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Wednesday, October 19, 2016

Thrift Stores

Tried to visit the new 'Our Store', a thrift-shop I favor that was previously located at 300 East and 350 south. About a year past, it attempted a relocation to a much large building on North Temple and 900 West. Visiting it around Christmas, it was clear all was not going well, and it was overdue to open. Dropped by today, to find that location vacant, but the thrift store had opened at a new location about a half block away, of about the same size as their original store. 

It occurs to me that in their relocation, they may have inadvertently 'traded down'. For economic success, thrift stores (counter-intuitively) want to be located in affluent areas. Counter-intuitive. Arguable, to effectively benefit the 'working poor', who make the most use of thrift stores, they should be located in low income neighborhoods, so as to be be more accessible to low-income families. But that means that such thrift stores also draw from the same population.  

Assuming donations follow the same patterns as retailing, people visit the nearest location, donation drop-offs being largely indistinguishable in terms of the 'product' offered to those making the donation. So thrift stores receiving donations from low-income neighborhoods only receive things that were cheap to purchase in the first place. Low quality clothing, knick-knacks, and flawed furniture (chipped, scratched, heavy, etc).

In contrast, thrift stores located in higher income neighborhoods receive higher quality goods, which they then sell at a discount. For such stores, the primary cost is space. The goods they sell cost them almost nothing, so such stores have an incentive to maximize throughput-sell everything they can, as fast as they can. This is certainly to their customers benefit. 

However, even thrift stores in wealthier environments have a lot of crap on the shelves. This is a result of selection bias. When all jeans cost $10, the best jeans are bought first. Eventually, only the crap remains. In urban contexts, this effect is magnified by 'pickers' from second-hand 'boutique' clothing shops. With enhanced knowledge of brands and materials, they mine all the nearby thrift stores for the best stuff (durable, stylish, branded, quality, condition, etc).

(Speaking of retail geography, I note that the less convenient a thrift store is to access, the better the stuff it has, all else equal. With limited space, and minimal turnover, such stores can only afford to keep the best stuff on the floor. You'll never see vast racks of printed cotton t-shirts in such stores.) But they also experience low turnover, and are inaccessible to the same people who would naturally purchase from them. 

These relationships can be summarized as follows: 

........................Good Access..........| Poor Access................|
Affluent Area.|Space is expensive.|Customer's Can't reach| 
Poor Area.......|Picked over ...........|No Good to Anyone....|

In this context, the optimal strategy for a thrift store might be to divide collection and sales. Put a small footprint location in an affluent area, and then put a larger sales floor in a low-income area. And hire some pickers and make the highly accessible location into their own boutique. 

One of the reasons I liked 'Our Store' was that it was a combination thrift store and social service provider. It provided groups space and some counseling in the front room. (And likely employment training and income). And it was in a highly accessible location, about a block and a half from library TRAX.