Economic downturns and uncertainty can be a time of considerable concern that make businesses batten down the hatches and wait for the storm to pass. Only when clearer skies are forecasted would they attempt to change accordingly. However, the most successful businesses will, irrespective of any downturn or uncertainty, consistently look inwards and, where necessary, evolve their business to keep it relevant in the modern world – and the first place they will always start? Data!
Charity retail is going through a period of uncertainty so there is no better time to fully utilise your data, coupled with expertise and vision, to create the most risk-averse strategy that will evolve your operation to meet customer needs both now and in the near future.
The most valuable asset most businesses have is their data. However, leveraging this data and using it to create something tangible (i.e.a 3-year business plan) is much more difficult than simply collecting the data in the first place. To do this requires a strong grasp of analytics, a fantastic system in place to gather all required data and, above all else, the time necessary to work on such a project. It is therefore no surprise that most charity retailers do not run a deep analysis of their data to mould their strategy and drive sales performance.
This means that in the competitive ‘Battle of the High Street’ many Charity retailers are falling behind. Commercial retailers and a small selection of charity retailers are already using data strategically to their advantage in both bricks and mortar and online. So, how do they do it?
“Information is the oil of the 21st Century and analytics is the combustion engine”
Peter Sondergaard, Gartner Research
How is data used elsewhere?
Retailers use it for analysing the use of their space. Every square foot of a shop floor is (or should be) accounted for and analysed to measure the best return for that space. A thorough analysis of their data will educate their decisions, which in turn lead to an improved customer journey and ultimately better sales. The analysis of a customer’s journey is not only limited to bricks and mortar shops of course. Online cookies and data capture tools measure our every click and view so that online retailers can offer more accurate pricing and market their products and services to their desired target audience.
Netflix and other streaming services use data to enhance its product and service. Unlike many traditional broadcasters, it uses individual subscriber data to tailor its content offerings based on your personal preferences. This is at its most noticeable when you let a friend or family member use your Netflix account – suddenly, you will notice the suggestions you get do not resemble anything you would ever dream of watching. Needless to say, this swapping and lending of accounts is reportedly going to be a thing of the past as streaming services look to clamp down on it to protect their product – and how did they discover people were doing it in the first place? Data patterns!
This use of granular data to customise the individual user experience makes subscribers “sticky” (a technical term for increased loyalty) and reduces the costly risk of producing or commissioning unpopular content.
How should charity retailers use data?
This is one of the key questions we are asked and for good reason. There is a very broad range of data available to charity retailers. Some of it will not actually deliver improved results but will take a lot of time to collate.
“Using data strategically is no longer just an option to charity retailers – it is now business critical”
Barry Moles, Author of The Science of Charity Retail
The key point is to use data weekly to drive commercial performance. Here are the top tips:
- Produce a concise, insightful weekly report.
- The ideal is 6 shops a page, so it is an easy-to-read usable document.
- Use colours to make good and weak performances to stand out. We recommend Green – Amber – Red.
- Make the completion of the report automated so it can be completed by 10.00am every Monday. If it takes more than 45 minutes, it is not automated enough.
- It must contain the following information:
- Weekly sales vs L/Y (EPOS data) by location. Programme the use of colours (Red – Amber – Green) to measure performance.
- Weekly sales vs target (EPOS data) by location. Programme the use of colours (Red – Amber – Green) to measure performance.
- Year to date profit (from P&L) by location. Programme the use of colours (Red – Amber – Green) to measure performance.
- Gift Aid percentage by location. Programme the use of colours (Red – Amber – Green) to measure performance vs target.
- Donation value by location (Qualitative info). Programme the use of colours (Red – Amber – Green) to measure performance.
- Percentage of department sales against total sales by location.
- Value to stock transferred in and out (Qualitative info).
- Weekly sales by category (for example Ladies) by location.
- Weekly average ticket performance by category by location. Programme the use of colours (Red – Amber – Green) to measure performance vs target (target needs to be based on best practice and location of the shop).
- Weekly items sold by category by location.
- Sales per space by category by location. Programme the use of colours (Red – Amber – Green) to measure performance vs target (target needs to be based on best practice).
- Online sales vs target by platform. Programme the use of colours (Red – Amber – Green) to measure performance vs target.
- Online average ticket performance by platform vs target. Programme the use of colours (Red – Amber – Green) to enquiries and measure performance vs target.
- Online number of weekly customer seller ratings.
- The number of new online listings the previous week.
These items will help the retail teams focus on delivery of optimum sales. Using less than all of these items will dilute performance as causes can be spotted by the data listed making it easier to focus on the actions required.
2. Avoid HR related, time and motion related data
Traditional retailers can use time and motion to understand the time required to complete every task, but this task related measurement does not consider the variables within charity retail. Managing volunteers, variable supply chain (donations), Gift Aid and of course the strong focus on customer service. HR data should be separated from commercial related data to keep the weekly focus on the delivery of KPI’s. It still has its part to play but only on quarterly reviews.
3. How to use the weekly report and data
There has never been a more important time to use the data generated, in the form of a weekly report and use this in strategically weekly shop and online visits. The days of a coffee and a chat should be replaced by highly structured visits to retail locations using data to frame conversations and coach the retail teams to improve performance.
4. Use data to make strategic decisions.
Use P&L coupled with the weekly reports to make all strategic decisions.
These are exciting times for charity retailers. In this fast changing, post- lockdown world opportunities to grow market share have never been better. The weaker charity retail operations who fail to use data correctly are going to struggle to optimise their retail businesses. However, those charity retailers grasping data and how to use It will become stronger and grow their market share. These are exciting times to be a charity retailer – the data proves it!