Thredup, one of the world’s largest online thrift stores, selling more than 35,000 apparel brands, today opened its first store in San Marcos, Tex.
The company plans to launch four more locations by the end of 2017.
The “smart store,” as Thredup is calling the unit, will be powered by proprietary technology that yields a trove of consumer insights. “The Thredup stores are designed to reinvent the traditional thrift experience for the modern customers,” said James Reinhart, chief executive officer and cofounder of Thredup. “While consumer mind-set is rapidly shifting online, omnichannel retail makes up 91 percent of the U.S. retail market, presenting immense potential for brands that can connect online and off-line in a smart, intuitive way.”
In the five years since Thredup’s launch, Reinhart has been busting a lot of myths about thrift shopping. “We’re changing the way people think about thrift,” he said, adding that “50 percent of our customers had never shopped ‘used’ before trying Thredup online.”
Reinhart said Thredup’s consumer research showed that shoppers want to touch and feel products before buying them. “We can serve customers better with stores,” he said, noting that the San Marcos store is having a soft opening today, which will be followed by a grand opening on July 20. “We’ll open a few stores in California,” he said, adding that stores will range in size from 3,500 square feet to 5,500 square feet.
“As a technology company, everything is tech first,” Reinhart said, adding that with tens of thousands of items selling online daily, Thredup will mine data to find out what’s trending by city and will stock shelves accordingly.
“We sell a lot of designer products,” Reinhart said. “Each store could have a specialty set of products that’s data-driven. We’d look at what’s different in Boston versus San Marcos, Tex.”
Unlike traditional retail where styles are swapped out seasonally, Thredup has the ability to tap into a constant influx of fresh inventory every time a customer walks into the store. Each store will be connected to Thredup’s national network of distribution centers, transforming the stockroom into a revolving door of possibilities.
Reinhart is also using technology to pinpoint shopper interests to boost average orders and lower returns. Thredup will send notifications to customers who opt-in, altering them to when their favorite brands are in stores.
“Today’s shopper craves an intuitive experience,” Reinhart said. “Thredup will cull thousands of [stockkeeping units] to instantly notify customers of new in-store arrivals in their size, favorite brands and styles.”
Armed with shopper data and a vast online selection, Thredup’s sales associates can pre-stock a customer’s dressing room, suggest online items based on in-store browsing, and even send a surprise box to her doorstep to try on at home.
Thredup will soon offer a Dress Up feature where customers select items online that could complement their in-store purchase with the items sent to their home to “try before you buy.”
Thredup offers up to 90 percent off brands such as J. Crew, Madewell, Banana Republic, Michael Kors, Club Monaco and Lululemon. At Thredup stores, the average discount will be 80 percent off, the company said. The smaller discount reflects the higher costs of operating stores. “The stores can’t be loss leaders,” Reinhart said.
Stores feature third-party vendors that provide categories not typically found on the site, such as jewelry and home goods. Momtrepreneurs will provide a platform for female artisans, Agape will supply candles and Her Pretty Things Jewelry will feature witticisms hand-stamped on charms.
Reinhart in 2008 started Thredup after being frustrated that a consignment store in Cambridge Mass rejected his clothing. “They said, ‘We don’t take these brands,’” he recalled.
He said he’s now poised to compete with off-pricers. “More than half our customers said that before Thredup they bought products at T.J. Maxx and Marshall’s. We’re stealing their share.
“We’re very competitively priced,” Reinhart said. “We have to be cheaper. Customers appreciate the uniqueness. We keep the merchandise online fresh. We use data and technology. We don’t have merchants making decisions.
“I’m convinced that these stores will work,” Reinhart said, adding that Thredup’s customers are everywhere, so the retail strategy will include A malls, outlet centers and “main streets all over America.”
Reinhart said so far, Thredup’s leases are shorter-term deals of “at least one year with the option to extend the leases.”