Beyond the Donation: Retail Innovation, Sustainability & Resale Success

Speakers

Stephanie Beringhele
VP, Growth + Partnerships, ASD

00:15
Hey guys, our next session of the day is with Salvation Army. They are beyond the donation. How the Salvation Army is transforming retail through sustainability, innovation, and purpose. So we’ll have these guys hop on up here. We also have an ASL interpreter. If anyone is in need of service, we can get you connected.

00:44
Oh, we are in for a treat Salvation Army. Are you familiar with the name? Anybody? Raise your hands. They’ve been very impactful with communities for a very long time, but we’re going to discover the new wave of retail that they’re doing for programming. So, gentlemen, go ahead. Let’s sit down. We’re gonna have some fun. I do have to say, if you’ve hit the show floor, you’ve probably seen their beautiful booth. They are over here in Central Hall. They have collectibles. They have clothing that’s been re-inspired with designers that are in the college arena. They also have a painting. So, before we really dig into that, gentlemen, introduce yourself.

01:27
I’m Lieutenant Colonel Mark Nelson. I’m the Air Sea Commander, so I’m in charge of the Adult Rehabilitation Centers Command in the Western Territory, and we run thrift stores to fund that work.

01:41
Atticus Firey, the director of strategic projects. Piers Fairclough. I’m the director of business. I’m Eli Hunsberger, director of retail sales and operations.

01:56
And with that, sometimes you forget. You hear about Salvation Army, but you forget about the cause and what they stand for. So, I want to learn a little bit about. There’s a name called the ARC. Can you talk about it real quick?

02:07
So yeah, we run adult rehabilitation centers, and in the Western territory, in the Western United States, we have 18 centers with 1,700 beds. These are drug rehabs. People, we help people at no cost and take care of them for six months. It’s one of the most successful programs in the world, and we’ve been running the Salvation Army. We’ve been running programs similar to this since December of 1892. It started in San Francisco, so it’s great work. It’s very rewarding to help people that everybody else in their life, and every judge, and every person in society has given up on, we get to see them emerge into a new person through the work that we’re doing, and that’s all supported by our thrift work, both in our bricks and mortar stores and our online outlet.

02:58
So there’s a key topic that we’ve been talking about all day. We thought about this as a team for ASC, and we said sustainability is key. It’s a topic, especially with the new generation that’s coming through, and we’re very keen on it. So, talk to us a little bit about sustainability and just having a second life for product

03:18
So we got involved in that because we’re a Christian organization, and just like we believe that every person has inherent value and is worthy of our help, we believe that we’ve been appointed as stewards of the earth to do the best with what we’ve been given, and we understand that we’re involved in the industry and textile. There’s all kinds of waste. There’s all kinds of products that could be thrown away, and a side benefit of our work to to resell that stuff is to make sure that it has a second use, and it it just helps the earth, and so we’re leaning into that more and more because it’s so important, and and these team members are doing a lot of different things to make that more impactful and more distributed across different channel.

04:05
So I don’t know how many in the audience have a retail store. Raise your hand if you got a retail store like a brick and mortar. Anybody? Boy, how the times changed! And when I think of Salvation Army, I always think of the little bell. You know, like it’s Christmas time, I’m like, ooh, give him money and all that fun stuff. But Eli, Eli, he’s in the corner pocket over here. He’s a little shy. He is transforming the retail space and he’s reimagining stores and incorporating all kinds of fun things. So, Eli, what are you doing to modernize the Salvation Army stores?

04:40
Well, we remodeled a lot of stores, right? We have a new, we have a new marketing plan, merchandising plan. All of our stores are brand. Well, not all of our stores, right? Let me clarify. We’re working in the process of remodeling stores and opening new stores. And along with that, we have new fixtures, right? Brighter lighting, polished cement, polished floors, right? We have a much better look than we used to. We don’t want to look like the old thrift store that everybody thinks of. We want to be a retailer competing against other major retailers, national chains. We want to we want to look like that. We need to attract we need to attract that customer to us, and the this next generation they love directing, so we need to have a great environment for them to come in and shop in, and that’s what we’ve been focusing on for the last seven years.

