Monday, December 8, 2008

Blue Hanger Redux

For the last four weeks, the junior class in the design program at the University of Texas has been researching Goodwill Industries of Central Texas to identify areas of improvement in its function and develop solutions to those deficiencies. Based on this research, my group proposes using Goodwill's Blue Hanger Outlets to host events.

During the research phase, our class divided into three teams. One team interviewed customers and employees to understand public and internal perception of Goodwill. Another documented the visual makeup of each store, including signage. My research team studied the Goodwill system — how a donation moves from the point of donation, to the sales floor, to Blue Hanger Outlets and to its final destination.

We talked to Joel King and Kevin McCown, the transportation manager and director, respectively, to get a bird's eye view of how the system functions.

Goodwill's system of processing donated items to maximize their profit is non-linear, but simple. When an item is donated, a manager identifies it as either fit for sale or trash. Some donations are obviously trash and are set aside for transportation to pick up, but most donations, the ones identified as fit for sale, are immediately priced by the manager and put on the sales floor. If an item doesn't sell within three weeks it is taken to transportation headquarters.

Transportation consists of a variety of vehicles, ranging from 12' box trucks to 24' trailers, to accommodate the various loading dock configurations at each Goodwill store. The transportation department picks up trash and unsold donations and brings them to the transportation warehouse where they enter the final phase in the system.

At the transportation warehouse, items are sorted into two rough categories: soft line items, like textiles, and hard line items, like appliances — basically everything made of metal, plastic, or wood. Tables are stacked high with discarded toasters, jeans and training toilets. Offered at a slash-and-burn discount and piled deep, Goodwill's rejects get their last chance for an average consumer's purchase. Unsold hard lines are boxed into four-foot gaylords — cardboard boxes resting on pallets — and sold at auction in bulk. The leftovers are recycled or trashed. Unsold soft lines are bound into 1,000-pound bales and sold by the pound (currently 12 cents per pound). Buyers of these bales send them to border towns to be resorted for sale in other countries. According to King and McCown the clothes from these bales may end up anywhere from Malaysia to Mexico.

After the official interviews and tours, we revisited both Blue Hanger Outlets, this time as customers, to observe the culture and function from the ground level.

Blue Hanger Outlets themselves are large warehouse spaces with bare walls and concrete floors. 4' x 8' wooden tables hold the unsorted masses of soft and hard line items. Nothing is individually priced, and large blue placards with mismatched white vinyl type display prices for broad categories of items. For example, at the time of this writing, any clothing item is $1.25. However, cashiers may use discretion and are allowed to price items higher or lower than their stated value, creating a garage sale atmosphere.

From the time we spent there and from our interview with King, we identified three main types of customers. The first and most prevalent are the families, primarily Latino, who buy clothes and other necessities. The second type is the bulk reseller, who buys and sells specific types of items, like stuffed animals or appliances. The third type are people who buy goods cheaply and then hold garage sales to resell the items at a marginal profit.

At the conflux of over-zealous thrift and Darwinistic capitalism a phenomenon occurs at Blue Hanger Outlets. Every hour or so, a row of picked-over tables are cordoned off, cleared of goods, and refilled with fresh goods. Meanwhile, a crowd gathers a respectable distance away from the workers to scope out new items. After the workers are finished refilling the tables, a manager gives the go-ahead and shoppers hurl themselves at the new array with abandon, which can result in the occasional scuffle. King and McCown said Blue Hanger Outlets average one or two altercations per month.

Overall, we found the Goodwill system highly efficient and progressive, willing to adapt changes in operating structure and implement them quickly. However, our foray into the Blue Hanger Outlet culture and function showed us there was still room for improvement.

Upon completion of the research and observation phase, the three teams were then segregated into four mini-groups, each incorporating at least one team member from the visual team, interview team, and systems team.

Though Blue Hanger Outlets could potentially be a thrifty student fashionista's secret haven, most shoppers are either very young or middle-aged and older. To find out why, we interviewed students at McNeil High School, a mile away from the main Blue Hanger Outlet (McNeil), and college-aged students at UT — a demographic largely absent from Blue Hanger Outlets. Their responses indicated a lack of knowledge of the outlet's existence. This isn't surprising given "the retail stores mission to drive Blue Hanger Outlets out of business," according to King, but we felt they were missing out on an opportunity to bring in new, young customers and use the space in other ways.

