Target TGT, a retail giant, has discovered a new way to profit by selling secondhand clothes. ThredUp is a marketplace that sells used fashion items such as Chanel bags, Gucci accessories, and Nike Shoes. The partnership leverages ThredUp’s “resale-as-a-service” online platform. According to Nielsen, African Americans spend 34% more on non-food items than mass merchandisers like Walmart, WMT or Target. Target’s target shoppers may be attracted to lower-priced brands, especially as they try to tap into the $51billion resale market.
What You Need to Know:
CultureBanx pointed out that this is Target’s second partnership with ThredUp after they partnered in 2015. It’s not surprising that Target is partnering with ThredUp for the second time after previously partnering in 2015. According to ThredUp, GlobalData Retail, and ThredUp, the resale industry is expected to grow to $51billion by 2023.
ThredUp claims to be the largest online thrift shop and has over 750,000 items from 2,000 brands. Customers will be able to access 400,000 items for women and children from Target’s brands and premium brands curated by ThredUp.
ThredUp CEO James Reinhart stated that 28 RaaS clients were now on the company’s roster, according to Seeking Alpha. In 2021, its Raas platform grew its client base by more than 30%. McKinsey reported that the secondhand market would increase by 10% to 15% in the coming decade.
Secondhand Profits:
Target can increase the profitability of its online business, which has been highly profitable. The total digital sales of the company grew by 20.8% in the last year. The possibility exists that secondhand fashion items could help the retailer drive higher returns. Target shares have been down by more than 5% in the past year.
Thrift shops are no longer seen as places where low-income shoppers shop. Instead, they attract middle-class buyers looking for vintage and unique items. Target wants to offer a better way for this group with its e-commerce platform.
Young fashionistas are increasingly seeing used goods to save money and reduce their consumption to ensure sustainability. Target said that this t was a way to improve customer service, such as what products Target carries and how they can offer value. It also helps the company achieve its sustainability goals.
