Does peer-to-peer resale make sense for Urban Outfitters?
Taking on popular marketplaces such as Poshmark, Thredup and Depop, Urban Outfitters (URBN) plans to launch a peer-to-peer secondhand marketplace, Nuuly Thrift, this fall. URBN will carry pre-owned men’s, women’s and kids’ apparel and accessories from any brand for purchase starting on its iOS app.
Nuuly Thrift will become a sister brand of Nuuly Rent, URBN’s subscription rental service for women’s apparel launched in 2019. Richard Hayne, CEO, told analysts last week on its second-quarter conference call, “Both Nuuly platforms, Thrift and Rent, will support its mission to be a curated destination for anyone who loves fashion and is exploring how to wear, buy and sell it in ways that are gentler on the planet and on their wallets.”
Like many other retailers, URBN is seeking to capitalize on the fast growth of recommerce. ThredUp’s 2021 Resale Report projected the $36 billion secondhand market would double in the next five years, reaching $77 billion, led by younger generations.
URBN found that three-quarters of its shoppers have made secondhand purchases in the past year and nearly half have resold items. URBN’s brands, which also includes Anthropologie, Free People, BHLDN and Terrain, consistently perform strongly on secondhand marketplaces.
Other retailers, however, have taken different approaches to resale. Macy’s and Madewell have partnered with Thredup in setting up their platforms. Levi’s, Patagonia and Lululemon only accept their own brands in their programs, that also include repurposing and repairing product.
Creating a peer-to-peer marketplace heightens the cannibalization risks around the sale of new merchandise. Nuuly Thrift counters that in part by incentivizing sales across its businesses. Sellers are given the option of receiving their payout directly into their bank account or choosing “Nuuly Cash,” earning a 10 percent credit on purchases at any of URBN’s businesses. Mr. Hayne told analysts, “This should create a cycle of buying and selling within the URBN ecosystem while also creating value for the customer.”
URBN also expects to benefit from its internal logistics and software platform, already built to support Nuuly Rent, as well as a tighter focus on curation versus other resale sites.
- URBN to Launch Nuuly Thrift, A Resale Marketplace to Buy and Sell Women’s, Men’s and Kids’ Apparel and Accessories – URBN
- Urban Outfitters, inc (URBN) Q2 2022 Earnings Call Transcript – Motley Fool
- Urban Outfitters’ Nuuly Thrift Aims to Capture Millions of Resellers This Fall – WWD
- Urban Outfitters to Take On Poshmark With Its Own Thrift Store App – Wall Street Journal
- Urban Outfitters to Take On Poshmark With Its Own Thrift Store App – Refinery 29
DISCUSSION QUESTIONS: Do you see a big sales opportunity for Urban Outfitters and other retailers in establishing peer-to-peer resale marketplaces? What do you think of the risks of cannibalization?