Target sells used clothing in partnership with ThredUp

Diving Brief:

  • The target tests a second-hand clothes marketleveraging ThredUp’s “resale-as-a-service” platform, the retailer said via email.

  • The offering includes approximately 400,000 women’s and kids’ items from Target-owned brands as well as select national and premium brands from ThredUp’s assortment, the retailer said.
  • This is Target’s second foray into space, having previously associated with ThredUp in 2015.

Overview of the dive:

According to ThredUp’s “Recommerce 100” (a listing of retailers and brands that use its RaaS program and those that don’t), at least 41 brands are in the pre-owned business. With hundreds of thousands of items, Target’s effort represents an unusually large scale, even if only in pilot mode.

In March, ThredUp CEO James Reinhart told analysts that its RaaS client list had grown to 28. ThredUp’s RaaS platform grew its client list by more than 30% last year and is seen by Wells Fargo analysts as potentially more lucrative than its own second-hand clothing site. ThredUp declined to comment on Target’s effort.

“We think it can be a very important source of inbound supply because [ThredUp] can generate incremental supply by leveraging the existing customer base of their RaaS partners,” Wedbush analysts Tom Nikic and Ezra Weener said in a March 8 research note.

Retailers and brands, many with the help of ThredUp, are scrambling to meet the growing demand for second-hand clothing. Buyers, including many younger ones, increasingly see second-hand goods as a way to find a bargain and limit consumption in the interest of sustainability.

For Target, the pilot is a way to explore how to better serve customers, including what products to offer and how to deliver value, while pursuing its sustainability goals, a company spokesperson said per e -mail.

The second-hand market is expected to grow by 10% to 15% over the next decade, according to McKinsey and Company; ThredUp sees it grow to $77 billion in four years.

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