Inside ThredUp: How AI and Resale Are Redefining the Future of Fashion
Inside a massive facility in Suwanee, Georgia, rows upon rows of clothes hang suspended from the ceiling—stretching as far as the eye can see. This isn’t a regular warehouse. It’s home to the largest garment-on-hanger system in the world, capable of storing up to 3.5 million pieces of clothing.
Every day, ThredUp, one of America’s biggest resale platforms, gives a new life to around 40,000 used garments. Over 100,000 items arrive here daily—proof that secondhand fashion is no longer a niche idea; it’s a cultural and economic movement.
Not a Thrift Store—A Tech Company in Disguise
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ThredUp doesn’t call itself a thrift store. Instead, it operates like a hybrid of Silicon Valley and retail, part logistics network, part e-commerce giant.
Its promise is simple: “We do the work for you.”
Sellers receive a “Clean Out Kit,” fill it with clothes they no longer wear, and send it off. From there, ThredUp handles everything—inspection, photography, pricing, and listing. Buyers, meanwhile, enjoy a seamless shopping experience similar to any modern online store.
This model has struck a chord—especially with Gen Z shoppers, who are driving the global shift toward secondhand fashion. Rising inflation, higher tariffs, and the search for sustainability have all played their part in this evolution.
The Secondhand Boom
According to market forecasts, the global secondhand apparel industry could reach $367 billion by 2029, expanding nearly three times faster than the overall fashion market.
Americans, once obsessed with fast fashion, are now rethinking value. For some, resale platforms are a way to save money amid economic uncertainty; for others, they’re a side hustle—a chance to earn extra income as living costs climb.
AI Is Changing How We Shop
A new force is now reshaping the resale revolution: artificial intelligence.
Fashion-tech startups like Phia, founded by Phoebe Gates and Sophia Kianni, are creating AI-powered tools that allow users to compare thousands of listings across new and secondhand marketplaces in seconds.
Phia’s algorithms don’t just find items—they learn your taste. Soon, your shopping feed could look more like a curated discovery page than a product list.
AI is turning secondhand fashion from a treasure hunt into a personalized experience. You can search for anything—“Nantucket wedding,” “4th of July outfit,” even “eco-chic office wear”—and get instant results that match your vibe and your budget.
Inside ThredUp’s Engine
Every item that passes through ThredUp’s facilities is sourced, sorted, photographed, and shipped entirely within the U.S. There are no overseas supply chains—just domestic efficiency powered by automation and human precision.
When the Suwanee center first opened in 2020, barcode labeling was done manually—one item at a time. Today, a single employee can handle that process thanks to automation. Across four major U.S. facilities, ThredUp processes hundreds of thousands of secondhand pieces each week.
And quality control? It’s personal. The final packers are the last people to touch an item before it reaches its new owner. They’re not just packaging clothing; they’re protecting trust.
How Tariffs Helped Resale Thrive
Ironically, tariffs meant to revive domestic manufacturing have boosted the resale economy instead.
Nearly 97% of clothing sold in the U.S. still comes from abroad—mostly China, Vietnam, Bangladesh, and India. With new tariffs driving up import costs, resale platforms have become a safe harbor for price-conscious shoppers.
Consumers are tired of inflation. Prices briefly stabilized in 2024, but began rising again in 2025. As a result, people are embracing resale not as a “downgrade,” but as a smart, stylish, and sustainable alternative.
The Business of Being Second Hand
The results speak for themselves.
In its third-quarter 2025 earnings, ThredUp reported a 34% revenue increase year-over-year, and its new buyer growth jumped 54%—the highest in company history.
Its stock, after years of stagnation, has soared over 1,000% in the past year. Meanwhile, competitors like Depop and OfferUp are riding the same wave, and even Amazon has dipped its toes into pre-loved fashion.
Why Shoppers Are Hooked
Younger generations—Gen Z and Millennials—are leading this transformation. They seek affordability and sustainability, values that fast fashion often fails to combine. Resale bridges that gap perfectly.
By 2029, new shoppers will represent 60% of all secondhand spending, with younger consumers making up nearly 70% of the total.
The stigma that once surrounded “used clothes” has faded. For many, wearing pre-owned items is now a statement of individuality and conscious living.
What Comes Next
As AI-driven tools continue to evolve, shopping secondhand will become smarter, faster, and more personal. Retailers and brands will need to understand what “value” means to their specific audience—because value no longer just means low prices; it means ethics, uniqueness, and expression.
Resale isn’t just a passing trend—it’s reshaping the heart of American fashion. The future of style will be sustainable, personalized, and deeply human.
And most of it?
It’s already hanging right here—in warehouses like ThredUp’s, waiting for a second chance to be loved again.
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