05:50
So, truth be told, I have a 13-year-old daughter, and she loves to thrift with me. We have a great, great time. One of the elements that she loves doing is live selling, and she loves to fill the gap. So she might find that really cool secondhand dress. So, boy, she wants to sprouse it up with some accessories. So, Eli, you’re not just here to hang out. What are you doing to incorporate the gaps? What kind of gap products that are new goods are you putting into your store?

06:15
Yeah. So, I originally came to ASD to find Impulse Seasonal and Christmas and Halloween to sell in the thrift stores and pop-up shops. I also want to do fill-in categories like socks and underwear, that that kind of thing. I need to increase our our basket sizes and bring more revenue in, and I think that’s the next that was the next step for us. So I have those pilots in place, and they’re doing well.

06:41
So if you’re an exhibitor in the audience, ooh, Eli is the one you want to get after this conversation. So Piers, you’ve been quiet over there. Let’s talk and let’s get a little bit of social because if you have seen anything, first of all, ASD tells you trends. You’re here, you will find out what’s going on in the market. And one of the biggest trends is happening right now is live selling. You see whatnot, TikTok shop, as well as eBay Live. So, what are you doing to update Salvation Army within this space, make it relevant?

07:08
Right. Well, we realize, you know, as as with a lot of nonprofits and smaller organizations, we have a limited retail footprint. Right. We only have, you know, maybe 90 odd stores, and so our our our reach for all the product that we have is very limited. So obviously, you know the the channel that we need to go to next is online, right? I mean, it’s nothing. I mean, you’re all doing that. I mean, we’re a little bit late to the game, but we have we have our auction website, shopthesalvationarmy.com. You might have seen we have some items there from that, and that does does very well because in our mind that’s that’s another opportunity for that item to be resold and reused without any you know without adding to you know everything that goes into making new products. Right? It’s improving sustainability by finding a new a new avenue for that product. We’re very excited for whatnot, live online sales. Again, you know we’re reaching a market and an audience that our stores can’t reach, and we have so many one-off unique items. Right, that again nobody’s going to walk into a single store looking for that. But you go online, and people will search, and they’ll see that one unique item. So we we find that to be a very exciting new channel for us. And again, we had a show today. I don’t know if any of you stopped by and saw it. We have, I think, another one tomorrow, another one not show tomorrow. So we’re very excited about that because it’s a again, it’s it’s a new channel for us, and we feel that you know there’s a lot of platforms like that: eBay Live Online, TikTok, and so on. So obviously, it’s a channel that we need to be in, and again, it just gives us another opportunity to put these unique products in front of our of our audience.

08:59
So Salvation Army and other thrift stores also have another unfair advantage to us retailers. People bring their good to their store, and they are antiques. They’re collectibles. They don’t even know what they just want it out of their houses. So, if you did go to their booth, you would see that they had an authentic Game Boy. They have sneakers from who knows how long ago, but they’re high-priced items, so how do you decide what goes in the store and what goes online?

09:26
Right, and again, you know that’s that’s where online has brought a huge benefit to us because you know people are coming to the stores and they and they’re probably just looking for you know some you know basic housewares or clothing. Not really, to be honest, nobody’s coming into a Salvation Army thrift store looking for you know a Louis Vuitton bag, right? Or you know a sterling silver tea set or the kinds of things that we get. So so the store is really a very you know we we don’t really have a good. It’s not a good marketplace for those items. So. What we usually do is we identify those items that are either unique or much higher value and set those aside to sell online. And those pretty much identify themselves, to be honest. But occasionally those those things change, so we have to alter what we what we put online. But again, you know, anything of any significant value online is always going to have a much bigger audience than than the thrift store. So you know we train our staff and things to look for. You know we have the the brands to look for, but obviously that’s that’s changing all the time. So we try and stay on top of it. But you’re right. We have just amazing amazing things that people donate to us-it’s just unbelievable. The things that people donate. We’ve had, you know, a sealed, brand new, first-generation iPhone. We had one of those recently sold. You know, we we have gold coins. We had a one of my favorites because I’m English. We had a signed photo of Winston Churchill. So, no, I’m not going to do that. But, but again, there’s so many of these unique items, and and online is is for us is the best place for that. And so, you know, again, it just amazes you what people bring to us, and we’re just we’re just grateful for it.

