Happy Tuesday, all. We’re feeling a bit thrifty today. And now we can’t get Fleetwood Mac’s “Second Hand News” out of our heads (in addition to another song).
In today’s edition:
—Andrew Adam Newman, Julia Gray
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Q&A
Been there, donned that
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ThredUp
ThredUp is known for collecting used clothes, but in the last couple years it’s also shown a knack for collecting new partners. Just today, for instance, ThredUp announced its latest: working with Pacsun to build Pre-Loved Pac, an online secondhand-clothing store.
- Customers will be sent a kit to load with clothes and ship for a store credit, while ThredUp’s proprietary technology will help sort, photograph, and price the items.
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According to ThredUp’s 2021 Resale Report, 34% of consumers report being more likely to shop with a brand that offers secondhand along with new clothes.
For ThredUp, which went public in 2021, Pacsun marks the 29th brand it has signed on for its resale-as-a-service (RaaS) program, which also includes Adidas, Crocs, and Walmart.
But RaaS isn’t the only place where James Reinhart, the co-founder and CEO of ThredUp, thinks resale can go.
Reinhart, who holds not one but two degrees from Harvard, an MBA and an MPA, is a data obsessive. When we spoke to him at Shoptalk in Las Vegas last week, he frequently pulled out his iPhone to show the latest graphs and pie charts ThredUp has posted. He talked about resale’s big picture, like his theory about how today’s market is like a Prius, the environmental benefits of used clothing, and why he doesn’t think anything he sells should be taxed.
This interview has been lightly edited and condensed for clarity.
You’ve said that the secondhand clothing market is at the Prius stage. How so?
We’re at the Honda Insight and Prius stage of resale. When those cars originally came out, they weren’t particularly attractive. The Prius was an ugly car. And the Honda Insight was an ugly car. But people who bought them were early adopters. They really believed in electric cars, and in the future of electric cars, so they were willing to tolerate poor design and poor battery life and all those things.
And that’s like where we are in resale. There’s a lot of things where the experience of shopping resale is inferior to shopping new, but these things are evolving. And my view is that so much of the technology around photography, inspection, and authentication—all these things are improving such that consumers are going to be getting a superior shopping experience as the resale industry evolves.
My point about Tesla is that now people can buy an electric car, where, not only is it sustainable, it has great performance, and, aesthetically, it makes sense. And so that’s my analogy: I think we’re moving out of like that early-adopter resale phase, which is where I think we’ve been in for the last few years.
Who do you think of as ThredUp’s competitors?
The competitive environment is nuanced. So, on the supply side, we generally compete with the Goodwills, and the Buffalo Exchanges, and the Crossroads [Trading Co.]. And just general consumer inertia, which is like, “I’ve always just given my stuff away. I don’t have to change my behavior.” And on the demand side, when we surveyed customers, we said, “Hey, if ThredUp didn’t exist, where would you have purchased this item?” 70% said TJ Maxx or another off-price store.
Did that surprise you?
No, it didn’t surprise me. Because part of my thesis, as the company was growing, was that one of the real structural advantages we have over off-price is being online.
Click here to read the full Q&A.—AAN
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Retail looks a little different than it did a few years ago—fewer malls and dressing rooms, more browsing couchside in our soft pants.
But even as shoppers turn to the web over brick-and-mortar stores, they still face one massive vibe slayer: bad product info.
And boy, do they hate it. In fact, inriver surveyed more than 4K customers, many of whom said incomplete or inaccurate product information left them feeling “suspicious,” “annoyed,” or even “cheated.” Not great!
Fortunately, inriver is here to help your brand create compelling, engaging product stories—the good stuff that 93% of respondents said they want to see before they make a purchase. Let inriver’s new Inside the mind of an online shopper ebook be your guide to giving your online shoppers the confidence they need to move from browse to buy.
Download the ebook today.
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Jhvephoto/Getty Images
Walmart still holds the throne as the nation’s leading grocer, but competitors are storming the kingdom’s aisles. After Kroger, Aldi was recently crowned the nation’s third-largest grocer by store count, according to data from the commercial real estate firm JLL.
The German company was the fastest-growing grocery chain in the US last year, based on both the number of new stores opened and the square footage of those 88 locations. The stores take up over 2.2 million square feet of space. Meanwhile, new Publix locations in 2021 accounted for a mere 1.3 million square feet.
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Lidl, another German grocer, has been leaning into its own US expansion.
Sizing up: Aldi stepped up its US expansion plans back in 2017, and the grocery chain is seeing the fruits of its labor. That year, Aldi announced a $5 billion, five-year strategy in which it would invest $3.4 billion to grow from 1,700 to 2,500 stores across the nation by the end of 2022. It’s well on its way to achieving that goal: As of late March, Aldi counts 2,160 US locations.
- In February, Aldi announced plans to open about 150 stores in the US this year.
Opportunity on aisle one: Following the pandemic-era grocery boom, grocery stores saw a 200% surge in new leases in 2021 compared to 2019, per Datex and JLL. Grocers are also investing in store renovations, in addition to new spaces. Seems as though Aldi was ahead of the curve with its $1.6 billion store-refresh project circa 2017.—JG
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Farfetch made a deal with Neiman Marcus to invest up to $200 million and take over the department store’s e-comm and omnichannel ops.
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Orders for manufactured goods dropped by 0.5% for the first time in 10 months in February, per the Commerce Department.
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Kohl’s is being pushed by an activist investment firm to reveal additional details about its financials and sales process to bidders and shareholders.
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Saks has named its first-ever SVP for ESG.
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Today’s top retail reads.
That’s the ticket: A Dutch nonprofit is trying to figure out the “true price” of goods—which means factoring in environmental and social costs. (The New Yorker)
Roadblock: A candid conversation with an Uber Eats driver on how inflation and increasing gas prices are eating into their pay. (Modern Retail)
Make it fast: Charting why Shein could command a $100 billion valuation. (Business of Fashion)
Learn: It’s not enough to know the basics of data analytics and company financials—you need to know how to combine them. In Morning Brew Quantitative, we’ll teach you how to forecast, model, and build buy-in for your recommendations. Apply for MB/Q now and save $200 on tuition costs!
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Music video for “Thrift Shop”/licensed by WMG (on behalf of Macklemore) via Giphy
What happened in the world of retail this week in…1999 and beyond? Retail Brew takes you way, way, way back.
Though not exactly retail, we believe it is our duty to tell you that this week, in 2013, Macklemore and Ryan Lewis’s “Thrift Shop” was at the top of the Billboard Hot 100.
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On April 5, 2021, The Collected Group—owner of Joie, Equipment, and Current/Elliott—filed for Chapter 11 bankruptcy.
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On April 6, 1930, James Dewar, a manager at the Continental Baking Company in River Forest, Illinois, practically struck gold and invented the Twinkie.
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And on April 7, 1999, the World Trade Organization sided with the US in the so-called banana wars, a protracted squabble with the EU over import quotas.
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Catch up on the Retail Brew stories you may have missed.
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Written by
Andrew Adam Newman and Julia Gray
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