It started out as a marketplace for buyers to sell second-hand clothes to peers, but ThredUp sees resale as a service (RaaS) as the next frontier for its business.
At the Sourcing at Magic trade show in Las Vegas this week, ThredUp’s Senior Director of Customer Success, Tanya Brinich, said RaaS – “essentially, a white-label platform for brands that they can connect to and deliver a for resale to their customers” – has become a white-hot space within the second-hand market. Shoppers can buy items directly through brand-operated “boutiques” that form a sales channel for second-hand clothes, shoes and accessories without sticking brands with the hassle of managing back-end logistics.
In recent years, ThredUp has partnered with Gap, Vera Bradley, Reformation, Farfetch, Michael Stars and Madewell, powering the sales technology and fulfillment capabilities needed to take back and resell apparel, shoes and more. A new trade-in item allows consumers to trade in any pre-owned fashion through their favorite brand’s ThredUp store and earn credits toward future purchases.
Early adopter Madewell launched its own RaaS channel, dubbed Madewell Forever, in 2019 to offer denim shoppers an alternative to the linear take-do-waste model of consumption. “Were [a] denim brand, and we know denim has a very negative impact on the environment,” Liz Hershfield, senior vice president of sustainability, said Monday.
Madewell launched its own denim take-back program in 2014, allowing consumers to drop off their used jeans at its brick-and-mortar stores to recycle them into industrial materials like insulation. However, “we really saw an opportunity for us in resale, because we also know that we make very high quality products and should have a second, third or fourth life,” she said. The decision to work with a third party was simple for the J.Crew-owned label. “That’s not what we do,” she said of running a re-commerce channel. “We make clothes, and it was really important that we had an expert as a partner.”
Brands at all levels express similar sentiments, according to Brinich. “We constantly hear from our partners that they want more transparency, more impact… than a sustainability report published every year,” she said. Selling second-hand through the RaaS platform generates “real-time insights” into how a brand’s products are being reintegrated into the circular economy, an increasingly important marker for brands looking to become more durable. ThredUp saw its branded resale stores grow 300% from 2020 to 2021, “and that number is only growing,” she added, noting that the platform sees about six new launches each month.
Additionally, she believes the popularity of resale is fueling demand for higher quality products, helping the industry move away from fast fashion. “When the consumer makes the initial purchase, they are already thinking about their resale value” and favor products whose value “can last over time,” she said. According to ThredUp’s latest resale report, 40% of buyers “think second-hand first” and browse eBay, Poshmark, The RealReal and similar platforms before making a purchase. It could help brands like Madewell. “A younger customer might splurge and invest in that $120 pair of jeans…because they know they can sell it or trade it for something else later,” she said. declared.
While Madewell wants to optimize product design and development to create less waste and use recycled and preferred materials, “resale is a top initiative” because “extending product life is the best thing you can do.” 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 reused,” she said.