We identified three main problems with Blue Hanger Outlets. First, Blue Hanger Outlets lack any cohesive identity, and their connection to Goodwill is unclear or unknown to shoppers. Secondly, they are used solely as bargain-hunting retail spaces and for bulk selling, targeting a narrow demographic and under-utilizing the uniquely mobile and exceptionally large space not available at normal Goodwill retail stores. Finally, 20% of the goods that pass through Blue Hanger Outlets end up in the trash. It is all the more troubling that King expressed regret at this figure, stating that many trashed goods are still useable, but holding onto them any longer than they already do is too costly.

We imagine Blue Hanger Outlets accommodating a variety of large and small-scale events, giving it a new identity, showing the community its tempestuous but necessary relationship with Goodwill retail stores, expanding its consumer base, and ultimately reducing the number of items that end up as trash. The warehouse space can accommodate everything from do-it-yourself workshops and clothing swaps, to a battle of the bands, to dance parties or fashion shows. These events can be held alone or be part of a larger all-day event in the spirit of Swap-O-Rama-Rama (SORR), a clothing swap and do it yourself workshop Goodwill recently partnered with at Maker Faire, an all-day counter culture geek and craft festival. When we told the high school students we interviewed earlier about reusing the Blue Hanger Outlet space to host those types of events, the responses were positive (by teenage standards), ranging from "yeah, definitely" to "yeah."

Events can take place either after normal hours or when the outlet is shut down from its usual retail functions for an all-day event. An all-day event might charge an larger admission fee of anywhere from $5 to $20 to help offset lost revenue. In any case, running two or more of these events concurrently fosters a dynamic, festive interplay between separate events.

Blue Hanger Outlets have completely modifiable floor plans thanks to wheeled tables (at McNeil) and a lack of dividers. Blue Hanger Outlet's tables become band or DJ stages, runways, and DIY workstations. For a SORR-style event, D.I.Y. and sewing stations are set up on tables set back a few feet from the perimeter. They are also the workstations and demonstration areas for volunteer designers and crafters to work on. These designers and crafters can also assist participants with the sewing machines and clothing modifications. Participants are encouraged to modify all the clothing they want using provided sewing machines and tools. Janome, the "world's leading sewing machine manufacturer" currently has an agreement with SORR to provide sewing machines free of charge.

Tables holding clothes to be swapped are arranged with the entrance to the warehouse close by. The clothing to be swapped comes from a combination of Blue Hanger Outlet stock and donations. Additional volunteers help by sorting donations, keeping things tidy and bringing out more clothes from the back as needed. The fashion runway and music stage are tables pushed together with plywood boards on top to make a flat surface. Participants model their own work on the runway. If the fashion show is a contest, it can be judged by audience reaction — whoever gets the loudest cheer is the winner. Prizes could be particularly high-quality donated clothing or Goodwill gift certificates.

Volunteer DJs or bands play either a secondary role as background music for an event like the fashion show or are an event in themselves, like an after-hours dance party or battle of the bands.

Any event held at a Blue Hanger Outlet will require external marketing to draw in new customers, because they currently lack an advertising presence and many potential customers are simply unaware of its existence. So in addition to using traditional advertising like handbills and radio spots, we developed an advertising vehicle consisting of blue hangers to promote Blue Hanger Outlet-specific events. The hangers are printed with a coupon-like incentive to encourage people to bring them in, keeping them out of the trash and recycling them back into the advertising system. They're distributed in a guerilla-style, fly-by-night campaign, standing out against other advertisements like posters. Most importantly, the innate need of such an unusual advertising vehicle to be placed in unorthodox locations helps Goodwill reach a younger audience desensitized to ordinary advertising.

Goodwill benefits from hosting events and advertising Blue Hanger Outlets in three ways. First, these events will make a profit, both directly from charging admission and indirectly from attendees to events returning to shop during normal business hours. Hosting an event at night, when only a handful of staff are needed to accept donations and admission to an event, ensures this. Plywood and fabric for a stage or runway is cheap and reusable and requires little set up time or construction. Advertising events with blue hangers is inexpensive. Secondly, more customers means less stuff ends up in the trash. Blue Hanger Outlets make more money from what gets sold on tables than in bales. Finally, Blue Hanger Outlets get an identity, going from grungy rummage to funky, creative and sustainable. The relationship between Blue Hanger Outlets and Goodwill retail stores become more transparent, which can only serve to strengthen Goodwill's reputation in the community.

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