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The Retail Carousel: Smart Brands Cashing in on Resale Economy

Millennials have a penchant for incorporating thrift finds into their wardrobes, but the trend goes beyond style nostalgia. During the economic downturn many learned to get creative with their clothes due to tight budgets. The secondhand marketplace has been a natural fit for a generation that prizes experience over products and is redefining what luxury means to them. Recent Ypulse Bi-weekly Surveys found that 68% would rather splurge on a weekend vacation than new clothes, and 81% say if a luxury product is passed down or sold second-hand, they think it should still be considered “luxury.” The retail carousel allows them to earn cash for items they no longer want, and spend less on something “new.” A win-win for them, but also an opportunity for smart retailers who have jumped on the trend.

Online retailers like Modcloth and ASOS have made vintage collections a part of their retail model, offering curated selections of used clothing and decor that allow them to make a profit from the generation’s hunger for thrift items. Other brands like Ikea, Patagonia, and H&M, have found ways to tap into the environmental appeal of reusing and reselling, creating programs and promotions aimed at young consumers that let them return old products for a reward, or find creative ways to give them new life. But not many have been able to take advantage of one of the other major consumer benefits of the retail carousel: the ability to make a profit off of used belongings.

Now new startups are finding ways to benefit from young consumers’ secondhand marketplace by making the reselling process turnkey and doing the selling part for them. Here are three taking creative approaches to the retail carousel:


Launching back in 2012 as a marketplace for clothing resale, Threadflip was built to foster a social community of fashion lovers, selling pre-loved clothing to new homes. Now that online consignment is reaching boom levels, Threadflip is riding the swell to the top and recently secured $13 million in funding to expand their operations by more than 40%. Sellers can take a completely hands-off approach with Threadflip’s Concierge Full Service—free “closet refresh” kits that include a bag and prepaid shipping for sending off loved but unwanted clothing. The bagged items are then sorted and styled by the Threadflip team, and uploaded to the marketplace within 24 hours for resale, of which sellers can earn up to 80% on their wares. Threadflip has found that “over 78% of accessories and apparel are ultimately sold when listed using the Concierge Full Service” and over 1,000 kits are being ordered per day. Sellers can just as easily bypass the white glove service and upload items directly to the site or via mobile, but are drawn back to the marketplace by constantly updating trunk shows, sales, “Editors’ Picks” from top sellers, and the ability to control their listings.


Selling consignment online can be as easy as packing a bag, but Twice tests the business savvy of sellers by evaluating the bag’s content and offering a price upfront. This way, sellers can receive cash for their clothes immediately without having to wait for a percentage of the resale, and can refuse an offer to have their clothes shipped back for a mere five dollars. Upfront offers are based on the number of items and brands in the bag, rating premium brands like Theory and Kate Spade over classics like J. Crew and Anthropologie, which rate higher than basics from American Eagle and Express. Twice is careful about what they sell, only offering women’s clothing and handbags, and not accepting lower-tiered brands like Forever 21 and H&M. While the inventory at Twice has grown to over 50,000 items from 400+ brands, the company is planning to expand with new program Twice Local. Clothing bags can now be picked up by any courier service scheduled same-day to two weeks in advance, providing a range of options for busy women who sometimes “find it hard to even make it to the mailbox.” The site is looking to grow over 100,000 SKUs in this localized venture, which has rolled out in a 25-mile radius of San Francisco and will expand to major metro areas across the country.


Women’s clothing is a safe bet for online consignment: 60% of female Millennials ages 13-24 said they have bought secondhand clothing in our instant poll today. thredUP operates more like a high-end retailer that a consignment store, featuring a handpicked “X Collection” for luxury and contemporary brands. But thredUp is also a marketplace for shoes, handbags, juniors and kids clothing, and maternity wear, making it a go-to for back-to-school swaps and especially Millennial moms. Sellers can earn up to 80% cash back for their items, similar to Threadflip, but unwanted or unsold items are automatically donated to charity, falling in line with Millennials’ desire to do good on the side. thredUP has even created a fundraising initiative that encourages groups to set up donation sites and raise money through clothing sales for a cause they care about.


Why It Matters:

Millennials get a reputation for not spending money, but more often than not, they just aren’t spending money in the places and on the things that retailers and other brands are used to. The retail economy, like many things in Millennials’ worlds, has fragmented, and they may be just as likely to drop cash on online secondhand as they are to buy new from the mall. The brands that acknowledge this shift and find ways to accommodate and play into it will benefit from the retail carousel as much as Millennials themselves are. These creative start-ups are benefitting from Millennials’ own clothing sales by making the process easy for them and providing easy access to the resale world.