Shopping second-hand was once labeled as lame — but not anymore. From fashion editors and style influencers to kids next door, shopping preloved and vintage items is now viewed as responsible, ethical, and cool.
So it follows that the second-hand market is booming. By 2029, it’s projected to hit $80 billion in value — that’s twice the size of fast fashion retail.
This data comes directly from thredUP — one of the many newly emerging online consignment marketplaces. Co-founded in 2009 by James Reinhart, Chris Homer, and Oliver Lubin, thredUP grew from a self-funded project to a unicorn startup within a decade.
In 2021, thredUP IPO-ed with a valuation of $1.3 billion. Since then, company share prices soared by a further 43%. But investors aren't the only ones who value thredUp — consumers are hooked too. As of Q2 2021, the platform has over 1.34 million active buyers and processes some 1.22 monthly orders.
So how did thredUp change both consumers’ and investors’ sentiment towards preloved garments? And how are they managing to successfully compete with fast-fashion brands and a flurry of other resale marketplaces?
We'll tug at some strings and unravel the story in this brand deep dive.
The thredUp Success Story
In 2009, James Reinhart was a regular business student in Cambridge, MA. And like many other students, he wanted to make some spare cash. After eying up a closet full of lightly worn shirts, James decided to sell some items at the local thrift store. But one store after another refused to take mass-market stuff.
After venting his frustration to a friend group, he realized that many other people struggled to get rid of gently used clothes. So the friends decided to create a peer-to-peer marketplace for giving those garments a new life.
First, thredUp traded male attire only. A year later they decided to re-focus on kid's clothes since the demand was bigger. That’s when they unlocked the floodgate. People had tons of clothes they wanted to get rid of, but it took too much time and effort to sort through everything and list it for sale.
So thredUp introduced the now-iconic Clean Out Kit (which, then, was just a huge, white plastic bag). Customers could fill up the bag and then send it in to be assessed, processed, and sold by thredUP. In exchange, early users received cash. However, now they get platform credit — a smart move for increasing customer lifetime value.
The volume of incoming clothes was eye-opening for the team, and millions of high-quality, almost new items were streaming into the thredUP warehouse each month. As a business owner, this prompted Reinhart to think more about the bigger picture — the impacts of conspicuous clothes consumption on the planet such as pollution, overproduction, deadstock disposal, wasteful production practices.
Choosing to shop second-hand wasn’t just about saving money — it also became a statement for boycotting fast-fashion brands, unfair and unsustainable garment manufacturing practices, and overhyped consumption.
A broader brand vision for thredUP progressively came to life:
“thredUP’s mission is to inspire a new generation to think secondhand first. My dream is a Clean Out bag in every closet, and thredUP as a household name across America — the first place people look when they want an amazing outfit for a great price.”
But to pursue that vision, Reinhart needed extra funding. thredUp was largely self-financed through personal savings, angel investments, and cash from friends — but to further grow the operational side, the team needed more capital.
So Reinhart went pitching the VCs his vision and mission for thredUP… and was rejected 27 times. But he remained relentless and finally persuaded Goldman Sachs to invest in his project in 2015.
The extra cash didn’t stay idle for long. It went straight towards expanding thredUP’s warehousing capabilities, establishing new brand partnerships, and rolling out product launches. The reseller even struck a partnership deal with Target — allowing customers to trade-in in their old clothes for store credit. This alone massively improved brand awareness.
Then thredUp also partnered with celebrities to launch “Shop Her Closet” — a pop-up online shopping experience, allowing users to buy preloved garments from the likes of Cheryl Burke and the Real Housewives of New York.
Plus, they introduced “Goody Boxes” — a curated $10 box of 10 preloved items you can keep or send back, available as a subscription. This product was meant to entice secondhand clothes skeptics, and it did the trick. In 2018, thredUP earned $129.6 million in 2018 revenue and then increased their numbers to $163.8 million in 2019.
