Innovation Spotlight: The Intersection of Tech, Fashion, and Sustainability ft. Pooja Sethi, SVP and GM of Resale-as-a-Service @ thredUP
Authored by Meagan Flynn
For the last eighteen months, the Covid-19 pandemic has changed nearly every aspect of our lives; from how we work, to how we interact with brands, but most importantly how we shop. With the pandemic, came a massive change in consumers’ purchasing habits — more time spent at home resulted in more online shopping. Like many others, this was my opportunity to re-evaluate my habits as a consumer, particularly my accustomed method of purchasing clothing.
I decided to undertake a massive closet clean out while simultaneously starting to dip my toe into the online resale market, and that’s when Pooja Sethi’s LinkedIn posts started to catch my eye.
Pooja is the SVP and GM of RaaS (Resale-as-a-Service) at thredUP, an online consignment and thrift store where you can buy and sell high-quality secondhand apparel, shoes, and accessories. She is leading a team that’s building the B2B business inside thredUP, enabling resale for some of the world’s leading brands and retailers such as GAP, Madewell, and Reformation.
According to thredUp’s 2021 Resale Report, consumer trends are shifting towards resale, and brands have plenty of reasons to get on board. The report states that 33 million consumers bought secondhand apparel for the first time in 2020, and 76% of those first-time buyers plan to increase their spend on secondhand apparel in the next 5 years. The post-pandemic consumer cares about value, sustainability and potential resale value — which is why the retail industry is beginning to view resale as a critical piece of their omnichannel strategy.
Pooja took the time to share her insights around what’s driving the shift to secondhand, why brands are leaning in to resale, and how consumers can have an impact on building a more sustainable future.
Pooja, you have an interesting background in traditional retail and e-commerce, what inspired you to join thredUp?
I’ve always been drawn towards high-growth industries, and I was seeing that thredUP was evolving at an expedited rate towards sustainability and secondhand. I’m very entrepreneurial and I love the idea of building something from the ground up, especially when that ‘something’ has an impact not just on the team, but an industry and the overall company. I’m a big thredUP fan girl myself, and so when the opportunity to join came to me, it was a no brainer.
thredUP’s mission has always been to inspire a new generation of consumers to think secondhand first. Where do you think ‘brands’ fits into this equation?
Before I dive into the brand piece, it’s important to note that secondhand is seeing increased demand, and if you think about it from a business point of view it’s only expected to grow. We publish a Resale Report annually (we’ve done it for nearly a decade), and this year’s report shows that consumers are expected to shift their spend towards secondhand over the next five years. In 2020, 33 million people bought secondhand apparel for the first time, and that’s in the U.S. alone. Over the next five years, secondhand is supposed to double to $77 billion — so when you think about the size of the market and the opportunity, it’s simply massive. Another key piece to consider is ‘purchaser behavior’, which has very quickly evolved to the intersection of ‘sustainability and quality’.
To answer your question, forward-leaning brands who are dedicated to driving change will see an increase in customer acquisition and retention. Sustainability is incredibly important to the younger generations, and the time for disruption in the fashion industry is now. In my role, I talk to a lot of brands and retailers that are really open to thinking about secondhand as part of their marketing strategy and want to understand how to think of it as a growth channel they can bring in-house.
My team and I recently launched Madewell’s resale shops, which are both online and physical. When you think about setup, there’s the core marketplace business and then the B2B business, which is Resale-as-a-Service (RaaS). What we do when it comes to RaaS, is we enable resale on behalf of brands by taking care of all the technical backend work. We want to make it as easy as possible for brands to get into this space and claim all the business that’s happening in the secondhand market and outside the mainstream ecosystem.
From a tech perspective, why aren’t brands well positioned to power their own resale?
When you think about secondhand, the product is literally sitting in the closets of customers and what comes back in ‘take back’ programs ends up being a lot of “single SKUs” — meaning each item is unique. Most brands have built their technology and supply chain around the opposite of single SKU, being large scale and mass quantity distribution. Not only is it expensive, it’s actually really complex and resource-intensive to invest in single SKU logistics which is why partnering with a third party like thredUP is the most cost-efficient, business-savvy choice. At thredUP, we’ve spent 12 years building a custom operating platform with distributed processing infrastructure and technology that makes us the industry leaders and experts in enabling resale at scale. We have developed our own data platform that runs off of single SKUs with over 35,000 brands. RaaS gives brands the ability to tap into new growth channels while leveraging thredUP’s expertise instead of building it from scratch.
thredUP’s 2021 Resale Report states that ‘secondhand is expected to be 2X bigger than fast fashion by 2030’ — what do you think is really driving those predictions?