11:17
It’s so interesting because a lot of brick and mortars will say, “Oh, that e-commerce is ruining my business”, but when you fuse a brick and mortar with e-commerce potential, it gives you so much more empowerment because you extend your consumer, as well as you can protect really expensive things from being in a store that somebody might be able to steal. So double beauty on that end. Okay, so this was a question that Eli wanted me to tell you while you’re on stage with everyone, can online marketplaces actually make business more sustainable?

11:49
Yes. Well, from our perspective, yes, because remember we’re we’re we’re always selling reused items. So, from our perspective, everything we sell is sustainable because it’s not being reproduced as new, right? So online, you know, it’s no different in the store. It’s an item that’s being reused.

12:18
One of the biggest users of, you know natural resources that is you know not terribly sustainable is jeans right denim anything denim I you know I I should know this how much water it takes to grow the cotton to make a pair of jeans somebody out here probably knows that I think it’s about 2000 gallons of water is required to grow the cotton to make a pair of denim jeans. So for us, we’ve really focused recently on on how can we keep this denim in circulation, right? How we can avoid you know people having to buy new new jeans all the time. So we’ve started selling those online through our online platform, and and these are not jeans that we would sell in our store. These are jeans that have already been in our store, did not sell, right? So the end life for those is you know is who knows what. Not something not very good, right? Because it’s not terribly sustainable. But what we’re able to do is to sell those jeans online, reclaim them from from the waste that they were going to go to, and now we’ve extended the life of those and reduced it. We’re trying to grow that. I think last month we it’s it’s about 30,000 pounds of jeans that we were able to to rescue from that, but there’s certainly a big opportunity for us to to keep doing that. Again, you may have seen at our booth, we have a lot of products there that have been made from recycled denim. We have bags that we have one of our influences in New York, Luisa Garcia. She she makes she’s made denim bags. We have jackets over there that that people have made for us, so we’re really pushing hard to try and keep the denim in circulation as long as possible.

14:09
All right, I know a lot of people can relate to this. You have that perfect pair of shoes; they’re so good, and then they wear out, and you can’t find it anywhere in the market. And so, you want to be able to find that favorite pair of shoes, but in better condition. Hello, AI and tech. It is our favorite friend. Also helps us do a lot of work. So Eli, this one’s for you. How has AI changed the way we do business and how we find product line? Or oh, it’s not Eli, Atticus. Here’s who’s going to answer this question. It’s a tough one. AI is taking over the world, but it is making our lives easier.

14:46
Yeah, it has made our life easier. So, of course, with brick and mortar, you’re not going to be the human touch is still going to be needed. So, we’ve been we’ve been experimenting with some AI with. Platforms that applications that we brought into the business to help us run our transportation part department more efficiently, track our maintenance costs, the cost the cost per vehicle, those kind of things, and AI has been a great tool for that. We’re also experimenting with some AI tools for, for listing, on our e-commerce sites. So we’re we’re doing that as well. So we we we recently have a an in-house application that was developed by one of our team that you just take some pictures of items and it automatically creates the listing, puts it on our platform, renames all of our pictures so that Google can swipe, and they come up in Google searches. All of that done in a matter of seconds using AI, and that that tool has more than triples the amount of listings that we can put up.

16:03
All right, Atticus, it’s your turn. Grab that mic. We’re talking about sustainability. There’s all kinds of definitions that we apply to it. Some people think it’s just recycles, but there’s so much more. So give us a rundown of what’s really going on in the marketplace when it talks about giving value to products so that they can live on more than the first five cycle.

