“We are really not a retail organization, and we don’t think of ourselves that way. We deliver goods from the donor to the customer,” said Roland Blahnik, president and CEO. “We have a high profile in the social services world, and we are well-known in our communities for the work we do to help people.”
More than 20 years ago, the organization’s leadership made the strategic decision to expand across parts of Kentucky that were without Goodwill’s services. From a two-location operation, the organization has grown to include 54 donated goods locations (commonly known as thrift stores), two temporary services offices, and a half dozen job placement, training, and counseling locations.
The organization is made up of four corporations. GTS Staffing is its temporary services arm and helps people with language barriers, the homeless, and those with less-than-perfect work histories find temporary employment with the goal of finding full-time work. Independent Industries, the first community rehabilitation program (CRP) in the state to receive ISO 9001: 2000 certification in manufacturing and human services, provides employment opportunities and related services for people with physical, mental, or developmental disabilities. Goodwill Industries Works is the donated goods program, and Goodwill Industries is the parent of the other corporations and operates a janitorial business that employs people with severe disabilities.
Easy on the customer
Since Goodwill Industries of Kentucky considers itself a material handler rather than a retail operation, efficiency within the donated goods operation means breaking things down into categories to make the shopping experience as simple as possible. Items are displayed in groups like men’s and women’s, making it easier for customers to look through items, essentially acting as the final sorters. The organization doesn’t necessarily have the luxury of being able to go into storage to replace items on the floor once they run out. It falls to the organization to determine what items customers are likely to buy.
“Our shoppers live in our neighborhoods, so they decide what materials and clothing fit well in their neighborhood. For example, we have a rural store that gets a lot of donated goods from nearby urban North Carolina neighborhoods,” Blahnik said. “The items are great, but they don’t sell well in that store because they aren’t right for a rural mountain environment.”
Although it isn’t possible for the organization to communicate to donors exactly what is needed on a large volume scale, the general message is that Goodwill will accept anything that people no longer need as long as it isn’t toxic. Goodwill Industries of Kentucky doesn’t take items like refrigerators, tires, or paint for that reason, and it announced that as of last December it would no longer accept donations of TVs or computers because of disposal challenges. Many people donate goods several times a year, and well-placed signage at each location lets people know what the organization can and cannot accept.
The visibility of the organization’s donated goods operations helps to fuel the social services it provides. Last year, Goodwill Industries of Kentucky placed 1,830 people with disabilities or other disadvantages in various jobs—as many as the rest of the CRPs in the state. That kind of presence means the organization doesn’t have to spend too much time and money promoting itself or its various services.
Goodwill Industries of Kentucky hasn’t finished growing yet, either. Last year, it opened three new facilities and has two more scheduled to open in the next few months. It also relocated two facilities in 2008 and has three more relocations on the drawing board. Building new locations is the organization’s preferred method of expansion and renovation because of the difficulties of retrofitting existing structures.
“We’ll have about 60 locations once everything we are working on is complete. I think we need about 75 locations to adequately serve our communities. We’re only at about 40% of the size we should be,” said Blahnik.
The organization also recently invested in a custom software solution to handle what Blahnik called its daily balance records, which balances daily sales at its donated goods stores. It is designed to streamline operations in the stores so managers can spend less time on paperwork and more time managing their employees. If the organization truly considered itself a retail operation, it would probably look toward investing in a point-of-sale (POS) system, as other Goodwills have done. But Blahnik said Goodwill Industries of Kentucky experimented with the idea and found it doesn’t get enough value out of POS registers and software to see a return on the investment.
So far, recent economic difficulties haven’t hurt donations or sales, although Blahnik said the organization noticed its sales growth softening about a year ago. Since that time, however, the numbers are back on pace. Although it has to borrow to build new locations, Blahnik said the credit markets are still willing to work with Goodwill Industries of Kentucky. As long as the organization continues to follow its plan of slow and steady expansion, it should be able to continue serving the people of Kentucky for quite some time.
“Retail as an industry is struggling, but we aren’t seeing that. We’ll be fine as long as our sales and donations stay strong, so we don’t need to do anything dramatically different,” concluded Blahnik.