James Reinhart, CEO of ThredUp, one of the largest online secondhand and thrift store businesses, joined Cheddar to talk about the growing resale market in the United States, resale trends, and his biggest takeaway from the company's 10th annual resale report. “When you look at the data, 62 percent of young people said when they go out to look to buy a new item, they think about shopping secondhand first," he said. Reinhart also noted that he sees pressure from inflation as a catalyst for even greater market growth.

Opening Bell

ThredUp CEO Sees Inflation Accelerate Growth of Secondhand Apparel Market

here to discuss is James Reinhart co founder and ceo of thread up James, let's kind of hit the other highlights here. Talk to me about the biggest takeaways, you know, from this report, what surprised you the most from this year's data? Yeah, well it's great to be here. I mean, I think that the overwhelming first part was that, you know, how many consumers, especially young people, are starting to think secondhand first. So when you look at the data, 62% of young people said when they go out to look for to buy a new item, they think about shopping secondhand first. I thought that was that was really a staggering start uh to this report. You know, when I look at kind of the second hand market, obviously, especially right now, I think about inflationary pressures, do you think some of the acceleration that it seems like we're seeing in the growth with second hand is related to inflation and people feeling that pressure in addition to kind of that younger generation, that seems to just be more environmentally conscious? Yeah, what's interesting is the trend that's driven second and over the last few years has really been more, you know, secular and pandemic related. I think what you see going forward actually is is what's going to happen with inflation and you look at the data, 58% of consumers said, you know, in a in a period of rapidly rising inflation, you know, second hand is a way to help their dollars go further. And so I think you've already seen this growth in this market and I think inflation is a real catalyst for the market to grow further. And so I think it's something we should all keep an eye on. So I look at this report then and I think of a company like a thread up and I think, you know, how do you interpret this report in terms of a strategy moving forward to capitalize on this environment that you already operate in? You know, ultimately it's about having the products that consumers want to buy, right? And so I think people shop secondhand because they can find the brands they love that prices they love, but importantly, in a sustainable way. And so I think it's incumbent on us and other secondhand retailers to make sure that we've got great product available. And I think that's really the key is the merchandizing and the storytelling around secondhand, you know, wedding season is going to be huge this year, I think it's like the biggest wedding season in 40 years or something, you know, second is a great place to find a wedding dress uh dressed to go to a wedding secondhand, you know, people are going back to work all the sorts of new clothes that people will need for that. So there's many ways in which people can shop second hand and I think threat up, wants to be available for all of them. And lastly here in terms of threat of specific and then we'll kind of get more broad in terms of the trends. Is are you already starting to see that demand in terms of what we're seeing in this report trickle into actual kind of, you know, customer demand for thread up. You definitely saw these spring trends really accelerate. You had shorts that were, you know, were up 50%, you had, you know, dresses for special occasions, up more than 50% year over year. So yes, we're already seeing a lot of those trends play out. And now I think the question is, does it have staying power through the summer? What are the trends for fall? And I think, you know, our team is very much focused on the worst. Where's the consumer gonna be as they get back from summer vacation. All those trips that have been penned up, you know, in in people's minds, you know, because of the pandemic and be ready to really uh you know, be the first place they come when, when we go back to fall more broadly now, when you look at kind of other brands out there, retailers responding to this resale market, how do you think they are responding right now or should respond and position themselves really to take advantage of this growing space. Yeah, my phone is ringing every day from brands who have now seen our data for many years have surveyed their consumers and understand that resale needs to be a big part of their future. And so I think what you're starting to find is brands opening resale shops growth in branded resale shops was up 275 year over year. I think that number is going to be double or triple penetration this year. And so every brand I think needs to consider what their resale strategy is. And I think threat up in our resale as a service business is positioned to serve them in any which way in which they want to get involved. But this is where the consumer is going and I think great brands, great retailers, they take note of that and they go where the consumer is going. Um and that's a big part of what we're trying to do and help them with. I mean to that point you look at the data that you guys are gathering and then you look at other data that shows I mean two and three consumers believe that their consumption habits really significantly impact the planet issues obviously like global warming and beyond to that. Then I think about fast fashion and the decade or two that we have enjoyed with fast fashion. Is this the end of that era, especially in the fashion industry? Boy, I wish, I wish that were true, but but fast fashion is a worthy competitor. You know, I think what you find is that consumers tell you that it's sort of an addiction that can't give up. I mean fast fashion is, it's big tobacco, I mean, it really is, it's bad for all of us. It's bad for young people in particular. And so we need to figure out a way to give consumers choice and selection in a way that doesn't harm the planet. Um, and so we're, we're working on that, but, but I do think fast fashion is, is not going away. Um, it's really the choices that we make as consumers, uh, to really, uh, to change the way the world shops and you know, we hope to be able to do our part when you look at trends, uh, you know, happening this year, happening right now. What are some of the resale trends that people should be watching out for? You were talking about weddings is like kind of wedding outfits and this is the season of prevents travel, but also wedding season. Yeah. I mean, wedding wedding season is gonna be gonna be a big one. I mean, I'm shocked that the number of shoes that people are buying, but you think about sort of, it's funny, you know, you haven't had as many places to go or work to go to a party to go to. And so, you know, women are buying lots of shoes on the site to, to go a new shoe for every occasion, You know, I guess, I mean returning to office is a, is a big piece because people have not had to go back to the office, even if they're only going back a few days. You know, they want, they want new outfits and uh, they want new tops and blouses and, and new pants and, and so you see a bunch of these transitional moments in people's lives and that's really what drives secondhand because you know, we're all feeling a little stretched, You know, gas is $6.7 out here, you know, in California and, and second hand helps you stretch that dollar. And so, you know, I think you're gonna see consumers in this environment with these transitions in their life becoming a second hand in meaningful ways. It certainly makes sense right now. Um, in terms of technology, right? And online marketplaces, how is, how are those kind of key areas driving the growth of the second hand market? Yeah, online marketplaces are really driving a lot of this growth. I mean, it's not as though you could not buy second hand over the last 20 or 30 years, there have been plenty of offline thrift and consignment stores. I think the big differences over the last 10 years as mobile phone penetration has grown to where it is and people can do this on their phones, You know, they can do it at 10:00 at night while they're sitting on their couch. And so that has driven a lot of the growth, you know, you combine, uh, you know, mobile phone penetration with a rising generation of consumers gen z and millennial who I like to call them. They were digital natives. You know now I think about them as resale natives and you combine digital and resale natives together and I think you have a powerful combination of people who are going to shop second hand and so I think that's a big part of what's driving the growth over the next few years. James, I was chuckling a little bit a moment ago while you were talking because I felt like you were describing me shopping for shoes 10 o'clock at night in my bed. I'm certainly that consumer in the resale market. Certainly not. No, I feel a little bit better about it now James really appreciate your time and your insight James, Reinhart, co founder and ceo of thread up.