Goodwill finds the need to spin off a down-market concept
Goodwill isn’t what it once was — something Goodwill itself acknowledges. So, the company is piloting a new store concept to address the perception that it is moving too upscale. The goal is to keep customers Goodwill fears it has been alienating.
The longstanding thrift store banner is trying out a store format called Simply Goodwill, according to Forbes. The store concept, like thrift stores of bygone days, will have no tags on individual items nor sorting by color. The reduced labor costs that come with a less organized product selection will allow for lower prices than regular Goodwill outlets. Children’s clothing with start at $1 rather than $1.99 and adult clothing will start at $2.75 rather than $3.79. The pilot comes as a response to feedback from core shoppers who said they miss the way Goodwill used to be. The test location was opened last month in Roanoke, Virginia.
The increase in the popularity of thrift shopping that led Goodwill to go more up-market is well-established. The reselling of thrift apparel alone is slated to be a $33 billion business by 2021, according to research by ThredUP.
But thrift store shopping isn’t the only area of retail that’s begun to move up-market as it has grown in popularity.
Aldi, for instance, which carved out its niche globally as a hard discount grocer, has made changes moving somewhat away from its bargain basement roots. The chain has increased its selection of organic products and, last year, began accepting credit cards for the first time.
And even dedicated-to-low-prices Walmart has been revamping its image with acquisitions of Millennial-friendly e-tailers and brands including Jet.com, ModCloth, Moosejaw and Bonobos.
If stores like Aldi and Walmart are concerned that they may be leaving core shoppers behind as they roll out more modern offerings and amenities, there could be value in watching Goodwill’s move to see if it succeeds in bringing an alienated customer base back.
- New Simply Goodwill Concept Store Being Tested In Roanoke, Virginia – Forbes
- Is thrifting going mainstream? – RetailWire
- Aldi’s evolution leads to credit cards – RetailWire
- Should Walmart buy Birchbox? – RetailWire
- Will adding off-price shops lift Macy’s full-price stores? – RetailWire
DISCUSSION QUESTIONS: Should retailers that are moving upscale to meet customer trends consider opening back-to-basics concepts like Simply Goodwill to keep core customers on board? What do you see as the potential risks and rewards of this strategy?