2017 2021 RESALE REPORT FOREWORD We are in the early stages of a radical transformation in retail. Consumers are prioritizing sustainability, retailers are starting to embrace resale, and policy makers are getting on board with the circular economy. Pollutive industries have the power to transform when technological innovation collides with the motivations of consumers, businesses, and government. We’ve seen it with electric cars, solar energy, and next, circular fashion. With this year’s Resale Report, we hope to shine a light on the positive power of resale, and create a catalyst for further collaboration and action across the industry. – James Reinhart, thredUP Co Founder & CEO 01 RESALE INDUSTRY SIZE & IMPACT OF RESALE As it becomes easier to sell clothes online, more consumers are purging their closets. GlobalData 2021 Resale Consumer Survey Footprint of a New vs. Used Clothing Item5 *Assumes 30% of lifetime is complete when reused to calculate relative savings. **Assumes used item is bought on thredUP via data from GreenStory Inc., “Comparative Life Cycle Assessment (LCA) of secondhand vs new clothing (2019).” 02 RESALE INDUSTRY SECONDHAND IS TRANSFORMING CONSUMERS’ CLOSETS Used Clothes Continue To Gain Closet Share Welcome to the closet of the future. GlobalData Market Sizing and Growth Estimates 03 RESALE INDUSTRY WHO'S THRIFTING & WHY % of consumers who are shopping secondhand apparel. PERCENT OF EACH AGE GROUP THAT HAS PURCHASED SECONDHAND APPAREL, FOOTWEAR, OR ACCESSORIES2 Note: 2020 data includes responses from men & women. 2019 and prior data only includes responses from women. The 2020 responses for women only are Gen Z: 46:, Millennials: 46%, Gen X: 38%, Boomers: 20%. 04 RESALE INDUSTRY RESALE'S ROLE IN THE FUTURE OF FASHION What retail execs say is the best approach to getting into resale.6 05 RESALE INDUSTRY RESALE'S IMPACT IS GREATER WITH GOVERNMENT SUPPORT CURRENT Linear Fashion Around 70% of fashion’s GHG emissions come from upstream activities, such as fabric production. Throwaway fashion culture perpetuates the problem, with the average consumer discarding clothes after only 7 or 8 wears.8 FUTURE Circular Fashion Extending the life of clothes diverts textiles from landfills and displaces GHG used in garment production. Buying an item secondhand replaces the need to manufacture a new item, reducing its carbon footprint by 82%.5 06 RESALE INDUSTRY PANDEMIC RECOVERY As it becomes easier to sell clothes online, more consumers are purging their closets. GlobalData 2021 Resale Consumer Survey THREDUP IMPACT 01 THREDUP IMPACT: ENVIRONMENTAL THREDUP'S IMPACT AT A GLANCE 02 THREDUP IMPACT: ENVIRONMENTAL WE RECIRCULATE CLOTHES AT SCALE MANAGED MARKETPLACE We help our thrifters look great, save time and money, and lower their carbon footprints. Find out how our technology moves thrifted clothes from one closet to the next. Convenient Clean Out Kit It starts with someone using our Clean Out Kit to send their items to one of our distribution centers. Quality Inspection Every item goes through a 12-point inspection to ensure it’s fit for resale. Rejected items are diverted for reuse or recycling. Itemization Our proprietary algorithm, honed over a decade of clothing processing and selling, decides whether to list or reject the item. Price Analysis Machine-learning algorithms perform an analysis to determine the optimal listing price. Storage Our technology-driven storage and fulfillment make a highly complex process simple. Listing Those same algorithms also help us identify likely buyers when the item is listed for resale. Thrifted! The item is quickly purchased by a buyer and gets one final quality check before it’s shipped out to its new owner. 03 THREDUP IMPACT: ENVIRONMENTAL WE EDUCATE THE WORLD ABOUT FASHION WASTE 04 THREDUP IMPACT: ENVIRONMENTAL WE ARE COMMITTED TO REDUCING OUR OPERATIONAL IMPACT *When/if FSC Certified is not available, we use SFI Certified. 05 THREDUP IMPACT: SOCIAL WE ARE DEDICATED TO MAKING AN IMPACT IN THE LIVES OF OUR TEAM 06 THREDUP IMPACT: GOVERNANCE OUR GOVERNANCE EFFORTS KEEP US FOCUSED ON DOING GOOD RESALE REPORT 2021 METHODOLOGY & SOURCES Methodology thredUP’s Annual Resale Report contains research and data from GlobalData, a third-party retail analytics firm. GlobalData’s assessment of the secondhand market is determined through consumer surveys, retailer tracking, official public data, data sharing, store observation, and secondary sources. These inputs are used by analysts to model and calculate market sizes, channel sizes, and market shares. Further, for the purpose of this report, GlobalData conducted a March and April 2021 survey of 3,500 American adults over 18, asking specific questions about their behaviors and preferences for secondhand. thredUP’s Resale Report also leverages data from the following sources: Green Story Inc. research and internal thredUP customer and brand performance data. View all sources here. Disclosure: All third-party brand names and logos appearing in this report are trademarks or registered trademarks of their respective holders. Any such appearance does not imply any affiliation with or endorsement of thredUP. Published: June 2021 Retail Sector Definitions Secondhand: Consumption of all used apparel. Includes both the Resale sector and the Thrift & Donation sector. Donation & Thrift: A sector of the broader ‘secondhand’ market that includes traditional options such as Goodwill, Salvation Army, and yard sales. These secondhand options are primarily, but not exclusively, offline. Resale: A sector of the broader ‘secondhand’ market that includes more curated product assortments, often well merchandised and/or higher end. Examples include thredUP and TheRealReal as well as