Reviewing your Retail Business

Charities should review their retail businesses every 5 years as best practice as the starting point for writing a retail strategy. This charity retail review can be carried out internally or by an external company, but if carried out internally we strongly recommend some external or independent verification by a charity retail expert, because the impact of a small miscalculation or oversight could, over a period of time be very expensive.

There are a range of different areas to cover within a charity retail review, but these are the key topics.

  1. Quantitative analysis

Carrying out a highly detailed analysis of the whole retail business is criticially important.  In terms of content this would result in between around two pages per shop or online selling platform (for example if you have 20 shops and are using 3 online selling platforms then the report will contain approximately 46 pages of just analysis). The content is generated from the following:

  • EPOS
  • P&L’s
  • The online selling platforms (if you have not yet linked your selling platforms to your EPOS).
  • The return on your space from your shop layouts and EPOS data.
  1. Qualitative analysis

There is a lot of qualitative information within charity retail that needs analysing, and these are some of the areas:

  • Detailed donations analysis by donation location.
  • The customer journey in shop and online.
  • Merchandising in shops.
  • Presenting the products online.
  • The brand visibility, promotion, and protection.   
  1. Retail Operations analysis

There are many aspects to retail operations analysis, but it is really measuring the current operation to the current best practices and ensuring the operation is consistent and delivering its key objectives.  To carry out a quick spot check of a retail operation review the Retail Operations Manual to ensure it is fully up to date and easily available in every shop. The key is to have introduced and embedded the latest best practices.

  1. Shops, Warehouse, and Donation centre analysis

This is a big topic as there are a range of considerations, for example profitability, brand promotion, fundraising, donations quality and quantity in every location. 

It is important to understand the subtle and sometimes fragile inter-dependencies that have developed over a period. The key is to overlay the changing retail landscape by location and area to the shops and project their value to the retail business over the next 5 years of every shop; for example, superstores are a growing influence and their influence has been growing but what if their location is going to have less footfall in the future.  Profitability is of course criticially important, but a highly donated shop has great value, as does a shop in an area with high legacies and very strong donor support.

  1. Online analysis

The charity retail online operation has been growing in importance over the past few yearsMany charities have grown their sales considerably, however the online operations in all but a very few mirror what people do within their homes when selling their possessions online (consumer to consumer model) only on a larger scale. Any analysis and review needs to consider when and how the online operation will be modernised with automation of time-consuming processes.

This area is quite difficult for most internal people due to its highly technical nature in terms of automation and integration and needs considerable external expertise.

  1. People analysis

People are so often the area that receives less attention that anything else, yet people can be a charity’s competitive advantage.  The key aspects of any retail review are:

  • Retail Structure.
  • Pay / Reward.
  • Volunteer and Staff recruitment.
  • Training and development.
  • Communication and support.

This area is quite difficult for most internal people due to its content and there is likely to be a lack of exposure to what other charities are doing.

  1. Strategy / Business Plan Development

The most obvious output is the Retail Strategy / Business Plan. Its important to financially model all the actions and ensure due consideration is given to the interdependencies.  A good example is by planning to sell more of the best fashion items online rather than in a boutique shop, which could adversely affect the boutique sales.  That does not mean don’t do it, but it is important to do the modelling based upon the quantitative analysis of the boutique shop and the online selling platform in question. 

Due to the complexity, high level of expertise and independence required to carry out a retail review a majority of charities use Skyline Business Services to either do the review or to check the output of an internal review.

Our review options

  • The Skyline Health Check is the original and proven charity retail review.
  • The Skyline Optimisation Review is ideal for optimising a good retail business.
  • The Skyline Strategy and internal review check is ideal if a charity want to do it themselves but have external input before publishing.  

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