Strategy: Goodwill, Brand Altruism, and Circularity

In a world increasingly conscious of its consumption footprint, the need for sustainability in retail has never been more pronounced.

Since its inception in 1902, Goodwill Industries has stood as a bastion of communal thrift and charity, where gently used items find new life in the hands of appreciative consumers. Known for its sprawling network of thrift stores, this nonprofit giant has long championed the cause of reducing waste and enabling job opportunities for those in need.

Fast forward to the digital age, and Goodwill, under the innovative leadership of Matt Kaness as the CEO of GoodwillFinds.com, is poised to translate its century-old mission into the lexicon of eCommerce, at a time when circularity is within the mission scope of every major brand.

For more than a decade, it has faced mounting competition from the likes of ThredUp, Poshmark and Etsy’s Depop, online platforms specializing in previously owned clothes. (New York Times)

Goodwill, a brick-and-mortar stronghold, has now successfully ventured into the online marketplace, aiming to carve its e-niche amidst the likes of the platforms quoted above. This bold pivot not only reflects a strategic adaptation to contemporary shopping trends, but also presents an untapped opportunity for brands to align with Goodwill’s enduring legacy of sustainability and social impact.

According to Statista, 61% of Americans know Goodwill. Poshmark comes in a distant second. So where do brands fit in? The strategy could be: reducing waste by partnering with the oldest and most known retailer in resale, benefiting others while reducing inventory exposure to your brand. As Kaness himself has stated, “There’s so much competition coming into the market now,” reflecting the urgency for Goodwill to evolve and stake its claim in the online resale market, a space brimming with for-profit contenders. By partnering with Goodwill, the goal for brands is not added revenue. Rather, brands can pass off their unsold or returned inventory to Goodwill, writing down losses in a charitable way while inching closer to the altruism that we hold so dear.

Human beings aren’t born altruists and turned into monsters by money. From the cradle, we’re greedy and needy. We turn to altruism as a result of penury, circumstance, or good breeding.

Chuck Thompson, The Status Revolution

The following memorandum is free to copy. It outlines why such an alliance not only enhances a brand’s circularity credentials but could potentially redefine the ethos of returns in the modern retail paradigm. Not only will you do good by instituting this type of strategy for your brand, you will be of the first to capture the tax benefits and earned media associated with pursuing sincere altruism.

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MEMORANDUM

To: [Brand’s Leadership Team]

From: [Your Name], [Your Position]

Date: [Current Date]

Subject: Strategic Partnership with Goodwill for Enhanced Circularity and Returns Management

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Introduction

This memo outlines the strategic advantages of partnering with Goodwill Industries as a pivotal component of our brand’s circularity and returns strategy. With an emphasis on sustainability and waste elimination, this collaboration will not only support [Brand’s] environmental commitments but also boost our brand image and customer loyalty.

Aligning with Circular Economy Principles

In the evolving retail landscape, the integration of circular economy principles is a business imperative. A 2PM quote on Circular Fashion noted: “Many of us walked Goodwill’s aisles out of necessity. I rocked $3 T-shirts with pride. Today, I could have probably sold a few of the same pieces for 30 times the price that I purchased them.” In the current market, consumers do not view thrift store resale as detrimental to brand equity. This is slightly different than the view of partnership with stores like TJ Maxx, Ross, and other bargain retailers.

By aligning with Goodwill, we can ensure that returned or unsold products are responsibly recycled or resold, reducing environmental impact and supporting local communities. This approach aligns with consumer expectations for sustainable practices and positions us as industry leaders in ecological stewardship.

Brand Image and Customer Loyalty

Partnering with a respected and recognized organization like Goodwill can significantly enhance our brand’s image. Goodwill’s mission resonates deeply with the growing demographic of socially conscious consumers. By publicly aligning with Goodwill, we communicate a clear message of ethical responsibility, potentially increasing customer loyalty and trust.

Goodwill’s Mission and Public Perception

Goodwill has long been synonymous with charitable work and sustainability. As it adapts to the digital age with platforms like ShopGoodwill.com and GoodwillFinds, it demonstrates a commitment to innovation and relevance in the e-commerce space. Aligning with such a dynamic and positively perceived brand can elevate our own sustainability narrative.

Communication Strategy

Our partnership with Goodwill should be actively communicated to our customers, showing our commitment to reducing waste. Leveraging Goodwill’s foray into eCommerce, we can promote our partnership through both physical and digital channels, creating a comprehensive narrative around our shared values of sustainability and social responsibility.

Tax Implications

Donating unsold or returned merchandise to Goodwill can provide us with tax benefits. These donations can be written off as charitable contributions, potentially reducing our taxable income. It’s crucial to consult with our tax advisors to optimize the benefits and ensure compliance with IRS regulations.

Operational Considerations

Integrating our returns with Goodwill’s donation system may require logistical adjustments, Matt Kaness and team at Goodwill are already working on a solution to assist with this measure. The long-term benefits, including reduced waste management costs and the potential for tax deductions, make this a viable strategy. By streamlining this integration, we can enhance operational efficiency and bolster our sustainability goals.

Goodwill’s eCommerce Presence

Goodwill’s expanding online presence provides an additional platform for us to redirect returns and unsold items. As stated in the New York Times, Goodwill has already achieved significant online sales growth, demonstrating the viability of this channel. By leveraging this, we can contribute to a more significant online inventory, potentially reaching a wider audience.

Challenges and Recommendations

While Goodwill’s decentralized structure presents challenges, these can be navigated through clear communication and collaborative strategies. We recommend establishing a dedicated team to manage the partnership and ensure a seamless integration with Goodwill’s systems.

Conclusion

A strategic partnership with Goodwill will bolster our circularity initiatives, enhance our brand’s social responsibility profile, and resonate with our customers’ values. It’s a forward-thinking step that not only aligns with our sustainability goals but also makes sound business sense. I recommend that we further explore this opportunity and engage with Goodwill to define the framework for a successful partnership.

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Action Items:

• Establish a task force to explore partnership feasibility.
• Engage with financial advisors to assess tax implications.
• Initiate dialogue with Goodwill to explore collaborative opportunities.

I look forward to your feedback and the opportunity to discuss this proposal further.

[Your Signature] [Your Name]

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The more that resale becomes ingrained as part of the consumer experience – buy-wear-sell-repeat – the more customers and brands are likely to think about the life cycle of their products. And that’s significant. Consumers will grow closer to brands, no matter where they find them, and in doing so, they may alleviate some of the environmental impact caused by textile waste. This is the solution that we’ve been awaiting.

If you can’t prevent returns, encourage them.

By Web Smith | Editor: Hilary Milnes with art by Alex Remy and Christina Williams