Charity Retail tomorrow

Charity Retail tomorrow

Customer aspirations and choices are growing. Why then do some charity retailers believe that doing the same tomorrow that they did yesterday will bring better results?

It’s a question that I have asked many charity retailers and so far I have never received a good answer. Especially when you consider that there are more charity retailers than ever plus a growing number of value retailers competing within the same marketplace. Why then are most charities are not doing what is required to tackle this growing competition is the key question but not that difficult to understand.

It is mainly because it is very challenging to make the required changes plus most charity retailers are not able to fully grasp the changes required because of a combination of a lack of technical retail knowledge and the fear of investing into the unknown to secure their business for tomorrow. There are two main themes charity retailers must grasp if they are going to be successful: Differentiation and Personalisation.

Differentiation is going to set apart the best charity retailers from the rest. Simply by Charity retailers doing the same as last year it will not deliver last year’s sales results, the sales will actually gradually decline. Its therefore critically important that charity retailers differentiate their offer to match the local area where they trade and there are many different types of charity shop formats to consider. Boutique style charity shop, Value charity shop, Specialist shops (Home shop, Furniture shop, Men’s shop, Book shop etc.) or simply Quirky upmarket style shops. The fit out need to enhance the customer experience, matching their shop style and simply calling it a boutique raising prices while selling some designdifferentiationer wear does not make the shop a boutique.

It’s about the customer experience, get the ambiance right, get the displays right, make sure the customer service is excellent, then get the product right, and priced right (that does not mean cheap it means what the customer will pay). By having the right combination of fit out, merchandising, ambiance, customer service and pricing a charity retailer can define the customer experience and become a destination for customers. When this is achieved differentiation can be be achieved.

The hardest challenge is selecting the right style shop for the wide range of different locations charity shops currently trade. Charity shops of tomorrow must not be afraid to pay higher rents for the right prime locations. It’s also important to bring all aspects of the retail offer together, with clear branding and a clear linkage between channels making the customer experience as seamless as possible. This means charity retailers having an own branded online offer matching their shops offer and linking them together. It’s called Omni Channel retailing.

Personalisation is going to be driven mainly by technology, from development of Omni Channel Charity retailing to highly personal in-store engagement. Personal shopping is nothing new – it was the way in which everybody shopped fifty years ago actually, the shop keeper knew their customers personally. Indeed, how customers are responding to an increasingly personal online experience clearly demonstrates a strong demand to move away from the anonymous shopping experience that has dominated for the past few decades back towards a more personal experience.

Just think about a loyalty scheme that links customers via their smartphone to products that have been donated. For example, a loyal customer has a new donated product is highlight to them via their phone when close to the charity shop. This can be done by using IBeacon technology so a customer a reasonable distance away does not receive the message and have a wasted journey as most items for sale are individual. This will generate a real interest but only from the targeted loyal customers who had previously indicated they would be interested and to whom the clothing item would fit. It would personalise the loyal customers shopping experience and deliver a good customer experience and of course improve sales.

The capture of customer data is already partly taking place thanks to the rise and rise of Gift Aid, this is just the next logical step. Then by utitechnologylising technology charity retailers could and should develop a customer loyalty scheme to personalise offers to customers.

This can and should also work with an online shop, but not E-Bay or Amazon but a standalone online shop promoting the brand of the charity. Of course charities should use Amazon and E-Bay to generate revenue but if a charity wants to develop some real brand loyalty it needs its own commercial online shop and link all three together with their retail estate.

The best charity retailers will also drive customers back in-store, building on multi-channel strategies to offer click & collect services both in response to customer demand but also in recognition of the powerful opportunity to cross-sell in-store.

To summarise customer expectations have changed radically over the past decade yet charity retail has hardly evolved, the shops have got smarter in appearance but not smarter in engaging their customers. A personalised, relevant and timely customer experience can now be delivered in any charity retailers shop, it just need to be grasped before the completion takes even more sales from our favourite charity retailers. All charity retailers need to ask themselves this question:

‘Are we going to fully embrace personalisation and differentiation, if not why not’.

 

Barry Moles

Consulting Director

Skyline Business Services