ThredUp wants to make secondhand a flawless fit for consumers.
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The company announced Monday it had released three new consumer-facing AI tools to enhance the shopping experience.
On the same day it announced a challenging second quarter and revealed it would divest its European business, the secondhand platform looked to the tools as a source of optimism and a shot at attracting and retaining shoppers.
The first capability, which the company calls Style Chat, allows users to prompt a generative AI chatbot and receive outfit inspiration in return. For example, a user might ask Style Chat for “a formal outfit for a fall wedding in a ski town.”
Style Chat may then return floor length dresses, heels and purses fit for a formal event.
Other new capabilities include improved search designed for natural language queries like “ denim jorts” or “sweater for work” and image search, which allows users to upload photos of items and be matched with similar items from ThredUp’s stock.
James Reinhart, ThredUp’s CEO and co-founder, said the data the company has accumulated over the years about its products and users helped build the systems to make these AI-powered tools a reality.
“We have been building this dataset for a decade, and it’s just now that we are able to take a lot of what we have been able to build and use it in new, creative ways,” he told Sourcing Journal.
Reinhart said he sees a major opportunity for those three tools—and others the company plans to release in the future—to make the shopping experience easier for customers. Part of that is because many people choose different styles of clothing for different pieces of their lives; a person might wear a different outfit to work than they would to go to dinner with friends or do chores around the house.
“Our average person has these personas. Where I see this incredible opportunity is, once you’ve given us, ‘Hey, these are my personas, and this is generally how my style manifests itself,’ you can save that in ThredUp, and then every day, every week, every month, on whatever cadence, we can populate your own personal thrift store based on exactly what you’re looking for. There’s real power in that from a repeat perspective,” Reinhart told Sourcing Journal.
Though personalization and customer experience have been hot topics among retailers experimenting with AI, part of the balance in implementing systems can be guiding customers in how to use them. Reinhart said ensuring consumers feel comfortable using ThredUp’s new tools is “something [he’s] very passionate about right now.”
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But rather than “scream from the rooftops” about the new tools, the company wants to meet consumers where they might struggle or appreciate some additional assistance.
“What we’re trying to do is intervene at the right moment for the customer,” he said. “We’ve built a really dynamic outfitting tool that I think people are going to love; it’s native to that [customer] journey.”
ThredUp’s new AI suite, which Reinhart said is a testament to the company’s culture and priorities, didn’t come to fruition without some difficult choices. Earlier this year, the company laid off about 25 percent of its staff; Reinhart has since disclosed that part of the reason for the layoffs was to go all in on AI.
He said the adjustment period has, in some ways, proven difficult. Some days, he wonders if he made the right choices. But overall, he said, the culture has shifted since those layoffs, noting that the company’s current employees have higher degrees of collaboration and an intense focus on how technology can better the organization.
“Teams are much more engineering led, data science led and culturally, it’s a different approach. We have fewer silos and more cross-functional teams, and [we’re] much more technology first than we’ve been in a very long time,” he said.
That laser focus on technology has also allowed employees to build some of the AI systems it has implemented; Reinhart did say some of those systems have been bolstered by partners, whether big players like OpenAI or smaller startups.
“Generally, the locus of all of the build is in house, which allows us to rapidly iterate and improve on it,” he said.
Reinhart declined to share his predictions for the financial impacts of new technology on ThredUp and its business model, but he noted that he and other executives will keep an eye on metrics like conversion rates, retention and average order values.
In his world, after all, it’s all about the consumer.
“We want to be known as a company that’s really pushing the consumer-facing opportunity forward. There’s a lot of AI bears out there that are like, ‘This stuff is never going to work for the consumer… Not every company will benefit from this the way that we might, so I’m really all in on the idea of what’s really developed with the customer in mind,” he said. “There’s a technology shift that’s going on with AI that will fundamentally change the way we deliver thrift and secondhand to the customer.”
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