Why some charities are not making the most of the economic conditions
As the UK economy approaches a potential recession amidst stagnating growth, there are significant expectations for a surge in charity retail performance. Historical trends have demonstrated that charity retailers often experience sales increases during economic downturns; however, the current landscape presents a more nuanced scenario.
Challenges within Charity Retail
Charity retailers are grappling with rising operational costs, particularly increased payroll expenses, alongside a noticeable decline in the number of active volunteers since the pre-COVID-19 period. Additionally, many organizations are witnessing a reduction in the quality of donated goods. While some charities have successfully adapted their retail strategies to navigate these challenges, others continue to fully undergo necessary adjustments. Moreover, there exists considerable variability in retail operating models across the sector, with many charity retailers diverging from the latest proven best practices.
Inconsistent Performance Outcomes
The interplay of heightened costs, a diminishing volunteer base, and inconsistent implementation of the latest best practices has led to fluctuating sales and profit results. Consequently, an increasing number of charities are expressing concerns regarding the performance of their retail business now and in the future.
Three Strategic Recommendations for Enhanced Performance
Enhancing Retail Dashboards
Although most charity retailers maintain a retail dashboard, many are basic and fail to leverage critical data due to cumbersome extraction processes from EPOS systems or a lack of clarity on the necessary analyses. Best-in-class dashboards, however, provide comprehensive performance data for each shop, including metrics such as return per retail space, items sold, and average ticket value at product level, all benchmarked against tailored targets reflective of each shop’s potential within its local context. Additionally, it is imperative to incorporate detailed e-commerce performance metrics, as many charities currently overlook this aspect.
Investing in Training and Development
While compulsory training for retail teams is common among charities, there is often insufficient investment in the ongoing personal development of these teams. Effective training goes beyond conventional methods; it must address varied learning styles and focus on topics that directly enhance both personal and organizational performance. Relying solely on one-dimensional training formats—such as online modules, PowerPoint presentations, or videos—for charity shop managers is unlikely to yield significant results. The most effective is interactive classroom training that covers all learning styles and is enjoyable, insightful and motivational. Key training topics should include:
– Gift Aid management
– Optimizing retail space, including the enhancement of the customer journey
– Strategic pricing of donations
– Effective merchandising techniques
Conclusion
Implementing the latest charity retail best practices, including retail dashboards, providing targeted classroom-style training for retail teams, and rigorously measuring performance to make informed adjustments, can significantly improve sales outcomes.
At Skyline, we have successfully guided numerous charities, both national and local, across the UK in implementing these strategies, demonstrating tangible improvements in their retail performance.
