The designer reseller Tradesy has bought styling service Fitz in a bid to match competitor The RealReal.
Tradesy has rebranded Fitz as Tradesy Closet Concierge, a new menu item granting sellers the option to hire a trained stylist to manage the resale process while also organizing their closet.
With Tradesy’s core model, sellers list items on their own through an app by loading a picture and entering its price. They then hold onto the item until it sells, when they ship it and pay Tradesy a commission of 19.8 percent. With the new service, which costs $400 per three-hour session, a stylist edits their wardrobe, breaking it down into what to keep, what to donate and what to resell, and handling next steps.
“We kept hearing that our users felt overwhelmed by their closets,” said Tracy DiNunzio, founder and CEO of Tradesy. “They wanted a way to be more organized and use the clothes they already had, and they wanted more guidance on what to shop for and what to sell.”
Fitz was co-founded in early 2017 by Alexandra Wilkis Wilson, who also co-founded Gilt and in-home beauty service Glamsquad. DiNunzio said, other than changing the name, Tradesy has no plans to touch the service as it stands: Fitz’s established resale partners for mid-tier fashion, including Pennsylvania-based Linda’s Stuff, will remain intact. However, all luxury items will be sold through Tradesy.
DiNunzio acknowledged that it’s early days, but said items listed through Tradesy Closet Concierge have been selling faster than those listed by sellers — an average of five to seven days, as opposed to the usual 14. She owed it to a professional overseeing what items are sold and pricing them.
Competitor The RealReal has long offered in-home pickup, alleviating the customer of pricing, listing and shipping processes. However, it pays consigners just 50 to 70 percent of an item’s going rate.
Today, peer-to-peer sellers have online options far beyond eBay, and the number is only increasing. Between 2013 and 2015, 23 venture-backed “re-commerce” sites launched, according to New York Magazine. Online fashion resale is currently a $2 billion market. And a report by Coresight Research (formerly Fung Global Retail & Technology) predicted the overall fashion resale will reach $33 billion in value by 2016, up from $18 billion in 2016.
The current leaders in the luxury space include The RealReal, which has raised $173 million to date and opened a physical store in New York last year, and Vestiaire Collective, which has claimed $130 million in investments and has 6 million members across 47 countries. Tradesy, opened in 2012, reports 7 million members and $80 million in funding, and it launched a by-appointment showroom in Santa Monica in November.
DiNunzio declined to comment on the cost of the acquisition, but shared Wilkis Wilson will stay on as a key advisor and will join the Tradesy board as an observer. Between Fitz and Glamsquad, she’s become an expert on in-home services.
“Today’s woman is time-starved,” Wilkis Wilson said. “When she can find a trick or hack or service that will giver her back some of her time and deliver her quality, she gets excited.”
She said, surprisingly, getting customers to sign on for a stranger to enter their closet proved more difficult than selling them on someone coming into their home do their hair or makeup. Women often have a “deep emotional connection” with clothes, she said. But, thanks in large part to word-of-mouth advertising, Fitz caught on: The company reports a Net Promoter Score, measuring customers’ willingness to recommend its services, of 100 (the highest possible score) and saw an unexpected number of repeat customers in the first year, with many hiring Fitz two to four times, said Wilkis Wilson.
To get Tradesy Concierge Service off the ground, DiNunzio said the company will employ targeted marketing across channels to existing customers in NYC, where the service is now offered, providing it to them free or at a significant discount. Concierge customers who consign with Tradesy will receive complimentary ongoing service, including regular communication and tips from a dedicated stylist and pickups of items when they’re ready to sell.
The Tradesy Concierge Service office will remain in NYC, though Tradesy is based in Los Angeles. By the end of the year, DiNunzio hopes to roll out the service to LA users, and eventually hopes to follow up with Houston, Dallas or San Francisco, where Tradesy has a large presence.
Competition for sellers’ business is heating up. In October, The RealReal entered a partnership with Stella McCartney, involving in the incorporation of The RealReal consignment services into Stella McCartney stores. And Vestiaire Collective has embarked on big expansion plans for the the Asia Pacific region.
DiNunzio said the crowded market isn’t a concern — in fact, it’s a good thing. “The startups in the space are starting to change customer behavior,” she said, noting that today, 18 percent of Tradesy’s target market has now sold something online, versus 3 percent at the company’s launch. “Our goal is to make every women who shops online a woman who sells online. We’ve barely scratched the surface of how big the market can be.”