Well Made

Ep. 95 Replacing Consumer Behavior with Erin Wallace

September 18, 2019 · RSS · Apple Podcasts

Even with sustainability being top-of-mind for many brands, ThredUp's Erin Wallace says, "We're still creating too much." This year, Burberry had so much extra inventory that they burned millions of dollars worth. ThredUp reacted with an open letter which got a ton of traction. In addition to nudging Burberry to end the practice, the letter made it clear that secondhand is a simple way to offset fashion industry waste.

ThredUp's annual resale report points to shifting consumer behavior across every segment of fashion and apparel.

Source: Thredup 2019 Annual Report Replacing Consumer Behavior

If ThredUp's massive distribution center is any indication, the impact of secondhand has gone way beyond the appeal of the treasure hunt. While part of Erin's job as Brand Director is to make the treasure hunt as seamless and as fun as possible, she's also tackling the stale stigma of secondhand and giving consumers the information they need to make more mindful purchasing decisions. It's no easy feat, but the world of secondhand is more exciting than it's ever been.

“Why aren't we thinking about what happens to your clothing at the point of purchase, and wanting to drive a concept of circularity in consumers' minds?”

 Replacing Consumer Behavior

On this episode of Well Made, Erin goes behind the scenes on ThredUp's annual Resale Report and how it's put together (6:12). It's early in the episode and we're already getting into the logistical challenges of handling 40-50% of pieces that don't meet ThredUp's quality standards (8:24).

The stigma of secondhand is wearing off, but Erin is already thinking ahead about how to help consumers think more mindfully about what they're purchasing and the resale value of those items (11:36). Erin jumps into ThredUp's latest venture, Retail x Resale. There are two models for companies to build resale into their infrastructure (20:21). The Marie Kondo effect had a huge impact on the ThredUp warehouse — they shipped out 80% more cleanout kits than usual! — but Erin has conflicting feelings about binging your closet (24:39). She shares current misconceptions about circular fashion and how consumers and businesses alike can take more incremental, actionable steps toward more mindful purchases (35:01). Finally, Stephan and Erin talk about the complexity of packaging sustainability, especially when it comes to the infamous poly mailer (38:21). Full transcript below. 

Also mentioned on this episode:

Header image via ThredUp. 


Stephan Ango: You're listening to Well Made, a podcast from Lumi about the people and ideas behind your favorite online brands. I'm your host, Stephan Ango. Erin Wallace, welcome to the show.

Erin Wallace: Thanks for having me.

Stephan: So you are the brand director of ThredUp. I think some of our listeners might be familiar with ThredUP. It's the largest online consignment store. I would love for you to describe a little bit of the scale of ThredUP as it has grown today because I don't think people quite understand just how much is going on over there.

Erin: Yeah, I know it's like a very common and fun misconception to talk about. When people maybe have been to one of our retail stores or someone purchased something and said, I got on ThredUP and they imagine something very different than it is. But what it is is the world's largest online thrifting consignment store, which means right now we have about 2.6 million unique items listed online and we process up to a hundred thousand items a day and we sell over 35,000 brands. And then operationally we have massive distribution centers across the country. Which are the largest on garment hanger facilities in the world, which I like to describe as the monsters INC. door factory if you imagine that in your mind filled with clothing.

Stephan: Yeah, right. Things on hangers going around automatically. My cofounder Jesse has been to one of those facilities and just said it was like one of the most inspiring things she's ever seen.

Erin: It gives me chills. I'll have to share a video link after. It's really neat.

Stephan: We'll put that in the show notes. But ThredUP has only been around for what? When did it launch? I actually didn't have that in my notes.

Erin: 10 years. On September 25th. We're getting ready to celebrate our birthday.

Stephan: That's pretty exciting. And you've been with the company for just over a year. You were at another company called Crossroads that people might be familiar with. I'm here in LA. I've been to some of your locations. The crossroads locations back in the day. You were with that company for like 14 years. And I'm guessing there was so much of your experience there that kind of informed what you're doing at ThredUP. I'm curious if you can give a little bit of background on what you did there. What got you excited about ThredUP and what you do with ThredUP today?

