Is Walmart about to become the king of online resale retailing?

Discussion
Source: walmart.com/thredup
May 27, 2020
George Anderson

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 (www.walmart.com/thredup).

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 have tested in-store thredUP shops.

“This partnership is our latest move to establish Walmart.com as a destination for fashion and offer customers the pre-owned items they might be looking for,” wrote Ms. Incandela. “We think they’ll be surprised and delighted by what they find, and we’re excited to inspire customers to look and feel their best.”

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 to Coach and Michael Kors, this digital partnership enhances Walmart’s fashion offering with fresh brands at amazing prices that their customers will love.”

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.

DISCUSSION QUESTIONS: What will the Walmart and thredUP partnership mean for each company’s business in the short- and long-term? How will this deal affect rivals to Walmart and thredUP?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"What an interesting idea and a smart way for Walmart to attract a different clientele to their website. "
"What a fabulous team! This is a partnership that is perfect for consumers and the environment. One of the best moves they’ve ever made."
"Everyone disses Amazon for folding brands into their marketplace and then knocking them off. Walmart does the same only a little more honestly through acquisition/partnership."

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21 Comments on "Is Walmart about to become the king of online resale retailing?"


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Mark Ryski
BrainTrust

Used is “in,” and Walmart is perfectly positioned to have a big impact. Price-conscious Walmart shoppers may appreciate the added “legitimacy” that Walmart brings to an already rapidly growing category. But instead of cool/hip shoppers, Walmart brings an everyday practicality. Walmart getting in the game means that the game will change – regardless of whether Walmart is successful or not, they will impact the category in a big way.

Lee Kent
BrainTrust

Absolutely! Love this and can’t wait to watch! For my 2 cents.

Suresh Chaganti
BrainTrust

This is an interesting play and makes sense. It could attract audiences from two completely different demographics for different reasons. 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.

Stephen Rector
BrainTrust

This partnership will allow walmart.com to carry premium brands that would never be seen in a Walmart store. It actually creates an even better “one stop shop” for the customer that buys her groceries and has an interest in a Michael Kors handbag – this is something other retailers can’t offer.

Shep Hyken
BrainTrust

I see this as a play for allowing other retailers to use the Walmart platform. The difference here is that there is a partnership with both companies working together versus one just licensing the use of the platform. With the emphasis they are making on fashion, this seems like a good partnership for both sides.

Kathleen Fischer
BrainTrust

What an interesting idea and a smart way for Walmart to attract a different clientele to their website. 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.

Rich Kizer
BrainTrust

When I first started reading this article, the infamous song “Sears has everything” began ringing in my ears. This deal I believe will be giant. The power of Walmart will literally drive customers to the sales tables. And Jenn Volk? She obviously has done a marvelous job at positioning thredUP for this business boom.

Ben Ball
BrainTrust

This market is not on my beat, but that “new” or “like new” condition sure sounds like a great place for counterfeit merchandise to thrive.

Liz Crawford
BrainTrust

What a fabulous team! This is a partnership that is perfect for consumers and the environment. One of the best moves they’ve ever made.

Jeff Sward
BrainTrust

Gotta love it when 1 + 1 = 3, or 5, or 6. A whole new audience for thredUP and a whole new tentacle for Walmart. Do I sense Amazon-like thinking?

Gene Detroyer
BrainTrust

Gee! Finally someone has one-upped Amazon.

Brandon Rael
BrainTrust

The sharing and resell arena was on fire and gaining momentum before the COVID-19 pandemic struck. For Walmart and thredUP, this is a win-win scenario for both companies. As we navigate through the post-COVID-19 economy, partnerships, and collaboration will be key for all companies, as they collectively work to provide outstanding customer experiences.

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. For Walmart, this is yet another diversification strategy and represents a potential revenue growth segment.

It will be interesting to see how this plays out.

Neil Saunders
BrainTrust

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. 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.