This, without a doubt, is coming from third-party consumer data with the numbers telling us that consumers are expecting to spend MORE. During the pandemic, one of the biggest trends we saw was everybody cleaning out their closets but then trading, buying, and selling on resale platforms. More so now than ever, consumers care so much more about the global impact that shopping sustainably can have. Compared to fast fashion, secondhand provides the buyer with the same value variety, but without the waste. Another driver as it relates to the rise of resale, is the fact that ‘younger’ generations don’t think thrift has a stigma.We are seeing millennials and Gen Z’s flock to brands that offer circularity and speak to the ‘timelessness’ trend we are seeing in fashion.
We touched upon this earlier in our conversation, but it’s undeniable that corporate sustainability is more important than ever to both consumers and brands. What do you think is driving the shift in the consumer mindset and what role are you playing in the changing narrative?
That’s a really great question. I think for the first time (in a long time) brands are really listening to social and societal issues that are affecting consumer behavior. A great example of this is the UN climate change report that was recently published, which talks about the global warming path that is coming our way, how it will impact us globally, and the five climate changes in which humans have varying steps to reduce emissions. The report shows aggressive, rapid wide-spread emission costs beginning now and could limit the warming beyond 2050. In some cases, based on the EFG, a lot of companies are trying to reach net zero emissions to cut back that warming to under 1.5 degrees Celsius in the second half of the century. There’s a lot of big government industry change happening that is forcing and putting accountability on boards and executive teams to really think about that ‘yesterday strategy.’ As for the trend that we’re seeing with consumers’ mindsets, it’s really fascinating to see that it’s actually the younger generations who are driving this. They’ve grown up to be more mindful of the habits that impact the planet and how that relates to consumption. Referring back to the report, 45% of Millennials and Gen Z refuse to buy from non-sustainable brands and retailers, and data shows that Gen Z not only care more than previous generations about the resale value of clothing but they also think of clothes as reusable versus disposable. On the flip side, there’s a lot of concern about greenwashing and transparency from brands and clothing marketed as sustainable when it’s not. This is where secondhand comes in; the benefits from thrifters are so clear because you don’t have to doubt who made the product or how it was made. There are tons of studies and data available on buying something used versus new and how that reduces the item’s footprint. The consumer mindset has really changed since COVID, and that has only accelerated demand. In fact, one in three consumers today cares more about wearing sustainable apparel than even pre-pandemic, so that tells you how quickly things have evolved.
How does thredUP think creatively about where to find the best talent to build the largest retail marketplace globally?
There are three things that differentiate us from others in our space when it comes to identifying and retaining great talent:
- When it comes to recruiting more junior talent thredUP has done a phenomenal job developing, launching, and scaling one of the most successful internship programs in our space. This program has grown exponentially over the years and converts a high percentage of interns into full-time employees.
- I think the other piece that we’ve done really well (and kudos to the founders) is we built a culture that embraces autonomy, flexibility, and work-life balance. After the last year and half it was important for leadership to think creatively and listen to employee feedback. For example, we had a Summer Festivus in July where employees could choose to rest and recharge and take a break from meetings in order to come back refreshed and relaxed and do their best work.
- Some of the tactics that we’ve been doing inside thredUP to hire and to be creative is building a culture of recruiting that does not just rely on our talent acquisition team to find talent, but instead uses every team member to be an active participant in identifying the best talent. They’ve done a lot of work to empower our team members with some of their bootcamp knowledge around how to engage their network, how to attract the top talent, and that’s been really helpful. The other thing we’ve done is redefine our interview process so that we’re able to move really quickly when we find the right talent by removing the unnecessary steps. We also want to make sure we’re learning more about the candidate while also spending time for the candidates to get to know us which has helped with their decision making. Needless to say, the talent war is real and we continue to improvise and learn what to do in this evolving market.