Erin: Yeah. I started in thrift, I always say like in the 90s in thrift stores in college, just as a person who loved fashion and self-expression and had no money. So, that was kind of where you landed. When I got out of college, I just got lucky and ended up at Crossroads just as you know, this was like an interesting company and model that made sense to me even though it was pretty far outside the mainstream at that point. And I just started out as a writer and it was a small family owned company that basically in that role I did everything. I wrote training programs, I opened stores, I launched apps, you know, it was just I had an opportunity to have my hands in all parts of the business. And so I stayed for a long time and kind of took it to where it was today, kind of. And was just ready to move on to something larger and ThredUP, I had been watching. I mean there was no online secondhand that was unheard of for a very long time. Because the margins are so hard to sell used clothing. And the idea of then being able to invest that into a digital format where you're selling one of one, I just didn't understand how it could be done. So I was very interested when all these companies started popping up probably around 10 years ago, seven years ago, five years ago. And then there was pretty much only ThredUP in a small handful of others left after the dust settled. So when I could see that they had really figured something out, I was really interested in getting involved. So that's what led me to ThredUP. Yeah, about a year and a half ago.

Stephan: And what are your responsibilities there?

Erin: So at ThredUp I oversee the brand team, the creative teams, and then I'm also heavily involved in I oversee the integrated marketing team. So it's kind of all of our campaigns and content and organic growth.

Stephan: You mentioned that this notion of the dust settling on the market, especially the online idea of thrifting. And I wonder if you can describe from your perspective what happened there. Because I do remember, I hadn't really thought about this, but there's so many companies that tried it out and maybe it's this investment that you were describing of the Monsters Inc placement, just the operational efficiency, being able to photograph things, price them, and all of that is so challenging. I'm guessing that's probably the reason why most people couldn't figure out how to do it. But what was it about ThredUP that allowed it to survive?

Erin: ThredUp up is by far the most operationally data-driven intelligent company that I've witnessed. I think they really understood and weren't afraid of what seemed, and they were told frequently, was an impossible challenge. That being the operations at the scale that they would need to achieve in order to be a successful company. They just tackled that and have built on it and just continue to innovate. And that's what has allowed the company as a whole to continue moving forward and then to survive when others couldn't.

Stephan: I think one of the outputs of that data-driven approach comes out in the studies and in the reports that the company releases. These are available publicly. I love this type of data analysis and visualizations. I've been pouring over it all morning kind of preparing for this conversation. It's just so fascinating. And I think where your particular area of emphasis being a sustainability and brand overlap. I'm curious like how do you get involved in the data aspect of that and how does data inform what you're doing?

Erin: I mean we're definitely involved. I mean obviously on the creative side, creating all those amazing visuals to tell the story of the resell report is a huge project that we take on every year and partner with our communications team and then obviously we have third party that collect all the data for us that's put into the report. But it is an amazing piece of reporting that people refer to throughout the year as kind of industry standard for if you want to know what's happening in the retail sector. Here it is. So yeah, I love it. I'm glad you enjoyed it too. In terms of how I use it, it's so helpful for the resell report to come out every year and really just help us tell the story of how resale and traditional retail are changing. With actual real stats, the adoption rates of different generations into resale over time. I think those are really important. People know that consumers are becoming increasingly eco-conscious but to actually put a number to it and say: 74% of Millennials and Gen Z is want to buy from sustainably conscious brands. And that's a real number that I think traditional consumers, whether you're older and you haven't bought secondhand, newer to secondhand for whatever reason, you're looking at that and going like, man, maybe I should check this out. Incredibly compelling numbers for us as a marketer. I look at stats that are more, we know that we're buying twice as much now compared to 20 years ago and keeping it half as long. And that's just a number that points to a larger sustainability problem and a larger end of life of garments story that I'm very interested in telling, which is why aren't we thinking about what happens to your clothing at the point of purchase and wanting to drive a concept of circularity in consumer's minds.

Stephan: Yeah. And I think overall the idea of reuse has been a theme that we've talked about on the podcast before with companies like Eileen Fisher and Patagonia who've been on before. You know, in some cases they were very focused on the aspect of actually repair. Is that something that you take into account at ThredUP? How do you manage the inventory that might be coming in that's not in perfect condition?

Erin: Yeah, it's a great question and it's something that we actively are always trying to find new solutions to. We are interested in repair. Actually it's a conversation we have on our organic growth channels. A lot is about extending the life of your garments even via clothing care and also we're having an interesting conversation about how often you should wash your clothes which is less frequently than people think. Which has been kind of a really fun conversation to have because some people are like, oh, that's awful. And some people totally get, so those are kind of conversations we're driving on social. But in terms of what we're actually doing on the operation side, so I mean all the clothing that we receive, we can still only accept only about 40% to 50% actually meet the quality standards required to resell on our core marketplace on Thredup.com. However that leaves a business just as large of clothing that we still have to figure out how to responsibly recycle or reuse. So it's a real problem that we've been working to crack in a way that is increasingly more sustainable. So one of the things we have is our rescues program, which is essentially exactly what you described, is bundling items that are in need of probably smaller minor repairs. Those aren't things that we operationally can do, but what we can do has been put them into rescue boxes at super cheap prices. We don't recoup the money it costs for us just to process them, but it helps a little bit to offset that. And we just sell them kind of in lots on our site to people who are willing to put in a little bit of repair in order to extract value from those clothing.

