Why the Rise of Online Thrift Retail Matters
Thrift stores can thrive online — especially when social commerce is involved — and further demonstration comes from Poshmark, an online retailer of used clothes that's moving toward its initial public offering (IPO). The factors fueling that move could play significant roles in retail for years to come.
Redwood Shores, California-based Poshmark has confidentially submitted a draft registration statement on Form S-1 with the U.S. Securities and Exchange Commission relating to the proposed IPO of its Class A common stock. The number of shares to be offered and the price range for the proposed offering have not yet been determined, and further details weren't available. The IPO is expected to commence after the SEC completes its review process, subject to market and other conditions.
Poshmark said that it has some 60 million community members. In February, the online reseller, which launched in 2011 and focuses on fashion, marked its 100 millionth sale. Poshmark consumers can buy from online sellers who curate their own products and otherwise guide shoppers toward purchases.
“Social commerce and resale surged to the forefront as more and more consumers sought out peer-to-peer platforms like Poshmark to shop their favorite brands and discover new ones,” Poshmark CEO and founder Manish Chandra said in the company’s 2020 social commerce survey report. It found that consumers – especially Gen Z and Millennial shoppers — are comfortable with buying items via social and social commerce platforms instead of directly through retailer websites.
That’s not the only factor that could work in favor of Poshmark and similar operations in the coming months and years. The pandemic is placing a premium on value shopping, including online. Already, 18% of online shoppers buy from or otherwise participate in resale markets, according to Raymond James, a St. Petersburg, Florida-based financial services company.
According to San Francisco-based ThredUp — which was founded in 2009 and now claims to be the world’s largest online thrift store — the global resale market will increase at a 39% annual compound growth rate through 2024, reaching $36 billion. Online sales of secondhand products will increase 69% in 2021 compared with 2019.
Further, sustainability is becoming an increasingly important ideal for younger consumers — that is, the shoppers for whom Poshmark and its peers are largely designed. Proof of the rise of sustainability in the larger retail space comes from recent moves made by the likes of Amazon and Walmart, among other retailers.
Evidence of how sustainability is playing out in the online apparel space, meanwhile, comes in part from colleges and universities.
Even as those schools grapple with pandemic challenges, students are forming what amount to sustainable apparel and fashion clubs, organizations meant to encourage the purchase of used clothes and shopping at online and brick-and-mortar resale and thrift stores. It’s a good bet that such values will stick with those students in later adulthood, helping to shape consumer trends over the next decade or longer.