Walmart has officially entered the reseller market.
This week, the retail colossus launched a new a site in partnership with ThredUp, an online thrift store where users can buy and sell preowned clothing. Known for its great deals on used designer items, ThredUp will now allow Walmart customers to buy designer labels at typical Walmart prices.
Walmart To Become More Fashion Focused
Walmart has striven for years to enter the fashion market, but to little success. Prior to its partnership with ThredUp, Walmart carried just a small sampling of designer lines, in addition to its in-house George brand, which offers simple, affordable staples.
But Walmart has recognized that offering a wider variety of brand names could be key to energizing its apparel division, especially among young consumers who seek out designer labels. Moreover, recent trends prove that shoppers have become less averse to buying secondhand clothing, which is considered less detrimental to the environment than mass-manufactured garments.
Now, Walmart’s partnership with ThredUp will give customers access to hundreds of brands like Coach, Armani, and Nike, while simultaneously leaning-in to a public acceptance of lightly-used clothing.
Impact of the Deal
“This partnership is our latest move to establish Walmart.com as a destination for fashion,” bragged Denise Incandela, Head of Fashion for Walmart E-Commerce. But how exactly will it affect Walmart’s bottom line?
It’s unclear just how the profit margin on secondhand apparel will stack-up against the profit of new, Walmart-made clothing. Producing cheap George-brand clothes may cost Walmart less than buying secondhand designer clothes, but the company is betting it will be able to mark-up the used designer items and maintain margins. While a typical article of George-brand clothing might cost between $20 and $40, a good-condition designer item can sell for $100 and still be considered a steal.
Walmart is not the only retailer experimenting with ThredUp’s services. Fellow bricks-and-mortar chain Macy’s has partnered with ThredUp in the past, even opening small, in-store thrift shops at select locations. While Macy’s admits that resale never proved to be a cash cow, the thrift store pop-ups successfully drew younger shoppers to the store.
But the real winner in the deal is ThredUp, a relatively low-profile company that will gain great visibility from its partnership with Walmart.