Poshmark’s Strategies May Benefit Competitors ThredUp and The RealReal
On the latest episode of the E-Commerce Retail Briefing podcast:
With the resale industry exploding, some major players are rising to the top. Poshmark, ThredUp, and The RealReal have established themselves as some of the top companies in the market. Poshmark claims to be the number one fashion buying and selling platform, but is their heavy lifting benefiting its competitors?
- New e-commerce platform, Verishop, is keeping stride with major retailers by rolling out free, one-day shipping. The company’s new shipping offer doesn’t require a membership fee or minimum purchase amount. After announcing the news, Verishop’s CEO said he believes fast and free shipping is critical in e-commerce strategies as consumer demand grows. He didn’t offer any specifics on how the three month old company logistically managed to roll out free one-day shipping nationwide, but did say Verishop partnered with both FedEx and UPS.
- Starting January 1st, Amazon-owned Whole Foods will be cutting health benefits for up to 1,900 of its part-time workers. Previously, employees only had to work 20 hours a week to be eligible for health care benefits, but Whole Foods announced employees will now have to work 30 hours to be eligible. A company spokesperson said the change is part of better meeting the needs of the business and creating a more efficient scheduling model. The company also announced that current Team Members who would be affected were being provided with resources to find alternative coverage, or letting them explore health care eligible positions starting at 30 hours a week.
- J. Crew’s sub-brand, Madewell, is filing for an IPO. According to the document, Madewell will split from J. Crew as part of its IPO. Details like price range and number of shares have yet to be determined, but according to a press release, proceeds from the IPO will be used to, “pay off indebtedness and for general corporate purposes.”
Poshmark’s Heavy Lifting May Be Benefiting Top Competitors ThredUp and The RealReal.
Could Poshmark be helping competing resale companies like The RealReal and ThredUp? The resale industry is exploding, with current projections of the secondhand fashion market hitting $51 billion by 2023 according to ThredUp. The resale segment is also expected to account for 45% of secondhand apparel market sales at $23 billion, growing from 25% of the total $28 billion in 2019. The current leaders in the industry are The RealReal, ThredUp, and Poshmark.
Industry experts have agreed that one of the most critical components of attracting new customers to the resale market is building awareness of the potential of resale platforms like The RealReal, ThredUp, and Poshmark. ThredUp has recently made a move into brick-and-mortar by partnering with Macy’s and J.C. Penneys, gaining credibility with customers who first experience the company at those locations. The RealReal operates their own store locations to make potential customers less wary of purchasing their high-end, luxury items. All three companies have also turned to television to create brand awareness.
Poshmark is the leader, running 14,872 spots in the last 30 days, significantly more than ThredUp and The RealReal who have run under 3,000 spots. Though Poshmark claims to be the number one fashion buying and selling platform, boasting 50 million sellers, the company’s heavy lifting could actually be beneficial to ThredUp and The RealReal. Poshmark runs on a peer-to-peer business model, where users do more work on the back end to make a sale. After a few times of putting in the work, users who want to stay in the resale game may turn to frictionless and more convenient alternatives like The RealReal and ThredUp. So while Poshmark may open the door for customers to try online resale, ThredUp and The RealReal have more potential to keep them around for the long haul.