You know ThredUp. You may have sold clothes on the online resale platform, you may have thrifted from there. Or you may know it simply as a useful resource for decluttering sprees, effectively replacing any kind of garment-trashing guilt with a virtuous, do-gooder attitude, knowing that your unwanted, pre-worn clothes will get a second life (earning some cash out of it also helps). In the 12 years since its launch, ThredUp has garnered a whopping total of 1.34 million active sellers, making its reach pretty damn high. But its impact on you — and on a much grander scale — the future of the planet is even greater than we previously thought, thanks to its Resale as a Service (or RaaS), a program that encourages retail partners to adopt a resale-first mindset and move towards a circular economy.
First, some background: ThredUp’s RaaS launched in 2018 with fashion-favorite Reformation as its sole retailer, and in the two years since, it has gone on to broker deals with at least an additional 20 (with potentially more in the pipeline), including Walmart, Gap, Macy’s, Abercrombie & Fitch, Madewell, Farfetch, Vera Bradley, Reebok, and many more, with the goal for consumers to swap their secondhand clothing for shopping credits.
“Back then, we wouldn’t even get calls from retailers. The question then was, ‘Why resale?’ Now, it’s ‘How can I make resale work for my business and customers?,’” says Pooja Sethi, SVP and GM for RaaS at ThredUp. “In order to make a dent and really fight fashion waste, we need a much larger audience. We need to engage and educate retailers, make it easy for them to enter the resale space, and help them integrate circularity in their business model. Our mission was to inspire people to sell secondhand, and we did that through our marketplace; now through RaaS, we’re inspiring brands.”
The need for circularity became even clearer to much of the fashion community when popular Instagram account Diet Prada recirculated a photo of what, at first glance, looked like the carcass of a dead animal. It wasn’t. It was what was left of a pair of composted jeans, with nothing left but the plastic fibers that make up the stretch in denim. In a single photo, it inadvertently captured the linear way in which the industry has essentially operated ever since it was conceived: businesses manufacture clothing, consumers buy it, and then it ends up in the landfill at the end of its life.
So, what exactly is a circular economy and how can a fashion label function as one? “Specifically for fashion, the end goal in a circular economy is where one’s clothes are being used more through the business models, they’re made to be made again, which means being designed from the outset through design durability or repair, so they can be kept in use for as long as possible, they’re easy to take apart and possible to recycle, and they’re made from inputs that are safe, non-toxic, renewable or recycled sources,” says Laura Balmond, who heads up the “Make Fashion Circular” initiative at the Ellen MacArthur Foundation, a charity with the sole mission to accelerate the transition toward a circular economy. “Circular economy is a framework for organizations to help achieve these massive global goals, like reducing waste, pollution, greenhouse gas emissions, water pollution, and biodiversity loss.”
The thing is, existing businesses aren’t set up for circularity, or as Sethi explains it, they’re not set up for “single SKU logistics — it’s really hard to build that from scratch.” For context, brand new garments that have the same stock-keeping unit a.k.a SKU are virtually identical (one product with multiple sizes is represented by one image and one bar code), but when items are used, each one is completely unique, requiring different photos, descriptions, and SKU. This is where ThredUp comes in: offering resale technology (the power to process and sell millions of unique items), data sets, and the ability to scale, to bring circularity to retailers in the easiest, most convenient way.
One shining example of ThredUp’s commitment to circularity is the launch of Madewell Forever, a 360-degree takeback program in which consumers can bring in any pair of worn denim from any brand in exchange for a $20 credit. Those items are collected and then thoroughly vetted at ThredUp’s distribution center through a rigorous quality check process; resellable non-Madewell items are listed on the resale platform’s marketplace, while Madewell denim is available to purchase for a fraction of the retail price (a range of $34.99 and $49.99 as opposed to $120) at select brick-and-mortar stores or online at Madewell Forever, which boasts the look and feel of Madewell but is powered by ThredUp.
“We offer premium denim, so there’s no reason that those jeans shouldn’t have a second, third, or fourth life. In 2014, we launched a successful denim recycling program, where we diverted over 500 tons of waste from landfills, and that laid the foundation for Madewell Forever — a giant step toward focusing on circularity by extending the life of our product, reducing our impact on the environment, and reducing waste,” says Liz Hershfield, SVP of sustainability at Madewell, adding that Madewell Forever was a couple of years in the making — a true labor of love. And with its launch, the company has aggressively set a highly ambitious goal: to collect a million pairs of jeans by 2023. (As for sales thus far, Hershfield says it’s too early to assess data, but she remarks that they have received “a really positive response.”) “Our consumer is really conscious about the environment; Madewell Forever is the solution that allows us to give them the tools they need to sustainably and responsibly dispose of their old denim. Fashion is one of the most polluting industries, and we can’t make an impact unless the majority of the brands focus on making change.”
Madewell is, obviously, not the first retailer to break into the resale market, nor will it be the last. Others have launched similar programs, like Patagonia’s Worn Wear, allowing consumers to trade in their pre-worn Patagonia pieces for credit; or The North Face Renewed, a partnership with The Renewal Workshop, which cleans and repairs damaged or returned (i.e. unsellable) items and gives them a second life; or Tommy Hilfiger’s Tommy For Life that resells restored, “good as new” styles — and by bringing it in-house, it eliminates the risk of purchasing counterfeit. Most recently, both H&M (in Canada) and Harvey Nichols have announced their forthcoming venture into secondhand by teaming up with resell service Reflaunt. And they all join existing resale marketplaces, like Vestiaire Collective, The Real Real, and Poshmark.
