Place & Distribution lessons … from that thrift shop down the road

Op-Shop-1

Op Shops – the place to bag bargains since 1880. Source: BMag

You might have heard that the community of Jilkminggan in the Northern Territory has recently opened its first opportunity shop, after a social media campaign to gain clothing for the store went viral. Donations of pre-loved clothing have flowed into the town, enabling the local Indigenous community funding to start social enterprises.

The opportunity shop – or ‘Op Shop’ as more commonly known in Australia, has a long history. The Salvation Army’s first ‘recycling depots’ were opened in the 1880’s and have now grown into a multi-million dollar recycling service. There are 3000 opportunity shops in Australia, used to raise vital money to support the work of charities locally and abroad. Op Shops also play an important role in recycling and ensuring the reduction of landfill in Australia, with over 300,000 tonnes of clothing given to charity bins annually.

So how does the humble op shop fare when critically viewing place in the marketing mix?  To help dissect this fully, we will look at Australian Red Cross, which currently has over 150 stores across Australia, staffed by 4500 Volunteers.

AustralianRedCrossShop440x250Source: Australian Red Cross

Distribution channels

An Op Shop on first glance seems seem to be a relatively simple demonstration of retailer selling to a consumer (Iacobucci 2013). However, the product is actually on its second path to sale from the original manufacturer. A consumer becomes part of the supply chain as they look to recycle items they have outgrown, leading to a part way reverse distribution channel. Upon donating, the goods then move through the intermediary of the retail store, to another consumer.

To fill stores with saleable product,  Red Cross provides incoming channels in store, through Donation Drives and most recently a ‘clothing drive’ collaboration with Uber that saw drivers making house calls to pick up unwanted goods.

Uber Red CrossSource: GlamAdelaide

Red Cross utilises a selective distribution channel (Iacobucci 2013). Incoming donations require close scrutiny to ensure the right match between item and place of sale. High quality items (e.g. luxury or designer brands) are targeted to Boutique stores, located in trendy suburbs such as Collingwood, Richmond and East Perth. Suburban stores are more likely to stock generic items such as department store brands and in both cases, pricing is tailored to meet the quality of the item and the target market.

Utilising Push and Pull 

Red Cross uses a combination of push and pull techniques to sell merchandise. The limited engagement with manufacturers limits push opportunities, however Red Cross invests in a dedicated volunteer sales force and attractive store displays. From a pull perspective, a loyalty card which encourages both sales and donations to receive a discount and an ongoing partnership with Country Road which provides vouchers for Country Road stores after appropriate donations encourages interaction between consumers/suppliers and the stores.

Location, Location, online?

The location of Red Cross Op Shops varies, although prominent locations include shopping strips in local communities. A recent expansion into Pop Up stores, such as at Queen Victoria Market, enables the ability to utilise premium real estate at lower prices while exposing product to a new group of consumers and create further brand awareness. The use of the Red Cross Shops Facebook page engages and builds a community of like-minded thrift shoppers while promoting numerous store locations.

While Red Cross has not yet moved into online shopping, competitors have. The Salvation Army launched an eBay store in 2013, looking to capitalise on the benefits of online offerings including improved perception, increased sales and further consumer engagement. By focusing on an appropriate sales channel (eBay), the Salvation Army addressed it’s biggest challenge of managing stock and ensuring supply highlighting an appropriate path for other retailers.

The verdict?

For Red Cross, a movement into online retailing would round out its current place mix. Success found so far should be leveraged, particularly in continuing high profile collaborations to build brand awareness and using the dedicated volunteer team to further engage with consumers and drive sales.

Kristy McLean | kmcle | 500155585

 

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s