Stephan: It would be cool if you could offer that as a service, but I wonder if it would be even possible really in a cost effective way that if I send you a big bag of garments and there's only half of them, or half of them need to be repaired to be sold. Could you just charge me or charge me a cut of whatever I make on ThredUP? Or something like that? But maybe it's just not the economics of it just don't work.

Erin: I think that's almost another business would be. Because of the scale that we operate at. It's like everything just becomes this, it's giant. So what seems simple is never simple is what I've learned. I mean what ends up happening to the majority of clothing, this applies to us in any charitable organization or for profit organization that accepts clothing, is that what they're unable to resell generally is sold by the pound into the aftermarket. Which you know is a little tricky and often means that those items are being shipped abroad, which has the sustainability impact that we would like to minimize by returning as much clothing as possible back domestically to minimize the impact.

Stephan: One stat I saw somewhere I think in one of your reports was around how consumers are making choices around the resale value of the products that they buy. Is that something that is measurable? Am I making that up? But I feel like that's something I saw somewhere on one of your reports.

Erin: Yes, I know and I can't remember what the number is off the top of my head. Apologies. But it absolutely is. An increasing amount of, consumers are thinking about the resale value of their clothing at the point of purchase. And that trend is rising quickly. I find that to be incredibly heartening. I just think about how you shopped 10 years ago, 15 years ago, the idea that when you went to a store and bought a dress that you were like, hm, this is going to really hold its value and I'm going to be able to resell this at a good return, would never have crossed anyone's mind. The point of purchase was the point of purchase and you bought it, you wore it, you were done.

Stephan: Well, I think people talk about that notion when they're buying a car or buying a house, a big investment like that. But you know, on these smaller purchases, you don't think about it necessarily that way. And I remember, I'm gonna have to find the link to this, I remember reading a really great blog post from someone. I think who was kind of a thrifter who was giving advice on how to point out the differences between a well-made piece of clothing and one that's not. And are there tips that you have as someone who's been in this industry for a long time about how people should evaluate the durability of a piece of clothing and how important that should be at the moment that they're purchasing it?

Erin: I've come at it from a little bit of a different point of view, which is I purchase probably 95% of what I wear secondhand to begin with. So I follow much more of a we have enough awesome clothing in the world policy. So if you start from point of purchase with secondhand, you're already having a more positive impact. But in terms of buying new and quality clothing, obviously there are brands with good reputations that source materials sustainably and have fair work practice that we support. I do think that the barrier to entry for those things, for quality often is price. The idea that quality and sustainable clothing should be accessible to all. I know people support, but it is not there as an industry. So I mean, you can pay a lot of money and you can get really great quality clothing and that's awesome. But everybody can't afford to do that. So I think that's where shopping secondhand and you know ThredUP obviously comes into play.

Stephan: Yeah. And as someone who works in supply chain, I have this fascination with an idea that we would be able to kind of track every item. So when you say you're mostly buying secondhand, I think something that maybe doesn't get taken into account is the third-hand, fourth-hand kind of market that happens. And I think ThredUP is involved in that. I don't know if you're able to track any of these things, but let's say you know, a pair of shoes could go across many different owners over time being purchased and resold through the platform. Is that something you're able to see at all or think about?

Erin: Not as granularly as we probably would need to be in order to tell that story, which I think would be so compelling. But what I can say is we have done things in the past where you can see where your clothing goes to just the zip code and people that the idea that. The idea that something they sold to somebody in Ohio or North Carolina and you're sitting in California. It's just kind of interesting to imagine that item with someone else living another life. It's pretty cool.

Stephan: Well, and there's a chart that I would definitely share in the show notes that I think is fascinating that maps out how the relative spending is happening in the industry across secondhand subscription, direct to consumer fast fashion, etcetera. And one thing that's growing is the rental market as well alongside secondhand. And that's a really fascinating notion because companies rent the runway, the turnaround time, that's expected, right? That any given item is going to have a life of however many uses, 10 or 20 or something like that. But when you're talking about owned purchased items, we don't necessarily think of it that way, but really what's the difference? I mean at the end of the day it's like the same inventory essentially. Maybe the rental ones are a little fancier, but that idea seems really powerful to me.