The team also set up a new tech office to improve their online thrift store shopping experience. After all, a big part of their brand identity was built on the premise that shopping second-hand can be as easy as ordering an item from a regular retailer. Since fashion is built upon meticulous creation, thredUp doubled down on creating a streamlined experience of discovering cute garments and modern styles for a fraction of retail price.
And just like that, thredUP reported their all-time-high revenue of $63.3 million in Q3 2021 from over 1.4 million happy thrifters who used the platform.
Brand Lessons from ThredUp
Despite being a raging success, threadUP still has modest brand awareness numbers. Per Statista, 60% of US females have never heard of it. And among those who did, 26% are not interested in using this service.
As a comparison, close competitor Poshmark does marginally better. 50% of American women have never heard about it., but among the 50% of those who did, only 37% are not interested in trying it.
While thrifting definitely has become more popular, it’s still not mainstream. Brands in this vertical still have a lot to do to engage and persuade new target audiences.
Here’s what thredUp has been doing right so far — plus, takeaways that will help other companies develop their own marketing campaigns.
1. Focus on Building a Unique Brand Experience
It's time-consuming to shop secondhand. You’re either visiting too many stores to find a gem — or at least something in your size. Or you’re spending hours placing and tracking bids on eBay. Neither is a great option.
Additionally, many people choose to throw away or stockpile clothing because they don’t have time to prepare it for sale on a marketplace.
So threadUP had to solve two connected problems:
Build an effective process for curating and marketing the obtained stock
Entice more users to shop second-hand on their platform
Supply wasn’t really an issue — from Gap to Gucci, customers bombarded thredUP with requests to “send things over so you could deal with them”. But the high volume of incoming clothes required better capabilities to deal with incoming stock. Essentially, thredUP was doing two businesses at a time — eCommerce and the logistics of moving goods.
So, they invested early on to improve their distribution capacity. Using the secured funding, thredUP built several highly automated warehouses where they can now process 100K unique items per day.
The team now relies on computer vision algorithms to rapidly assess the type, condition, and characteristics of every garment. Then, the software either marks it as “for sale” or informs the customer who mailed it in about alternative options — donating the items to charity, recycling, or returning them.
After the product is listed, AI algorithms analyze the historical trends and programmatically set pricing. This way, thredUP manages to maintain a good selection of brands, sizes, and garment types. Plus, deliver a delightful browsing experience for users — which is sure to drive customer retention.
To add even more delight, thredUP introduced other engagement mechanisms — such as a pop-up quiz users can complete to receive a host of personalized recommendations. The platform’s algorithms also monitor user behaviors’ to figure out their preferences and make more relevant suggestions.
Additionally, to prevent inventory accumulation and cut the carbon footprint, the algorithms also direct shoppers towards clothing items that are located in the warehouse closest to them.
More recently, thredUP launched the “Thrift the Look” feature. Users can now browse outfits options, put together by influencers and the thredUP editorial team and find similar items in just a few clicks. Another cool feature, this helps thredUP move stock and cement the perception that “shopping second-hand is fashionable”.
The Takeaway: Stellar CX and UX are major selling points for consumers. In industries like online retail, a more convenient and engaging experience can be a huge differentiator compared to the competition.
Whether you’re investing in back-office process upgrades or customer-facing solutions, always keep your brand experience at the back of your mind.
2. Evolve Your Brand In Line with Audience Perceptions
When thredUP launched, second-hand clothing was still looked down upon by many consumers. So, the team played it safe with their brand positioning — speaking about “saving money”, “being eco-friendly”, and “reducing waste”.
“In the early days of thredUP, our goal was to convert skeptics. Our brand was designed to shake up preconceptions about secondhand and build trust,” said Anthony Marino, thredUP’s President. “Today we have less convincing to do. Skeptics have become fans and advocates. Stigma has been replaced by pride”.
Donning preloved items is a statement people are eager to share. Even Paris Hilton now “confesses” that she thrifts:
With such a major shift in its target audience’s perceptions of the market, thredUP felt the need to catch up. In late 2020, they presented a full rebrand, with its new creative direction having been inspired by its customers who shop with intention and seek to influence others.
