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For some consumers, swapping is replacing shopping

Exchange websites allow people to get toys, clothing and other goods without spending much cash or going to a mall. The phenomenon signals a shift in Americans' outlook on commerce.

December 17, 2010|By Sandra M. Jones

Early this fall, James Reinhart noticed something odd happening at ThredUp, the children's clothing swap site the Harvard Business School graduate and his buddies dreamed up a year ago.

Swappers started using the online exchange to trade toys. As the volume of toy trading increased, ThredUp decided there was enough demand to expand its service. The San Francisco start-up officially launched its toy exchange site Dec. 6, just as holiday shopping shifted into full gear.

The turn of events at ThredUp signals how dramatically shopping is changing in the wake of the Great Recession. Stung by the global financial crisis, plugged into social media and worried about the future of the environment, consumers are taking matters into their own hands, finding ways to get what they want without cash and without going to the mall.

The pundits have different names for the phenomenon. Community commerce. Secondhand nation. Conscious consuming. Meshing. Whatever the label, a new shopping mind-set has sprouted from the recession in which access to goods trumps ownership, and consumers create their own rules.

"There's been a long-term shift from mindless to mindful consumption," said John Gerzema, chief insights officer at New York ad agency Young & Rubicam and author of the book "Spend Shift." "People are realizing that thrift isn't a bad word. And we're very comfortable using social tools. The old way of spending doesn't have to happen. We can rent it, borrow it, trade it."

Social innovator Rachel Botsman estimates that there are thousands of swap marketplaces springing up around the world. One reason: It feels good to get rid of clutter and know that it's being put to good use.

"Technology creates the efficiency to match millions of 'haves' with millions of 'wants,' whatever they may be, as well as the social glue to create trust between strangers," said Botsman, coauthor of "What's Mine Is Yours: The Rise of Collaborative Consumption." "Swapping can provide almost as much choice as traditional shopping."

Bonnie Kulenkamp, a 30-year-old mom and grade-school teacher from Indianapolis, discovered ThredUp this summer after adopting a child. Her house was filled with gifts for a baby boy, but in the end she and her husband adopted a baby girl. So she packed up the blue clothing and swapped it for pink duds.

"Little kids grow out of clothing so quickly," Kulenkamp said. "I like that I can trade things she's outgrown and get a whole new box of things that fit her. We don't have extra money to buy new things, especially when they don't wear it for very long."

ThredUp began as an adult clothing swap site in September 2009 but changed its focus to children's clothing in April. In October, it held a Halloween costume swap. It has 50,000 registered members and swaps more than 1,000 boxes of clothing a week. Recently there were more than 5,000 boxes listed on the site, including more than 300 containing toys.

ThredUp works like this: A potential buyer browses "boxes" on the site, makes a selection and pays $5 plus shipping per box, typically bringing the total to about $15. Senders list the items in the boxes. ThredUp provides the shipping boxes and labels, as well as scheduling the home pickup.

The company, advised by Netflix Inc. Chief Executive Reed Hastings, claims to save the average family $569 a year. It estimates that its clothing and toy swaps will save families a combined $500,000 in spending over the holidays. Next year ThredUp will look into working with Meetup.com, a network of local groups, to host face-to-face swaps for bigger items such as strollers and children's skis.

"It's really the beginning of a much bigger trend," said Reinhart, ThredUp's CEO. "Fractional ownership and sharing are something people are doing more of, not just because it's good for their wallets, but people are also seeing it as good for the environment."

For years, Americans have kept the economy growing by buying more stuff. Now they find themselves waking up with a stuff hangover, said Lisa Gansky, a technology entrepreneur and author of "The Mesh: Why the Future of Business Is Sharing."

The rise of online swapping is just the start of a broader consumer movement away from throwaway goods, Gansky said.

Shoppers have thrived for years — and still do — on disposable fashion from the likes of Target, Forever 21 and H&M. They stretched to buy big houses and turned the homes into credit machines. Now the pendulum is swinging the other way.

"What's happening is that what we used to call waste actually has a lot of value in it," Gansky said. "A few years ago my toaster broke when my friend was here visiting from South America, and she asked, 'Where do I go to get this fixed?' When I heard myself say, 'It's cheaper to buy a new one,' I realized there was something wrong with this sentence."

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