Building On Strategy To Extract Greater Value From Charity Shops

This blog is the 2nd 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.

In the first blog I explained this 4-phase model and followed through stage-1 of how to identify the resources and capabilities that are valuable and then gave some examples of this that specifically related to charity sector shops.

In this blog I’ll show the 4-stage methodology again and complete the example relating to charity sector shops by explaining phases 2-4 of the 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.

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?

Charity Shop 2

2 – Are these resources at all Rare and 3- can these resources be easily imitated?

I hope I have prompted you to recognise that from the strategic perspective there is a lot of value within our charity shops but the rarer that this value is seen to be, then the more desirable it will be to our customers and the easier it is for us to raise the money we need for our causes.

Although as charities we can differentiate ourselves from the main body of the high street through all of the examples I have given above. What makes us rare is the difference in our operating model. Yes, just like any other retail shop we are looking to be profitable but from then onwards things are very different. It is the causes that we help and the positive change that can be made to society that define our mission and our very reason for existence.

Other retailers may have a fundraising box or may donate a portion of their income to charity but that is just a tertiary activity that falls within their Corporate Social Responsibility (CSR) functions rather than a purpose or passion and as such cannot imitate any organisation within the charitable sector where fundraising and donations run through the very heart of the organisation.

Another key value that is rare and cannot be imitated by mainstream retailers are the benefits mentioned in the previous blog relating to our cost base.

The bigger challenge though firstly is how rare is our offering when consumers are faced with comparing this to each of a number of charity shops on the high street often trading next door to one another? Then secondly just how easily can this be imitated? If the offering cannot be differentiated between one charity’s shop and another then it is no longer rare and has probably already been imitated.

The key here is to recognize and accept that the locations, products, employees, supporters and value to the community are similar for most charities that have a high street retail offering. Some larger charities will have economies of scale in size that could enable processes to be more efficient or purchasing of overheads costs to be cheaper, whilst other smaller charities can be more responsive and proactive. As a result effectively all of these factors can be imitated by other charities.

It is in the value of the ‘special’ and ‘unique’ stories that each charity can tell where although imitation may be achieved there can be differentiation of the type of stories can carry unique value. Simply the story of ‘how a dog was saved from cruelty’ or ‘a child was saved from hunger’ are both compelling but they are more compelling to different people depending upon which subject individuals feel is more relevant to them and their values.

We shouldn’t try to compete with the great stories from other charities in terms of challenging the validity of those stories; instead we should make the stories from our charity as interesting and compelling as possible.

4- How can the Organisation be set up to exploit/optimise this value?

a) We need to capture the interest of those passing our shops or waiting for buses or taxis outside of our shops and convert them to customers. To do this we need to create messages in our shop windows or mobile displays that build curiosity and create a reason for people to enter into our stores and learn more.

b) With such compelling stories we should seek to change the shopping experience from being a passive selection process to become an active journey of experiential discovery that links the purchase of a product to the value that the purchase has on the individual or the cause that benefits from our work.

This can be achieved through using the window and wall space in our shops to display photographs, short bios, illustrations, animations and text that shows exactly what we do and when possible with the addition of audio visual media; tell the story from the voice of the people whose lives are changed.

For example taking £1 of income from this shop and showing how when it is added to other £1’s of income it purchases a book which when used by a child in an African village and with a teaching volunteer enables the child to learn to read. Then give an example of how this skill has enabled an older child to become a doctor or an entrepreneur who can support their family out of poverty.

We can show where the journey started, and finished or where we would like it to finish, which shows the positive, value that we bring. In this way we can engage with customers in a more intimate way and help them see the real value of what we can enable them to do.

We should consider bringing some of these stories to life by having special engagement days in the shops that show the results of what we do. This could for example involve one of the rescued animals visiting the shop, an aid worker showing the products they use and telling the stories of what they saw and achieved when on assignment, the relative of someone that had excellent care in a hospice or a member of staff who can explain the value or change that the charity has been able to make.

c) Let’s not forgot the value of the passion of our workers and shop volunteers, we can capture just what drives them and in doing so can bring a local perspective to the message boards on the walls and windows in our shops further embedding our achievements.

d) One of the challenges that many charity shops face is that the demographic of shoppers is focused more in the 30 something and older age groups. We are missing engaging with younger people, particularly the 20 something age group who can be some of our best ‘message spreaders or vocal advocates’. We can start to engage with this group when they are children by using our storyboards and linking them to quizzes that enable them to learn more about what we do, and the importance of the values that we have on wider society.

To engage more effectively with the 20 something we need to consider using social media more effectively and be brave enough to within set parameters enable staff or volunteers in our shops to use social media to engage with the local community. We also need to revisit our store layout and get younger volunteers to mix and match clothing and accessories to create more edgy and fashionable clothing combinations that can show the potential uniqueness that can come from shopping in our charity shops.

e) We can be the link from the national story told on the central website to the local one in our shop by showing just what each community where we have a shop has done to help make the difference eg having a poster that shows ‘the money raised through this shop has enabled one village in Africa to have safe drinking water’ etc.

We shouldn’t be afraid to show how much we are embedded in the local community as an employer and the value this brings to the local economy, or our role in bringing the community together through the work of our volunteers. In this way our customers can see that they are making a difference to both our causes and to the community where they live.

f) Let’s try improving engagement with our customers and understand why they buy from us, and the kind of products they want. We can send text messages when the right product arrives and bring them into the shop where there is the opportunity for them to buy other products.

g) Products donated are often quite unique and quirky which gives us the opportunity to market them in our windows or social media as ‘stay buys’ or the most unusual ‘product of the month’ and crate some buzz and conversation around them.

h) Blogging is becoming something that more people do regularly and with it they build large local and national networks. We should have the confidence to engage with bloggers who can tell our story or promote our quirky or unusual products of the month and thereby engage with and share their network.

I believe that by re-assessing what we do in our retail stores, we can through improved engagement with all our stakeholders deliver even more value to our causes and to wider society. This may be by improving the things we already do, or by starting new initiatives.

In future blogs I will be considering where strategy fails in its implementation and what can be done to avoid this.

Russell Shackleton

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

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.