James Reinhart on ThredUP and Thrifting with Guy Raz | How I Built This | NPR | Summary and Q&A

Summary

In this video, James Reinhardt, the founder of thredUP, discusses how his business has been impacted by the COVID-19 crisis. He talks about the challenges his company has faced, from ensuring the safety of employees at distribution centers to adapting to changing consumer behaviors. James also discusses how thredUP is remaining resilient during this time and the importance of sustainability in the fashion industry.

Questions & Answers

Q: How has thredUP been impacted by the COVID-19 crisis, and what challenges have you faced?

During the crisis, thredUP has seen a surge in people sending in their clothing to sell, as people have been cleaning out their closets while staying at home. However, this surge has created a challenge in processing all of the clothes. Additionally, thredUP has faced the challenge of keeping their employees safe at the distribution centers and navigating the various guidelines and regulations across different regions.

Q: Have you had to lay off any employees as a result of the crisis?

thredUP has only had to do a small handful of layoffs, and they implemented a furlough a couple of months ago to reduce hours. The main challenge has been ensuring the safety and well-being of the employees at the distribution centers while still abiding by the guidelines. Managing through the complexity of the situation has been the most challenging part for thredUP.

Q: Has there been an increase in people sending clothing to thredUP during this time?

Yes, thredUP has seen a huge surge in people sending in their clothing during the COVID-19 crisis. With people spending more time at home and cleaning out their closets, there has been a higher volume of clothing being sent in for resale. This surge has been great for thredUP, but it has also posed challenges in processing all of the items.

Q: How are the distribution centers operated during this time?

The distribution centers are laid out in a way that allows for social distancing and the safety of employees. The challenge comes from managing the complexity of the shelter-in-place regulations and guidelines, as they vary across different regions. thredUP has had to navigate these differences to ensure the safety of their employees while still operating at a reduced rate.

Q: How have sales been affected by the crisis?

Initially, there was a contraction in sales during the mid to late March period when people were uncertain about the situation. However, thredUP has seen a steady recovery since then and the business is doing well overall. While they may not be at the expected level, thredUP is still experiencing double-digit growth. The affordability and value that thredUP offers to consumers have contributed to their resilience during this time.

Q: How does thredUP handle clothing that is not suitable for resale?

thredUP rejects about half of the clothing they receive due to quality reasons. They work with domestic thrift stores to recycle some of the rejected items. Additionally, there is a repurposed market where companies use the clothing to create things like rags. The goal is to ensure that nothing ends up in a landfill and to promote sustainability and reuse.

Q: Why should someone choose to send their clothes to thredUP instead of donating them to organizations like Salvation Army?

While donating clothes to organizations like Salvation Army may offer a tax write-off, most people choose to send their clothes to thredUP because of the convenience and simplicity. thredUP offers free pick-up of clothing and provides an easy way to get rid of items cluttering up their homes. Additionally, thredUP gives customers the option to donate their proceeds to charities through their platform.

Q: Does thredUP sell men's clothing?

Currently, thredUP does not sell men's clothing. The market for men's clothing is different, as men tend to wear the same things repeatedly and wear out their clothes at a higher rate. thredUP primarily focuses on women's and children's clothing.

Q: How are you keeping your teams running efficiently during this time of remote work?

Prior to the crisis, thredUP already had work-from-home days twice a week, which helped in transitioning to full-time remote work. However, thredUP also implemented a furlough, reducing the workweek to four days to provide employees with more flexibility, especially for those with children. The transparency of the organization and maintaining a sense of trust among the employees have also played a key role in keeping things running smoothly.

Q: How are you thinking about reaching consumers and marketing during this time when physical marketing is limited?

thredUP is being creative with its messaging and utilizing the assets it has, such as the clothing it sells. They have launched campaigns like "Choose Used" and "Closet of Celebrities," where they repurpose clothing and partner with influencers and celebrities to promote reuse and sustainability. By leveraging partnerships with retailers like JC Penney and Macy's, thredUP can utilize their large distribution networks to reach a wider audience.

Takeaways

The COVID-19 crisis has presented both challenges and opportunities for thredUP. While the surge in clothing sent for resale has been positive, processing the increased volume has posed a challenge. Safety measures at distribution centers and navigating guidelines across different regions have been complex. Sales have seen a steady recovery, attributed to thredUP's affordability and value proposition. The company remains focused on sustainability and is creatively marketing its message through partnerships and campaigns. As a leader, James Reinhardt has prioritized providing perspective, maintaining transparency, and guiding his team through these difficult times. In the long term, thredUP aims to separate itself from competitors and continue making a positive impact on the fashion industry.