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0:05Right around now, you're probably seeing a lot of lists for gifts for dads and grads. or maybe the best barbecue gear or how to trick out your backyard for summer. Yes, this is one of those seasons where brands start pushing all the reasons to open your wallet. But while economic indicators show that the year had a strong start, consumers are starting to cut down on spending and starting to save more. That means companies are going to have to pull out all the stops to keep up the momentum, and they may need to pivot to an entirely different method of attracting them. Here to talk about all that, editor and podcast host Karin Vembar and comedian Kat Alvarado.

0:43Stick around for the best of Business Wars Daily.

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2:28From Wondery, I'm David Brown, and this is the best of Business Wars Daily, where we talk about trends, controversies, and how they affect you, the consumer. And I'm joined by editor and podcast host Karin Vembar and comedian Kat Alvarado. Kat, you have a comedy album coming out on May 26th called Off-White. Tell us a little bit about it. Yes, I'm so excited. It is my debut comedy album. I recorded it in San Diego, and it is the culmination of 10 years of hard work and doing stand-up comedy all over the country. And it really covers the theme of being a mixed half-Latina Nicaraguan kid and not fitting in, and my quest to find a sense of self and community.

3:10That's so cool. That's awesome. And when you say you recorded in San Diego, live? Is it a live recording or what? Yes, it is a live recording. We did two shows, recorded everybody. And you know what? It's one of a kind, because never again will someone have a comedy album with people coughing up a lung from hopefully not COVID. But every time I heard it in editing, I was like, dear God. Oh, my gosh.

3:35And Karin, you're an editor at Retail Dive. What kind of things do you cover and how did you get into that beat? Oh, hi. Retail Dive is a B2B publication. So we do retail business news. And my background is in journalism, but I had a personal styling business for about a decade. Oh, wow. And I started doing local retail reporting and eventually went over to Retail Dive to do reporting full-time. So I made the switch from styling to reporting. So I gather you're a pretty busy person since you also co-host the fashion and retail podcast Pop Fashion. Tell us about that. Pop Fashion is a lot of fun.

4:12And basically, my co-host and I, Lisa, we just talk smack about fashion. And it's secretly a fashion business podcast, but we just laugh a lot. Yeah, yeah, that's wonderful. That sounds like that could be a great listen. Hey, listen, there's a relatively new type of shopping that seems to be catching on. Consumers heading to secondhand e-commerce retailers, sites like Depop, The Real Real, Poshmark, and ThredUp. Nearly two-thirds of all consumers have either bought from or sold on these platforms in the past year. And one-third say they plan to increase purchases from them, according to Morning Consult.

4:51Let's dig into this a little bit more with a clip from our sister show, Business Wars Daily. Competition among the platforms themselves is also heating up as they try to grab a bigger piece of the market. So, the companies are making moves to attract more buyers and get a leg up in some creative ways. Depop, which has soared in popularity in the past few years, recently launched a new make-an-offer function, appearing right next to the buy button, which allows buyers to suggest a price that they're willing to pay for any item. The company says this will help customers get better deals by making negotiating easier.

5:28Depop has also released a collection of top vintage finds from its sellers to showcase notable Los Angeles locales. Over at competitor ThredUp, they're trying to capture customers' interest and wallet share with a series of high-profile partnerships. The company's teamed up with retailers like H &M, Target, and J.Crew to resell gently used items on the platform. In its quirkiest partnership, ThredUp has also teamed up with Heinz, yeah, the ketchup maker, to release a line of, quote, pre-loved clothes with ketchup stains. The Heinz Vintage Drip Collection featured more than 150 secondhand clothing items, quote, embellished with ketchup stains, Charged reports.

6:11So maybe someday soon that mayonnaise stained T-shirt you have tucked away in your drawer might be in style again. Hang on to it. Uh, you know, when I read about that, I kind of thought marketing has reached a new high, or maybe it's a new low. Kat, would you buy clothes with ketchup stains on them? Absolutely not. When they said gently used, gently loved, I was like, oh, that's not so bad. And then they said ketchup. I'm like, I could do that myself. Now I sound like my mother. We have that at home. Yeah, exactly. Karin, what say you? You know, if it was the right item, maybe. But I'm still stuck on the phrase vintage drip, which is fantastic.