Erin: I agree. I mean I think that there's an overall mind shift in the concept of ownership when it comes to clothing and that to your point that is a combination of secondhand, thirdhand, fourthhand, you know rental subscription. There's just all these different ways to think about your closet and it's definitely like driving a lot of adoption. It's appealing to people.

Stephan: I know that a big part of your job is kind of the outward communication and what ThredUp is doing and just sustainability in circular fashion. If there was something that you could just like snap your fingers and everyone would just understand, what would it be? Or like in a different way of asking is, are there misconceptions out there that you just wish you could eliminate?

Erin: Yeah, I mean I think the simplest thing that I always go back to that people are still surprised by is just for the US economy, I think they'll manufacturer about 34 billion garments this year and of those 64% will ultimately end up in landfill. And I like to partner that stat with the idea that if everyone in the US bought just one item used instead of new it would be the equivalent of taking half a million cars off the road. It's five, almost six billion pounds of carbon emissions. And that's shocking to me.

Stephan: That's pretty crazy.

Erin: I know, I know. And it's such a small act, right? So instead of buying your next pair of jeans new, just buy a secondhand pair, that would be your contribution. It's such a small contribution done at scale that makes such an impact. I think people are just really fundamentally unaware of the overproduction issue in the garment industry. And we talk about sustainability at the point of creation, but we're still creating too much. So you know, you really have to balance your new clothing consumption habits with other alternatives, whether that's rental or secondhand in order to kind of stem the trend of the fashion industrys.

Stephan: When I look at the chart that I was mentioning, the areas that are shrinking are mall brands in general. We've talked a lot about malls, kind of the shrinkage of malls in some of our episodes, department store's. So those two things are probably the biggest areas where things are shrinking. Which is to be expected. But the fast fashion seems to be relatively stable or slightly growing, that's almost behavioral and we've been trained I think by some of these bigger fast fashion conglomerates about a certain behavior that the products A, can be really inexpensive and B, you're going to change your mood or style or things multiple times a year and you might want to buy things that go along with that. And how do we change the mindset you think for people who kind of maybe think of that as the default or they maybe not even considering it, that's the store that's in their area and that's what they go to.

Erin: Yeah, I think the outfit of the day culture and just rise of social media and sharing what you're wearing all the time has definitely contributed to that. Like obviously in tandem with fast fashion injecting new, cheap constantly. It is just like the default behavior for a lot of people. I think when I think about changing consumer behavior, I think that will come over time. But in the meantime you have to offer a similar experience or satisfaction in order to replace consumer behaviors with a better alternative. So in my mind at this point, I don't think it's probably reasonable just yet to say everyone stopped buying fast fashion. However, if you can have the same cheap, fun, immediate treasure hunt, in our case, I think it's more fun than fast fashion. Then you start to just see people shift towards a different model. But without necessarily having to say, I'm not allowed to have any more new clothes. So we're not trying to take the fun out of shopping. It's more like you can have fun shopping but you can do it more responsibly.

Stephan: Yeah. I would love for you to share a little bit about what you've been rolling out recently with big retail partners. If you can describe a little bit about that cause that was in the news recently.

Erin: Yeah, it's been a really exciting few months, but in the last, wow it's been less than a month. We officially launched resell as service which essentially powers buying and selling secondhand clothing for retailers, which allows traditional retail models to join resale and extend the life of clothing. So there's kind of two sides of it. On one side there's big traditional retail partners where we actually have a ThredUP pop up inside their store. So bringing secondhand literally into a traditional retail model, which just kind of injects a different energy into their stores. Brings in new customers and drives repeat values because I think repeat visits rather just because unlike traditional retail stores, secondhand inventory, every single thing is unique and it changes I think in store cases weekly on our site, hourly. So that's part of the thrill of shopping secondhand. And then with other resell partners, they're using ThredUP to offer a clean-out service to their customers. So they put our clean-out kits into their outbound orders, which allow their customers to then clean out their closets as part of their purchase cycle. Their items are sent into ThredUP and then they're able to use the credits that they receive back to shop at either ThredUP or the brand that they partnered with in the beginning. So Reformation and Kiana are two of our big partners on that side. So they're pretty cool partnerships.

Stephan: Yeah, and I mean obviously the logistical complexity of what you're doing is just a whole different kind of level of expertise that they probably don't want to get their hands in, it's just so complex and not their expertise.

Erin: Yeah, I mean I think that's you hit the nail on the head, is that like everybody wants to have resale somehow involved or add more circularity, but quite frankly like the infrastructure is insane and we've spent 10 years building that backbone and building that muscle. And so now we're kind of interested in allowing retailers to tap into that to just create a larger ecosystem of resell.

