Whether it is a handbag from the 1970s or a leather motorcycle jacket circa 1999, what’s old is new again, and online retailer thredUP sees the circular economy movement as a thriving opportunity. The consignment retailer and secondhand shop recently kicked off RAAS, or Resale-As-A-Service, a project to attract traditional department stores to get on board with more sustainable fashion.

“The closet of the future … is going to look very different than the closet of today,” said James Reinhart, CEO and co-founder of thredUP. “If you think back 10 years ago when we started, you had none of these direct-to-consumer brands. There was no such thing as rental. There were no subscription companies. In just these 10 years, we’ve had a radical shift in how people shop and buy apparel. And I think that shift is going to continue.”

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The retailer collects around 100,000 pieces of secondhand items daily and says resale is growing 21 times as fast as the larger retail market; it could be a $51 billion market by 2023. Shoppers propelling the growing circular economy are Millennials and Gen Zers — the 18- to 37-year-old population — who are purchasing about 2.5 times more than any other age group.

Big box stores, like JCPenney and Macy’s, have seen their sales yo-yo in recent years and have signed on with thredUP. In doing so, the retailers have three options: store pop-up, online collaboration or a loyalty program.

Some experts believe department stores will lean toward pop-ups, because they tend to attract more shoppers. As reported by Forbes, pop-ups offered by thredUP will be between 500 and 1,000 square feet and “feature new items on a weekly basis, offering brands that aren’t already in a typical Macy’s or JCPenney. There will be 100 pop-ups by Labor Day.”

According to Reinhart, the loyalty program has been the top option, where shoppers can purchase items from thredUP’s retail partners and also receive a “clean out kit.” Buyers use this kit to send in pre-loved clothing items to thredUP — thredUP retains the markup on resold items, consumers get credits and bonuses with the retailer and the retailer sees improved customer retention. It’s a win-win-win.

thredUP has reportedly received more than $300 million in total funding for the project. It’s possible that thredUP’s RAAS initiative may help grow the circular economy and give struggling department stores a brighter future.

+ thredUP

Via TreeHugger, Forbes and FirstResearch

Image via Burst