6:56which I have to work into like my daily life now. What do you think's behind this increase in secondhand purchases, Karin? I mean, why do you think these sites have caught on? I mean, because everybody's broke is essentially why. I mean, after, you know, there's a lot of talk about what's going on with inflation, but groceries, rent, mortgage, people have to be really thoughtful about how they're spending their money. And there's other things going on that are interesting too. Like there's an increased awareness on how apparel is tied to sustainability. Also fashion's just changed a lot, especially since the pandemic, you know, there's always going to be trends, but you know, it's kind of anything goes right now.

7:40And if you're interested in wearing something from two or three seasons ago, you can buy it secondhand and no one's, no one's going to care. There's a lot more freedom and self-expression and how people want to dress. Kat, those all sound like compelling reasons to go secondhand. What do you think? Have you done this or anything close to it? Yeah, I have done a little bit of it. And part of it is that some of the new stuff looks used anyway. So at that point, why am I paying$150 for jeans when I can get them at Salvation Army for two? I have student loans to pay. I've got rent. That is insane.

8:20like, let's cut the corners where we can. You know, there seems to me, though, to be a difference between, say, going to the local thrift store, you know, and going to a resale site like Poshmark, right? Because when you go to a thrift store, you can try it on, look in the mirror, check it out. And there are lots to sort of thumb through. And part of it is the search, that there's something about that, at least I believe, there's something about that sort of tangible thing of shopping old school. Do you think there's anything to that? Or what about these resale sites, you know, the stuff online?

8:56I find that I prefer going in person because I do like thrift shopping and like you'll see me on a Saturday going into Buffalo Exchange to look for stuff. And it is really fun to find that special item that just speaks to you and you feel like nobody else has this shirt. Of course, I'm sure thousands of people have that shirt, but to me, I feel special. it's not the same when you're doing it online and you just can't see what it looks like. Like how gently used is it and how much is Photoshop? Yeah, exactly. Well, there's that. Well, Karin, I gather that with Poshmark in particular, they have a live shopping platform where you can sort of live stream products you want to sell.

9:37Any word on how that's worked out so far? You know, it's only been around. Poshmark has been doing Posh shows for only about a month now. So it's so early on, it may be too early to tell. But for that particular platform, I think it's a really smart idea because it's peer-to-peer. Live streaming in general hasn't caught on in the U.S. like it has in China. And some places have experimented with it. Walmart has played around with it as a medium. Meta, though, shut down their live streaming efforts this past year. But Poshmark is different, I think, because it's about seeing someone that you're buying directly from.

10:21And it may be really great in that particular way because people want to trust and want to see who they're buying from. I get that. But there's also, Kat, what do you think? I mean, this sort of sounds like echoes of QVC or Home Shopping Network when, you know, you're holding it up in front of the camera and you're watching the pitch and the whole deal. What do you think? Well, it sounds like that, but even more so, it kind of reminds me of LuLaRoe. I don't know if you guys saw the rise and fall of LuLaRoe, all those documentaries they had. It was a multi-level marketing scheme and they were selling these colorful tights that all seemed like they were one of a kind and people would go on Meta and live stream the tights they had.

11:05and this seems like it would be like that you have your haul of used clothes that maybe you're trying to sell and you have an event and you try to sell them to your friends it's it's an interesting thing I could see how it can be fun especially if you do it with your friends and turn it into a a drinking game or something like a hopperware party almost but have you ever bought anything from that sort of platform? Never. Stay tuned as we talk about another e-commerce platform that's making inroads in the U.S. as the best of Business Wars Daily continues.

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13:07Welcome to the best of Business Wars Daily. We're talking with editor Karin Vimbar and comedian Kat Alvarado. If you watched the Super Bowl this year, you might have seen the ads with the tagline, I'm shopping like a billionaire. Let's listen to a little bit of that Super Bowl ad.

13:27They came from the e-commerce platform Timu. It's a site where you can find just about anything from clothing to power tools. It's a Chinese-owned app that's had explosive growth in the U.S. since it launched here in September of 2022. We covered Timu recently on Business Wars Daily. Well, Timu's explosive growth hasn't shown signs of slowing. The app saw 7 million downloads in January 2023, and that was before it reached 113 million viewers during that biggest football game of the year. Impressive, no doubt. But where exactly did this app, which was virtually unknown in the U.S. before last fall, come from?

