Inside ThredUp’s pivot: CSO Alon Rotem on redefining resale as a dual-sided platform

Resale is no longer a niche or sustainability-led initiative. It is taking measurable market share from traditional retail, with the global market projected to reach 393 billion dollars by 2030. ThredUp remains one of the sector’s leading players in the US.

Here, resale grew at nearly four times a faster rate than the overall apparel market, even outpacing its global trajectory, according to ThredUp’s latest Resale Report. Now in its 14th edition, the report has become both a diagnostic and strategic tool, tracking consumer behaviour and the structural forces shaping resale.

For ThredUp, these insights have driven a strategic shift from a high-volume marketplace to a more infrastructure-led model. Following a 2025 rebrand and a renewed focus on the US, after exiting Europe in 2024, the company reported revenue of 310.8 million dollars, up 20 percent year-over-year.

Speaking to FashionUnited, chief strategy officer, Alon Rotem, explained the brand refresh exhibited both maturity and market evolution: “We were a startup once, but we went public in 2021 and revenues are north of 300 million dollars at this point. As we’ve scaled, it’s been important to refresh our brand at intervals. What you see today is a more streamlined, cleaner look that is accessible for our entire customer base.”

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From demand-constrained to supply-constrained

ThredUp’s rebrand was a targeted effort to align its consumer-facing identity with the growing sophistication of the resale market. At its core is a cleaner, more elevated visual language, led by a new ‘infinity’ emblem: a thread-drawn ‘T’ symbolising circularity and the interconnected nature of secondhand fashion.

The update reflects the company’s shift towards a more polished, experience-driven platform, a pivot that is closely tied to a series of product upgrades on the site designed to enhance usability on both sides of the marketplace. For buyers, this includes AI-powered discovery tools, weekly trend edits, and more detailed listings with improved imagery and product data. For sellers, operational changes, such as streamlined doorstep pick-ups and transparent payout systems, aim to reduce friction and encourage participation.

This repositioning comes as resale increasingly transitions into a default starting point instead of an alternative channel. According to the report, 41 percent of consumers now look to secondhand first for value, while 46 percent browse resale before buying new. In the US, the market is projected to reach 78.8 billion dollars by 2030, adding 23.3 billion dollars in incremental value.

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Resale is no longer demand-constrained but limited by supply, forcing platforms to rethink seller incentives and logistics. Rotem noted: “The industry is now supply-constrained, not demand-constrained. Everyone wants the stuff. Now it’s up to the industry to go find all of the supply that’s out there and make it available.”

For ThredUp, the move from a solely transactional marketplace to a dual-sided platform is characterised by its Resale-as-a-Service (RaaS) offering, which since last year is now available to brands without platform fees. By embedding resale capabilities directly into retailers’ ecosystems, ThredUp is positioning itself as an established backend utility, providing the infrastructure in a market that remains operationally immature.

The rise of the ‘liquid closet’

Central to this shift is how consumers now view clothing as an asset rather than a sunk cost. According to the report, 60 percent consider resale value when buying new, while 57 percent resell for income, more than double last year. Rotem described this as a fundamental shift in consumer psychology. “[Gen Z] see their clothes as assets to be liquidated to fund the next purchase. The ‘digital closet’ will become a normal behaviour, allowing consumers to constantly ‘edit’ and rotate their wardrobe,” he explained.

This ‘liquid closet’ model is reshaping the design of resale platforms, making speed, convenience, and control more important than maximising resale price. This dynamic is reflected in the data, where 36 percent of consumers say they would sell more frequently if payouts were faster, while 31 percent of non-sellers said they would start reselling if AI automates the listing process.

In response, ThredUp introduced peer-to-peer listings, allowing sellers to retain control while accessing platform demand. Launched in late 2025, the feature has already doubled average selling prices. “The reason we added peer-to-peer wasn’t necessarily just to go ‘premium’. It was to serve the marketplace more broadly. We recognise many sellers want to retain control: they want to house the item, determine the pricing, take the photos, and answer the buyer questions. We want to be a unified platform where you have the best of both worlds,” Rotem noted.

Discovery beyond platforms

Nearly half of secondhand discovery (46 percent) now happens outside resale platforms, driven by social media and creators. This fragmentation is pushing retailers to reconsider where transactions begin. ThredUp itself has taken to experimenting with new distribution channels, including TikTok Shop. In January 2026, ThredUp sold around 100,000 Clean Out Kits via TikTok Shop, highlighting the power of passive discovery.

