generic The thrifting revolution: How retailers are upcycling for big gains
Secondhand clothing is getting a new life with the emerging market of digital thrifting.
Marketplace app Depop and several retailers have made their entre into upcycling clothing for big returns by catering to vintage-minded youth with environmental sensibilities. Depop blends the refurbished sales of eBay and voyeuristic influencer-hood of Instagram to target Gen Z shoppers.
Neiman Marcus first pioneered department store partnerships with resale when it bought a minority stake in online seller Fashionpile. J.C. Penney and Macy’s also announced a pilot program last week reserving sections of stores for resale giant ThredUP. This fall, Neiman Marcus will launch shops inside some of its stores where customers can sell pre-worn designer items to Fashionphile.
In June, Depop raised $62 million in a funding round led by venture capital firm General Atlantic. The London-based app claims over 13 million users in over 147 countries and plans to grow its engineering and data science teams.
Founded in fashion capital Milan in 2011, the digital thrift store allows socially conscious satorialists to curate their wares by era and good.
Depop’s Rebecca Levy told FOX Business the most lucrative sellers on the app can rake in $400,000 a year, and that sellers have made more than a half a billion dollars since its launch in 2011. Over 140,000 listings go live every day, and the app takes a 10 percent commission from each sale. Average sale are around $30, and most transactions are for a single item.
“Ninety percent of our 15M+ active users are under 26," Levy said. "By 2020, Gen Z will be the largest group of consumers, commanding up to $143 billion in spending power.” They feel strongly about serving their fashion community that is otherwise ignored or misunderstood by retail.
They connect with their entrepreneurs and users via app, web and social media, and at a handful of big-city store locations “to deepen our understanding because when [their] community succeeds, [they] succeed."
Though the resale business is only a fraction of retail, it’s growing rapidly and indicative of trending shopper attitudes. According to GlobalData PLC, second-hand merchandise sales are projected to balloon to $51 billion by 2023, up from $24 billion last year. A survey by Boston Consulting Group says one third of shoppers said they sold items to clean out their wardrobe and finance new purchases. More than 100 teens were polled this summer by New York’s The Strategist, and Depop was their favorite resale platform.
The digital marketplace has attracted the likes of young celebrities like Maisie Williams and Madison Beer, along with YouTubers, proving its mission that anyone can be an entrepreneur.
Depop was co-founded by Simon Beckerman of PIG magazine and RETROSUPERFUTURE sunglasses. First developed as a social network where PIG’s readers could buy items featured in the magazine, Beckman realized the potential and grew the app.
Depop has almost completely grown by user word of mouth, and users must be 13 or older to sign up. All payments transactions are conducted through PayPal, where the user agreement is 18-plus, though parents may co-sponsor their teen's payment account. Depop says it is focused on expansion and is not yet profitable. App employees moved into their own floor of a co-working space in Little Italy in NYC.
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Depop would not speculate on an IPO listing at this time, but the company’s rapid expansion illuminates its bright future. For youth and the fashion-forward, vintage is avant-garde.
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