Stephan: So we had the CEO of Poshmark on recently and I think the approaches are very different, right? Because they're more like peer-to-peer. It's all kind of people shipping to each other, whereas ThredUP is more centralized and is involved in the processing and organizing of the inventory, which personally is just more the way that I kind of think. And I think it's important that companies like yours are investing in the infrastructure that's necessary because there's an infrastructure at scale of manufacturing. So we need an infrastructure at scale for the kind of recovery and other side of it. But is that a fight or anything internally? I mean it feels like a strong kind of mission and value of the company, but there must be the thought of, Hey, wouldn't it be easier if we could just let our customers ship things to each other?

Erin: Yeah. You know, I think it was a decision made a while ago that it is a fundamental difference and we do think it actually is an advantage for us in a different point of differentiation. I love Poshmark and think peer-to-peer is an awesome model. Ours is just different. And I think what it offers is total convenience and that is what we want to be able to offer in order to encourage people to clean out. There are just a lot of people, myself included, to be quite frank, who just are not interested in taking pictures of their things and writing descriptions and monitoring the transaction and shipping this stuff. Even with best intentions and knowing you'll make more money, you'll get a better return. I just don't want to invest my time that way and I really just want to put it all in a bag, we say from GAP to Gucci and get it out of my life and know that I haven't done something terrible with it. You know, I didn't throw in the trash. I'm doing it responsibly, but I just want it gone. So I think being able to offer that service and be successful and offer people some money or donation or credit to shop the site feels like the right direction for us.

Stephan: A lot has been written about the Marie Kondo effect. We can post links and stuff like that. And I know that it affected you in a big way this year with her Netflix show. I kind of feel like you can make an argument both ways about the impact of that, whether it's a good thing or a bad thing. But I wonder how you perceive that, I mean obviously I think it's probably great in terms of like bringing a lot of inventory into ThredUP, but do you think that long term it's raising the level of consciousness or is it just an opportunity for people to like have a big empty closet and fill that up again with a bunch of random other stuff?

Erin: Yeah, I have complex feelings about Marie Kondo. It was a huge impact on ThredUP. I think it was about an 80% lift in requests for cleanup kits and we already get a huge number of requests. So that was exciting to see all of the things that were coming in from a viewership point of view. There was not a lot of conversation or any conversation about what people were supposed to do with their stuff when they were getting out of their life. So I know across people who work in resale sustainability, it was a little bit painful to see bags and bags of trash with no conversation about how to responsibly get rid of those items. Yeah. So I was happy to see the lift to see that people were looking for that, but envisioning an equal or greater number of items just being tossed, which is tough. Whether people are then going to fill their closets with more new stuff. I don't know. I mean I think overall it was a good way to highlight the crisis at this point that we're in stuff. And I think everyone's really starting to feel it. And you can see that resonate at scale with Marie Kondo. Because I mean she had a book out several years before that. And I remember I was at Crossroads at the time and there was an impact there too. But it making to Netflix level proportions and hitting a note really speaks to a larger conversation that people are ready to have about their stuff, what they do with it, how to get rid of it. Yeah. So I actually found it quite heartening.

Stephan: It does feel like there's been some sort of tipping point I feel this year. At Lumi we're involved in a lot of packaging sustainability questions and it's hard to pinpoint exactly. If I had to guess, I would say that there's been so much polarization in our politics that it's kind of forced people to pick a side maybe. And if you're gonna have to be picking a side between not caring about the planet and caring about the planet, I think a lot of people are sort of realizing that they care about it and that is maybe a good thing. I'm generally not so fond of how much polarization there is, but if it helps people actually kind of strengthen their beliefs or feelings around this, maybe it is a good thing.

Erin: I hadn't really thought about it in that way, but I think that's really interesting. The concept that because the nation's political system is what it is right now, that essentially people feel more on one side or another than ever before. And we know that the planet is on one side and not on the other. And so it's just more prevalent. It feels more dire. I mean, absolutely for anyone who does care, even a little bit about the environment, it feels certainly more dire now than it ever has that I remember.

Stephan: But why? Do you feel the same way as I do that really maybe in the past 12 months it's like some sort of inflection point of some kind or is that just something like you could say the same thing happened, in the late sixties and then we got over that and forgot about it for 30 years. Is it just fashionable?

