While other retailers are filing for bankruptcy protection or closing up shop, Walmart and secondhand clothing retailer ThredUp just partnered up in a master move that may disrupt the space.
In this overview detailing why this merger is a match made in retail heaven, we’ll share consumer and market intelligence around:
- The state of retail post-COVID
- Walmart’s grocery dominance and why retail is a natural next step – and also, what may be next!
- The key trend the ecommerce giant is expertly taking advantage of, and why others should consider following suit
And brands will want to note some key stats we’ve uncovered:
- Gen Z and millennials accounted for nearly $350 billion in consumer spending in 2019.
- The resale apparel market has grown 21 times faster than general retail over the past three years. It’s expected to reach $51 billion by 2023.
- Online grocery shopping has grown by 193% over the past 10 months.
The State of Retail Post-COVID
As we move past COVID-19 into June, the retail landscape in nearly unrecognizable. As of April 2020, total U.S. retail sales are down 16.5% as retailers scrambled to make changes to their business models and recapture market share. Unfortunately, many can’t make the necessary changes quickly enough as record numbers of retailers continue to close forever.
It’s not all bad news for retail though, as ecommerce continues to be the wave of the future. Global retail ecommerce sales grew by over 20% in 2019 and it’s still expected to reach $4.13 trillion in 2020.
As people have embraced online retail out of necessity, it has brought with it major shifts in focus for the industry. A search on the future of retail shows 15% of the global conversation centered around future digital retail experiences.
And technology has formed the backbone of these changes as retailers pivot and adapt to better serve the online consumer. Some areas of rapid change in the ecommerce industry include:
- Click and collect curbside pickup functionality
- Contactless payments and/or deliveries
- Digital app ecosystems for mobile users
- Autonomous vehicle delivery platforms
- Supply chain transparency and diversification
- Sustainability and resale/recommerce initiatives
And we can’t neglect the ubiquity of partnerships and mergers that have formed throughout the pandemic. Adaptability has been a critical skill of late, and Walmart has it in spades with its recent partnership with reseller ThredUp.
All Roads Lead to Retail
While brick and mortars continue to go the way of the dinosaur, consumers outfitted with mobile apps and curbside pickup options have become even more heavily invested in online retail. Over the past few months, groceries, takeout and consumer packaged goods purchased online have been a literal lifeline. And people are loving it more than ever.
Ordering goods online was a “thing,” but online grocery shopping wasn’t really the mainstream default way to shop until recently. In fact, it has enjoyed a meteoric rise in popularity growing by 193% from August 2019.
By leveraging its mobile app and curbside pickup capabilities, Walmart has been a key player in meeting consumer need on the grocery front. And it certainly helped to already have a robust online presence in place. Below we can see that articles related to its mobile app.
First quarter sales figures reflect this push, with Walmart experiencing growth of 8.6% in total revenue during Q1 this year, totaling $134.6 billion. Grocery pickup and delivery services helped catapult their ecommerce sales by 74% in the U.S. alone.
Since Walmart is already in the top tier of ecommerce retailers, adding depth in the resale sector is bound to further propel this giant into the digital stratosphere. That’s forward thinking fueled by market intelligence, and it’s getting a lot of social traction.
And speaking of the future, a few areas to think about for future growth and integration into ecommerce include:
- Voice commerce/Chatbot functionality to aid in searches and purchasing
- AI and machine learning integrations for enhanced customer service
- VR and AR applications (i.e. overlaying items into your living space, etc.)
But there’s one trend above all others that super hot right now across all categories – sustainability. And the Walmart/Thredup combo is on top of that too.
Sustainability is the New Black
Consumers love everything to do with sustainability right now, and that trend extends into ecommerce, naturally. Walmart expertly spotted it and jumped on the opportunity. And as you can see below, ecologically minded fashion is right up there with technology and green living regarding what interests people the most.
The demographics speaking the loudest here – Millennials and Gen Z, have a lot to spend and smart brands are paying attention to the things they care about.
Accounting for roughly 40% of consumers globally and with a purchasing power of $143 billion, Gen Z has retailers jumping over each other to win their business. And they’re not that far behind millennials whose spending sits at $200 billion annually.
Consumers in the gen Z and millennial age brackets are very concerned about environmental issues so sustainable resources and products are definitely on their radar. It’s a burning kind of love with no end in sight. And as a third of gen Z consumers are expected to purchase from the secondhand market, it comes as no surprise that digital thrift stores have become such a hit in the demographic.
The resale market expected to hit $51 billion by 2023, and top brands are itching to get in on the action. And with ThredUp marketing itself as the “world’s largest online secondhand shopping destination,” Walmart’s new partnership is setting the bar high for its competition. And they’re out ahead of them all early.
The Early Bird Catches the Consumers
Not only does this master move expand Walmart’s market reach, it does so by appealing to the sensibilities of a burgeoning consumer base. And it could be just the ticket to close the gap with Amazon.
This new partnership is a prime example of adaptability coupled with smart market analysis. Not content to bask in Q1 success, Walmart is moving quickly to increase its market penetration online. And to future proof its offerings.
Ensure that your brand stays on the forefront of innovation and capture your market share with the powerful contextualized analysis tools and visualized data that NetBase Quid has to offer. And be sure to reach out for a demo to put your brand on the fast track to the most accurate and complete consumer and market intelligence on the digital block!