Lauren Keen began saving in highschool. It was a strategy to discover low cost, attention-grabbing garments with out contributing to the wastefulness of quick vogue.
In 2015, her freshman yr of school, she downloaded the app for Poshmark, a form of Instagram-meets-eBay resale platform. Quickly she began promoting in addition to shopping for garments.
This was the golden age of on-line reselling. Along with Poshmark, firms comparable to ThredUp and Depop appeared, which gave a second life to previous garments. In 2016 Fb debuts Market. Even Benevolence went into motion by launching a classy web site.
The platforms tapped into two shopper tendencies: shopping for issues on-line and the timeless pleasure of choosing up a gently used merchandise for a fraction of the unique value. Through the Covid-19 pandemic, as individuals cleaned out their closets, enthusiasm for reselling grew. It was so sturdy that Poshmark determined to go public. On the day of the preliminary public providing in January 2021. the corporate’s market worth peaked at $7.4 billion, about as a lot as PVH, the corporate that owns Calvin Klein and Tommy Hilfiger, on the time.
Then the second-hand clothes enterprise started to crumble.
Utilizing the Poshmark app, Ms. Iger and others mentioned, it started to really feel like looking for one thing in a cluttered closet. The app was cluttered with options that did not work or that she did not use, and it appeared “spammy,” she mentioned, sending too many push notifications.
For a lot of platforms, promoting used gadgets has been discovered to be tough to scale. Now on-line distributors are attempting to recalibrate. Final yr, ThredUp determined to go away Europe and give attention to gross sales in america. Trove, an organization that helps manufacturers like Canada Goose and Steve Madden resell their merchandise, has purchased competitor Recurate. RealReal, the posh items purveyor, has appointed a brand new CEO as the corporate tries to enhance profitability.
Poshmark is present process maybe the largest reinvention but. In 2023 Naver, South Korea’s largest search engine in addition to a web based market, purchased the corporate in a deal valued at $1.6 billion, lower than half the IPO value.
One thing of a mix of Google and Amazon, Naver is betting it will possibly rebuild Poshmark, which has 130 million energetic customers, with the identical know-how that made Naver dominant in its personal nation.
It will probably additionally assist breathe new life into the resale market. Analysts consider the style resale market nonetheless has room to develop in america, with income anticipated to extend 26 % to $36.3 billion by 2028, in response to retail consulting agency Coresight Analysis.
New legislation in California may help. The regulation, handed final yr, requires manufacturers and retailers that function within the state and generate a minimum of $1 million to create a “producer duty group” to gather after which reuse, restore or recycle their merchandise. Resale platforms like ThredUp and Poshmark might be able to assist manufacturers fulfill this mandate.
Proper now, nevertheless, Naver’s give attention to Poshmark is extra basic: Make it a greater place to promote and store. The corporate has the “operational know-how” to take action, mentioned Philip Lee, founding father of media outlet The Pickool, which covers each South Korean and American know-how firms.
“They’re making an attempt to revamp Poshmark after which develop market share,” he mentioned.
A wedding of demand and commerce
Poshmark, which is predicated in Redwood Metropolis, California, was based in 2011. by Manish Chandra, an entrepreneur and former know-how govt, and three others. In making an attempt to develop, Poshmark confronted an issue frequent to resellers: capturing the treasure-hunting pleasure of thrift procuring with out irritating customers with infinite scrolling. The corporate knew it wanted higher search, in addition to interactive parts that gave individuals extra causes to return past paying $19 for a J. Crew sweater.
For its half, Naver was in search of methods to develop past South Korea, the place its commerce and search companies have been already mature. The rising on-line resale market in america supplied a chance and in addition gave the corporate entry to the most important shopper market on the planet.
“Commerce is a giant progress driver for us,” mentioned Namsun Kim, Chief Monetary Officer of Naver. And the peer-to-peer sector, the place customers promote to one another, was nonetheless in its infancy and had room to develop. However, Mr. Kim added, “it is a more difficult phase and so it is more durable for lots of the larger gamers to enter.”