Erin: No, I think it's the adoption rates are too high and continue to trend kind of up in the right up and to the right, whether that's like from just like business point of view or what we see in our reports and how shopping behavior in younger generations so we can predictably say it's going to continue to grow. I think it's just hit mainstream, these kind of alternative options. It's just less of a stigma now for some reason. I don't know how that suddenly became so widespread. But yeah, thinking back to just how far it's come from like Crossroads days in the stigma of secondhand into 10 years ago and the stigma of secondhand that they were started trying to overcome at ThredUP, to the conversations we're having today. It's very, very different.

Stephan: And it seems like the Gen Z generation, which is just starting to enter kind of like purchasing age and being like more active members of the purchasing group are pretty much like flocking to these different platforms that offer this. And I don't know if it's just maybe a combination of they've engineered since the beginning in this mobile friendly way or is it that there's more of an entrepreneurial spirit or something. I'm just curious about, what's your perspective on like where you see Gen Z kind of taking us?

Erin: I mean, I place all my hopes in Gen Z having two of my own. But they're definitely, just from a numbers point of view, adopting it two and a half times faster than average. Secondhand that is, and I think one in three Gen Z will buy used apparel this year. I love that stat. I think that they have been born into a very hyper environmentally aware generation more so than anyone else and obviously they're like digital natives. So they have the ability to acquire information faster. And then it's also baked into most curriculums in their schools. They're just very aware of the impact of behavior on the environment and they're born into a generation that has less to no stigma around secondhand clothing. And so I think these things just make sense to them innately more than having to be trained to accept as something new. Because at this point, traditional secondhand stores have been around longer than they have. So they've always been here. It's nothing new to them.

Stephan: You highlight a lot of brands that maybe emphasize sustainability as part of their mission or are simply brands that you see a lot of throughput on the platform for. We have a lot of brands who listen to your people who work at like e-commerce, fashion brands who listen to this. And I'm curious if they're thinking about what can we do in the design of our products to give them more of a second life or enable them to be sold and is that what can they do to participate more in a way that kind of benefits their customer and their company?

Erin: I mean, I would go back to the resell as the service model and look at some of the partnership. Like specifically if it's a traditional ecommerce company, say similar to Reformation, adding the ability to clean out clothing to your business model helps your business by allowing them to sell out and receive credits that they can then use to make another purchase at your company. So it's a win win for everyone. So, I think those are cool ways that every brand should be investigating. Whether that's something that can work for their business.

Stephan: Yeah, I would love for ThredUP to get even more involved in the B2B side of allowing the platform to serve other brands because we obviously have examples of companies that have vertically integrated that. And we talked about Patagonia and Eileen Fisher and there's more of kind of like taking that whole stack and trying to allow their customers and the benefit of that is that you sort of stay in within that brand's ecosystem. And so brands like that, but we've talked also about the logistical complexity of all of it. So how do we set it up? Because obviously brands are incentivized by repeat purchases and fast fashion has been so successful because it's whether you want to call it planned obsolescence or just like a choice that customers are making to purchase items that are not going to last, that drives repeat consumption. That is how companies stay afloat. Those two kind of things kind of pull at each other and I don't really know how to solve that. Exactly.

Erin: Yeah. I mean, I think that's the beauty of some of these partnerships is that they drive repeat purchase just by it's sell your clothing, get credit back to the brand that you purchased from in the first place. It's kind of a beautiful system.

Stephan: But if I'm an ecommerce company, first and foremost, is there a way for me to do that?

Erin: Yeah. So like I was saying with Reformation. So, If I purchase from Reformation and I get my order and I open my order and there's a clean-out bag from ThredUP in it and I fill up my bag, send it to ThredUP up, I can cash out from ThredUP and Reformation credit and then I can use that credit to shop from Reformation again. Sorry, maybe I didn't explain that very well.

Stephan: No, no, no. It's making more sense to me now. Okay. That's fascinating.

Erin: Yeah. So it is just basically plugging resell into your business model and driving repeat visits for that ecommerce company.

Stephan: So like with Reformation for example, have you seen enough of a loop to kind of have any case studies or any data on that or is it still just too early to tell?

Erin: I don't know that we have releasable data at this point, but it's a very strong partnership that's been going on for a while. I can follow up and see if there's anything we can share, but I'm not aware of shareable data at this point.

Stephan: Yeah. But it would be fascinating to close the loop and see what kind of lifted provided or something like that in terms of if you can keep the dollars in that ecosystem that does it incentivize some future purchases?

Erin: Yeah, absolutely.

Stephan: I'm curious like what are some other misconceptions that you see out there about sustainability or circular fashion or other things that you would wish that we could-- I look at the charts in your report and it's 2028 this is where we want to be. What are the things that we're going to need to do to get to 2028 or beyond on this pace? So what are the things we wish we could accomplish faster?

