Target tiptoe into resale with new ThredUp deal
Target ThredUp Website
Target is tiptoeing back into used sales thanks to a deal with resale company, ThredUp.
The big-box retailer confirmed Friday that it launched a page on ThredUp’s website in late March that includes listings for women’s and children’s clothing, as well as accessories. Some items come from Target’s private labels, such as children’s clothing brand Cat & Jack, or its limited-time designer collaborations, such as one with Lilly Pulitzer in 2015, and others come from luxury brands that don’t. are generally not sold by Target. All are curated by Target from ThredUp’s inventory.
A company spokesperson said Target is in a “test and learn” phase with ThredUp. She declined to share the financial terms of the deal. ThredUp also declined to comment.
This isn’t the first time Target has partnered with ThredUp, an online consignment and thrift store. Target started — and then stopped — a roughly six-month trial in 2015. It allowed shoppers to get Target credit for lightly used items that ThredUp was willing to resell.
A Target spokesperson said the company decided to partner with ThredUp again to capitalize on customer interest in value and sustainability. Target’s new webpage on ThredUp’s website is labeled as a beta test. It includes around 400,000 pieces at prices up to 90% off.
The partnership is part of Target’s broader sustainability initiatives, including Target Zero, a new label in stores and online that flags products or packaging designed to be refillable, reusable or compostable. The retailer also recently transformed a San Diego-area storefront into its first net-zero energy store by adding huge carport solar panels.
For retailers, resale is a way to market themselves to Gen Z and Millennial shoppers who appreciate “treasure hunting” and the green aspects of saving, said research analyst Ashley Helgans. on stocks that follows the sector for Jefferies. Through second-hand shopping, these younger consumers can develop an affinity for new brands and decide to shop directly from the original seller, she said.
For ThredUp, making deals with retailers is a way to expand its reach and sell inventory faster in a growing but highly fragmented industry, Helgans said. It competes with other players including The RealReal, eBay, Poshmark and Depop.
ThredUp also has profit-sharing agreements with retailers like Walmart and Madewell, which list the items on their own websites.
Helgans said Target’s earlier test may have come too soon. In 2015, the resale market was around $1 billion, according to Jefferies. It has now reached around $15 billion in 2021 and is expected to more than triple to $47 billion by 2025.