. The inspection process is too labor intensive to scale efficiently, so if we end up visiting I would love to ask about their plans to streamline the inspection via machine learning and AI (if that’s what they’re planning)!

    Like

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s