Why A Successful Online Resale Site Is Looking To Open Brick-And-Mortar Stores

Why A Successful Online Resale Site Is Looking To Open Brick-And-Mortar Stores
Advertising

ThredUp, a hugely popular online thrift store, has begun opening physical retail locations for their resale products

Anna Johansson
  • 10 july 2017

Even if you’re not willing to admit it, everyone loves a good thrift store find. Purchasing a like-new article of clothing for a fraction of the retail price? Priceless. This is why online resale site ThredUp has been such a success, accepting gently-used articles of clothing and accessories of any brand and sells them to the public. In the eight years it’s been in business, it’s raised more than $131 million in equity funding, and now it’s planning to use some of that cash to open physical retail locations.

What has spurred this sudden interest in taking a wildly successful online store to the physical world of retail? ThredUp’s Head of Retail Experience, Heather Craig, told Fashionista that it’s because the customers asked for it.

“Our customers for years have been asking for us to have some sort of a brick-and-mortar expression of our brand,” she says. “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. This is kind of a perfect time to go into retail when there’s all these sort of other changes happening in the opposite direction.”

Craig also pointed out that 91 percent of stores use both online and offline components. There’s also the fact that 85 percent of clothing and accessories is purchased offline, despite the large number of online retailers.

They also hope that their physical stores will help to take away the negative stigma that surrounds thrift stores. About 50 percent of ThredUp customers never shopped secondhand before using ThredUp, according to company statistics. They’re hoping to change the customer service dynamic and bring a better name to recycled clothing.

“When you’ve shopped in previous thrift stores, you may have noticed that some of them are not really highly merchandised, their service might not be as great, a lot of the products may seem a little bit outdated or not as exciting,” says Craig,” but what we’re really looking to do is change that so we have a store that is beautifully designed and merchandised; it’s a very clean and minimal aesthetic.”

There will be a total of four stores opened by the end of 2017, according to ThredUp’s cofounder and CEO James Reinhart, but only two locations have been identified.

They opened their very first store in San Marcos, Texas on January 27 of this year. It’s an interesting choice of location since ThredUp’s headquarters are in San Francisco, and San Marcos is a fairly small town of just 60,000 people. Reinhart says they chose this location because of its incredibly successful Tanger Outlet.

Everything about the brick-and-mortar store—from the location to the inventory—is backed by data. They’re calling it the “world’s first smart thrift store.” They look at things like customer demographics, online habits, locations, and other factors to pinpoint areas where they think their stores will perform best. Each store will be housed with technology that stocks their inventory with products that speak to their customer base, and it will have the potential to bring up to 1,000 new items each day.

“One of my hypotheses is that the ThredUp customer shops a lot at outlets,” he said in an interview with Forbes, explaining how the data pointed at San Marcos as a potentially highly profitable location for a thrift store.

ThredUp is also currently working on another store location in Walnut Creek, CA, which is very near their San Francisco headquarters. Walnut Crrek is a more affluent neighborhood, so this is where they plan to sell designer clothing and accessories.

The other goal of the stores is to improve customer service. If a customer received the wrong size shoe online or the product wasn’t as advertised, they can more easily exchange products at a brick-and-mortar location.

They’re also hoping to help customers complete outfits and find exactly what they’re looking for. The challenge of a thrift store is that you won’t have inventory in every size. To help customers get over this problem, their brick-and-mortar stores are offering the use of an iPad to take an image of the item and look for similar ones in your size, both online and in-store.

“The vast majority of our business will be online,” Reinhart said. “The store serves a set of customers we can’t serve online. It makes sense as a growth strategy.”

The competition is growing for online thrift stores, and opening a retail store could be a great way to stay competitive. As reclaimed clothing grows in popularity, ThredUp needs a way to stay at the top of the industry. Their brick-and-mortar stores may be what keeps them at the top of the thrift store empire.

ThredUp

Even if you’re not willing to admit it, everyone loves a good thrift store find. Purchasing a like-new article of clothing for a fraction of the retail price? Priceless. This is why online resale site ThredUp has been such a success, accepting gently-used articles of clothing and accessories of any brand and sells them to the public. In the eight years it’s been in business, it’s raised more than $131 million in equity funding, and now it’s planning to use some of that cash to open physical retail locations.

+advertising
+brick and mortar
+Fashion
+Interview
+retail
+shopper experience
+shopping

Learn About Our Membership Services

Need Research Help?
As a member you can ask us any research questions and get complimentary research assistance with a 4-day turnaround. Reports inclde stats, quotes, and best-inclass examples on research topics.
Remain Informed & Strategic
We publish several trends reports each month. By becoming a member you will have access to over 100 existing reports, plus a growing catalog of deep topical analysis and debrief-style reports so you always remain in the know.
See Trends Come To Life
Meet your peers and immerse yourself in monthly trend and innovation webinars and discounted conferences.
No search results found.