Goodwill's Thrifty Retail Strategy

Molly Soat
Marketing News
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Key Takeaways

​​What? Goodwill stores are opening high-end thrift boutiques to attract younger, trendier customers.

So what? This retail strategy is boosting revenue and keeping Goodwill's brand image fresh.

Now what? Retail marketers should be looking for growth opportunities based on millennial buying habits. 

Thrift store chain Goodwill's brand strategy markets resale to the young and upscale with stylish secondhand boutiques and fashion-focused marketing tactics​.

Sifting through dusty bins of secondhand sweaters was once seen as a necessity for families trying to make ends meet, or for college students who’d rather spend money on pizza and beer. Fast-forward to the end of the Great Recession, and thrift store shopping is more mainstream than ever. Now, socially conscious millennials seeking “upcycled” duds scour the racks of Buffalo Exchange and Crossroads Trading Co., and young homeowners hit up The Salvation Army in search of vintage furniture. The​ resale industry, itself, is a lucrative one: In 2014, the revenue for the resale industry reached $9.2 billion, with annual growth of 2.3% from 2009 to 2014, according to market research firm IBISWorld. Yet despite the surge in thrift store shoppers, the industry still faces major perception problems, experts say: Namely, the shabby, hit-or-miss image associated with warehouse-sized thrift shops. To position itself away from the resale industry’s frumpy image, Goodwill—owned by Washington, D.C.-based Goodwill Industries Inc. (GII)—is redefining its retail strategy to appeal to younger, and more affluent, demographics. 

The organization, which nets about $4 billion annually with 165 independently operated U.S. territories and locations in eight countries, has 92% brand recognition among all U.S. consumers, according to the company, and stands as one of the foremost brand names in thrift retail and nonprofit organizations nationally. In fact, according to market research firm IBISWorld, Goodwill holds 42.6% market share in the U.S. thrift category. 

In the organization’s efforts to broaden its appeal, individual Goodwill territories across the country have opted to forgo the more traditional secondhand storehouses to open sleek resale boutiques—60 total over the past four years—where gently used designer dresses are draped over chic mannequins, poised next to artfully arranged home furnishings. “When you walk into our [boutiques], they look and feel like Urban Outfitters or Anthropologie—polished cement floors, exposed ceilings, brick walls, a whole fragrance system inside—because we’re very sensitive to the shopping experience,” says Frank Talarico, CEO of Goodwill Orange County in California.

The goal of Goodwill’s boutique-store strategy is twofold, according to Michael Meyer, vice president of marketing at GII: to attract high-end shoppers who have never been to a Goodwill before, and to reach existing thrift store shoppers with a better, more curated shopping experience that drives higher per-visit sales. 

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Author Bio:

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Molly Soat
Molly Soat is the senior staff writer for the AMA. E-mail her at msoat@ama.org and follow her on Twitter @MollySoat.

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