There are two frequent enterprise fashions for reselling: peer-to-peer and consignment. With consignment, a platform collects and redistributes bodily items. Poshmark makes use of the peer-to-peer mannequin, which depends on dozens of individuals — a lot of them novices — to haggle over costs after which ship gadgets to one another. This decentralization generally is a headache for manufacturers that like to take care of a sure stage of management over their merchandise. And platforms like Poshmark have to make consumers really feel comfy with trusting sellers on their website.
Earlier than shopping for Naver, it was tough to push by the required know-how modifications, mentioned Vanessa Wong, vice chairman of product at Poshmark.
“I’d all the time speak to my engineers and ask, ‘What if we do that or that?’ They’re like, ‘That is exhausting. The hassle is basically nice,” Ms Wong mentioned.
The acquisition of Naver provided each the funding and the experience to make the modifications. Based in 1999, the corporate is all over the place in South Korea.
“We aren’t only a easy search know-how or AI service,” mentioned Soo-yeon Choi, chief govt of Naver, which is headquartered close to Seoul. The corporate, she mentioned, is “assuaging individuals’s frustrations, which is critical to assist progress.”
Demand has constructed Naver “into the large energy they’ve in Korea,” mentioned Mr. Chandra, who stayed on as chief govt after the Naver buy. This was the principle precedence when the corporate purchased Poshmark.
A number of new gadgets have been launched for customers and sellers. With a software known as Posh Lens, customers can take an image of an merchandise and, utilizing Naver’s machine studying know-how, the location populates listings which are the identical or just like the shoe or tank high they’re in search of. A paid promoting characteristic for sellers known as “Promoted Closet” pushes listings larger in prospects’ feeds.
Poshmark can be featured live broadcastsa few of that are themed to enchantment to the TikTok technology and enhance engagement. One get together auctioned off garments beforehand worn by South Korean celebrities, a hyperlink that was made with the assistance of Naver.
Nonetheless, the resale market is experiencing rising pains and hasn’t discovered its footing for the reason that peak of the pandemic. It is unclear whether or not Poshmark’s modifications will likely be sufficient. In Could, Mr. Kim, Naver’s chief monetary officer, mentioned in an earnings name that Poshmark’s profitability was bettering, however by November the corporate warned that progress had slowed attributable to weak spot within the peer-to-peer resale market in North America.
Errors and reinvention
The corporate has already made some delays on unpopular selections.
In October, Poshmark launched a brand new charge construction that elevated prices for customers. Sellers rebelled, fearing larger prices would drive shoppers away. Inside weeks, the corporate scrapped the brand new charge construction.
And there are nonetheless person complications: tags and key phrases that assist customers discover what they’re in search of may be miscategorized. Sellers typically misbrand their merchandise to attract extra eyes to their much less in style merchandise. (Amazon’s hard-to-unload leggings, for instance, may be listed as free individuals clothes.)
The corporate is beta testing modifications with its common sellers — individuals like Alex Mahl, who sells hundreds of {dollars} value of clothes on the location every year. And in devoted Fb teams linked to Poshmark, there’s loads of speak in regards to the modifications sellers and consumers would nonetheless prefer to see.
“The one approach it should do properly is there’s going to be fixed change,” Ms. Mahl mentioned of Poshmark’s modifications. “When you simply used an app that by no means modified, one, it might be boring, and two, the chance to simply do higher would not exist.”
One latest morning, Ms. Keen, the vendor who joined Poshmark again in school, was pleasantly shocked to search out that the app had some new options that she actually favored. She snapped a photograph of her grey Aerie tank high with Posh Lens. Inside seconds, the app populated lists of comparable merchandise. It was a lot better than arising with the adjectives wanted to explain it.
“I adore it,” exclaimed Mrs. Keen.
