It started as a marketplace for buyers to sell pre-owned clothing to peers, but ThredUp sees resale as a service (RaaS) as the next frontier for the business.
At this week’s Sourcing at Magic trade show in Las Vegas, ThredUp Senior Director of Customer Success Tanya Brynich said RaaS—”basically, a white-label platform for brands to plug in and deliver a resale experience to their customers.” Become a white-hot spot in the secondary market. Consumers can buy goods directly from brand-managed “shops” through a used clothing, footwear and accessories sales channel without the hassle of back-end logistics management.
ThredUp has partnered with Gap, Vera Bradley, Reformation, Farfetch, Michael Starrs and Madewell in recent years to develop the sales technology and fulfillment capabilities needed to take back and resell used clothing, shoes and more. A new returns element allows shoppers to trade in any pre-owned fashion brand of their choice through the ThredUp store and earn credits toward future purchases.
Early adopter Madewell launched its own RaaS channel in 2019, dubbed Madewell Forever, to offer denim consumers an alternative to the wasteful linear consumption model. “We [a] The denim brand, and we know that denim has a really negative impact on the environment,” Liz Hershfield, senior vice president of sustainability, said Monday.
Madewell launched its own denim recovery program in 2014, allowing consumers to drop off their used jeans at its brick-and-mortar location to recycle them into industrial materials like insulation. But, she said, “We really saw the opportunity for us in resale, because we also know that we make high-quality products that should have a second, third or fourth life.” The decision to work with a third party was an easy one with the J.Crew team-owned label. “That’s not what we do,” she said of the rebranding channel. “We make clothes, and it was really important to have us as a partner.”
Brands across the board are expressing similar sentiments, Brinich said. “We always hear from our partners that they want more clarity, more impact, from the annual sustainability report,” she says. Selling secondhand through a RaaS platform generates “real-time data” on how a brand’s goods are reintegrated into the circular economy—an increasingly important signal for brands looking to become more sustainable. With ThredUp’s branded resale shops expected to grow 300 percent from 2020 to 2021, “that’s a growing number,” she said, adding that the platform sees about six new startups each month.
What’s more, she believes the popularity of resale is fueling demand for high-quality items, helping the industry move beyond fast fashion. “When consumers make their first purchase, they’re thinking about resale value,” she said, and they’re prioritizing products whose value “can stand up over time.” According to ThredUp’s latest resale report, 40 percent of consumers “think second first” and browse eBay, Poshmark, The Real Real and similar platforms before making a purchase. That can help brands like Madewell. “A young customer might grow up and invest in that $120 pair of jeans … because they know they can sell it or trade it in for another product,” she says.
While Madewell seeks to streamline design and product development to create less waste and use upcycled and preferred materials, “recycling is top notch” because “extending the life of a product is the best thing you can do,” Hershfield said.
“People are going to keep buying new things, and we’re going to keep making them, so we need to be able to make sure those products are widely recycled and recycled,” she says.