Macy’s and JCPenney are entering the secondhand resale market for the first time, partnering with online consignment store thredUP to offer apparel and handbags from leading designers and brands. Macy’s is presently piloting thredUP in 40 stores, while JCPenney will offer the selection in 30 stores.
The moves come as both department stores are experimenting with creative ways to drive shoppers back to their brick-and-mortar locations. The total secondhand apparel market is anticipated to more than double by 2023 (from $24 billion in 2018 sales to $51 billion), with the resale sector having the biggest impact on its growth (climbing from $5 billion in sales to $23 billion), according to the 2019 Annual Resale Report from thredUP and GlobalData Retail. Such high potential growth can’t be ignored by traditional retailers, especially as they explore new partnerships.
As Macy’s puts thredUP merchandise into its stores, it will be taking items from brands and categories that Macy’s doesn’t currently offer, said CEO Jeff Gennette in an earnings call, telling analysts that the move would not result in any cannibalization of Macy’s existing offering.
“Really, we are merchandising into where we see holes in our inventory,” Gennette said. “This idea that merchandise was pre-owned is very attractive to many customers, not just because of the price, but also because of the sustainability, so that’s how we approach that.”
While Gennette said the thredUP assortment will be likely take up 500 square feet within Macy’s stores, JCPenney will provide a larger footprint, with the thredUP branding occupying anywhere from 500 to 1,000 square feet per store.
“With the rise of online resale markets, there’s no doubt that demand for great value on quality brands is at an all-time high,” said Michelle Wlazlo, EVP and Chief Merchant for JCPenney in a statement. “There’s an emotional thrill that comes with finding one-of-a-kind secondhand product for much less. While there are more secondhand shoppers than ever before, we’ll continue to test and evaluate how this resonates with customers.”
Shoppers making ThredUP merchandise purchases are eligible to earn JCPenney Rewards. It is not yet clear if Macy’s will integrate thredUP purchases with its loyalty programs. Macy’s won’t take thredUP consignments or returns, except for returns of thredUP merchandise purchased at Macy’s stores.