Their brand strategy is now focused on making the thrifting movement even bigger, bolder, and prouder with a new slogan of #THRIFTLOUDER. By putting forth up the narrative that they are the “advocates for meaningful change”, thredUP stands for something bigger than just selling second-hand clothes — a call to action for consumers everywhere to stand up for their beliefs.
And that sentiment should resonate well with their core target audiences — sustainably-minded consumers, fashion-driven, but eco-conscious Gen Z shoppers and Millennials. In fact, nearly half of Gen Y and Z consumers say that they want brands to make them feel like part of a larger cause and connected to other like-minded folks, sharing their beliefs.
thredUP accomplishes the above by enlisting all sorts of advocates. Over the years, celebrities like Olivia Wilde, Lena Dunham, and Aimee Song among others teamed up with thredUP for different brand campaigns.
The team also does co-branding partnerships and has engaged the likes of Walmart, Adidas, and, most recently, Madewell into their circular fashion economy. All of these campaigns further chipped away at the stigma around second-hand shopping and helped thredUP develop positive brand associations among different target audiences.
The Takeaway: When it comes to branding, don’t confuse consistency with permanence. To stay relevant, brand marketing has to evolve in line with the changes in your industry, your target markets, and your target audiences.
Failure to recognize and act on those at the onset can lead to losses in brand equity — as can be seen in what happened to Pandora.
To stay up to date, we recommend using brand monitoring to assess wider consumer sentiment. Also, it’s a good idea to run internal customer analytics and sentiment analysis to identify how the narrative around your brand changes.
3. Educate Your Audiences — But Also Learn From Them
Though the perception of thrifting has changed dramatically, there are still more audiences left to persuade. threadUP has chosen “education” as a means for swaying their opinions, but they’re also keeping their marketing fun.
To a large extent, they’re still engrossed in educating the public on how their shopping decisions affect the world around them — without sounding like an overzealous activist (sorry, Gretta). Instead, they focus on keeping those big conversations both fun and substantial.
Since 2013, thredUP has been publishing an annual resale market report. On one hand, that’s a cool marketing vehicle for securing extra media coverage for the brand. On the other — the data they choose to highlight also forces more people to think about the “darker” issues of the fashion industry.
At the same time, thredUP’s brand narrative isn’t exclusively focused on “sustainability”. They also discuss other, albeit smaller, issues that their customers face. For example, the 2019 ad “The Cure for Common Closet” is a light, funny, and relatable story of “nothing to wear and no money to spend”, but told from a sustainable perspective.
Overall, their brand marketing is carefully balanced to prevent any perception that they are pushing people to buy more clothes than they actually need. Because having too much second-hand clothing stockpiled (and discarded) isn’t any good either.
Most importantly, they are receptive to customer feedback and recognize when it’s time to abandon a failed idea. In 2018, thredUP launched a branded collection, Remade.
All the items were made from recycled or upcycled materials. “The line had a modest success,” the team later admitted. “But one of the most important lessons we’ve learned while rolling out that program is that, when people come to ThredUp, they come to buy used things!”.
Informed by their audiences, thredUP decided to focus on expanding their inventory size and adding new product categories instead. And that seems to be working for them.
The Takeaway: Marketing is a two-way street. You have to both contribute and listen to the discussions happening around your product.
The best marketing happens when your target audiences communicate their needs and wants using the ideas you’ve planted in their heads. But to find the concepts that resonate, you need to peek into your audiences’ minds.
thredUP managed to breathe a second life not just into clothing, but into the concept of thrifting as a whole. It made the shopping experience more accessible and attractive to the average buyer and seller.
The experiential factor, combined with the progressive transition to conscious consumption, has put thredUP in the front row of the industry. With the extra money from its recent IPO and rising consumer interest, we’re interested to see what move thredUP will pull off next! And in the meantime, happy thrifting!