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Gen Z shoppers are flocking to Goodwill, but a tough economy is squeezing donations: ‘Thrift is like punk rock. It’s always been cool’

December 16, 2022, 11:30 AM UTC
Katy Gaul-Stigge, CEO of Goodwill NYNJ, photographed at a Goodwill store and donation center in Brooklyn.
Photograph by Rebecca Greenfield for Fortune

As president and CEO of Goodwill Industries of Greater New York and Northern New Jersey, Katy Gaul-Stigge sees economic trends from a unique vantage point. And the view is not particularly pretty at the moment: Shopping and donation trends at the 23-store, secondhand goods chain suggest consumers are gripping their wallets more tightly and seeking cheaper clothing and home goods. 

Goodwill NYNJ’s retail business took in $47 million in the year ended in June, up 19% over the prior year, as shoppers in the greater New York area seek financial relief from a turbulent economy and the rising cost of living. At the same time, Gaul-Stigge says that donations have slipped because people are holding on to their items for longer or selling them on sites like Poshmark and eBay rather than giving them away.

The organization, whose proceeds help people with disabilities find work at companies like Amazon and Walgreens, has long ridden the vintage and resale wave in retail but wants a more reliable stream of goods to sell. Now, Gaul-Stigge is seeking partnerships with retailers to donate their unsold goods instead of tossing them out, arguing it’s more environmentally sound and can help them hit their corporate social responsibility targets. “We are ready to help you hit your ESG goals,” she quips.

This interview has been edited and condensed for clarity.

Fortune: So, how’s business these days?

Gaul-Stigge: We get an early-bird view of how people feel about things, and we see a strong interest in value shopping. But we’re starting to see a slowdown in donations, which means that people are holding on to their goods or saving them to sell with competitors like Poshmark, ThredUp, and other online consignment players, so they can make money. That slowdown in donors will affect our ability to put out products for our shoppers.

Given that, are you rethinking your approach to sourcing goods?

We’re always looking for more partnerships with national retailers, local retailers, warehouses, and anybody with excess inventory. We’re happy to help them because we don’t want to see that inventory go into a landfill or incinerated. Our message to them is, “We are ready to help you hit your ESG [environmental, social, and governance] goals.”

And how is inflation manifesting in how you operate?

We haven’t raised our prices, and our prices at the start of 2020 are the same as today. We also have $2 Tuesdays where everything in a certain category, like women’s tops, is $2.

Has the slower economy changed who shops at your stores, attracting more middle-class shoppers?

The stigma around secondhand shopping is absolutely gone. But a lot of what’s driving business is that Gen Z, and other younger people, are interested in sustainability. Thrift is like punk rock; it’s always been cool. Now it’s reaching a bigger audience because of the acceptability of buying secondhand items. People are interested in secondhand, in extending the useful life of an item. People are interested in the circular economy.

What about the impact on those who use the services financed by the items you sell?

Pre-pandemic, we served 20,000 people a year in our programs for the unemployed and people with autism, intellectual or developmental disabilities, or mental illness. During the pandemic, people stopped going out for work, so they weren’t using our training as much, but that doesn’t mean the need has gone down.

And how is the tight labor market affecting how you carry out your mission?

We’ve seen an increase in employers taking a chance on people with disabilities. We think once employers learn what great employees they can be, they will want more of them.

How has remote work affected what people bring in as donations and what customers need?

There’s been a mismatch between people bringing in items like donated suits and shoppers being more interested in things like jeans. But when we think about suits, people are not just buying the whole suit; they’ll buy the blazer and mix it with jeans, and thrift is great for that.

In the past, you’ve struggled to balance having inviting, hip stores with cool merchandise and potentially confusing customers if your locations get too “trendy.” Where have you landed on this?

We want to provide value for our core customers, but we also want it to be a great experience. Because it’s low price doesn’t mean the store shouldn’t look nice, so we make sure the stores are bright and cheery. We tried to make our stores hip in 2017, and we confused shoppers. People come to Goodwill expecting a certain price range. Even if it is a vintage Valentino, they don’t want to see it for $300 at a Goodwill, even if that’s the market price. But it’s a fine line because you want value from the donated goods.

A few years ago, you had 41 stores in metro New York. Now you have 23. What happened?

We had to close some during the pandemic, including a bunch in Manhattan. Talk to any retailer there, and they will tell you they haven’t seen traffic come back. We rent, so we don’t own those stores. People don’t give us a charity rate, so it’s still the bloodthirsty Manhattan real estate world. We have to navigate the waters with sharks. We’re a nonprofit, and I don’t have a real estate team.

Between this job and your previous one as executive director of workforce development for the mayor’s office in New York, you have your finger on the pulse of the workforce’s needs. What do you think workers need now?

Workers need more childcare, which is in a crisis, and it is setting working families back in a big way. As for skills our clients need in the workplace, we continue to ask government agencies for more training in areas like pharmacy tech and cybersecurity. That kind of training connected to specific skills is needed for better jobs. We don’t want things to go back to how they were pre-pandemic, but we want jobs to get better. Part of why many people aren’t returning to old jobs is that they were very hard jobs for meager pay.

Get to know Gaul-Stigge:

  • Her first job was in retail at a Gap store in Austin.
  • Gaul-Stigge, in August, was named one of four cochairs of New York City Mayor Eric Adams’s Future of Workers Task Force.
  • She had a long career in New York City government agencies before taking the helm at Goodwill, including as deputy commissioner for employment and contracts at the Human Resources Administration.

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