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Resale’s on Track for $50 Billion and Gap Wants to Be a Part of it

Online secondhand marketplace ThredUp is partnering with Gap Inc. on a new program designed to encourage shoppers to participate in the resale economy.

In a statement Thursday, Gap Inc. revealed that it would offer shopping credits for Gap, Banana Republic, Athleta, and Janie and Jack to consumers who turn in worn apparel through ThredUp’s Resale-as-a-Service (RAAS) platform. The program allows retailers to promote circularity by making their stores a touch point for consumers looking to part with their used clothing.

Shoppers who choose to redeem their trade-in credits at Gap Inc. brands will receive an additional payout bonus of 15 percent, the company said. Starting in April, ThredUp Clean Out kits and labels will be available at select stores across the country, giving consumers a convenient avenue for submitting their unwanted goods for consignment.

The partnership with Gap Inc. represents the largest distribution to date of ThredUp consignment materials to a fashion firm under the RAAS platform.

“After watching its stock tumble 30-plus percent over the past year, Gap Inc. is making a strong play to be in front of the expected boom in the resale market,” said Tyler Higgins, leader of the retail practice at AArete, a global management consultancy. With the resale market expected to surpass $50 billion by 2023, according to ThredUp’s resale report last year, the partnership “is Gap Inc.’s way to both stay competitive in the marketplace while executing a strategy for new customer acquisition.”

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Gap Inc. president of specialty brands Mark Breitbard all but copped to the strategy in his statement about the partnership.

“As the resale revolution continues to gain momentum, participating in re-commerce is not only good for our planet, but good for business,” he said. “Our customers are diversifying their closets, whether with new clothing, rental pieces or secondhand goods. We’re thrilled to partner with ThredUp in offering a sustainable and innovative way to shop for the closet of the future.”

In addition to participating in the RAAS program, Gap Inc. has independently pledged to divert more than 30 million pounds of material waste from landfills by optimizing packaging and reducing volumes. Currently, the company claims to divert almost half of the waste generated by its North American facilities.

ThredUp’s resale report revealed that the equivalent of one garbage truck of textiles is sent to landfill or incinerated each second. But nearly half of the entire adult female population—56 million women—bought secondhand products in 2018, suggesting that the appetite for resale is vast, and there is a viable channel for diverting usable garments from such a fate.

In fact, last year, ThredUp upcycled its 100 millionth item, which the company claimed displaced an estimated 870,000 tons of CO2 equivalent, which nets out to about 74,000 road trips around the world.

“ThredUp’s Resale-as-a-Service platform was built with consumers and retailers in mind,” co-founder and CEO James Reinhart said. “After spending the past decade building the backbone of resale on the internet, we are thrilled to partner with the iconic brands in the Gap Inc. portfolio to deliver a convenient, responsible clean out service to their customers.”

Collaborative efforts between resale bodies and retailers “can be a boost in terms of traffic, engagement and conversion, which specialty and department stores certainly could use,” Chris Ventry, vice president of the consumer and retail practice of SSA & Company, a global management strategy consultancy, said.

Finding new ways to draw consumers into stores or engage them online is imperative to future success, and the resale economy can be a part of that strategy. “All retailers… are questioning how to best utilize their real estate, whether this is brick-and-mortar square feet, or on retailer websites, mobile sites and mobile apps,” he added.