This shift towards social discovery has likely contributed to the company’s surge in buyer acquisition, with its active buyer base growing 30 percent last year. Rotem said: “Our job is to meet the customer where they are. We started selling Clean Out Kits on TikTok Shop and in the month of January, we sold something like a hundred thousand kits.”

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The ‘premium’ pivot, without going luxury

At the same time, ThredUp is recalibrating its assortment in response to shifting demand. Premium goods now account for 18 percent of revenue, though ThredUp maintains its position in the “middle ground,” with an average selling price of 25 to 30 dollars.

“We definitely want to continue to own the middle ground,” he added. “Even in our peer-to-peer beta, where pieces are two to three times higher, there’s a lot of distance between the value and the mass brands all the way up through premium and upscale before you get to the luxury space where items cost several hundred dollars. We think we can serve that whole market in between.”

Similarly, Rotem recognises a trend among consumers of combining affordable pieces with more upscale pieces in what he deemed as “high-low fashion”. The strategic positioning also aligns with consumers increasingly rejecting low-quality garments that cannot be resold. In the report, 49 percent of shoppers say they have already reduced purchases of such items, making the middle market a more scalable venture.

Solving the ‘single SKU’ problem with AI

Operationally, resale remains complex. Unlike traditional retail, inventory is non-standardised, with millions of unique items: what ThredUp calls a “single SKU” model. “Resale has inherently been a lot harder to shop,” Rotem explained. “On ThredUp, there are four or five million different items available at any given time. In order to find the needle in the haystack and make sure customers don’t feel “thrift overwhelmed”, we need to develop powerful tools.”

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AI is central to solving this, enabling product data extraction, visual search, and pricing optimisation, driving improvements in conversion, loyalty, and return rates. According to the report, 81 percent of AI users say it improves the resale experience, while 69 percent would use it to find specific items. AI is therefore helping to dismantle any friction that has previously defined secondhand shopping, enhancing efficiency in the process.

AI’s adoption throughout the industry has been met with both caution and acceptance, yet Rotem affirms that ThredUp itself has aimed to be thoughtful about its integration, ensuring continued internal discussions about how it is rolled out. “We are optimistic about how AI can benefit our business and our customers. When you look at resale versus traditional retail, AI advancements will disproportionately benefit resale,” he added. “If AI normalises resale behaviour and causes people to choose secondhand over new, we think that is a net positive for society.”

Resale as compliance and a competitive necessity

It would be hard to discuss the resale market without also acknowledging its place as in the circular economy. As regulatory pressures accelerate, so does the adoption of resale, particularly as Extended Producer Responsibility (EPR) frameworks and broader sustainability mandates begin to take hold in the US.

Brands and retailers are moving to either reevaluate their product lifecycles, or directly build resale into their operating models. While 66 percent of retailers view resale as a compliance tool, only 16 percent are equipped to scale it, and 58 percent see lacking a resale presence as a structural disadvantage. This gap between intent and capability is where ThredUp’s RaaS model is gaining traction. By removing platform fees and lowering the barrier to entry, the company is hoping to serve both as a compliance and commercial partner.

“Retailers totally get it now. Regulation is increasing the need for resale for compliance reasons, and they realise that from a supply chain standpoint, resale is a hedge against things like tariffs. But the gap is that while they know it’s a permanent structural disadvantage to lack a resale presence, the vast majority don’t have the resources to scale it yet,” Rotem elaborated.

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ThredUp has partnered with brands including Gap, J.Crew, and Tommy Hilfiger, while also enabling international players like Beyond Retro to access the US market. Though ThredUp had exited Europe in 2024, partnerships with retailers outside of the US suggests a different approach to tackling the region.

When asked about the future of ThredUp’s European ties, Rotem said: “It wasn’t a permanent retreat, it was a specific business decision to improve the financial profile of our US business as a public company and demonstrate profitable growth sooner. In the long run, we remain open to new opportunities.”

Profitability through platform evolution

While not yet profitable, ThredUp is shifting from volume-driven growth to a multi-layered model combining marketplace transactions, peer-to-peer listings, and B2B infrastructure. This strategy reflects a broader shift within the resale sector, requiring platforms to reduce operational friction and capture value across a garment’s entire lifecycle.

“The resale report tells us the market is growing not just in size, but in rate. Consumers are increasingly looking at secondhand first, which suggests it’s a better value proposition: price, availability, and sustainability all play a role,” Rotem said. “Our job is to execute on that opportunity by making sure we have great supply, from consumers’ closets and brand partners. In terms of whether we’re a retailer or infrastructure, the answer is both.”