Harley Feldman
BrainTrust

This will be a great partnership. Walmart will be able to offer secondhand goods from thredUP extending their product offerings from new through secondhand goods while thredUP gets access to Walmart’s huge online base of customers. Both companies’ competitors should take note as this deal will change the perception of the secondhand market.

Ricardo Belmar
BrainTrust
This announcement has so many positive angles to it – this may be Walmart’s best strategy yet to attract net-new customers to their brand. Especially during these difficult times when consumers are possibly hesitant to return to stores. Here are just a few positives I see from this: Net-new customers for Walmart.com – both new value-oriented shoppers that didn’t shop at Walmart before, plus sustainability-oriented and general thrift shoppers that have been growing significantly in the overall resale market. All of these groups now have a new home online – Walmart.com! A great example of Walmart opening up their marketplace in a very Amazon-like way that actually does Amazon better than Amazon. Walmart.com becomes more of an everything store with this than Amazon. One place you can go to buy clothing from resale, plus other home essentials and groceries. All in one basket. Brings more legitimacy to thredUP and the entire resale market for consumers who might not have seriously looked at the resale option before and thought it was “too difficult” to buy/return when… Read more »
Patricia Vekich Waldron
Staff

#Recommerce is totally trending, especially with Millennials and Gen Z. They are looking for fashion variety and access to aspirational brands/looks that are sustainable at a lower price point. Buying online without friction or risk makes this a winning partnership.

David Leibowitz
BrainTrust

Very promising. Should be great execution aligned to the resale/recommerce economy trend. Also, it begins to position Walmart.com as more of a MARKETPLACE to compete/contrast with Amazon.

Watch both of these spaces!

Lee Peterson
BrainTrust

Everyone disses Amazon for folding brands into their marketplace and then knocking them off. Walmart does the same only a little more honestly through acquisition/partnership: Jet, Bonobos, Modcloth, Eloqui, etc. So hopefully we “get” the pattern; partner with, acquire talent, then dump the brand and use the talent and what you learned for the mothership. Welcome to 21st century retail: Big fish eat little fish.

Steve Montgomery
BrainTrust

It might initially sound like an odd couple deal but it brings advantages to both companies. Each has established itself as a place for price conscious customers and with this the arrangement brings value to each company. Walmart get access to brands that otherwise would be not available on its website and does so at price points that will appeal to its existing customer base. thredUP gets access to Walmart’s very large value focused customer base and its customers get free shipping for orders $15 dollars less than thredUP offers with no restocking fee.

Shikha Jain
BrainTrust
We can learn a thing or two from thredUP partnerships that have already been attempted with other retailers. Markdown retailers like TJX benefit more from hosting resale platforms than classical department stores like Macy’s or JCP. The keys here are consumer audience and brand fit: those who already make a habit of buying things at less than full price are more likely to spring for preowned items. For this reason, Walmart, which associates itself with affordability and getting high value items for a steal, could have the right shopper demographic for a successful thredUP partnership, at least in the short term. If this works, resale partnerships with big box stores could be the new Starbucks inside grocery stores. Soon, Millennials and Gen-Zers may expect to be able to find a secondhand section at most large retailers. The opportunity for resale growth is wide open, and secondhand retailers will need to seize it. Traditional retailers will have to get on board to keep the attention of sustainability-minded shoppers, while ensuring brand fit in the assortment they… Read more »
Sterling Hawkins
BrainTrust

Walmart has really transformed itself into a company that can dream up new and valuable ideas and then execute on them; their partnership with thredUP is just the latest example of that. It seems to be a valuable connection for both brands and together they bring a lot of extra value to the customer. Looks like a win and I wouldn’t be surprised to see rivals attempt something similar.

wpDiscuz
Braintrust
"What an interesting idea and a smart way for Walmart to attract a different clientele to their website. "
"What a fabulous team! This is a partnership that is perfect for consumers and the environment. One of the best moves they’ve ever made."
"Everyone disses Amazon for folding brands into their marketplace and then knocking them off. Walmart does the same only a little more honestly through acquisition/partnership."

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