Poshmark CEO: Influencers 'pretty much driving our consumption'

Summary

Poshmark CEO Manish Chandra discusses the impact of inflation and post-pandemic consumer behavior on the second-hand fashion market. Despite a spending slowdown, Chandra notes an uptick in sales towards the end of June, driven by fast-moving trends and the platform's social experience. Poshmark's new features, like live streaming and Posh Lens, aim to boost user engagement and make finding items easier. Chandra highlights the platform's community-driven approach and its appeal to a wide range of consumers, including the potential to capture an older demographic through selection, sustainability, and economic benefits.

Takeaways

• 📉 Inflation is easing, but there is a noted slowdown in spending growth, impacting the consumer retail sector.
• 🛍️ Poshmark, a platform in the second-hand fashion market, has observed changes in consumer spending due to inflation and shifting post-pandemic preferences.
• 🔄 There is a recent uptick in spending towards the end of June and the beginning of July, indicating a potential positive trend for the back-to-school season.
• 👜 Consumers are adapting quickly to fashion trends, with significant year-over-year sales increases for brands like Coach and Loro Piana.
• 🤳 Poshmark introduced live streaming in April, which has quickly scaled and contributed to user engagement on the platform.
• 💼 As a business leader, Manish Chandra discusses navigating the uncertain economic environment and Poshmark's role in helping consumers save money and make money through resale.
• 📈 Despite a slowdown in 2022, Poshmark is optimistic about long-term growth due to new trends and the platform's inventory flexibility.
• 🕶️ Poshmark is leveraging AI with a new feature called Posh Lens, which matches user-uploaded photos to find similar items, enhancing the shopping experience.
• 🤝 The platform's community engagement and inventory breadth make it an attractive partner for brands looking to connect with a diverse user base.
• 👗 Influencers and creators are key drivers of consumption on Poshmark, helping to shape fashion trends and community interests.
• 🌐 Poshmark aims to capture a broader demographic by increasing selection, reducing the stigma around second-hand shopping, and emphasizing economic and environmental benefits.

Q & A

What economic conditions are currently affecting the consumer market according to the transcript?

The transcript mentions that inflation is easing but there is a slowdown in spending growth, indicating that high inflation and a shift in consumer spending towards experiences like travel are affecting the consumer market.

How does Poshmark CEO Manish Chandra describe the current trends in consumer spending on the platform?

Manish Chandra notes a slowdown in spending due to inflation and a post-COVID shift towards travel. However, he also mentions an acceleration in spending towards the end of June and beginning of July, which he views as a positive sign.

What is the impact of younger consumers on the trends seen on Poshmark?

Younger consumers are rapidly adapting to different fashion trends, such as 'Barbiecore' and 'Y2K', which are driving significant year-over-year sales increases for brands like Coach and Loro Piana on Poshmark.

How has Poshmark enhanced user engagement on its platform?

Poshmark introduced live streaming in April, which has been scaling fast and hosting over a hundred thousand shows per month, facilitating buying, selling, and auctioning, thus keeping users engaged.

What challenges and opportunities does Manish Chandra see for Poshmark in the current economic environment?

While there has been a slowdown in spending, Manish Chandra sees opportunities in the platform's ability to offer discounted shopping and income opportunities for consumers, which can be beneficial during stressful economic times.

How does Poshmark's business model benefit from not holding inventory?

Poshmark's model allows for quick adaptation to current trends and consumer demands without the burden of inventory, which can be an accelerator for long-term growth.

What is the new feature 'Posh Lens' and how does it work?

Posh Lens is a feature developed in partnership with the South Korean company Naver, which allows users to upload a photo of an item they like and find matches across Poshmark's extensive inventory.

How does Poshmark's community engagement impact its business strategy?

Poshmark's vibrant community of over 100 million users is a significant asset, as it recycles millions of items and provides a platform for brands to engage with a massive and highly engaged user base.

What role do influencers play in Poshmark's ecosystem?

Influencers and creators are crucial in driving consumption and trends within Poshmark's micro-communities, which cater to specific interests and fashion needs.

How does Poshmark plan to capture an older demographic?

Poshmark aims to capture an older demographic by increasing the selection of items available, reducing the stigma associated with second-hand shopping, and emphasizing the economic and environmental benefits of resale.

