• by Sarah Mahoney  @mahoney_sarah, August 6, 2024

ThredUp, the ecommerce platform offering more than four million pieces of used apparel, has hit plenty of speed bumps lately. The Oakland, California-based tech company unveiled a new suite of AI-powered shopping tools, hoping it can regain its sales momentum by making it faster and easier for people to find exactly what they're looking for.

The features include improved search, which lets customers use natural language, like "floral dresses" or "swimsuit for a triathlon." It’s adding an image search, which allows people to upload, snap or share a photo, leading to matching or similar items in inventory. It also includes a style chat, with chatbots that help users find complete looks, like “outfits for a Cape Cod fall wedding” or “what to wear on a Disney Bahamas cruise.”

“AI presents an enormous leap forward for secondhand shopping by bringing emotion and storytelling to the millions of unique shopping journeys that happen regularly on ThredUp,” says James Reinhart, chief executive officer, in the announcement. “Generative AI technology is accelerating how we’re changing how consumers shop and providing the easiest and most fun way to shop sustainably.”

The company says the new tools are its most significant product launch since it started more than a decade ago.

The news comes as ThredUp posted second-quarter financial results that fell short of expectations. Revenue dropped 4% to $79.8 million, and it recorded a net loss of $14 million. Active buyers, a key measure of brand health, also dropped, slipping 3% to 1.7 million for the quarter, with orders declining 6%.

In an earnings call webcast for investors, Reinhart called the quarter “challenging” and cited struggles in the European business. “We also experimented in the U.S. with initiatives around new forms of customer acquisition and promotions, and they simply didn’t perform the way we expected,” he says, including cutbacks on marketing. “And we are operating in an incrementally more challenging consumer environment, where the compounding effects of inflation continue to hurt our core customers.” 

Moving forward, “we are going live with our 'endless expression' marketing campaign that launches our new AI shopping products to all customers,” he says. “We believe that AI disproportionately benefits our business relative to other marketplaces and retailers. And as consumers become more accustomed to these types of products in their lives, we believe we will see significant upside in our business.”