ThredUP Is The Win You Didn’t Know Walmart Needed

Walmart is the biggest retailer on the planet. ThredUP bills itself as the largest online thrift store. Now, the two have announced an online partnership that will give consumers access to 750,000 pre-owned women’s and children’s items, accessories, footwear and handbags from thredUP on Walmart’s site.

The partnership received accolades from many on the RetailWire BrainTrust in an online discussion today.

“What a fabulous team!” wrote Liz Crawford, vice president of planning at TPN Retail. “This is a partnership that is perfect for consumers and the environment. One of the best moves they’ve ever made.” 

“What an interesting idea and a smart way for Walmart to attract a different clientele to their website,” wrote Kathleen Fischer, director of retail marketing at enVista. “Thrift shopping has grown tremendously over the past few years and, with the events of the past few months changing the way many consumers look at purchasing, is likely to become more mainstream.”

Denise Incandela, head of fashion at Walmart U.S. eCommerce, writes in a company blog that the resale clothing items being sold through its site will be in “new” or “like new” condition. Accessories and handbags will come “gently used” and be sold at low resale prices. Walmart will offer free shipping on orders of $35 or more and will not impose a charge on returns to either Walmart or thredUP, a deal not previously available to the online thrift store’s customers.

Walmart’s partnership with thredUP is unusual compared to past deals the resale e-tailer has made with brick and mortar chains in that it is exclusively online. J.C. Penney and Macy’s
M
have tested in-store thredUP shops.

Digging into the mechanics of the partnership, RetailWire’s BrainTrust found plenty of cause for enthusiasm.

“This may be Walmart’s best strategy yet to attract net-new customers to their brand,” wrote Ricardo Belmar, senior director, retail transformation specialist at InfoVista. “Especially during these difficult times when consumers are possibly hesitant to return to stores.”

“From thredUP’s perspective, the company will now have access to a far broader consumer base, and the opportunity to acquire new customers beyond the constraints of their own platform,” wrote Brandon Rael, director at Alvarez & Marsal. “For Walmart, this is yet another diversification strategy and represents a potential revenue growth segment.”

“It could attract audiences from two completely different demographics for different reasons,” wrote Suresh Chaganti, executive partner at VectorScient. “Value shoppers on one hand and environmentally conscious shoppers on the other, who also happen to be younger. Good win-win as far as I can see.”

BrainTrust members also see Walmart plugging existing holes that the retailer has been thus far unable to fill. 

“This is a great way for Walmart to bolster its online presence – which is weaker in non-food than grocery and is especially weak in apparel,” wrote Neil Saunders, managing partner at GlobalData. “It also gives Walmart a slice of the action in the resale space, which has been growing rapidly. It is also a win for thredUP as it expands its reach and ecosystem of buyers and seller.”

Jenn Volk, thredUP director of product management, said the partnership with Walmart would enable the two companies “to power a sustainable, secondhand shopping experience unlike any other. From Calvin Klein and Nike
NKE
to Coach and Michael Kors, this digital partnership enhances Walmart’s fashion offering with fresh brands at amazing prices that their customers will love.”

“This partnership will allow walmart.com
WMT
to carry premium brands that would never be seen in a Walmart store,” wrote Stephen Rector, president of BakerTown Consulting. 

ThredUP’s 2019 annual report, conducted by GlobalData, showed that the apparel resale market has grown 21 times faster than new clothing sales over the past three years. Annual revenues are projected to reach $51 billion by 2023, up from $24 billion, driven by sustainability-minded Millennials and Gen Zers. These two groups are buying secondhand items two-and-a-half times faster than consumers in older demographics.

The deal between Walmart and thredUP comes at a time when new clothing sales have taken a hit as stores across the U.S. were forced to close beginning in March in response to the novel coronavirus pandemic. Retailers have engaged in deep discounting online ever since in an effort to move excess inventory created when consumers shifted their purchases to stock up on food and other essential items.

Terms of the deal were not published, but it is thought to be similar to those made with other third-party sellers on Walmart’s online marketplace.