What are the long-term growth drivers for Poshmark as identified by Manish Chandra?

The long-term growth drivers for Poshmark include new trends like live shopping, the fast-moving velocity of consumer demands post-COVID, and the platform's ability to offer both shopping and income opportunities.

Outlines

00:00

🛍️ Consumer Spending Amidst Inflation and Shifting Trends

Poshmark CEO Manish Chandra discusses the impact of inflation on consumer spending and the second-hand fashion market. Despite a slowdown in spending due to inflation and a post-COVID shift towards travel, there is a recent uptick in spending as seen in June and July. Younger consumers are rapidly adapting to new fashion trends, leading to significant year-over-year sales increases for brands like Coach and Loro Piana. Poshmark's strategy includes enhancing user engagement through social experiences, such as the introduction of live streaming, which has quickly gained traction. The platform's mid-20 minute user engagement rate is attributed to this interactive approach. Chandra also addresses the broader implications of economic conditions on Poshmark, emphasizing the platform's role in helping consumers save money and make money through resale, which aligns with current trends towards sustainability and economic practicality.

05:00

🌐 Poshmark's Community and Influencer Dynamics in the Resale Market

In this segment, the discussion focuses on the role of influencers and creators within Poshmark's community and their impact on driving consumption. The platform has seen a natural growth of user-generated content with individuals opening their closets to the community. Poshmark's broad inventory, catering to various price points and needs, appeals to a wide audience, including niche markets. The influencer community on Poshmark helps to drive trends within these micro-communities, which are based on shared interests or lifestyles. Looking towards the future, Poshmark is addressing the challenge of capturing an older demographic by expanding its selection and reducing the stigma associated with second-hand shopping. The company is capitalizing on the growing interest in sustainability and economic benefits of resale, as seen in the increasing adoption rates across different age groups. Personal anecdotes highlight the platform's effectiveness in saving money, as demonstrated by the resale of items like bridesmaid dresses, which can nearly recoup the initial cost.

Keywords

💡Inflation

Inflation refers to the rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling. In the context of the video, it is mentioned as a factor affecting consumer spending, with the CEO of Poshmark noting a slowdown in spend due to inflation.

💡Consumer Spending

Consumer spending is the amount of money consumers spend on goods and services. It is a key driver of economic growth and is central to the video's discussion on the health of the consumer market, with the Poshmark CEO discussing its impact on their business.

💡Post-COVID Spending Shift

Post-COVID Spending Shift refers to the change in consumer behavior where spending patterns have evolved after the COVID-19 pandemic. In the script, the CEO mentions that consumers are shifting their spending from goods to experiences like travel, affecting retail sales.

💡Back-to-School Season

The back-to-school season is a period typically associated with increased consumer spending as families purchase school supplies and clothing. The CEO expresses optimism about this period as a positive time for retail, suggesting it as a potential catalyst for sales growth.

💡Fast-Moving Trends

Fast-moving trends refer to styles or preferences that quickly gain and lose popularity in the market. The CEO of Poshmark cites 'Barbiecore' and 'Y2K' as examples, noting that younger consumers are rapidly adapting to these new trends, impacting sales of certain brands.

💡Coach Bags

Coach is a luxury brand known for its bags and accessories. In the script, the CEO mentions a significant increase in year-over-year sales of Coach bags on Poshmark, indicating a resurgence or 'renaissance' of the brand due to current trends.

💡Live Streaming

Live streaming is a broadcasting medium where content is presented in real-time. Poshmark introduced live streaming to their platform to enhance user engagement, with the CEO sharing that it has quickly scaled and involves users buying, selling, and bidding on items.

💡User Engagement

User engagement refers to the level of interest and interaction users have with a platform or service. The CEO highlights that Poshmark's strategy includes creating a social experience to keep users engaged, which is crucial for the platform's success.

💡Second-Hand Fashion Market

The second-hand fashion market involves the buying and selling of pre-owned clothing and accessories. Poshmark plays a significant role in this market, and the CEO discusses how economic conditions and consumer behavior influence this space.

💡Posh Lens

Posh Lens is a new feature on Poshmark that allows users to upload a photo of an item they like and find matches within the platform's inventory. It represents an innovative use of AI and machine learning to enhance the shopping experience, as described by the CEO.

