ThredUP helps retailers enter the circular economy
ThredUP, the secondhand marketplace, wants to be the backbone of the circular economy, CEO James Reinhart tells Axios.
Why it matters: The worldwide apparel resale market could reach $300 billion by 2031 and represent more than 10% of global retail sales, according to Morningstar data.
Driving the news: Retailers are looking to appeal to customers who are inclined to shop more sustainably — either through building their own resale platform or partnering with companies like ThredUP.
What’s happening: ThredUP is focusing on building its infrastructure to process as many goods as possible on behalf of its retail partners.
- “Our investments are a lot on the back end,” Reinhart says.
- ThredUP processed well over 100 million unique secondhand items, Reinhart says, and it’s approaching 150 million pieces of clothing.
What they’re saying: “One thing to watch over the next year is, how do brands start to really compete in resale for the best experience?” Reinhart asks.
- Companies like Lululemon are launching their own online resale programs, but that still requires significant investment, Reinhart says.
Reinhart also sees retailers continuing to leverage resale partners instead of going it alone.
- Outsourced services like design, manufacturing and shipping often lower the cost for retailers, he says.
- Retailers are looking for areas in the supply chain where they can leverage partnerships, he adds.
- "I think resale is increasingly in the camp of services that they will hire,” he says.
How it works: Founded in 2009, Oakland, California-based ThredUP offers a marketplace for buyers and sellers, as well as “resale as a service,” helping brands run and scale a resale operation.
- “We want to continue to bring relevant personalization and merchandising so that the experience of shopping the brand's resale feels increasingly like the brand's native site,” Reinhart says.
- ThredUP adds photos and attributes of the items on the e-commerce site, as well as the authentication and inspection for quality.
Zoom out: Resale often starts with initial conversations retailers have with themselves and their customers.
- Retailers aren't just thinking about how to monetize resale — they're also considering "how they build clothing that can be more circular in the future," Reinhart says.
The bottom line: Reinhart sees ThredUp as an enabler of brands to do resale at a real sufficient scale.
Editor's note: This piece was corrected by removing a reference to ThredUP offering cleaning services (which it does not).