Inside the Depop turnaround

This article is part of our Vogue Business Membership package. To enjoy unlimited access to Member-only reporting and insights, our NFT Tracker, Beauty Trend Tracker and TikTok Trend Tracker, weekly Technology, Beauty and Sustainability Edits and exclusive event invitations, sign up for Membership here. For a decade after its launch in 2011, Depop emerged as one of resale’s most prominent success stories. With a Gen Z user base, the platform inspired meme pages, helped propel major trends such as ‘cottagecore’ and Y2K, and encouraged a generation to make and sell their own clothes. But competition in the resale market has heated up in recent years, with Ebay investing in its fashion vertical and newer players like Vinted winning market share. Depop was acquired by Etsy in the third quarter of 2021, appointing former chief product officer Kruti Patel Goyal to replace outgoing CEO Maria Raga in September the following year. Now, as the platform returns to “healthy” growth, Patel Goyal is ready to talk through Depop’s strategy. “The mood at Depop is really positive right now,” she says, speaking from the company’s newish headquarters in Farringdon, East London, which opened in 2021. Her office, overlooking a central atrium, is entirely glass, with a bookcase filled with neon signs, Depop merch and outfits. “We’re not just a transactional platform,” she says. “We’re a place that people go to for a combination of inspiration and connection to a like-minded community. Now, we need to continue to evolve and invest in that.” When Patel Goyal joined Depop in 2022, the company's revenues were growing. However, like many resale and e-commerce players, the business was still chasing profitability. Depop posted an operating loss of £59 million in 2022, citing a slowdown in the growth rate of the resale market as well as heavy competition from new players. While Depop doesn’t break out revenues, new owner Etsy says the company’s performance “significantly improved” in 2023, returning to “healthy growth”. “Profitability is definitely something that’s in focus for us — we want to have the underpinnings of a really sustainable long-term business,” says Patel Goyal. “We’re making good progress in that direction. The most important factor is continuing to grow the business, and we’re really encouraged by what we’re seeing in terms of the growth trends over the last year.” Resale competition is heating up Resale remains an opportunity for those businesses that get it right. Thredup and Globaldata’s annual resale report says the worldwide secondhand apparel market grew 18 per cent to $197 billion gross merchandise value (GMV) in 2023. It’s expected to grow three times faster than the overall apparel market to $350 billion by 2028. There’s everything to play for right now, as “after 2028, growth will slow a bit as the market matures”, says Neil Saunders, managing director of retail at Globaldata. Federica Levato, senior partner and EMEA leader of fashion and luxury at consultancy Bain, shares Saunders’s optimism about the sector over the next few years. “The market’s expansion provides ample room for multiple players to coexist and thrive,” Levato says. “Incumbents and new platforms often differentiate themselves through unique value propositions. Established platforms might rely on brand reputation and extensive customer bases, while new platforms might focus on niche markets, superior technology or enhanced customer experiences.” During the pandemic, as the resale market boomed, competition emerged from low-cost resale platform Vinted, which slashed seller and postage fees, making it easier and cheaper to list than Depop and other competitors. Then as resale’s growth slowed, platforms had to work harder to acquire and keep consumers. “We weren’t immune to that,” says Patel Goyal. “We experienced much the same as other marketplaces or other e-commerce businesses did. I think one of the benefits that we have is that we have such a massive market opportunity ahead, and we’re in a space that is growing so much.” On joining Depop, Patel Goyal accelerated development of the platform’s user experience. “Opportunity and challenge are two sides of the same coin,” Patel Goyal says. “All of these [resale] businesses are learning from one another, and that’s how we’re moving forward. That’s fundamentally a good thing, but it means that we have to keep investing in those things that differentiate us, keep delivering a great value proposition and keep innovating to do it better and better over time.” Her three-part growth strategy is as follows: streamline the user experience for buyers and sellers with product development; lean into personalisation and curation; and expand further into new markets, notably the US. Responding to pain points In a significant move, Depop waived its unpopular seller fees in March this year, scrapping the 10 per cent charge on total transaction costs, transferring the shipping cost to the buyer. This aligns the platform’s fee structure with competitors such as Vinted. The change was promoted with a major billboard campaign in the UK. “Removing seller fees was an important part… to bring more people to resale,” Patel Goyal says. A lot of other platforms are transactional or perhaps they’re very cheap, but they don't have personality when it comes to the sellers, and assortments from sellers often aren't as curated. “That's right,” Patel Goyal says. “The peer to peer nature of the marketplace is really important. There