“It’s a hard time for retailers right now, and it seems to me that it’s the ThredUps that are cracking this rather than the retail-led platforms,” muses Lucy Shea, the group CEO of sustainability agency Futerra. “I think most retailers are looking for partnerships because they’ve got the backend sorted entirely, but I wouldn’t be surprised if we also see brands bringing [pre-worn clothing] back in-house and using their own platform for brand control — and to keep consumer data as well.”
It could be argued that wielding brand control would not only ensure quality control of whatever is being sold secondhand, but also establish its resale value (the price at which it’s set), and thus, shape the desirability of the brand as a whole.
Sethi makes the case that there is no downside for retailers to go into resale. In fact, according to the 2021 ThredUp Resale Report, the secondhand market is expected to double to $77 billion in the next five years, growing 11 times faster than any other clothing sector by 2025, with resale driving the growth. And the industry is bracing itself for when the resale market is expected to outperform traditional retail. She speculates that this seismic shift has only accelerated during the pandemic for two main reasons: First, that people had nothing to do but declutter, which led to an excess of quality secondhand inventory (a supply of 36 billion clothing items, to be exact), and second, an eco- and value-conscious buying mindset drove up the demand for vintage (33 million consumers thrifted for the first time in the last year). Coupled with the hard-to-ignore effects of global warming, and it was inevitable that consumers would demand change from retailers. Plus, the pandemic shined a light on just how fragile the existing supply chain really is, leading to production delays and a spike in prices, prompting consumers to turn to secondhand.
“We’re talking to brands that are coming to us to help them engage in resale and make it a meaningful revenue channel because it’s where the customers are headed — they care about quality, sustainability, and value,” continues Sethi, adding that 62 percent of retail executives have reported that their customers are already participating in resale. “How does secondhand become a value strategy for brands and how does it become a customer loyalty acquisition strategy? That’s what we’re trying to do — we’re trying to help brands see resale as another growth channel that sits within the ecosystem, with RaaS being in the background orchestrating the technology.”
A business at the end of the day is a business: there’s the bottom line, stakeholders to answer to, profit margins to increase. So, it’s hard to see the “incentive” for consumers to exchange pre-worn clothing for credits as anything other than a benefit for retailers to drum up more sales. It begs the question: Is the environment really in their best interest?
“These resale models can’t be seen as one niche part of the business; they can’t be helping, for example, companies to continue to sell more products in a linear way that only requires more resources — over time it has to become a core part of how businesses are operating,” Balmond asserts. “Business models like resale have a huge opportunity to decouple profit from ever-increasing production, and this is important because of the way clothing is produced, which has a huge negative impact on the environment, how materials are sourced, the amount of energy used in production, and the toxic substances that are used.”
Balmond argues that in order to achieve true circularity, resale business models are just one piece of the puzzle, which means everything, from what comes before resale (how products are made) to what comes after (how to ship said products without creating unintended consequences, like increased carbon emissions), should be taken into consideration. She believes designing circularly from the outset is key, so these pieces can be resold, easily repaired, and also recycled at the end of their lives. And it can be done.
She offers up the 2019 Jeans Redesign project as an example. About 90-something brands, including Gap, Guess, Tommy Hilfiger, and H&M, were tasked to design and produce a single pair of jeans that were durable, recyclable, and made from safe materials, along with strict requirements (designing out rivets, for one, since they’re not recyclable, or minimizing anything other than cotton down to a max of two percent), which invariably led to constructive conversations with designers, production teams, and suppliers. “We need to be tackling design and production as well as finding models to keep them in use,” she continues. “Designers have had the job of creating beautiful products, but they never had to question what happens to those products when they’re no longer used. Now that there’s more information, it’s empowering designers to make different choices, so their products can be kept in use and 100 percent biodegradable or recyclable.”
Designers have had the job of creating beautiful products, but they never had to question what happens to those products when they’re no longer used. — Laura Balmond
ThredUp’s stance, Sethi says, is for manufacturers to produce less and for consumers to reuse more: “We can’t expect consumers to stop buying new clothes completely. The more retailers learn about circular fashion, the more consumers will make smarter choices. And if consumers are getting shopping credits, they’re not necessarily buying more, but they’re buying more consciously, and when they’re done, they can recirculate that product.”
What everyone can agree on is that dismantling a linear model and ushering in real change takes scale and collaboration. “Encouraging people to buy and sell secondhand items helps to create a consumption culture that normalizes reuse rather than disposability,” says Rachael Wang, stylist and champion for sustainable and ethical fashion. “It won’t be any one program that reverses climate change, but programs like [ThredUp] influence people, and people elect government officials. It will be the combined effort of consumers, corporations, and the government that will have the biggest impact on prioritizing the health and well-being of garment workers and the reduction of the fashion industry’s effect on the planet.”
Shea makes it a point to give the United Nations Framework Convention on Climate Change’s Fashion Industry Charter a shout-out as one of the many initiatives for the industry to work together to decarbonize its footprint and minimize energy use. Meanwhile, James Reinhart, the CEO of ThredUp, is advocating for the government to play a role in circularity (suggestions include offering tax deductions for brands with resale programs or removing the sales tax on secondhand purchases).
“What I love about ThredUp and other resale programs is that they’re showing a way that’s not linear,” Shea says. “They’re not perfect. None of them are. We live in a linear system at the moment but ThredUp should be massively applauded for getting out there and experimenting and not aiming for perfection, but aiming for progress.”