A Strategy creating something special that extracts the untapped value from Charity shops

For years I’ve supported many charities with donations and more recently shared my knowledge in the areas of strategy, change and risk management, governance and internal control. There are few organisations that are more effective at changing peoples’ lives and changing society and I have a passion to help them become as effective as possible.

This blog is the 1st of 2 blogs that gives some suggestions about how charities with shops can be more effective in engaging with the community, and create more income for their causes. I’ll give an example of a 4-stage process that I have used in business but which I have not seen applied in the charitable sector before. I hope that it can create some thought to executives and trustees in charities and especially in those smaller charities that just have a few shops. I’d be interested to hear your opinion, answer any questions or to provide help for your charity.

Strategically charities much like any other organisation need to have a means of differentiating themselves from one another and from other retail offerings on the high street. Ultimately they need to be able to take this differentiation and communicate it to their supporters and customers in order to capture the uniqueness of their brand. This then creates a compelling reason to support the charity so that it can best achieve its objectives.

The 4-Stage Strategy Design Methodology:

Each charity will have its own strategy, though in my opinion a successful sustainable strategy should consider 4 specific areas:

  • Are the resources or capabilities of the charity Valuable?
  • Are these resources at all Rare?
  • Can these be easily Imitated?
  • How can the Organisation be set up to exploit/optimise them?

Once we can separate the resources and capabilities that are valuable to our stakeholders and which we are especially good at from our other resources we will know which resources to invest in to make the best return on our time and effort.

Those resources that are rare are especially important to us as by their nature they separate us from the competition whether that is mainstream retail shops or other charities. It means that those organisations that do not have those resources will have to invest in them if they want to copy us and that takes them time and money to achieve. We have already invested in these resources so we start ahead of the competition and should use that to be the first or the best.

If we can then seek to identify resources that are relatively unique then that makes them very difficult to imitate and as long as we can find ways to optimise them we will have a unique value proposition to offer.

Why we need the strategy now:

In the post EU referendum world that we are now living in just how prosperous the UK will be in the medium to long term is something that only time can answer with certainty.   What is clear to me is that with the absence of a detailed government plan comes a great deal of uncertainty regarding the specific structure of our international relations and how that impacts upon prosperity within the UK. If this continues it is likely to result in a slow down or potential economic recession.

Whilst a recession is not good for the economy it is likely to make the need for charities that can help those in economic or social need even more essential. Although there may be a greater call on charities to help there is also clearly an opportunity for those charities that have a high street retail presence to grow their revenue. Indeed the results of the annual ‘Charity Shop’ survey by ‘Charity Finance Magazine’ identify an underlying trend that in times of recession the sector usually experiences rapid growth.

The recent demise of BHS and the closure of its stores as it sells through its merchandise are also likely to leave another large hole on our high streets that will make the diverse range and brands of charity shops even more prominent.

The advent of online fundraising websites and online shops has given many charities an efficient and simple mechanism for registering members, obtaining and processing financial donations or selling merchandise, and although this simplifies gift aid collection it doesn’t provide the opportunity for face to face customer engagement; charities are yet to concede that online merchandising makes fundraising through charity shops redundant.

Faced with this situation just how can charities best meet this challenge and differentiate themselves from one another on the High Street?

As an experienced retail professional I’ve walked along a number of high streets and visited many charity shops and I believe that the quantity and variety of charity shops make it increasingly difficult for customers to differentiate the offering of one shop from another. Clearly some may be slightly better than others but sadly many look more like bland disorganized school fetes than organized retail shops. I’m not wishing to criticize the fantastic efforts of the volunteers and shop workers as I think they do a great job, I just have some frustration that weaknesses in strategy or a lack of imaginative merchandising impede them in making their charities even more successful.

There is a huge opportunity for charities to create their own unique presence from the other shops on the high street because unlike other shops they have real and compelling stories to tell!

1 – Which resources do we these charities have that are valuable?

VALUE IN OUR LOCATIONS:

a) Although – I don’t believe that we fully recognise the value of our resources and capabilities for example the location of our shops may not be in most prime retail shopping centres. Despite this there location on the tertiary shopping areas of the high street are usually on those streets that shoppers and workers pass in order to reach the prime shopping areas or are near bus stops that bring them into our towns and cities.

VALUE IN COMPELLING STORIES:

b) We have many compelling stories to tell; whether that is ‘How we improve the lives of those in poverty’, ‘How we protect animals from cruelty’, ‘How we bring compassion and dignity to people with terminal illness’, or ‘How our research is finding cures to diseases’ and many other amazing stories.

VALUE TO THE COMMUNITY:

c) We are a central part of community cohesion, as an employer, as part of the local economy and a place where volunteers can meet and share ideas that can make a lasting difference to society. We are a location of choice for people to donate goods and/or purchase them.

VALUE IN OUR EMPLOYEES / SUPPORTERS

d) Our supporters that volunteer in our shops and sorting warehouses are unique within the retail industry. They volunteer because they believe in our mission and get personal satisfaction from being associated with it. Money is not the reason why they choose to work with us; the reason is much deeper and separates up from other shops on the high street.

Equally I would suggest that our employees work with us because of the type of organisation that we are rather than because our pay or advancement prospects are the best on the high street. This engagement is also of real value as well.

VALUE IN OUR PRODUCTS:

e) One of the most unique aspects of operating a charity shop is that we don’t have a traditional supplier list or a catalogue of products we can order from them, as a result we do not know which products we will be selling from one week to the next. This means that the only way that our customers can discover what we are selling is to visit our stores each week. A reason for regular visits to our shops has its own intrinsic value.

VALUE IN OUR COST BASE:

f) It would be wrong not to recognize that we also have value in the lower cost base that comes from volunteers working in our shops, products been donated, and the reductions, exemptions or rebates in local and national taxation that we are eligible for.

Having identified some of the valuable resources and capabilities that I believe exist in the high street retail presence of charities, in my next blog I will give examples of which ones are rare and hard to imitate. Finally I will seek to complete the strategy by explaining how these capabilities can be optimised so that charities can respond to the opportunities that lay ahead.

Russell Shackleton

Managing Director of Shackleton Consulting Plus, he provides consulting to charities and businesses on strategy formulation & implementation, risk and change management, governance, process improvement and people development.

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