ThredUp Adds ‘Try-Before-You-Buy’ Model

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Online thrift store ThredUp is entering the “boxes” space with a new try-before-you-buy option that aims to do the treasure-hunting for you.

For a $20 fee, customers can receive a “Goody Box” of 10 to 20 items that are chosen based on a shopper’s preferences. The customer can keep what they like and return (for free) what they don’t, with the $20 going toward any purchase.

Company CEO James Reinhart hopes that this will help “convert the skeptics” of thrift shopping. “People love a good bargain but don’t like doing the work, so we can bring the bargain without the hunt,” he says. “It’s about getting people over the hump — everyone wants to find a deal.”

In a one-month test of 1,000 people, 30 percent were new customers, Reinhart says. The average order size was larger than current ThredUp shoppers, with customers who received a Goody Box spending 30 percent more than average.

Photo: ThredUp

“Customers were keeping 10, 11, 12 items, and even those keeping a smaller number said it was fun and asked, ‘Can you send me another one?’” he says, adding that Goody Boxes are also a way to engage existing customers, in hopes that they buy more over time.

When we tested the service, we were impressed at the variety and quality of options, and it makes sense that customers would buy more than planned. When it comes to sorting through secondhand, less — in this case — is more.

The process starts with a short online questionnaire. In addition to basic information such as size, age, height, and price threshold, it asks for favorite brands and to select one of three categories: cold weather essentials, office styles, or holiday party.

Our request for “office styles” in the vein of brands such as Club Monaco, Stella McCartney, and The Row resulted in 18 pieces ranging from a $22.99 Ann Taylor top to $130.99 Alexander Wang dress pants. A pair of Opening Ceremony flats was $82.99 and a Zara faux leather skirt was $25.99, in addition to a $51.99 Club Monaco blazer and a $64.99 long-sleeved blouse from The Row (originally estimated to be $534). Aside from a few fit issues, we kept at least half of the pieces, and probably wouldn’t have selected them all during an online browsing session.

Photo: ThredUp

The pieces are chosen using a combination of a proprietary algorithm and human spot-checker “to make sure that there is nothing crazy going on,” Reinhart says. He adds that existing ThredUp customers are able to mine previous browsing history to inform the software. For new customers, he estimates that the process is “80 percent computer, 20 percent human,” but for returning customers, he estimates that it can end up being almost “99 percent computer.” He adds that the process is more complex than something like personal-styling service Stitch Fix because inventory changes hourly; there are 35,000 brands and 2 million unique items to sort through. “We joke that we are a tech and logistics company that happens to sell used clothing,” he says.

Perhaps the buzziest and most successful try-before-you-buy service, Stitch Fix uses a combination of computers and human stylists to curate five items that customers try before buying or returning. Founded in 2011, it also charges a $20 “styling fee” that is applied to any purchase, and has built technology that makes better product recommendations over time. Before going public this November, it announced that it had reached almost $1 billion in sales in fiscal year 2017.

Stitch Fix has largely hung its hat on a model of computer-aided personalization that allows this approach to make sense. “The model itself — that customers do not choose — is bold,” says a Stitch Fix spokeswoman. “We have created a better way to shop, and a model for businesses of the future: a mutually beneficial partnership between humans and machines that eliminates the burden of searching through millions of results online or saving consumers a time-consuming trip to the store.”

Even Amazon is testing a try-before-you-buy offering. In June, it announced Prime Wardrobe, which lets customers select three to 10 pieces (from clothing, shoes, or accessories) to try on during a seven-day period. The service is free for Prime members, and like the others, comes with a prepaid return label.

An Amazon spokeswoman wouldn’t say when the service would open up to the public in the US, but did offer that early feedback from customers was exciting. “Fashion is one of our fastest-growing retail categories,” she says. “We know many customers struggle with not being able to touch or see items in person when buying online. With Prime Wardrobe, we wanted to remove that barrier.” She also emphasizes that this was not an attempt at personal styling. “By giving [customers] the chance to choose their own clothes, feel the fabric, try a size, and easily return an item, Prime members will know exactly what they are getting,” she says.

Photo: Margaret Malandruccolo, via Amazon

Thus, each company is finding a way to differentiate its service, suggesting that “try before you buy” might become the new normal in online shopping.

“Amazon is an impressive company, but we are good at very different things,” the Stitch Fix representative says. “They are good at assortment and fast shipping. We believe Stitch Fix is the best at personalization and finding the perfect dress for that first date or dressing you for a special occasion.”

And at ThredUp, “all the stuff we sell is cheaper than the rest of these services,” Reinhart said. Ultimately, he sees this model as “the wave of the future.” “We would be idiots for not trying to develop something that could do this for our customers,” he said.