16:26
That’s an excellent question, Stephanie. Thank you. No, but it is important one because you know those two terms, sustainability and recycling, are often interchanged and used inappropriately. And I think, as a group, as a society, as we start to lean in more and more and more to sustainability, it’s important that we use the right nomenclature. And so, just kind of the the 101. Many of you already know this, I’m sure, but sustainability is really the overarching architecture or framework that encompasses your environmental, your social, your economical impact, with a goal really of reduction of the use of resources. So sustainability is the umbrella from which recycling is one specific process under that umbrella that is used to recover in textiles, to cover fiber, yarn, and other waste, with the goal of repurposing that into something brand new. So sustainability is the overall architecture. Recycling is a is a piece of it, and I mentioned textiles because that’s really the a large bulk of of what we transact in, and on any given month, you know, we’re left with millions of pounds of textiles that did not sell or are not sellable, and so we’ve been constantly leaning into new ways to do something with that. So it’s not just ending up somewhere irresponsibly, and with that, you know, we we particularly the new law in California, the SP 707, we’re really leaning into the community of thought leaders to try to find ways to create recycling at scale, at commercial scale, which doesn’t exist today for textiles. So nomenclature is important, and it’s a great great question.

18:19
So in order to get the the buy-in, I call it the buy-in of the next generation you can talk to them all day long of recycle resell all these kinds of things the best way to entice the new generation to believe in your product or what you’re doing is to let them experience it firsthand so we mentioned I kind of sneaked it in there is a beautiful mural that’s over on the concourse in C3 there’s also some product line that’s been reimagined by college students. So tell us your efforts on getting this generation to dive all in and get curious with it.

18:52
Well, that that area led by Bianca on our team has been a really, really important initiative because we, you know, our desire is to inspire that next generation of consumers in our stores, but also consumers of the product. Ultimately, if we can change the way things are manufactured and consumed, we can have a much better outcome from a sustainability standpoint. So, where better to start that initiative than at the colleges? So, first, it was kind of a four-point plan. First, we decided let’s just provide those college students with as much product that they need, knowing that they have to go out and buy that stuff. And these normally college students could use a few extra bucks, so we thought let’s go to all the colleges and just give them product that they can use in their workshops and in their classes. That was met and received well. Next was let’s partner with the schools on upcycling and reimagining projects that we could then take the end result and amplify through the media, social media, print media, etc. That would then elevate those students, that college, and our efforts to society to help push towards sustainability. You mentioned the mural that’s hanging above our. EV van that was in partnership with Santa Monica College in California. Their students took 1000s of pounds of textiles that we dumped into their classroom. They took all of that and created this beautiful mural. That mural’s made 100% out of unwearable textiles. There’s nothing on there that’s not from a piece of clothing. And then we worked a deal with SeaWorld. SeaWorld actually had that installed in the epicenter of their park, so that over the last year, 3 million people were able to walk by and read the storyboards. I can’t read lips. Sorry. Yeah. Okay. It was for World Ocean Day. Yeah, I was unveiled for World Ocean Day. But that’s a great example of how the partnership with colleges. Final next step was then we reached out to all of the designers. So you have college kids, fashion design schools. Now we went to the designers, particularly in downtown LA and some other urban spots. So we’ve done a lot of projects with designers, and finally, and fourthly, we’ve created a collective, a few collectives. Salvation Army and some key designers have formed collectives in which now we’re doing community events, fashion shows, etc. So it’s it’s been a journey. Obviously, there’s economically that’s it’s not a positive for us. We’re doing it because we know, as Colonel said, it’s the right thing to do for the environment and for these people who are looking to get into new careers and and for us, long term, there’s a payoff because we know that that next generation will look for that world class shopping experience in one of Eli’s stores.

