Goodwill Focuses on eCommerce as Secondhand Competition Grows

Goodwill is increasing its eCommerce focus amid competition from brands like Poshmark and ThredUp.

“There’s so much competition coming into the market now,” Matt Kaness, chief executive of GoodwillFinds eCommerce, told The New York Times (NYT) in an interview Sunday (Oct. 15). 

“So all the donations — the billions of pounds of donations that Goodwill gets every year — is now a massive market that for-profit players are targeting.”

GoodwillFinds is the company’s new online site, and as NYT noted, models itself on other retailers’ sites, with categories like women’s and electronics and a filter that lets shoppers browse by brand, size and color.

“Every purchase made through GoodwillFinds initiates a chain reaction, providing job training, resume assistance, financial education, and essential services to individuals in need within the community where the item was contributed,” PYMNTS wrote earlier this month in a larger report on second-hand retail.

The program began with four regional Goodwills and has since expanded to 10 metropolitan territories, that report said, offering an inventory of 250,000 items, with a goal to list 1 million items by the end of the year.

GoodwillFinds represents “true circularity, which Goodwill has been pioneering for over 100 years,” Kaness said in a statement. “We are building a modern technology and marketing platform that enables reCommerce at scale, which is great for consumers, local communities and our planet.”

According to the report, Goodwill is hoping to attract customers with “high lifetime value” and are examining the commission structure that could eventually help the eCommerce site break even.

And while fans of Goodwill say it’s easier to just drop off clothing with the nonprofit than deal with businesses like The RealReal, Goodwill still feels threatened, the report said. The secondhand retail market is projected to hit $258.8 billion by 2027, but analysts say Goodwill is growing more slowly than its rivals.

“We’re kind of playing catch-up,” Kaness told NYT.

Meanwhile, a separate PYMNTS report in August looked at the wider struggle facing resale initiatives, which often need substantial upfront investments.

Creating a successful resale platform involves infrastructure development, operational costs, marketing efforts, and inventory acquisition. In a difficult retail market, where many brands are already wrestling with falling sales and slim profit margins, investing in resale can be a risk.  

“Moreover, brands and retailers must also consider the potential cannibalization of their primary sales channels,” the report said. “By promoting resale, they run the risk of diverting customers away from purchasing new products at full price.”

The post Goodwill Focuses on eCommerce as Secondhand Competition Grows first appeared on PYMNTS.com.