14:07Timu is based in Boston, but like I said earlier, it's owned by PPD Holdings, which also owns Chinese e-retailer Pindodo. According to Statista, Pendoto, which has been in business since 2015, had around 751 million monthly active users in the first quarter of 2022. So you might say PPD Holdings seems to know what it's doing when it comes to e-commerce. Timu's sister company isn't the only tie to China. The products Timu sells also ship directly from China rather than from a network of U.S. warehouses a la Amazon. that allows Timu to cut out the middleman and offer rock-bottom prices on its products.

14:44And when I say rock-bottom, we're talking$6 swimsuits and$3 slippers here. It's those prices, though, that have some customers scratching their heads. As one analyst told CNN, quote, American consumers might not even be ready to accept some of these price points. There's always the question, is it too cheap to be good? Too cheap to be good. You know, I remember when those ads debuted on the Super Bowl and my wife turned to me and said, you know, something tells me shop like a billionaire. You know, Warren Buffett's not shopping like this. He's not going to Timu or any other billionaire that you might think of.

15:24What do you think, Kat? You have a too cheap threshold? I absolutely do. I mean, I'm like any other sustainably conscious millennial out there. I'm thinking, what is the impact of this$3 swimsuit? Who risked their life in a sweatshop to make this swimsuit cheap enough for me to buy at this price point? It's kind of uncomfortable, definitely. And honestly, shop like a billionaire. I'm pretty sure billionaires are flying in helicopters to their next summit and having someone else shop for them. Like, they don't shop for themselves. No. Yeah, that did seem a stretch to me, too. So I presume you haven't bought anything on Timu, Kat.

16:05No, I have not bought anything on Timu. In fact, even on a shop on Amazon, I don't buy the cheapest thing because I always feel like the cheapest price point has a price. It's going to fall apart in one use, something like that. Yeah, a hidden cost, as they say. Karin, have you covered Timu? Do you think they're going to rival Shein or anything like that? I haven't covered Timu yet. I have my eye on them because they've grown so much so fast. And Timu and Shein are alike where they both sell cheap products, but they have such different business models that I don't know if comparing them is really the way to go.

16:44Timu is marketplaced. They have independent sellers. It's not just apparel. Shein commissions their own product. It works with manufacturers. It does runs of apparel in small batches. So again, I don't think of them as rivals, but I am interested in how they push other retailers in their spaces, because it sounds like both companies are really good at leveraging data. And I think that's going to be really interesting to see how it plays out with different retailers. You know, I don't know what y 'all thought of this, but when I saw the commercials, I sort of thought this is like AliExpress, but it has a beachhead in the U.S.

17:24Does that sound about right? I mean, because it sort of seems to be everything and it's supposed to be everything to all people almost. As far as I know, that's a fair comparison. That was my immediate thought too. I mean, honestly, my first thought was, who are these people? Where do they come from? Because this is big money all up front. Super Bowl big. Super Bowl big. Hey, you're listening to the best of Business Wars daily. We're going to have more on Shein and what it's doing to rebrand itself when we come right back.

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18:56Welcome back. We're talking with Retail Dive editor Karin Vembar and comedian Kat Alvarado on the Best of Business Wars Daily. You know, we've been exploring the business of fashion and how major companies are trying to lure customers. Mega retailers like Timu and Shein have rock-bottom prices. But, you know, that comes at a cost, as Kat was saying, certainly to workers. She and in particular has been called out for potentially unethical working conditions in its factories. Karin, how have you seen consumers balance a love for low prices and also concerns about business ethics? Well, I think the good news is that people are struggling with that balance.

19:38They're thinking about these issues. I've been hosting Pop Fashion for so long. I've really seen and witnessed an awakening, first with news coverage, that there's more coverage of these issues. And also, I've noticed with our audience in particular, they love fashion, but they're asking questions about how to make ethical decisions as consumers. Especially if you go back to the example of Shein, the thing that Shein is getting right right now is that they're making trendy clothes in plus sizes. And not a lot of companies are engaging with the plus size market. So what do you do if you're plus size and you want to wear something trendy?