💡Community

In the context of the video, the term 'community' refers to the user base of Poshmark, which is described as vibrant and engaged. The CEO emphasizes the importance of this community for brand partnerships and the resale market's growth.

💡Influencers

Influencers are individuals who have the power to affect the purchasing decisions of others because of their authority or influence. The CEO discusses the role of influencers and creators in driving consumption and community engagement on the Poshmark platform.

Highlights

Inflation is easing but there are signs of slowing momentum in spending growth.

Poshmark plays a big role in the second hand fashion market.

There has been a slowdown in spend due to inflation and a shift in post-covid spending towards travel.

Towards the end of June and beginning of July, there is some acceleration in spending which is a positive sign.

Consumers are spending on fast-moving trends like Barbiecore and Y2K.

Year over year sales of Coach bags on Poshmark were up 5X in June.

Poshmark introduced live streaming on its platform in April, which is scaling very fast.

Over 100,000 shows were happening on the Poshmark platform last month with people buying, selling, and bidding.

Poshmark helps consumers not only spend but also make money, which is beneficial during stressful times.

There has been a little bit of a slowdown in 2022-2023, but new trends like live shopping are picking up the business.

Poshmark does not hold any inventory, allowing it to merchandise to current trends quickly.

Poshmark is testing a new feature called Posh Lens, which uses AI to match photos of items users like to similar products on the platform.

Posh Lens is developed in partnership with the South Korean company Neighbor, using their ML technology.

Poshmark has over 100 million distinct SKUs, making building the AI model for Posh Lens a complex task.

The community aspect is a big advantage for Poshmark, with over 100 million users and a very engaged base.

Influencers and creators are driving consumption on Poshmark, with some working directly with the platform.

Poshmark is working to capture an older demographic by increasing selection and reducing the stigma around second-hand shopping.

The growth of resale in closets is expanding, driven by economic factors, sustainability focus, and the potential for making money by selling.

