Early last fall, James Reinhart noticed something odd happening at ThredUp.com, the children's clothing swap site the Harvard Business School graduate and his buddies dreamed up a year ago.
Swappers started using the online exchange to trade toys. As the volume of toy trading increased, ThredUp decided there was enough demand to expand its service. The San Francisco-based start-up officially launched its toy-exchange site Dec. 6, as holiday shopping got into full gear.
The turn of events at ThredUp signals how dramatically shopping is changing in the wake of the Great Recession. Stung by the financial crisis, plugged into social media, and worried about the future of the environment, consumers are taking matters into their own hands, finding ways to get what they want without cash and without going to the mall.
Pundits have different names for the phenomenon: Community commerce. Secondhand nation. Conscious consuming. Meshing. Whatever the label, a new shopping mind-set has sprouted from the recession, where access to goods trumps ownership and consumers create their own rules.
"There's been a long-term shift from mindless to mindful consumption," said John Gerzema, chief insights officer at New York-based ad agency Young & Rubicam and author of the book, Spend Shift.
"People are realizing that thrift isn't a bad word. And we're very comfortable using social tools. The old way of spending doesn't have to happen. We can rent it, borrow it, trade it."
Social innovator Rachel Botsman estimates that there are thousands of swap marketplaces springing up around the world, for everything from media to makeup. One reason: It feels good to get rid of clutter and know that it's being put to good use.
"Technology creates the efficiency to match millions of 'haves' with millions of 'wants,' whatever they may be, as well as the social glue to create trust between strangers," said Botsman, co-author of What's Mine is Yours: The Rise of Collaborative Consumption. "Swapping can provide almost as much choice as traditional shopping."
Bonnie Kulenkamp, 30, a schoolteacher from Indianapolis, discovered ThredUp last summer after adopting a child. Her house was filled with gifts for a baby boy, but in the end she and her husband adopted a baby girl. So she packed up the blue clothing and swapped it for pink.
"I like that I can trade things she's outgrown and get a whole new box of things that fit her," Kulenkamp said. "We don't have extra money to buy new things, especially when they don't wear it for very long."
ThredUp began as swap site for adults' clothing in September 2009, but changed its focus to children's clothing in April. The site has 50,000 registered members and swaps more than 1,000 boxes of clothing a week, with more than 5,000 boxes listed.
A potential buyer browses "boxes" on the site, makes a selection, and pays $5 plus shipping per box, typically bringing the total to about $15. Senders list the items in the boxes, ThredUp provides the shipping materials and labels, as well as scheduling home pickups.
The company, advised by Netflix Inc. CEO Reed Hastings, claims to save the average family $569 a year.
Next, ThredUp is looking at working with Meetup.com, a network of local groups, to host face-to-face swaps for big items such as strollers.
"It's really the beginning of a much bigger trend," said Reinhart, ThredUp's CEO. "Fractional ownership and sharing are something people are doing more of, not just because it's good for their wallets, but people are also seeing it as good for the environment."
For years, Americans have kept the economy growing by buying. Now, they find themselves waking up with a "stuff" hangover, said Lisa Gansky, a technology entrepreneur and author of The Mesh: Why the Future of Business is Sharing.
The rise of online swapping is just the start of a broader consumer movement away from throwaway goods, Gansky said.
"What's happening is that what we used to call waste actually has a lot of value in it," she said. "A few years ago my toaster broke when my friend was here visiting from South America, and she asked, 'Where do I go to get this fixed?' When I heard myself say, 'It's cheaper to buy a new one,' I realized there was something wrong. . . ."
Early-21st-century technology has made it easier to reach more people at the same time consumers are reevaluating how they spend.
Seven out of 10 Americans say that the economic crisis has permanently changed the way they think about spending their time and money, according to Young & Rubicam's BrandAsset Valuator, a quarterly survey of 16,000 consumers.
That shift isn't lost on entrepreneurs. There are swap sites for books, CDs and video games (Swap.com, among others), fashion accessories (DigNSwap.com, among others), even time (Timebanks.org).
"As consumers start to reshape the way we conduct commerce and the way products are considered, we're starting to see them forgo traditional channels," said Ruthie Winig, director of social marketing at Frank About Women, a Winston-Salem, N.C.-based consulting firm.
"They aren't waiting for retailers to empower them. They are empowering themselves."