are so many places where I can buy from a nameless faceless platform. But there aren't as many where I can follow people. Whether it’s following their style or knowing that I found somebody who not only has my style, but has my size and shape, who I can buy from.” Depop has also improved search efficiency by an estimated 50 per cent over the past 18 months. “Often, when speaking to young users about resale and their resale habits, one of the criticisms has been that it’s difficult to find products because everything’s one of one,” Patel Goyal says. “We have 34 million SKUs on Depop, so search is important.” The improved search allows users to shop by trend, an all-important feature in today’s relentless, rapid trend cycle, Patel Goyal adds. Depop uses AI-powered curation, which helps to identify and surface trends earlier for its community, enabling them to shop trends across the 34 million-unit catalogue. “We see this shift in shopping behaviour really distinctly on a platform like Depop, and particularly because of our user base. Our users are both active consumers of — and contributors to — fashion trends,” the CEO says. “Platforms need to keep customers engaged,” says Globaldata’s Saunders. “This means ensuring that the product mix is good and contains some real gems. It also means making searching for the right products easy, something that can be a challenge with hundreds of thousands of SKUs. AI is helping with this.” Cultivating the seller community, on and offline Unlike other platforms such as StockX, Ebay and Vestiaire, Depop’s sellers are its storefront, each with curated stores that speak to a certain aesthetic. On Seam (@onseam) are two US-based Depop sellers who launched their Depop shop in 2017, focusing on Y2K garments from brands like Carhartt WIP, Avirex and Coach. “Depop has done a great job promoting our shop to new customers on the app, giving us more motivation to sell there,” the duo says over email. “You can become a top seller or get featured on the explore page by posting more unique pieces that draw in customers — that’s why Depop has the best community.” Depop implemented a “make an offer” feature in early 2022. Previously, users would make offers (sometimes bordering on the ridiculous, as documented by meme account @depopdrama) via the DM function. Now, it’s much easier and more binding once a buyer outlines a desired price and it’s accepted. “While I don’t always accept offers, ‘make an offer’ makes it a lot easier for some of my peers to run their business on Depop and is increasing their sales,” says seller Anna England (@byeanna), who has sold around 1,500 crochet bags on the platform since joining mid-pandemic. Tapping the IRL resale market to drive community A rebalancing of online and offline purchasing is noted by Patel Goyal. Depop sellers are seeing value in driving revenue and creating real-life communities in tandem with their Depop stores. UK-based sellers Campervan Vintage (@campervanvintage) launched a Depop shop in 2020, and after making enough money to buy a camper van, now take their inventory to festivals across the UK. It drives a large portion of their revenue, and they plan to go back to Depop full-time in the autumn. Depop itself is participating in the IRL secondhand scene to reflect this shift among sellers. On 18 to 19 May, Depop partnered with Hypebeast to host a two-day vintage market in Greenpoint, Brooklyn, spotlighting top secondhand fashion sellers, Depop sellers and local artisans. Sellers On Seam participated in the event, noting that “the recent Brooklyn flea was our biggest push from the platform, a great experience.” The Brooklyn event is one of many real-life activations planned for the US in the coming months, as Depop makes major inroads in the US market. It’s currently the fastest-growing resale platform in the region, with GMS growth up 30 per cent from 2022 to 2023. The company is “investing heavily in culture-driven marketing” to continue to reach new users, Patel Goyal says. Last year, the platform partnered with Amex at festivals across the UK and the US, joining forces with music artists such as Caity Baser and Flo Milli to curate Depop edits around events like British Summer Time and Coachella. It also partnered with stylists including Harry Styles’s stylist Harry Lambert to create curated shops on the platform. In the gaming world, it has partnered with The Sims to allow players to purchase the designs of selected Depop sellers in the form of ‘thrifted’ garments for avatars. “There’s always this challenge of how do you stay true to that core and authentic voice and that community,” says Patel Goyal. “That’s why staying deeply connected to our community, making sure that we’re actively listening to them and communicating back with them through multiple different touchpoints is so important as we get bigger and bigger. So we don’t inadvertently fall into being nameless and faceless.” Comments, questions or feedback? Email us at feedback@voguebusiness.com. Correction: Depop implemented make an offer feature in early 2022. A previous version of this story said the changes were made this year. Correction: Depop moved into its new office in 2021, not 2023 as previously stated. More from this author: ‘Rare, vintage, Y2K’: Online thrifters are flipping fast fashion. How long can it last? As consumers pull back spend, resale faces fresh challenges Depop is bringing virtual thrifting to gaming with The Sims

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