Transcripts

inflation is easing but there are signs

of slowing momentum in spending growth

from June's retail sales the consumer

picture remains muddy for the average

retailer here to take a deeper dive into

the health of the consumer and looking

Beyond into the social Marketplace we

have Poshmark CEO Manish Chandra Manish

thanks so much for joining us today I

mean Poshmark plays a big role in the

second hand fashion market so how do

certain economic conditions like high

inflation play a role in your business

are you seeing similar types of Trends

well we've seen definitely a Slowdown in

spend both because of inflation and as

consumers have sort of shifted postcovid

spending into travel and other things

however I can say that towards end of

June and beginning of July we are seeing

some acceleration which is a positive

sign so keeping our fingers crossed as

we head into the all-important back to

school season Manish what are consumers

spending on those that are still

spending on the plan they are spending

on very fast-moving Trends so one of the

things that you see especially with the

younger consumer which is a big portion

of our constituency is how fast they're

adapting to different Trends I mean this

week is all about Barbie core and then

you've got the Y2K Trends so for example

in June our year over year sales of

Coach bags were up 5X

wow and then um quite luxury you know

stealth wealth uh Lord and Piana is up

almost 100 wire so some of these brands

are starting to see a Renaissance driven

by these trends and I noticed a stat

that you have user engagement in the

mid-20 minute range that is pretty

significant how do you continue to keep

users engaged on your app and website

for us it's all about creating a very

social experience which gives both users

a comfort to shop from each other but

also discover new Styles so in April we

introduced live streaming on our

platform and that's scaling very fast

you know while we've had problems in

America and getting live streaming to

adopt we are not seeing anything last

month we had over a hundred thousand

shows happening on the platform and

people are buying selling bidding

auctioning on that platform so

ultimately engagement is all about

people finding something fun to do but

also sharp Manish what is it been like

just as a business leader navigating

this very uncertain environment because

on the one hand coming out of covid

consumers were still spending they had

the savings to do it and now like you

were saying we've seen this shift

towards experiences so what does that

mean for Poshmark here in the longer

term

well for us we are not just about

spending but also helping the consumer

through this very stressful time because

people can not only shop at a discount

but they can also make money so it's

really great for the planet and great

for the pocket so what we've seen is

definitely a little bit of a Slowdown

during 22 getting into 23 but with new

trends like live shopping faster Trends

and then people just getting out and

about we're starting to see the business

pick up the other thing is because we

don't hold any inventory so it allows

people to really merchandise to whatever

is happening right now and that

fast-moving velocity that we've seen

coming out of covid is in a way very

very uh

long-term growth accelerator for

Poshmark speaking of that fast velocity

AI that's something you guys are

leveraging here you have a new feature

called Posh lens so basically you can

upload a photo of something that you

like and you will match so that

consumers can more easily find it tell

me a little bit about that and are you

seeing people engage with that it's very

exciting we've just been better testing

it for a few weeks we are going live

with that feature it's actually

developed in partnership with the

neighbor which is the South Korean

company that acquired us back in January

and so it's using some of the ml from

them and some of the work we've done in

terms of modeling the interesting

problem we had is we have inventory but

it's very distinct because we have like

100 million plus distinct skus so

building the model for that took some

time but it's really powerful I mean if

I took a picture of your outfit right

now I would probably find 100 jackets

that are there at all different price

points and Brands so it's very exciting

from that perspective it's early but we

are seeing a lot of excitement in the

community around the feature and one of

the other uh trends that we have seen

within the second hand selling Market

thredup has reached some strategic

Partnerships with some of the larger

retailers who are trying to get exposure

to what you have at Poshmark is that

something that you're thinking about I

guess what kind of Leverage What kind of

Advantage could that maybe get you yeah

I think for us the the big thing that

Brands find in the partnership and some

are partnered directly and some

indirectly is our community we have a

very Vibrant Community we have over 100

million users on the platform just to

give you a sense over the last decade

our community has recycled over 200

million items so they get access to

pretty massive user base and then it's a

very engaged Community it's a very vocal

community so it's very powerful from

that perspective the other thing which

is uh interesting about Poshmark is the

scale and breadth of inventory so you

know it's not very Niche we have luxury

products we have everyday products we

have products at all price points so it

really appeals from a very broad

perspective part of that Community are

influencers I notice influencers on the

Poshmark app all the time is that do you

reach out to those influencers did they

come to you and how do you foresee maybe

leveraging some of those influencers

well influencers and creators are pretty

much driving our consumption today uh

it's a little bit of both we have people

who open their closets on their own

there are people that we work with and

do some charitable work a lot of it is

around what we see the consumer Trends

which is this focus on micro Community

you know I'm a dad I'm a professional

I'm a baseball player I'm like sort of

going to pickleball or whatever like

whatever my passions are and each of

those communities have different fashion

needs different clothing needs and

creators are influencers that help sort

of drive that growth for for us and for

that community

when it comes to

looking out here in terms of future

growth for your business for your

industry I think a lot of people out

there are kind of questioning how much

bigger this demographic could be in

terms of your Target because I would

guess it probably skews younger right

because it's the younger Generations are

a little bit more uh conscious or have

been I should say about the resale

market and also not wanting uh not

wanting so much waste out there how do

you capture that older demographic

so we've been working at it I think you

see a lot more adoption of that

um I think there's two things one is

selection so I think the selection has

just grown dramatically over the last

several years but the other thing is the

stigma I don't think today if you go

around and say hey about this on

Poshmark people would say oh no they'll

say wow let me tell me more so that is

the other big piece but the progression

of the closet from sort of abubar who

has maybe 10 percent in the closet a

second hand to gen Z who's 17 to 18

percent is very encouraging so I think

the growth of the closet that comes from

resale is going to expand driven by both

economic factors and just focus on

climate change sustainability and the

third thing is it's just good for the

wallet as well in terms of making money

and selling money which talk to someone

she wore a bridesmaid dress sold it the

next day and pretty much recovered what

she spent on it and if you think of a

typical wedding season we think of eight

or nine bridesmaid dresses to buy it's a

very powerful tool to have done that

many times myself on your site and it's

and it's effective and you're right you

end up saving a heck of a lot of money

in the long term personally I'm going to

buy myself a Coach bag

I'm excited I'm excited but we need

Chandra Poshmark CEO thank you so much

for joining us today good luck with

everything thank thanks for having me