The social shopping app is taking a page from Instagram and rolling out 15-second, user-generated … [+]
Poshmark is joining the social media juggernauts capitalizing on a captive consumer base by adding a video feature to its fashion marketplace that aims to make shopping for used clothing on your phone feel more like, well, shopping.
With stores and restaurants shuttered and millions of people stuck at home, platforms like Zoom, TikTok and Instagram are thriving, and now the San Francisco-based business, which sells used clothing, shoes and accessories, will allow its eight million sellers to post live 15-second videos or upload footage from their phones that links directly to the items they are selling.
Poshmark was founded by Manish Chandra, Tracy Sun, Gautam Golwala and Chetan Pungaliya in 2011 as a way for women to sell clothes they no longer wore. The app lets them “like” and comment on other people’s listings, which helped make Poshmark a more personal experience than shopping for secondhand stuff on eBay. It has since expanded into categories like menswear, kids and home décor, taking a 20% cut on sales. In 2019, it said it paid out $2 billion to sellers, double the previous year. It was reportedly valued at $1.25 billion after some existing investors sold shares in a secondary transaction last year, according to the Wall Street Journal.
The company has been building and testing a video option for over a year and planned to roll it out in the second half of 2020 but fast-tracked the launch due to the pandemic so it could offer more of a “real-world experience” to shoppers. The new feature allows sellers to show off the ways they styled an outfit they have for sale or give the backstory on how they acquired a particular item, for instance. The content will automatically disappear after 48 hours.
The feature mimics Instagram, which lets influencers and brands tag clothing, furniture or other items in their posts and link to a website where it is available for purchase. Instagram has been doubling down on its shopping features and last year began allowing customers the ability to checkout from some retailers without leaving the app. Social shopping apps such as LikeToKnow.It also offer people the ability to shop the looks that they see on celebrities and influencers. However, none allow for the purchase of secondhand clothing, a segment that is growing 21 times faster than the overall apparel market.
“Physical retail is challenged in this environment,” says Chandra, 52, CEO. “People are looking and turning in so many ways to online.”
Chandra is hoping that video will increase engagement and sales among its 60 million registered users, who spend an average of 23 to 27 minutes per day on the Poshmark app. With purchases generally correlating to time spent on a service, Poshmark sees this as a way to forge a better connection between buyers and sellers, and help move the $175 million worth of inventory that gets uploaded to its platform every week (Poshmark doesn’t hold any inventory, leaving users to buy and sell directly from each other).
While many retailers are struggling amid prolonged store closures and a looming recession that has cut into discretionary spending, Chandra says that Poshmark’s business has been fairly steady. A wave of new sellers have turned to the platform for supplemental income after cleaning out their closets or even as a main source of income. The bigger challenge is demand. Poshmark is reliant on apparel sales, which dropped a whopping 52% on a national level in March, according to the Department of Commerce. Chandra declined to provide specifics, but says demand has picked up after lagging at first.
“We were concerned in the early days of the crisis,” says Chandra. “But it seems to have balanced out.”