Poshmark, the peer-to-peer mobile marketplace for members to buy and sell new and secondhand items, had a problem with its app: As users navigated through the millions of products posted by the company’s 2 million registered sellers, they’d often get lost in the never–ending scroll of clothing, beauty and accessories. If they got too far down the reselling rabbit hole, shoppers would drop off without making a purchase.
To solve this product oversaturation, Poshmark has built out the social arm of its social commerce app. Since its launch, shoppers have been able to follow sellers’ profiles, “like” products, comment on in-app boutiques and share items with other users. Now, with a newly redesigned “Shop” tab in the app, Poshmark is collecting that social engagement data, plus commerce data from searches and frequently visited brands and product categories, and is using it to help push customers to what they want to purchase.
“Shopping has always been an intensely social experience,” said John McDonald, head of product at Poshmark. “A lot of times, people were shopping through the app and interacted with a seller, or brand, or product. Then they lost their place. Instead of that cold navigational experience, we’ve personalized the feed to feature things you’ve shown interest in.”
Essentially, Poshmark will be using social behavior on its app as a way to retarget past products and seller profiles that the shopper expressed interest in. According to McDonald, this is both to keep shoppers engaged in the app and promote purchases, as well as to match customers to the sellers that they want to shop from, which will help sellers to grow their businesses. Poshmark CEO and founder Manish Chandra said that Poshmark’s top sellers have made up to $500,000 in a year through the app.
“It’s beyond online consignment,” said Chandra. “These sellers feel like stylists and curators. That’s a whole different experience. They become invested.”
Poshmark’s discovery feed on the left, and its new ‘Shop’ tab on the right.
Since launching in 2011, Poshmark has become a community-minded marketplace for self-made sellers who operate mobile-based consignment boutiques on the app. These sellers photograph, upload and price their items on their own, and unlike luxury resellers like The RealReal, they deal with brands at any price point, from Forever 21 to Chanel.
The company, according to its own reports, has close to 2 million registered sellers and millions of buyers, with crossover between the two being “north of 50 percent,” according to Poshmark head of product John McDonald. Sellers are uploading $3 million worth of inventory daily in the women’s, men’s and children’s clothing categories, as well as shoes, accessories and beauty. The company reports that its users spend about 20 minutes daily on the app and revisit it seven to eight times per day.
Poshmark, which has raised $70 million in funding, including a $25 million round in April, has kept expenses low while scaling growth. The company handles the logistics of shipping and returns and manages any disputes between buyers and sellers, but maintains a relatively hands-off approach to online consignment. Competitor ThredUp, for instance, takes items on a donation basis and sorts through products before selling what’s approved on the site.
Poshmark, meanwhile, puts as much power as it can in the hands of its sellers. The company has made updates in the past two years to its model that have helped promote the sellers’ in-app shops as if they were small businesses: It has expanded its categories, it has made partnerships with brands to sell items wholesale directly to Poshmark sellers, and now, it’s using shopper data to revert them back to the items they’ve interacted with.
“Poshmark makes it interesting because it’s peer-to-peer,” said Caryn Neary, founder of fashion incubator Bene Rialto. “So you have this idea of people following you, and you can start something else beyond reselling—like emerging designers could get first buyers for their own designs.”
Unlike luxury consignment platforms, like Vestiaire Collective and The RealReal, Poshmark isn’t concerned with feeding customer information to the brands that are performing on its platform. Instead, it wants to better inform its sellers so they can make more money, boosting the company at the same time. It hosts an annual user conference called PoshFest, during which it shares best practices and case studies from successful app sellers. It also shares trend reports about what’s performing through weekly Facebook Live updates and blog posts.
With the new Shop tab, Poshmark is building social user behavior directly into purchasing habits.
“That crowd is hungry for knowledge about what sells well,” said McDonald. “But what binds everyone together is the social aspect. To be successful, you have to be very engaged in the community. And the more you’re engaged, the more you’re shopping and spreading engagement, which drives retention for others.”
