Thredup CEO and cofounder James Reinhart remembers the first Shoptalk conference in 2016, likening the site of where the resale panel took place back then to a closet.
Six years later, Reinhart sat on the main Shoptalk event stage Monday, delivering a keynote at the annual retail conference in Las Vegas taking place this week. It’s the first Shoptalk held in person since 2019.
The prominence of resale and the subject of circularity throughout the conference sessions underscored the segment’s rapid growth very much in line with Thredup’s own rise.
“I think resale is definitely having its moment and it’s being driven by consumers,” Reinhart said. “It’s not just the young people that are driving this; it’s a broad movement around sustainability.”
For Thredup, that moment led to the raise of $168 million in an initial public offering a year ago and the expansion of its platform to also include retailers. In fact, Reinhart said Thredup will be announcing the launch of a “very big retailer” soon that “will really set the standard for where brands can take [resale].”
The company also has four distribution centers processing 100,000 pieces of clothing daily and is in the midst of building another facility in Dallas, spanning the equivalent of four football fields in width and four stories tall.
“That’s sort of the Willy Wonka experience of Thredup,” Reinhart said of the Dallas facility.
As Thredup has grown, so too has the industry with a competitive landscape that includes The RealReal, Depop, Grailed, Poshmark and Vestiaire Collective.
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“I think it’s lots of brands are starting to appreciate this is where the consumer is headed,” Reinhart said, adding, “I think the competition more than anything, for me, is showing that there’s so much innovation that remains.”
The pandemic helped push resale as people in the early days of shelter-in-place orders kept busy cleaning out their closets. However, that trend of purging closets and then repurposing those items “has remained sticky,” the CEO said.
Even with all the buzz around sustainability and circularity, Reinhart said the resale industry is still navigating what it looks like when it grows up, pointing to different disconnects. He mentioned Gen Z and millennials may be helping drive resale but said “it’s also a generation that’s shopping at Shein more than anyone else, so I think it’s a complicated and nuanced topic.”
That’s made all the more murky with marketing from some companies touting sustainable efforts that are anything but, in an act that’s been labeled greenwashing.
“I’m really concerned about the potential for greenwashing in this industry, in particular brands that are thinking about resale in the context of selling their customer returns,” Reinhart said. “Can we be honest that selling your customer’s returns is not a re-commerce strategy?…. I think we have to be really careful that we don’t allow brands to get off the hook, frankly, by selling their returned product and selling that off as a sustainable strategy on circularity.”
As fashion companies navigate those waters, they’re also figuring out aspects such as pricing and how to create sustainable product at price points that are attractive enough to woo consumers away from fast fashion.
There’s also the regulatory front, with the industry moving towards more government oversight. New York’s Fashion Sustainability and Social Accountability Act is perhaps the starting point. The bill’s aim is to hold brands with revenue of $100 million or more to greater accountability with visibility into at least half of their supply chains, environmental and social sustainability reports and greenhouse gas emission reduction plans among other requirements.
“I think we’re headed in fashion to emission standards. We’re headed into a world where the government is going to play a role in regulating companies,” Reinhart said. “I think people who think that’s not going to happen have their heads in the sand.”
If anything, greater awareness of waste within fashion among consumers and now among politicians, signals only more change for resale and its next act.
The CEO likened the disruption within resale to the emergence of the off-price channel decades ago: “Those [discounters] are 40 years old. It’s a disruption that plays out over time and I think we’re still in the early stages of all this.”