It began as a marketplace for shoppers to sell pre-owned apparel to their 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 senior director of client success Tanya Brinich said that RaaS—“basically, a white label platform for brands that they can plug into and offer a resale experience for their customers”—has become a white-hot space within the secondhand market. Shoppers can purchase items directly through brand-managed “shops” that form a sales channel for used clothes, shoes and accessories without sticking brands with the hassle of managing backend logistics.
ThredUp in recent years has partnered with Gap, Vera Bradley, Reformation, Farfetch, Michael Stars and Madewell, powering the sales technology and fulfillment capabilities needed to take back and re-sell used garments, footwear and more. A new takeback element lets consumers trade in any pre-owned fashion through their preferred brand’s ThredUp shop and earn credits toward future purchases.
Early adopter Madewell launched its own RaaS channel, dubbed Madewell Forever, in 2019, to give denim shoppers an alternative to the take-make-waste linear consumption model. “We’re [a] denim brand, and we know denim has a really negative impact on the environment,” senior vice president of sustainability Liz Hershfield said Monday.
Madewell launched its own denim takeback program in 2014, allowing consumers to drop off their used jeans at its brick-and-mortar locations to be downcycled into industrial materials like insulation. However, “we really saw an opportunity for us in resale, because we also know we make really 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 Group-owned label. “This is 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 across the board are expressing similar sentiments, according to Brinich. “We hear from our partners all the time that they want more transparency, more impact… than a sustainability report published each year,” she said. Selling secondhand through the RaaS platform generates “real-time information” about how a brand’s goods are being reintegrated into the circular economy—an increasingly important marker for brands seeking to become more sustainable. ThredUp saw its branded resale shops grow by 300 percent from 2020 to 2021, “and that number is just increasing,” she added, noting that the platform sees about six new launches each month.
What’s more, she believes resale’s popularity is fueling demand for higher-quality goods, helping the industry move away from fast fashion. “When the consumer is making the initial purchase, they’re already thinking about its resale value” and prioritizing products whose value “can stand up over time,” she said. According to ThredUp’s most recent resale report, 40 percent of shoppers “think secondhand first,” and browse eBay, Poshmark, The RealReal and similar platforms before making a purchase. That 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 in for a different product later,” she said.
While Madewell wants to optimize design and product development to create less waste and use upcycled and preferred materials, “resale is a top tier” initiative because “extending the life of the product is the best thing that you can do,” Hershfield said.
“People are going to continue to buy new things, and we’re going to continue to make them, so we have to be able to make sure that those products are extensively recycled and reused,” she said.