Secondhand E-Commerce Sites See A Silver Lining

The coronavirus pandemic has changed consumer shopping behavior and shifted dollars from brick and mortar retailers– many of which are only now starting to open – to online stores, and resale is a beneficiary.

“It’s definitely been a surreal time,” said Postmark CEO Manish Chandra. “When the pandemic started in a big way in late February and into March, when it was first declared a pandemic, the initial reaction [to Poshmark] was very negative. After people adjusted, we saw a massive increase in engagement in sales and selling.” 

During the pandemic, Poshmark launched Reposh, an easy, one-click way to sell items bought on Poshmark. Chandra said the company wants to support the use and reuse of items. “We see this becoming very powerful,” he said. “It’s not just great for the environment, it’s great for us as a society, too. It’s something whose time has come.”

An Instagram-like story feature introduced on the Poshmark app lets users showcase listings with short videos and photos that disappear in 48 hours. Usage of Posh Stories has been ramping up, Chandra said, adding, “People want that human connection. Stories are taking [selling] to the next level by adding the human element of a video.”

Poshmark’s community has swelled to 60 million members, with sellers from mid-March through mid-June sharing 60 million listings daily, up from 30 million prior to COVID-19. Sellers have been uploading over $175 million worth of inventory every week, a spike that occurred prior to COVID-19.

Since the pandemic was declared, Poshmark has seen a 50% increase in listings and orders and a 40% uptick in new sellers year-over-year. And with consumers homeward bound, the average time spent on Poshmark has risen to 30 to 31minutes, versus 27 minutes before the pandemic.

James Reinhart, CEO of ThredUP, said the site’s low prices have appealed to consumers during the uncertainty of the COVID-19 pandemic. “Great value is what we offer,” he said. “When consumers are feeling a little more uncertainty about the economy, we really benefit from that.”

Reinhart believes secondhand’s upward trajectory will continue at the expense of traditional retailers such as department stores. ThredUp today released its 2020 Resale Report, which projects that the total secondhand market will reach $64 billion in five years, from $28 billion in 2019.

Consumers looking for bargains as they shop from home will contribute to secondhand’s 27% growth rate in 2020, which the ThredUp report compares to the broader retail sector’s projected 23% decline.

ThredUp has partnered with retailers such as Macy’s, J.C. Penney and Madewell to bring a secondhand shopping experience to their stories through Resale-As-A-Service platform. “I’m still bullish on collaborations,” Reinhart said.

The resale giant last month partnered with Walmart on an online resale program that will give customers of the world’s largest retailer access to Thredup’s inventory of 750,000 pre-owned products. “Walmart has the ability to sell a broader assortment of brands, but at a price point that really hits the sweet spot for the customer,” Reinhart said. 

Aware of fast fashion’s impact on the planet, Gen Z and Millennials are driving resale, which is expected to reach $44 billion in sales in 2029, eclipsing fast fashion, which will post $43 billion due to stagnating sales, the ThredUp survey said.

The RealReal is recovering from pandemic-related declines due to drop in supply. At its Brisbane, Calif. warehouse, for example, only 25 out of 200 employees were allowed to work to comply with state and local shelter-in-place orders.

Now that the orders are relaxing, The RealReal’s higher staffing levels at warehouses, along with efficiencies from its investments in automation, have allowed new supply to be processed at pre-coronavirus levels.

Julie Wainwright, CEO of The RealReal, said that while it seems counterintuitive, women have been buying trophy handbags during the pandemic. “We have a weird anomaly – high value handbags are selling really well,” she said, citing styles from Louis Vuitton, Hermes’ Birkin and Chanel. “It may be because Louis Vuitton and Chanel are pretty much shut down, and also, they raised their prices.”

The home category, art and tabletop are also doing “incredibly well,” Wainwright said, adding that products with a pop culture provenance are strong sellers, such as Michael Jordan sneakers, which shot up 55% after “The Last Dance,” a 10-part documentary about the basketball legend aired in April and May.

Demand for demonstrative fashion has shifted to understated luxury, befitting the at-home work force. “It’s not as bold and not as logocentric,” Wainwright said of the prevailing looks. “Tops are overselling, as are casual dresses. We’ve gone back to classic simplicity.”

The RealReal is postponing the opening of its Chicago store, which had been scheduled for a July launch, and will now open at the beginning of 2021. “It’s such an unpredictable time for brick and mortar,” Wainwright said. “It’s also an interesting time. The second half of March and April were really tough months for us. We had to completely redo things. During that time we were completely agile. It’s been a challenging time, but also a time of innovation and reinvention.”

Virtual appointments – 20,000 of them – replaced in-person white glove consignment visits that were suspended, and stood in for meeting with valuation consultants at luxury consignment offices, which were temporarily closed.

Wainwright said she was prepared for the challenged posed by the coronavirus. “This business was born out of a recession. It’s been a challenging time, but also a time of innovation and reinvention, and I think it will serve us really well.”