Ecommerce Company ThredUP Rolls Out AI-Powered ‘Goody Boxes’ to Rival Discount Clothing Chains

A digital service takes on T.J. Maxx, Ross and others

ThredUP created Goody Boxes to compete with big name retailers like T.J. Maxx.
ThredUP

For shoppers who absolutely love a good deal but hate hunting through racks, ecommerce company thredUP has a new offering just for them. The secondhand retailer has launched Goody Boxes–a non-subscription, no commitment box filled with discounted items for purchase. Over time, thredUP’s Goody Boxes will learn your tastes, using a machine learning algorithm to figure out what you like and dislike based on what you keep and what you send back, essentially taking the rack hunting out of shopping.

Here’s how it works: For a deposit of $20, the company will send a box filled with 10 to 20 secondhand items to customers to try on. Consumers can keep what they like and send back any items they don’t want. Once the unwanted items are sent back, the company charges you for the items that you keep.

“A lot of these other services, you might pay $20 but then the cheapest thing in the box is $75. You end up having to spend so much more,” James Reinhart, CEO of thredUP, said. “Unlike some other services where it is three, four or five items, we swing the pendulum the other way. We send you a whole bunch of stuff because we know that if we send you a lot of things at great prices, that you will keep a lot of stuff.”

“One really important principle for us is that we don’t want people to feel pressured to keep anything,” added Reinhart. That’s why many of the items included in a Goody Box are priced in the $20 range.

For those unfamiliar with thredUP, the brand gives out bags (about the size of laundry bag) to help people clean out their closets. “We pick [the bag] up from your house and then we take care of it. Everything we can sell we put online and we pay you for it,” Reinhart said.

With the new Goody Boxes, thredUP will be taking its inventory—which includes over 35,000 brands—and creating custom boxes for shoppers based on size, occasion and style preference. To begin, the company will offer three themes of boxes including cold weather essentials, holiday party and office styles.

Office styles, for example, comes with eight to 15 items appropriate for the workplace. A box might include pants, skirts and blouses from different brands (Gap to Gucci) at up to 90 percent off retail price.

One of the most unique parts of these Goody Boxes, at least from the brand’s perspective, is the way the boxes are filled. Customers complete a style quiz before selecting a box (something many subscription services use to learn more about shoppers), but the brand has its own machine learning algorithm to scan the brand’s inventory and make each box as relevant to the consumer as possible.

As people continue ordering boxes at their leisure, the website learns more about what each shopper likes and doesn’t like based on what they keep, return or favorite on the thredUP website.

With the move, Reinhart feels thredUP can take on some of its biggest rivals–bargain stores such as T.J. Maxx and Ross.

“We can deliver you incredible value and convenience in a way that I think shopping at an off-price store … you might get a good deal, but you kind of have to be there on a Tuesday at 3 p.m. to find it. We eliminate some of that friction,” Reinhart said. “When we survey new customers about where they would have purchased something if thredUp wasn’t around, more than 50 percent say they would have bought it at T.J. Maxx or Ross, so we feel like we are continuing to eat into the share of those off price retailers over time.”

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