20:18Like, this is a hard question. It's difficult for people to weigh, like, what their dollar is doing. And also, one, just to wear the correct clothes or wear clothes that give them a particular style. And the thing I really always come back to is just do the best with what you got. You work with the budget you have, you read, you make informed decisions. And if your situation changes, then you make a different choice. And a way to engage is also not to consume as much. You can back down on how much you're buying. And that can be part of a larger ethical choice. That's a really interesting way to think about it, because I think a lot of folks beat themselves up if they can't find the thing that checks all the boxes when it comes to, is this ethical?

21:06You do the best you can is what you're saying. And the fact that you're mindful of this and Kat clearly, based on what you were saying earlier, you are mindful of this. And I'm curious, what took you to that point? Was there some news story you heard at some point or was there, is this something that's always been on your mind for, you know, since you were younger or how did you get there? Well, I, as, as a Nicaraguan American, I grew up visiting my family back home in Nicaragua. And I grew up seeing people who lived in poverty. And I know that when I see prices that are way too low, it's some person who's really struggling and, you know, maybe being taken advantage of in an unsafe working environment.

21:50And so I just try to be conscious of that. I know there's people who are like, yeah, but they have jobs. But, you know, you kind of got to go with your gut. Like, how bad of a job is it if I'm buying a swimsuit for$3? dollars really like this seems like it's pushing it um as as much as i do like i want to support like trade and i know that it's good for the jobs to to be there so it's it's tough it's a tough call i think what i've chosen personally is um i know i have a fixed budget last year i was lucky enough to call myself a first-time home buyer and congratulations thank you and now i am house poor Well, there's that.

22:29That comes with the territory, as they say. It really does. And so I've decided, you know what, I'm going to be a minimalist. I'm going to wait until I can afford one really good item. Maybe buy some, if I'm going to be trendy, I'm going to buy it like ahead of time when the trend just pops up. Even that means paying a little bit more because I'll get more use out of it over time than buying it. Like usually once they hit the cheaper fast fashion places, they've already been a trend for like a year. Karen, you've probably seen that. That's what I've noticed. So by the time I get it at a Forever 21 type place, it's about to go out of fashion because everybody has it now.

23:10So I skip it. No fast fashion. I stick to high quality, a few pieces that hopefully aren't so trendy that everybody's going to be laughing at me a year from now if I wear it. Yeah. You know, Karin, I'm sure that you've covered the fact that some retailers get flack pushback from shoppers like Kat who are conscientious about this. But frankly, I get the sense that a lot of retailers just ignore the protests or just ignore these concerns. But as The New York Times reported recently, Shein is actually trying to lean into its customers' concerns. I say lean in kind of. It's reportedly pouring millions of dollars into initiatives to try to address these criticisms.

24:00And one of those initiatives has to do with its designer program called SheinX. Shein hires designers, gives them a budget, and then sells their designs on its site. There are about 3 ,000 participants who've reportedly received something like$5 million in total so far in commissions. But, and there is always a but, this program was started only after a slate of designers launched criticism at Shein for copying their designs. What do you make of that? This doesn't sound common in the fashion retail world, but Karin, what would you say? This is really a marketing effort by Shein. It's a PR marketing effort by Shein, and really it has to go in that category.

24:41Sort of like greenwashing with environmental concerns? Yeah. Yeah. I mean, I personally think it's that. But one thing that you have to think about, like big picture, is what's going on with fashion design jobs right now, because there's only so many of them out there. So if you studied fashion design in school, what do you do with your designs? Who backs you? Where do you get that financial backing right now? And by the way, private equity money has come in and purchased so many mid-tier brands that where you start off your career as a fashion designer is a little confusing right now. And Shein, for better or for worse, they are filling in a gap where how people can design and see their designs displayed.

25:25So it's really interesting on how the entire picture of how fashion is produced has changed. And Shein's kind of in the middle of how that's being pushed right now. You know, I'm curious what you make of that, Kat. I mean, you know, you have all of these people who, at least according to Shein, have received$5 million in total from commissions. But, you know, you hear what Karin is saying here. How do you read what's happening? Well, from what she's saying, they're filling a gap. And as someone who's a creative trying to make her way, I appreciate every small opportunity I get to get some experience.