OfferUp CEO: Reinventing Commerce One Local Seller At A Time

Recommerce has been on the rise for the better part of a decade now, and it seems countless marketplaces have sprung up to offer consumers a host of inroads to buy gently used goods of all kinds.  Value shoppers, collectible hunters, fashionistas and curiosity seekers tended to make up the ranks of the usual recommerce consumer class — or they did until a few weeks ago, OfferUp CEO Nick Huzar told Karen Webster during this week’s edition of the Monday conversation, when the outbreak of the COVID-19 pandemic rapidly expanded his consumer and seller base to the set of just about everyone overnight.

“What we saw was a huge influx of demand pretty quickly because you can’t get things right now, the stores are closed down,” Huzar noted.

Parents, he noted, have become an particularly avid shopper base at the moment, as they are desperately searching for ways to keep their children entertained and physically active now that school has been shut down for the year almost everywhere and store shelves are running short on things that no one was ever predicting shortages of.  Searches for puzzles on OfferUp, he noted, are up 1,000 percent; above-ground swimming pools searches are up 450 percent; water table searches are up 300 percent, as are the searches for video games; and searches for swing sets are up 200 percent.

One customer he spoke to, he noted, tried to purchase her children a trampoline to keep them active and couldn’t find one in stores, but was able to find a pre-owned one for a great deal that she picked up that day.

That surge in demand has created what Huzar called a “seller’s market” on OfferUp these days — and one that is increasingly including a larger variety of seller types, including car dealerships, small furniture retailers and other Main Street businesses looking for a productive digital on-ramp that offers immediate access to eCommerce customers.

The Growing Sellers Market 

When Huzar started OfferUp, like a lot of founders he was solving his personal problem — a room full of things that had to go immediately because he had a child on the way.  That feeling, in the age of social distancing and homebound consumers, is now likely affecting a lot of people, Webster and Huzar noted.

There is something about spending all of one’s time in their home that really clarifies what they need to have around them and need to acquire immediately — and what they really could stand to be rid of.  And with unemployment spiraling and paychecks becoming unknown commodities for tens of millions of Americans, there is also an impetus to actually generate some cash in lean times.

But in the last few years, Huzar noted, he has also seen an increasing proportion of businesses selling new goods appearing on the platform — and really making OfferUp a core part of the multichannel sales strategy.

“A  good example would be a local furniture store here in Seattle that has sold $2 million worth of furniture in two years on OfferUp,” Huzar told Webster, noting that this literally a mom-and-pop furniture business that early on saw the possible opportunity to have a line out to a new consumer demographic and put nearly their entire store inventory on the platform.  And that hasn’t just been a consistent revenue generator for them over the last few years, he noted — it has also been something that has allowed them to pivot quickly for COVID-19 by simply adding in, “Hey, we also do free delivery.”

Huzar has seen a host of the car dealerships on the platform make a similar move, making their inventory easily viewable on OfferUp to consumers who either can’t go to their local dealerships or who are merely wary about doing it, and then making it easy to negotiate the entire deal, including end-to-end financing, all over the phone. From there, he noted, cars are delivered to driveways, the keys are left under the mat and the deal is done fast — but without unwanted contact.

And those pivots, he noted, are going to be critical in commerce and across the economy because, “this is going to go on for a while.”  First, because there are just a lot of unknowns and anxiety out there about the course of the pandemic. And second, Huzar noted, because in the course of adapting, people are learning they like parts of their new way of life better.  He had always been a proponent of in-office work, he noted, believing that a remote workforce would damage productivity and communication. Now, nearly two months in, he is forced to admit that in fact the effect has been the opposite of what he feared — the team is more productive and effective at communicating in a new environment. Now they really have to think about what they want their post-COVID arrangements to look like and be willing to admit there might be something to thinking differently.

Something, he noted, a lot of businesses are waking to realize as the road to recovery is beginning to come into view.

Expanding The Brand

The worry for a marketplace like OfferUp that has become so associated with C2C transactions, Webster noted, is coming down with the eBay syndrome — where trying to keep on doing and selling more types of things from more types of sellers eventually just confuses customers about what the brand’s basic value is even supposed to be.

And while losing focus is always a risk to any retail endeavor, Huzar noted, OfferUp’s core value as a brand has never been around C2C, but around the concept of local businesses — still the locus of roughly 85 percent of all sales. Recommerce has become a crowded world in recent years, with a lot of brands focusing on a lot of retail vertical niches, but all going after them at a large national level — which requires large and national shipping logistics, something that in recent days has become a complicated operational challenge.

OfferUp’s focus, he said — and what the team thinks about all day every day — is local retail channels: how can they unlock all that local inventory and get it into the hands of the local customer who wants it but just doesn’t know how close they are to it at the moment.  It is why OfferUp added local shipping to its platform a little over a year ago — because it was yet another way to take friction out of local commerce, though it has turned out to be very important as it has seen shipping spike 200 percent in recent weeks.   It doesn’t mean OfferUp expects to capture all of a consumer’s commercial needs from its platform — we didn’t all shop at one store before the pandemic, and it is unlikely we are changing quite that much after it.

But the retail marketplace is changing, and will likely have a harder digital shift than it did before — and retailers that want to make it through, Huzar said, need a digital entry point.

“And if you look at Seattle or even L.A., for example, over 18 percent of the adult population in these markets is using OfferUp every single month now. I think merchants are saying, ‘Hey, you know, why not try it? All I’ll have to do is take a picture.’”