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BUSINESS PROFILE How Poshmark and thredUP Captured the Eco-Friendly Millennial Market Once upon a time, it was considered bad taste to rock the same outfit “sustainable badge of honor” patch. The company estimates it has conserved 2.7 The Clothing Trend of the Year Is ‘Secondhand’
With the help of their smartphones, shoppers can access both online thrift stores from their pockets. But that convenience is just one reason the concept succeeds. THE ECO-FRIENDLY ADVANTAGE According to Newsweek, 73% of millennials claim climate change is “personally important” to them. It makes sense, then, that they choose Poshmark and thredUP to opt out of the traditional fashion industry, which is the second most polluting industry in the world after oil. “I started selling clothes on Poshmark in college as a side hustle. The money was nice, but decreasing my impact on the environment was another big motivator,” says Alexandra Nelson, a millennial and “Posh Ambassador” (top seller). “I wanted to keep clothes out of the landfill.” Nelson operates under the name @rosebudthrift and has made hundreds of dollars a month catering to 66,000 followers. Learning about the connection between fashion and climate change pushed her to buy secondhand, and she’s not alone. Millennials and Gen Zers are the fastest-growing demographics in the secondhand market, and GlobalData Retail predicts secondhand goods will make up 17% of everyone’s closets by 2029 (up from 3% in 2009). “I’d say 75% of my wardrobe is second hand, and a lot of it is from Poshmark. I even bought my wedding shoes on the app,” says Nelson. ThredUp uses its eco-friendly status to hook young customers. “Have More, Waste Less” is front and center on its website, and it recently released a
several Instagram posts in a row. But today, it’s trendy to wear the same outfit again and buy secondhand. Credit for that about-face goes, in part, to resale clothing companies Poshmark and thredUP. Over the last decade, both companies have carved out a niche with cash- strapped, eco-friendly millennials and made resale shopping cool. Each has its own origin story, but their advantages are the same: They offer a greener, cheaper, more social shopping experience. THRIFT STORES IN YOUR POCKET Harvard business school student James Reinhart founded thredUP, “the world’s largest online consignment and thrift store,” in 2009 after a local thrift shop rejected his bag of old clothes. He realized a resale website could kill three birds with one stone, reducing clothing waste while helping people clean out their closets and pad their pockets. Today, millions of people mail their clothes to thredUP’s massive warehouses for redistribution. thredUP has shuttled more than 65 million pieces to new homes. Poshmark was the brainchild of Indian immigrant and engineer Manish Chandra, who launched the app in 2011. Chandra dreamed of creating a fashion-focused social network for resale clothing, a cross between eBay, Facebook, and Vogue. Today, more than 60 million “Poshers” buy and sell clothing on Poshmark. They follow each other’s “closets” and connect at virtual fashion parties. Unlike thredUP users, Poshers buy and sell directly to each other.
billion kilowatts of electricity, saved 6 billion gallons of water, and kept 1.4 billion pounds of carbon dioxide from entering the atmosphere. DISCOUNTS MAKE THE WORLD GO ‘ROUND Forbes reports, “9 in 10 shoppers buy from discount stores, and 75% are looking specifically for deals on clothing.” Poshmark and thredUP both ride this wave, offering massive discounts on trendy brands. On Poshmark, sellers set their own prices, and buyers can make competitive offers. This approach appeals to millennials, who have less household wealth today than those in earlier generations had at the same age. HOW CUSTOMER EMPOWERMENT PAYS OFF Last but not least, thredUP and Poshmark profit by getting their users involved. On Poshmark, buyers and sellers “meet” each other virtually and exchange messages. The platform doubles as a social network that can become as addictive as Facebook. Both sites also empower people to buy and sell from home. This became a vital asset during the COVID-19 pandemic. According to GlobalData Market, online secondhand shopping soared last year and will grow 69% between 2019 and 2021. This ensures Poshmark, thredUP, and their competitors will see continued success. To hear more about thredUP’s origins, check out interviews with Reinhart on the “How I Built This” podcast.
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