Social commerce marketplace Poshmark is known for a high pace of innovation and growth, but as the platform has gained more users and more inventory, it has become harder for shoppers to discover items that are most relevant to them.
In what appears to be a simple shift, but what was a major undertaking from a data perspective, Poshmark today makes an update that separates its app into six entirely separate user experiences.
Called “Posh Markets,” the first categories are women’s, men’s, kids, boutiques (meaning only retail, rather than resale), plus-size and luxury. Shoppers of each are treated as individual communities, and experiences are tailored to each category through the app’s feed, showrooms (curated collections from all the Poshmark closets) and “Posh Parties” (real-time virtual shopping events where shoppers “meet up” in the app to shop). Items can appear in more than one category, and the seller experience does not change. Each market is available through a drop-down menu.
Previously, the assortment was a mix, but shoppers could choose to search from different categories or subcategories — as long as they knew what they were looking for. But if, for example, a parent used the app to shop for both themselves and their children, a browsing session through Poshmark’s more than 75 million items and 5,000 brands was not likely to be as personalized. Now, if they select, for example, “women’s,” any seller’s store they visit will only surface relevant results.
Founder and CEO Manish Chandra compared it to visiting a shopping mall that only shows merchandise from stores that is relevant. The separate sections will easily allow for new separate categories to the app, as they are all accessed through a drop-down menu that navigates to each individual “experience.” New categories such as streetwear, home decor and beauty are all “markets of interest,” Chandra said, adding that this enhances the potential for each community to grow into a billion-dollar business. It also means that Poshmark can curate experiences geographically (for example, items available in Canada), thematically, for an event such as Coachella or for specific partnerships, without creating niche standalone apps.
“The launch of Posh Markets positions us for massive growth, allowing social commerce to penetrate all areas of e-commerce, taking on an even greater segment of the industry,” Chandra said.
This May, Poshmark announced that it had crossed the billion-dollar mark, meaning it had payed out more than $1 billion to those who had sold on the platform. Sellers, of whom there are more than 4 million total according to the company, can make as much as six figures, with some even making more than $1 million.
The company makes money by taking 20 percent of each sale of $15 or more (and a flat rate of $2.95 on those that are priced less), and also by selling wholesale merchandise to some sellers through what it calls a “wholesale portal.” In the last five years, Poshmark reports growing tenfold in gross merchandise sales and revenue. Its men’s segment is also quickly growing, with one in five new users joining Poshmark being a man.
The company reports that users spend an average of 25 minutes a day in the app, and open it seven to nine times a day. (That’s roughly half as much time as Android users spend on Instagram or Snapchat, according to recent numbers from SimilarWeb as reported by Recode.)
Since being founded in 2011, Poshmark has attracted almost $160 million in funding, with investors including Ashton Kutcher and Rachel Zoe. Poshmark has also sold items from the closets of Kutcher, in addition to DJ Khaled and Rachael Ray.
The company has also extended its social-selling business to outside platforms: Later this fall, Poshmark will share the results of a first-of-it-kind partnership with Snapchat. Poshmark was the first fashion and retail partner to have access to Snap Kit, Snapchat’s new developer platform that allows Poshmark sellers to both link in to and out of Snapchat. For example, a seller can post a Snapchat video wearing an outfit and link to their Poshmark page selling that look; notably, the seller can also link out to their Snapchat video from within the Poshmark app, and embed the video within Poshmark so that a shopper can view it without leaving Poshmark.
A Snapchat post linking to Poshmark
This is unique among social platforms and video shopping, as Instagram, for example, does not allow other apps to display or link to its Stories. (Instagram does allow brands to sell directly from an Instagram Story, but not influencers or, in this case, Poshmark sellers.)
Although Snap’s approximately 190 million users pales in comparison to Instagram’s 500 million or more, “Snapchat continues to have a stronghold on the Gen-Z demographic, a tricky group of shoppers that marketers have yet to fully figure out,” said Kamiu Lee, CEO of influencer network Activate.
Chandra said that harnessing video shopping is crucial. “Seeing it in real life and in action on people is very inspiring,” he said, adding that one of his early visions was that a woman could take a selfie in a dress at a party and sell it. “As soon as you’ve worn it, that dress is obsolete.”