Erin: Again, where your clothing goes, but specifically around donations. I think that's something that the larger consumers need to understand. Again, this goes back to overproduction, but what happens to your clothing when you donate it? I think a lot of people feel that their purchase behaviors are justified as long as they donate it when they're done. And it's just kind of like you wash your hands of that and you can just go out and buy more stuff. And not understanding that you know, just like us, but even more extreme, the limitations of charitable organizations, limitations being square footage of the stores that they're able to operate means that they can only return between 10 and 20% of what they receive back into the communities they serve. Which is a staggering amount of clothing. Again, that's just being kind of shipped into the aftermarket and spread around the world. So that's something that I'm really focused on trying to educate people just around the larger problem to drive obviously more adoption of secondhand. And then secondarily as we were talking about earlier, perhaps evaluating your purchase cycle and consumption habits.

Stephan: I think one of the challenges that any brand or company that operates kind of in the sustainability area wrestles with internally all the time is the sort of perfect is the enemy of good kind of problem. Where you're always just like looking at the problems seem so insurmountable and the things that we need to accomplish are so difficult that you want to shoot for something as good as possible but that often prevents you from putting something out there that would be better. And I'm just curious like how you deal with that conversation internally at ThredUP with your team or with other teams to keep making progress even if it's incremental at first.

Erin: Oh yeah. I mean this is a struggle for everyone. I would hope. Because there is no perfect. But yeah, I mean so much of the good and the standability work that we do is baked into our business model. But that doesn't mean that every aspect of our business is sustainable and that struggle is real when we operate like such a tight margin. Huge challenging business to make decisions around. I mean, maybe you can help me with this. Packaging even, we have this beautiful box that people really love our unboxing experience, but I struggle around like the sticker that's on there and tissue paper and you know, how to source things to keep, how to make the entire experience as sustainable and low impact as possible. But also still deliver on the business needs is always something we're always chipping away at and always evolving.

Stephan: Well I think, I mean, that's exactly right. I think, and this question comes from a real pain that I feel every single day. And we had Jeffrey Hollander who is the founder of Seventh Generation on the podcast a few months ago and he was really advocating for the opposite. He was saying we should spend more of our time thinking about really innovative solutions that allow us to radically shift and not do incremental solutions. And I totally agree with him on that. I think that we should probably spend more time on that. But also we should do both because we shouldn't get in our own way. Like, for example, this past week at Lumi we launched this new product category, which is like compostable poly mailers made of renewable bioplastic. And of course, we got some people commenting, saying things like, I'd rather have no packaging or I'd rather have, biodegradable has its own problems because either you need to know how to set up composting at home and some facilities are difficult to access. And there's a lot of issues. And as soon as you talk about it, you start to realize everything is more complex than you initially imagined. But poly mailers continue to be one of the most vastly used packaging items in the fashion space for a bunch of reasons, some of which are environmental because it's so much lighter weight than a box and saves on carbon emissions and in transit. So these things are never that easy. But I think that it's a net improvement to go towards renewable material sources. So why don't we take a step there while we work on what we can do to actually avoid using it all together, if that makes sense.

Erin: Oh yeah. I mean I totally agree with that. I don't understand why those things would be mutually exclusive. Like incremental improvement and large scale thinking have always kind of been the way of the world. You know, there's the big thinkers and there's the day to day and both of those things are super important. It's funny, we just switched to poly mailers as well for a lot of our orders and did a ton of research and communication around it and had actually had really cool conversations mostly on our Instagram channels where we kind of have more of these sorts of conversations with people. And it was really interesting. I learned so much about it. one of the things, the misconception around how to recycle the bags themselves was something that I didn't know. I was like, no, I know all the bags that I have been improperly recycling now I can like collect and walk them to my local Trader Joe's. It was like, who knew? But yeah, and just the weight and impact of boxes that may seem like a better choice. But actually when we weighed out all of our options, we decided the poly mailer actually felt like the better choice for us from a sustainability and cost point.

Sephan: It's complicated.

Erin: It's so complicated.

Stephan: Yeah. And actually I think that something that needs some help. I think this is where having a data driven organization like ThredUp-- You have the power now and as you kind of start using those poly mailers, you'll be able to have more metrics around that and be able to like study that data and maybe a release it in some future study. But that's, I think a big piece that's still missing is continuing. First of all, standardizing the language. That's been a big part of what we're trying to do at Lumi is just having words that we can actually use that mean something because there's a lot of greenwashing and words that get thrown around that don't correlate to a specific definition. Like things like biodegradable that don't really mean something specific unless you like narrowly define what biodegradable actually means. Because you can put a logo that you can find on Google images that says biodegradable, but in fact bio-degradable is almost everything on earth is biodegradable given enough time. So it's like, there's things like that. It is not like there's a few standards around that, but they're not commonplace enough. Like some say something like FSC is you an actual certification, right? So these things get thrown around and it becomes really difficult to even have a conversation among people who actually care about making improvements. I don't know if that's something that you encounter in your process.

