Competition for Used Apparel Acquisition Between Charities and For-Profit Organizations
(With Sabrina Rinder, Marc Reimann, and Guido Voigt)
There is increased competition for the acquisition of used apparel as more for-profit organizations (FPOs) enter a market traditionally dominated by charities. Our research focuses on the competition between charities and FPOs. Specifically, we study how used apparel donations and returns from consumers are impacted by an organization’s (1) drop-off point density, (2) collection channel, (3) information provided, and (4) financial reward. We conduct incentivized and non-hypothetical discrete-choice experiments in a lab in which participants bring one piece of used apparel they have not worn for around two years and decide whether to give it to a charity, to an FPO, or to keep it. The alternatives differ in drop-off point density, collection channel, information, and financial rewards. We complement the lab data with hypothetical online experiments, resulting in 1,056 participants and 21,120 decisions from the U.S. and German-speaking countries. Using multinomial logit models and market simulations, we show that increasing drop-off point density significantly impacts consumer donations to charities, even when this is done in collaboration with a postal delivery provider. The most preferred information is that used apparel is collected and donated to communities in need. For charities, generic information does not increase donation quantities compared to no information (“keeping apparel out of the landfill”). Although physical collection is preferred over postal delivery, collection quantities can be increased by collaborating with a postal delivery provider with a higher drop-off point density. Offering a high drop-off point density instead of a low one makes a consumer more than four times more likely to donate to a charity. In addition, providing donation information makes a consumer between 1.4 and 2.8 times more likely to donate to a charity compared to no information.
Gil Souza
Gilvan Souza is the Haslam Chair in Business and Distinguished Professor of Business Analytics at the Haslam College of Business at the University of Tennessee, Knoxville. He also holds a part-time professorship appointment at the University of Graz, Austria. Prior to coming to Haslam in 2022, Souza held appointments at the Kelley School of Business at Indiana University from 2009 to 2022, and at the Smith School of Business at the University of Maryland from 2000 to 2009. He received a doctorate from the University of North Carolina in 2000, an MBA from Clemson University in 1995, and a bachelor’s in aeronautical engineering from ITA (Brazil) in 1990. For a time, he worked at Volkswagen of Brazil in new product development and product planning.
His research focuses on sustainable operations, in particular carbon footprint reduction, the circular economy, closed-loop supply chain management and renewable energy. Souza has expertise in applied optimization, lean operations and supply chain analytics. He has over 40 publications in premier refereed academic journals, is a senior editor for Production & Operations Management (POM), and a departmental editor for Decision Sciences. He wrote the book, “Sustainable Operations and Closed-Loop Supply Chains, Second Edition” (Business Expert Press), and co-edited the book, “Closed Loop Supply Chains: New Developments to Improve the Sustainability of Business Practices” (CRC Press). Souza won the Wickham Skinner Early Career Research Accomplishments award from the POM Society in 2004. A former president of the Sustainable Operations Special Interest Group of the Manufacturing & Service Operations Management Society of INFORMS, he also served as the president of the College of Sustainable Operations of POMS.