Dive Brief:

• Target is testing a secondhand apparel marketplace, leveraging ThredUp's "resale as a service" platform, the retailer said by email.

• The offer includes about 400,000 women's and kids items from Target's owned brands as well as national and premium brands curated from ThredUp's own assortment, the retailer said. 

• This is Target’s second foray into the space, having previously partnered with ThredUp in 2015.

Dive Insight:

According to ThredUp's "Recommerce 100," (a list of retailers and brands that use its RaaS program and those that don't), at least 41 brands are in the secondhand business. With hundreds of thousands of items, Target's effort represents an unusually large scale, even if it's only in pilot mode.

In March, ThredUp CEO James Reinhart told analysts that its roster of RaaS clients had risen to 28. ThredUp's Raas platform expanded its client list by over 30% last year, and is seen by Wells Fargo analysts as potentially more lucrative than its own secondhand apparel site. ThredUp declined to comment on the Target effort.

"We believe this is can be a very important source of inbound supply, as [ThredUp] can generate incremental supply by leveraging the existing customer base of their RaaS partners," Wedbush analysts Tom Nikic and Ezra Weener said in a March 8 research note.

Retailers and brands, many with the help of ThredUp, are working to meet surging demand for secondhand clothing. Shoppers, including many younger ones, increasingly see used goods as a way to find a bargain and to limit consumption in the interest of sustainability.

For Target, the pilot is a way to explore how to better serve customers, including what products to carry and how to offer value, along with furthering its sustainability goals, a company spokesperson said by email.

The secondhand market is set to expand 10% to 15% over the next decade, according to McKinsey and Company; ThredUp sees it reaching $77 billion in four years.