Erin: I think. Yes, definitely. Well, I mean, especially when it comes to things like switching over packaging or we were recently in a conversation around, I can't actually talk about the details, but it was something else that involves anything production of something net new and then really looking into. We were being told this is biodegradable, it's like the exact situation and just something about it when you've been thinking about sustainability, investigating some of these things for a long time. When someone gives you a more kind of blanket term, it immediately just sets off a little, I need to do some research on this. And when you just get more vague answers back and can't find anything definitive anywhere, it kind of just falls under that, this is the general word we use to say that we're sustainable, but we have nothing behind it to actually provide any great assurances. So I don't know, there's a lot of that out there for sure.

Stephan: Do you have some, I don't know what the kind of the way that ThredUP works through those things internally, but are there principles or approaches or things that you've found useful to talk with your team and keep making progress and not get stuck in the weeds of again, the like perfect is the enemy of good type of thinking.

Erin: I would say overall as a company culture, we don't get stuck in the weeds on much of anything. It's a very forward moving culture. So when we need to get something done or take an approach to whether, let's stay in the packaging zone, if from an operation side, they're looking into this, there's open communication. So all the groups are looped in just like an FYI, this is happening or we're looking at these options. Do you want to be involved in this? Is usually how it happens. And then we'll pick it up and say, looking at it from a consumer point of view and from a sustainability point of view, like, oh, we're suddenly going to switch from paper to poly. Yeah, that's our conversation we're going to need to have with our consumers who certainly view us as a sustainable option. Like, is this sustainable? How do we feel about this? Like we open the conversation, do the research, talk about whether we feel like it's aligned with our values and go from there. So it's very forward moving. It's very, very rare we get too wrapped around the axle of things for very long.

Stephan: That's awesome. I want to wrap up by asking and I'm kind of putting you on the spot here, but do you have people, resources, podcasts, magazines, online publications, books, things that you kind of go to for best practices in this area or brands that you look up to? I'd love for you to share a few threads for our listeners to explore.

Erin: Yeah, sure. We're part of a sustainable fashion forum here in the bay area that we love. And they're actually in terms of just individual people that are great resources, I often will check in with them. I love obviously Eileen Fisher and all the Patagonia work. I love the Renewal workshop up in Oregon and some small businesses that I look to just as inspiration for things that they're doing out in the world. Like Fab Scrap and Queen of Raw. Those are some of the ones that are coming to top of mind.

Stephan: Cool. Yeah. We'll put some links in the show notes. Is there anything else we should point people to? Obviously thredup.com. We'll have the link in the show notes. T. H. R. E. D. U. P. Is there anything you want to point people to if they want to learn more about everything?

Erin: I mean, I would definitely check out the site, check out the resell report is probably the most comprehensive place to get a full picture of the resell industry and the trends. And then I have to give a plug for, we're always hiring. And it's a pretty inspiring and stunning place to work. We're actually, this is as aside, but we're actually getting ready to relocate. Our offices are moving our headquarters from San Francisco to downtown Oakland, and we're in the middle of doing a historic renovation of a block of amazing Victorians from the late 19th century. And I think it's been a real labor of love and a real reflection of the brand that we're reclaiming and reusing a tremendous amount of materials in the project. So it's just kind of an exciting time between funding and the retail partnerships, the overall trends in resale and the heart of this brand. It's an exciting place to be.

Stephan: I'm looking at your jobs page. There's a lot of data analyst positions, which is really a lot of what we're talking about.

Erin: There's others in more than marketing, creative. I know we have a creative director role open and few design roles. There's breadth. It's not just all data. We all work together. We all love each other.

Stephan: But definitely check out the careers page. There's a ton of cool jobs and it's such an inspiring company. So best of luck with everything. Thank you so much, Erin.

Erin: Thank you.

Stephan: Oh, one last thing before we go, I'm talking to you at home. What's your favorite brand these days? Is there something that you think is really well made or maybe someone that you love for me to talk to? Send us a tweet. We are at Lumie, l u m I on Twitter. We're making this show for you, so tell us what you want to hear and we'll make it happen. Thanks. See you next time.


You can find this and all future episodes on iTunes, Google Play, and here on the Lumi blog. This episode was edited by Evan Goodchild.

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