Target tiptoes back into resale with new ThredUp deal, as it makes sustainability push

Key Points
  • Target has a new landing page on resale site, ThredUp, which features items from its private labels and limited-time designer collections along with select items from luxury brands.
  • The big-box retailer previously launched — and then shut down — a test in 2015 with the online thrift shop.
  • The resale market totaled $15 billion last year and is expected to more than triple to $47 billion by 2025, according to Jefferies.

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Target ThredUp website
Source: Target

Target is tiptoeing back into secondhand sales through 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 of women's and kids' apparel, along with accessories. Some items are from Target's private labels, such as kids' clothing brand Cat & Jack, or its limited-time designer collaborations, such as one with Lilly Pulitzer in 2015, and others are from luxury brands not typically 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 financial terms of the deal. ThredUp also declined to comment.

This is not the first time Target has teamed up with ThredUp, an online consignment and thrift store. Target launched — and then shut down — an approximately six-month test in 2015. It allowed shoppers to get Target credit for gently used items that ThredUp was willing to resell.

A Target spokesperson said the company decided to partner again with ThredUp to tap into customers' interest in value and sustainability. Target's new webpage on ThredUp's website is labeled as a beta test. It includes about 400,000 pieces priced at up to 90% off.

The partnership fits into Target's broader sustainability initiatives, including Target Zero, a new label in stores and online that points out products or packaging designed to be refillable, reusable or compostable. The retailer also recently turned a San Diego-area storefront into its first net-zero energy store by adding massive carport solar panels.

For retailers, resale is a way to get in front of Gen Z and millennial shoppers who enjoy the "treasure hunt" and green aspects of thrifting, said Ashley Helgans, an equity research analyst who follows the sector for Jefferies. Through secondhand purchases, those younger consumers may develop an affinity for new brands and decide to make purchases directly from the original seller, she said.

For ThredUp, striking deals with retailers is a way to expand its reach and sell inventory more quickly in a growing, but highly fragmented industry, Helgans said. It competes with other players, including The RealReal, eBay, Poshmark and Depop.

ThredUp has also struck profit-sharing deals with retailers like Walmart and Madewell, which cross-list items on their own websites.

Helgans said Target's previous test may have come too early. In 2015, the resale market stood at about $1 billion, according to Jefferies. It's now grown to an estimated $15 billion in 2021 and is expected to more than triple to $47 billion by 2025.