As the lines between online and offline retail continue to blur, online clothing consignment store ThredUP is opening its first brick-and-mortar retail locations after an online-only presence since its founding eight years ago.
The first physical store is now open in San Marcos, Texas, with a second in the works in Walnut Creek, Calif. and more to follow by year’s end.
As Racked notes, “ThredUP is one of a handful of digital companies, like Tradesy, Poshmark, and The Real Real, that’s turned consignment — a costly business model — into a successful digital venture.”
Calling itself “the world’s largest online thrift store,” about 1,000 new items across 35,000 brands are added to the site every hour for ThredUp’s nearly 20 million users. Its e-commerce business processes 100,000 items in a single day.
ThredUP has raised more than $131 million since 2009, in part because its inventory is not limited to just ‘luxury items’ offered by other re-commerce sites. The brand lets sellers mail in unwanted clothes and accessories and its back-end technology takes care of the rest.
So why change the business model and brand model now?
“Our customers for years have been asking for us to have some sort of a brick-and-mortar expression of our brand,” said ThredUP’s Head of Retail Experience Heather Craig. “We really thought there was a huge opportunity for our customer as well as for growth to be able to go into this brick-and-mortar segment of the business.”
How it plans to differentiate its physical store experience to better serve customers:
1. Spaces & Styles Backed by Science: Because tens of thousands of items sell on thredUP.com daily, we can determine what brands are trending in certain areas and cities—and stock our stores accordingly. Plus, store inventories are informed by our most active customers, so the more you shop, the more just-your-style pieces you’ll find.
2. A Revolving Door of Fresh Finds: Unlike traditional retail where styles are swapped out seasonally, we have the unique ability to tap into our constant influx of fresh inventory and 35,000 brands to create a new store every time you walk in the door.
3. Amazing Prices on Your Favorite Brands: We offer up to 90% off the largest selection of brands anywhere, including J.Crew, Madewell, Banana Republic, Michael Kors, Club Monaco, and Lululemon. With an average discount of 80% off, in our stores everything is on sale, all the time.
“We’re so excited to bring thredUP stores to traditional malls, outlet centers, and main street shopping districts across the country.”
Craig noted that 91 percent of the U.S. retail market is still omnichannel and 85 percent of apparel is still bought offline. ThredUp cofounder and CEO James Reinhart told Forbes picked San Marcos for its first store because of its proximity to the Tanger Outlet. “One of my hypotheses is that the ThredUp customer shops a lot at outlets. The store serves a set of customers we can’t serve online. It makes sense as a growth strategy.”
The more suburban and affluent Walnut Creek store will offer more designer brands (and handbags) and all stores will cater to local demographics leveraging smart tech to stock stores accordingly.
“We know what customers want to shop for and will be implementing that, so it’s already a different kind of store,” Craig told Racked.
“We have millions of units of inventory, but we’re able to create an assortment based on what’s being searched and bought online. It applies regionally, too: In central Texas, for example, we’re able to see that dresses sell really well in the market, and specific types of dresses, too, so we’d just be pulling all that into the store.”
ThredUP is leveraging its trove of customer data to deliver customer satisfaction, stocking stores with styles customers in the area have been recently purchasing or browsing online.
brick & mortar is eh but storefronts built off local customer data may work. ThredUp opening stores. https://t.co/6fpZQ4BloP via @techcrunch
— Eric Pelnik (@pelnike) June 28, 2017
Forbes estimates that ThredUp’s revenues will top $100 million this year. “Essentially they are removing all of the merchandising risk that other brick and mortar retail stores are faced with, which the startup says will give them a much better chance at succeeding in the physical world.”
Reinhart believes, “We are transforming the way people think about secondhand, and we have the capacity and the energy and the vision to make that a part of people’s lives for 20, 30, 50 years.”
"I'm cleaning out my closet today! thredUP makes it SO easy and it comes with a no landfill guarantee!!" –@JsEverydayFash pic.twitter.com/ZKCmDLKFkD
— thredUP (@thredUP) June 28, 2017
ThredUP epitomizes the smart retail brand of today, hedging bets with online and offline destinations, keeping the purchase process simple, the cost to customers low and proffering a live conscious mantra: “We want to leave the planet sustainable for the next generation — saving water, recycling and reusing items, and donating to important causes.”
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