ThredUP launched in Boston in 2009 as a place to swap outgrown children’s clothing with other parents. Today, people sell gently-used children’s, teens’, and women’s clothing directly to thredUP, and buy directly from thredUP. It’s now a giant online shop for quality used clothing.
Clothes sent in are reviewed, measured, photographed and placed online for sale – or, if they don’t meet thredUP’s exacting standards, rejected. Sellers receive as much as 40% of the expected resale price.
ThredUP has raised $25.9MM from Highland, Trinity, Redpoint, and NextView, among others.
Q. Anthony, before joining thredUP, you were responsible for sourcing and managing U.S. investments for Richard Branson’s Virgin Group. What attracted you to thredUP?
A. My wife was using thredUP to buy clothes for our kids. She was so impressed with it she then bought something for herself. I arrived home from work one night and she said, “You need to go work for this company. They are awesome.”
Q. What does the thredUP brand stand for?
A. We’re bringing “wow” to second hand clothing.
People don’t often think of second hand clothes as delivering a “wow” experience. It’s often associated with a treasure hunt in a dusty store, or sifting through racks of items, or questionable quality, or inconsistent experiences. thredUP has changed all of that. We have made the experience of buying and receiving secondhand clothes indistinguishable from buying new. As a result, women are finding completely new possibilities on thredUP to look great, find their style, and save a lot of money.
Q. Who is your target market? How do you reach him or her?
A. Our core users are women shopping for themselves or their children. They are practical, smart, and value convenience. We also have a large cohort of very style conscious women who love to wear contemporary styles but don’t want to spend a fortune.
At heart, all our customers share the desire to be savvier shoppers and find new ways to achieve their looks. Also, they love the fact that by shopping on thredUP they are being efficient (they are very busy people!). They sell us their clothes when they no longer wear them and get paid for it, but they also know they are doing something that stops waste. We call that taking consumables and turning them into durables.
Q. Which channels have you found to be most successful for building and engaging with your customer base?
A. New customers come to us mostly organically, by word of mouth from friends or reading about us. Many of our users came through referrals. We do a bit of search advertising but not much, mostly to test new acquisition ideas.
We communicate regularly with our customers over email as well. But we are always conscious to give them something in return for opening that email. No one needs more spam.
Q. This is now a pretty crowded space, with companies such as Poshmark, Threadflip, 99Dresses. Lithuanian startup Vinted just raised $27MM to expand in the U.S. And, of course, there’s EBay. How do you differentiate thredUP from the competition?
A. First off, we aren’t a marketplace. We take inventory, quality check everything, and quality is guaranteed. So if you value convenience, thredUP is the best place to sell your items. Just put them in our clean out bag, send it to us (we pay for shipping both ways, by the way) and then we give you money for your items. Very simple.
If you are a shopper, you can shop with complete confidence about quality, and because we add upwards of 10K new items every day to thredUP.com, including shoes, handbags and accessories (in addition to women’s and kids’ apparel), it isn’t a “treasure hunt” experience. It’s everyday reliable, and that’s key to our mission of bringing “wow” to second hand clothing.
Q. How fast is the business growing?
A. We’re growing 50% QoQ. We’re adding 10K new items to the site per day. We have 200 employees.
Q. Do you consider thredUP an ecommerce company? A big data company? (I know thredUP uses its huge trove of historical transaction data to price used clothing optimally.) A logistics and fulfillment company? All three?
A. In many ways, thredUP is a mash-up of big data and secondhand clothing. Never has this much information been injected into the buying and selling of second hand clothes. That helps us be very transparent with users about pricing and also be reliable.
Q. Tell me about the consignment experience.
A. Customers were sending us more and more premium products, and by that I mean designer and premium brands. Those items sell very well and add breadth to our product offering, so we wanted to be able to pay those sellers more so that they would continue to send us those items. So if an item lists on our site for $40 or more, it is sold on consignment (meaning you receive payment after we sell it). We are paying sellers up to 80% of what we sell it for—the highest in the industry. For item that list for less than $40, we will continue to pay sellers up front.
Q. You released new iOS and Android apps last month. How important is mobile to thredUP?
A. Mobile growth is just astonishing. Heaps of our users are shopping us over mobile, which we think of as mobile web or native apps (like iOS and Android). They are valuable customers and so we are constantly updating our mobile features and experience to keep them hooked.
Q. Describe your social media strategy.
A. Social is an extension of everything we do in product, merchandising and marketing. We use it to keep the dialogue with our customers going in an open way, and to try out new ways to engage them around events or promotions or even just things that are of interest. Our team has fun on social. If we’re having fun then our users probably are, too.
Q. How are you using data and analytics to improve your marketing?
A. I start every day with a review of the numbers. It’s at the foundation of everything we do. Sometimes I think the M in my title sands for Metrics rather than marketing. We are fortunate to have a very good analytics team here who can put a number on just about anything, and the marketing team does a wonderful job understanding how to translate those figures into action.
Q. How do you measure customer satisfaction? Do you look at repeat business? Net promoter scores? Something else?
A. All the above. We also watch our cohort return rates very closely.
Q. How popular is the “return assurance” guarantee?
A. A small portion of our customers use it, typically the first time around. Then they usually opt out.
Q. I hear you’re hiring.
A. Yes. We need more good people. Visit thredup.com/jobs!
Q. What can we expect next from thredUP?
A. In the coming months we’ll be expanding into new categories and also going deeper into existing ones. So stay tuned (or at least tell your wife and daughter(s) to stay tuned)!
