Brands from Gap to Gucci have traditionally shown little interest in secondary markets. However, with younger consumers flocking to e-commerce resale sites such as The Real Real, Vestiaire Collective and StockX, brands are reportedly looking for ways to participate and grab a piece of the $21 billion business.
ThredUp, which claims to be the biggest secondhand marketplace, today is launching UpCycle, an online platform that allows brands and retailers to launch and scale recycling programs. ThredUp’s first partner is sustainable fashion brand Reformation.
“ThredUp believes in extending the life of clothes and the positive impact reuse can have on our environment,” said founder and chief executive officer James Reinhart, adding that many brands share ThredUp’s vision, but don’t know where to start. “UpCycle will help retailers capture the value sitting in customers’ closets while advancing a more circular economy.”
“The real change has been in the past year,” said Karen Clark, vice president of communications and partnerships at ThredUp. “Brands and retailers are really interested in the circular economy. They see it is a good business decision. So many consumers are participating in secondary markets.”
Other resale e-commerce sites are trying to make inroads with brands and retailers. The Real Real last year entered into a strategic relationship with Stella McCartney where the designer’s stores along with The Real Real’s brick-and-mortar units facilitated consigning and hosted panel discussions about the circular economy.
At the time, Julie Wainwright, The Real Real’s founder and chief executive officer, said, “The fear [for brands] is that we’re cannibalizing their business.”
Wainwright on Friday had a different perspective. “We’re in discussion with many brands at this time,” she said. “There’s been a shift in how brands view and work with the secondary market. They’re increasingly realizing the benefits of the secondary market, not just in helping extend the reach and desirability of their brands, but also the sustainability benefits.”
The Real Real on Oct. 1, National Consignment Day, launched a sustainability calculator to quantify consignment’s positive impact on the planet. Portland, Ore.-based consultancy Shift Advantage developed methodology for quantifying greenhouse gas, and energy and water saved by consigning clothing. Experts from the World Resource Institute and the Ellen McArthur Foundation reviewed the methodology. The 2.5 million women’s items consigned to The Real Real since 2012, offset 65 million car miles in greenhouse gasses and energy. That’s the equivalent of planting 340,000 trees.
ThredUp created UpCycle because “we thought there would eventually be a time when retailers would start to see the value of secondhand and how leveraging secondary markets would appeal to a modern consumer,” Clark said. “We want to help retailers get on board and help them with their recycling efforts. We thought about how we can help retailers recapture some of the value that’s being lost to secondary markets.”
Clark acknowledged that brands and retailers can try launching their own recycling programs, but it would be difficult. “They may not be able to support it without the technological or operational infrastructure that’s needed to receive, evaluate, price, photograph and resell items,” she said. “We’ve been building our infrastructure for 10 years and have the ability to process 100,000 garments a day. We have algorithmic pricing that immediately knows the price of, say, a Gap T-shirt. We’ve captured a lot of data.”
ThredUp said it will divert 10 million items from landfills this year. “If we can multiply that by 10 with brands and retailers, we feel we can make a big difference,” Clark said, adding that UpCycle will let any retailer launch an apparel recycling program by taking advantage of ThredUp’s resale technology, proprietary supply chain and processing and fulfillment expertise.
Brands and retailers distribute UpCycle clean-out kits that customers use to send unwanted clothing to ThredUp. Instead of earning cash, ThredUp will pay consumers with a retailer gift card, driving them back to the store — in this case, Reformation. With a gift card in hand, shoppers can refill their closets with the retail partner’s apparel. Reformation will be offering a payout booster for a limited time. Starting in November, Reformation will become a payment option for sellers on ThredUp.
“We’ve had a lot of inbound interest from retailers when we’ve had conversations about the modern consumer and how she’s more likely to buy from an environmentally sound company,” Clark said. “We’re changing shopping behavior. When consumers go to buy apparel, they now think of the resale value.”
ThredUp is “talking to a lot of different brands about apparel recycling,” said Clark, noting that the next partnership will bow on Black Friday. “We’ll launch 10 more brands this year. Next year, we’ll work with a retailer to feature new products alongside used products. The line is starting to blur for consumers. We envision a marketplace that’s not primary or secondary, but a third option that features new and used products.”