upscale offline players like Buffalo Exchange. These secondhand options are primarily, but not exclusively, online. Secondhand Products: Consumption of all used apparel, footwear, accessories, books, furniture, entertainment, and beauty. Department Stores: A type of general retail store, wherein the retailer displays products within distinct departments, often located on separate floors, specializing in defined product areas. Examples include Bloomingdale's, Macy's, JCPenney, Nordstrom. Off-Price: A retailer that sells items at lower prices than those typically charged by retail businesses. Off-price stores typically purchase overstocked goods or make special purchases. Examples include TJ Maxx, Marshalls, Ross, Burlington Coat Factory. Value Chains: Value stores are a retail format that sells inexpensive items, at a single or limited number of price points. Examples include Walmart, Target, Dollar Tree. Mid-Priced Specialty: Specialist clothing retailers operating in the middle of the market in terms of price. Not value but not premium or luxury. They tend to be found in malls or traditional main street locations. Examples include Gap, Ann Taylor, J. Crew. Fast Fashion: Specialist clothing retailers with a fast stock turnaround and whose business models rely on selling high volumes at (usually) inexpensive price points. Examples include Zara, H&M, Forever 21. Direct-to-Consumer: Specialists and generalists selling clothing directly to the public. Primarily online only. Excludes C2C or auction type sites, and the online side of traditional retail businesses. Examples include Everlane, Warby Parker, Outdoor Voices. Sustainable Fashion: Apparel that has been produced, sold, and distributed in such a way as to minimize, as much as possible, any damaging social and environmental impact. To be classified as sustainable, a company must reduce negative impacts at multiple stages of the supply chain and of the product’s lifecycle. Examples include Reformation, Allbirds, Eileen Fisher, Patagonia. Amazon: Amazon's clothing sales in the US, stated at gross merchandise value. Subscription: Subscription-based services for clothing. Excludes non-clothing elements of subscription models, and rental services. Examples include StitchFix and Trunk Club. Other: Sales of clothing from all other sources, including grocers and supermarkets, drug stores, duty-free, warehouse clubs, variety stores, other non-clothing specialists, and convenience stores. Primary Sources 1. GlobalData Market Sizing: GlobalData’s assessment of the secondhand market is determined through ongoing retailer tracking, official public data, data sharing, store observation, consumer surveys, and secondary sources. These inputs are used by analysts to model and calculate market sizes, channel sizes, and market shares. Market data analysis included in this report was done in April, 2021. 2. GlobalData Consumer Survey: The consumer data in this report is derived from a consumer survey of 3,500 U.S. adults. The survey asked them a number of questions about their attitudes towards apparel, secondhand products, and resale products. The sample was designed to be representative of age and income and was also geographically representative. Surveying was undertaken by GlobalData in March and April, 2021. Note: Survey data from prior years only sampled U.S. women. Secondary Sources 3. EPA Clothing and Footwear Waste Estimates 4. Internal thredUP Customer Behavior / Data 5. Green Story Inc. Environmental Study: Independent research firm, Green Story Inc., was contracted to calculate the environmental savings from reuse of secondhand garments sold by thredUP. The study compared the environmental burden of purchasing a brand-new garment with that of reusing an average garment sold by thredUP across all stages of the garment’s lifecycle. The savings were calculated across three areas: greenhouse gas emissions, energy use, and water consumption. The study followed international ISO 14040 LCA standard. 6. GlobalData Fashion Retailer Survey: 50 U.S. fashion (apparel, accessories, footwear) retailers were surveyed in March and April, 2021 about their Circular Fashion goals. 7. World Bank Report “How Much Do Our Wardrobes Cost to the Environment?” September 23, 2019 8. McKinsey’s 2020 “Fashion on Climate” Report 9. Ellen MacArthur Foundation 10. The estimated retail price of an item is based on the estimated original retail price of a comparable item of the same quality, construction and material offered elsewhere in new condition. Our estimated original retail prices are set by our team of merchants who periodically monitor market prices for the brands and styles that we offer on our marketplace. Disclaimer This Resale Report contains forward-looking statements. thredUP has based these statements largely on its current expectations and assumptions, and on information available as of the date of this report. However, we operate in a competitive, new, and rapidly changing market. New risks may emerge. thredUP assumes no obligation to update any forward-looking statements after the date of this report, except as required by law. This Resale Report also contains estimates and other statistical data made by independent parties and by thredUP relating to market size, growth and other industry data. This data involves a number of assumptions and limitations. thredUP has not independently verified the data generated by independent parties and cannot guarantee accuracy or completeness. Projections and assumptions about the future performance of the markets in which thredUP competes are subject to a high degree of uncertainty. These and other factors could cause results or outcomes to differ materially from those expressed.