Coffee, Tea, Or.

Superstore touching-up thrift image

If you're buying a book and sipping a gourmet coffee you might think you're in a Barnes & Noble-type store, right? Well in Hurst, Texas, you could be in a Goodwill superstore just opened. in July.

"The coffee shop was the riskiest thing," said David Cox, director of community relations and marketing for Goodwill Forth Worth. "We never had anything like that before. But, it has become one of the most popular places in the store."

The superstore's book section now fills four alcoves of 2,000 square feet, compared with a size of only one aisle in other Goodwill stores. Unlike commercial book chains, Goodwill's book store offers a buy-back program where shoppers can turn in old books for money while helping the cause.

The cafe and the book store might be a result of the success of super book chains. Also, Goodwill noticed disgruntled family members who accompanied shoppers but desired to be elsewhere. "Usually the father who doesn't want to shop needs a place to relax," Cox said. "They would sit in a car in the parking lot before and now they can sit in an air conditioned cafe with a Danish."

Commercial book stores have stated that customers who hang around the cafe help sales. But, does this translate to other retail items? "If the customer is invited by the store to spend some time, then the opinion about the store will be positive," Cox said.

The superstore is an example of a nonprofit rethinking its business strategies. The superstore offers upscale items at bargain prices in a space almost three times the size of the average Goodwill store. Hurst's 22,000 square feet contrasts the range of 4,000 to 12,000 square feet of most other 1,900 Goodwill stores nationwide.

Customers find displays of goods where glassware and pottery are found in hutches and baker's racks. A boot might be placed in a atmospheric display about farms. The visual effects are new but the prices are the same discounts as before. Tommy Hilfiger pants along with a pair of DKNY jeans are priced at $3.25.

"In the first week, we had to continuously maintain the shelves because of the flow of people," Cox said as the first week sales topped $80,000. "We anticipated the store would be a million dollar effort and it looks like it will be better than that."

Goodwill was threatened in the Dallas-Ft. Worth market with greater than average competition, according to Cox. "We expanded to a larger store to compete with the big retailers," Cox said. "We wanted to create a store that would generate a lot more revenue."

Goodwill operates differently from other nonprofits. Revenue is generated through a self-sufficient business. As much as 65 percent of its revenue come from stores. Donated clothing and goods are turned into revenue as the thrift concept provides items for customers and income for the organization.

"The superstore will help generate the much-needed revenue to fund our programs," Cox said. "Down the road this helps us to develop a training program for people to work in other locations."

The grand plans called for a super investment. The purchase of the building and modeling cost $1.7 million. But the cost is deemed an investment. Goodwill seeks a new customer base who never frequented its stores.

Goodwill's community goes beyond the customer to the donor who supplies the organization with items. For this reason it places stores where the donations originate. "Shoppers will drive to a store, but donors will not," Cox said.

These donors have previous knowledge about the mission of the organization. The Hurst location proved to be a logical spot from the amount of donations received in a parking lot prior to the purchase.

"We positioned ourselves in a middle to upper-middle class area of town," he said. "This is an upscale suburban community and we recognized that it was an important donor base from recent donations. We thought we could expect more than enough donations to fill the shelves."

Now the donation area features a drive-through and deposit in front of the store to make access easy. Special attendants serve donors during times when lines form.

Hurst's operation is part of a national trend with other Goodwill stores but is the first to have such a variety. The store is designed around the boutique concept. Definite departments stand out unlike the traditional, one huge room with bins.

Hurst has a department for teenagers to create their own image called the Funky Boutique. A New Goods boutique offers items from close-outs or returned items. A Plus Size Boutique offers goods for larger consumers. Meanwhile, a complete Wedding Apparel section caters to the young audience.

"We decided on the types of items from the success of previous stores," Cox said. "Customers determine the items we offer by their requests."

Unexpected glitches occur with any new endeavor. Goodwill discovered it had a larger space than expected for the cafe section and the chairs covered a smaller space than required. "We've recently ordered some more furniture, such as cozy seating like that found at Starbucks," Cox said. "The section can become a community where people stop on a daily basis."

Key design and layout can increase sales but the exact percentage is unclear, according to Mary Jane Moreau, founder of Studio B Dallas and lead creative on the Goodwill superstore project.

"Retail sales are linked to a consumer's experience," she said. "If they are used to seeing directions or displays and they fail to find them, they will be disappointed."

Moreau sought to change the Goodwill store's image. "Goodwill never had signage (inside) or directionals," she said. "Many clothes were not hanging on hangers." Moreau wanted to get the customer right at the front door with information about where to go along with which items are available. The object is to also help the customer move around the store.

Goodwill stores operate independently, which probably helps them get things done faster, according to Moreau. But the lack of central coordination also hinders them without a single graphic, marketing or advertising agency. "If they have any signage or graphics, it's a pre-bought set of posters," she said.

With Moreau's guidance, the Hurst store took four testimonials about people who have benefited from the organization and turned it into messages around the store. "This makes the customer appreciate the work of the organization and helps with branding," she said. "Many people shop without knowing about the mission of the store or that it's a nonprofit."

The store's structure had large 9-foot openings at the top of the walls along the right and left side. "They needed something to close them up," she said. "Now seven-foot fabric banners rotate with Goodwill messages like the logo or messages that Goodwill changes lives so the mission is being promoted. This makes people more willing to shop and also increases donations."

Goodwill's fears that thrift stores are increasingly emerging could chip away at its usual market. "The designs help Goodwill increase its branding with the message about how it helps the community," she said.

The superstore concept is part of a national trend to move into higher income areas, according to Christine Nyirjesy Bragale, media relations manager at Goodwill Industries International in Bethesda, Md. "We want to place our stores in those areas, yet have them close to most sections of the city," she said.

Goodwill opened the first superstore seven years ago and others now exist in Phoenix, Portland, Ore., Portland, Maine and Tacoma, Wash. These giants are a small percentage off all stores but are an effective way to reach new shoppers. "Customers tell us they like having a large variety of products and a bigger store helps us achieve that," she said.

New shoppers may be coming from stores like K Mart or Wal Mart, explained Studio B's Moreau. "The Targets and Wal Marts probably will not see this as a new competitor because Goodwill has 80 percent used merchandise," she said. "But if the trend continues, the other discounts might become concerned."

Moreau believes nonprofits have to use for-profit formulas in retail to generate funds. "Copy the people who are successful to have customers come back for more," she said.

Goodwill's reason to expand helps fulfil its mission, explained Cox. The nonprofit now employs 30 people for the store. The next step is a possible similar store in the area next year.

A new training program promises to complement its janitorial and office computer skills program. "We identified the need to have a retail training program for people with disabilities," he said. "We will train them for jobs in merchandising and cashier work for outside employment."

Nonprofits have to think of competition as coming from the for-profit world, Cox explained.

"Many for-profit stores solicit donations for 'charities but while charities obtain some funds the bulk goes to make some people richer. We use our funds so that the bulk goes to help the disabled," said Cox.

Tom Pope is a New York city-based journalist who writes about management issues.