21:29
So, true confession: we had a colleague who was at the Santa Monica College when this was all going down, and she sent us picture after picture. We’re like, “Ooh, it looks so good! We want to buy it. So, that’s something that now taking an item that maybe was going to see the trash bins or something terrible, and now there’s a social media frenzy. We’re posting it, we’re talking about it, we’re asking how do we purchase it, and then you layer in maybe there’s an auction. You want this? Let’s have you buy it. Let’s have you go as high as you can on it. So you guys are doing a very good job of just relooking at your business model and saying how do we incorporate multiple touchpoints to make sure that you’re relevant for this future generation. So we’re very excited about that. I do have extra questions on here, but I also see an audience, and I think what a unique time to be able to ask some questions to this group who does resell sustainability and also new goods, does anyone have any questions? And if not, I’ll keep going. But here’s your chance. Anybody else? Anybody? Okay, we’re gonna keep going. We’re gonna do a little bit more. Okay, this one Piers, we’re gonna have you talk a little bit more. There is an environmental cost to e-commerce: packaging, shipping, and returns. How do you balance the opportunity to extend a product’s life with the footprint it creates online, Eli gave that to me. Just so you know

23:04
Thanks. That that that’s genuinely a hard question. I mean, as my kids would say, that’s valid, right? It’s you know, there’s a lot of a lot of stuff goes into packaging and shipping. So the only a couple of things that that I think you know bail us out a little bit here, and that is that product that’s being shipped is still a product that would have been manufactured, right? So regardless of you know the the shipping the environmental overhead of shipping it, we still feel that that’s you know a good use of that product. But you’re right. There is a lot of environmental overhead there. I think what’s hopeful, though, is we’re able now. There’s more and more packaging options that are much more sustainable and recyclable. So we want to lean into that. You know, in some places they’re more advanced to that. Like in Europe, now they have companies that make packaging boxes and mailers from recycled textiles, and for me, that will be a great circular opportunity for us. Right, we use our our textiles to make the packaging that we ship these things out. So you know, by doing that, we’ll have you know we’ll really close that circle. So that’s one thing we’re going to look at and see you know what things can we can we do to reduce that piece of it, which is probably the hardest piece to to be fully sustainable.

24:33
Okay. Uh oh. All right. Dig in, Mark.

24:36
The bottom line on that is that all of our stuff is reuse, right? It’s all resale stuff. So sometimes an online customer is the only customer that will reuse that, and so we’re just widening the net so that it can be reused.

24:51
Okay, I wasn’t gonna do it, but I am gonna do it. I’m gonna get personal because for these gentlemen, they have dedicated their whole lives to helping people. So the reason why they’re trying to create money and they’re trying to do these stores is to get the funds to then take care of our communities, and I think sometimes that’s lost upon us. So all this hard work, where you’re at this major trade show and you’re finding new goods and you’re finding creative ways to get the funds to support these communities, why do you do it? What inspires you? And Eli, we’re going to go for you because now you’re really on the fight.

25:27
Well, so yeah, so I’ve been working in retail operations leadership for 37 years now, and I do have to say I started when I was 16, and I do have to say that working for this organization has given me purpose, right? It’s not just about making some CEO or a bunch of board members a lot of money. It’s about saving lives, transforming lives, and I gotta say that I had a similar journey, so I found myself in jail. Yeah, facing federal charges, and yeah, I found myself at the Salvation Army Adult Rehabilitation Center in Denver, Colorado, and completed the program, got off of paper, went back to my retail career, and later on in my career, I decided to go back and work for the Salvation Army, so that I could give back to use my retail skills and talents to actually help transform lives and others that are in our programs, 1,100 beds across the Western United States, 1,700 beds across the United States, Western United States. So yeah, that’s that’s why I do it.

26:59
So if you see this crew on the show floor, and I highly encourage it. Go check out their booth, go check out the mural that they’ve done. But it’s very inspirational, and it’s nice to know that sometimes the people behind the scenes they’ve got their own storyline, but they’re doing big, beautiful things. So go support them, check them out, check out that Game Boy, and especially that clothing that I was talking about, and if they want to reach you, is their best website or anything? Where do they go to just learn a little bit more about the mission? Do you guys have like a www. arc? Is the Salvationarmy.com?

27:35
You know, the the easiest one is satruck.org.