I received an email from a student working on a dissertation about charity shops and ecommerce with some interesting questions:
Q: How long have you been working in the charity sector? Please could you tell me about how/why you began working in this sector.
A: I’ve been working in the charity sector for four and a half years, three years with the British Heart Foundation and a year and a half with the National Trust. Before that I had been volunteering with a not-for-profit organisation for a few years and working for a global company. The National Trust were looking for someone with commercial skills to redesign their online shop and develop a marketing plan to begin to grow their ecommerce business.
Q; Before this job, what interaction did you have with charity shops?
A: Almost none.
Q: Does your shop/charity offer online sales?
A: Yes. The British Heart Foundation has two online sales channels. Our ecommerce website sells branded goods for BHF supporters and we have an Ebay shop that sells higher value donated goods.
Q: How does the selection process differ when selecting stock for the physical and online stores?
A:Yes. The majority of the goods on offer in the physical shops are donated and so the selection is based on what has been donated. The shops also have a range of new goods to supplement the types of goods that aren’t donated such as household ornaments, Christmas cards, and materesses. The shops have a small range of branded supporter goods such as pin badges. The goods selected for the online shop are all new goods (no donated) and the majority are either branded, such as pin badges or t-shirts, or goods that support the aims of the charity, such as CPR training kits.
Q: What factors affect the sales of an online shop as opposed to factors in a physical shop?
A: The two main factors affecting sales are the products and the marketing. As the online shop provides goods for BHF supporters rather than customers in general, the customer base is limited to the number of people who are supporting the BHF by taking part in a running event or a campaign to learn CPR. This affects the sales as the goods on offer aren’t of general appeal and customers only purchase if they have an existing relationship with the BHF. The online shop becomes part of the customer’s journey with the BHF, but in a complex organisation where different departments have different aims, this marketing can be a challenge. In some ways the challenges affecting the real world shops are greater as they have to market themselves to three groups of people in order to trade effectively. They need donors to bring stock, volunteers to provide their time, and customers to purchase goods. This makes running a charity shop far more complex than any other high street retail business.
Q: How much interaction does the online sector have with the physical stores? Do you think that having more/less interaction would benefit sales?
A: There is very little interaction between the ecommerce website that sells new goods and the physical shops as they have different product ranges and very different customers. Ecommerce customers are looking for ways to show their friends and family that they support the BHF and so purchase a wrist band or t-shirt, whereas physical shop customers are price-driven. There is more interaction between the physical shops and the eBay shop as the physical shops provide donated stock to be sold on eBay if they think the product is of higher value or specialist interest and so might sell for more on eBay than in the shops.
Increasing interaction between the physical and online shops could have the potential to increase sales in some product ranges but it would also increase costs, so the challenge is how to understand what products customers want and how they want to buy them.
Q: In respect of both your charity and your sales area, do you think having an online shop and the growth of the online sector has influenced sales in terms of your charity or your shop itself?
A: Yes, selling online has increased overall sales for the BHF. Growth in the online sector is driven by customer expectations and those expectations apply to charities as much as any other organisation.
Q: In your opinion, what are the advantages and disadvantages of having an online presence to the wider charity sector?
A: The two main advantages of selling online are reach and convenience. Charities are able to reach far more customers with an online presence than physical shops. Being able to place an order at a time and place, and on a device that is convenient to the customer and being able to have the order delivered to them rather than having to go to a shop during its opening hours makes shopping online convenient for the customers.
The disadvantages of selling online is the cost. Often charities starting out in ecommerce won’t have an ecommerce website, a warehouse, packaging, etc, all of which take considerable investment to set up and are an ongoing cost. Larger charities are often required operate their Ecommerce business as a limited company separate from the charity meaning that this trading arm has to pay all the tax and operating costs that any other retailer would but often without the scale, all of which reduces the margins that are achieved.
Q: From your (charity’s) perspective, how has the online market changed and grown since you’ve had an online store? Have any difficulties arisen and if so how have they been addressed?
A: The BHF has had an online shop for seven years, and during that time almost every aspect of the online market has changed. Website hosting moved to the cloud, website platforms became cheaper and more powerful, marketing has become more complex with an increase in the number of channels, and customer expectations have increased with leaders in online retailer such as Argos and Amazon offering delivery within hours.
The greatest challenge I’ve seen faced by charity ecommerce businesses to secure investment from within the charity to grow. Charities have to, quite rightly, be very careful and considered about how they spend money given to them by their supporters and often results in charity ecommerce businesses not being able to justify budget to increase the size of the team, make more products available, develop the website, or market to customers. This challenge is addressed best by building influence with key decision makers and very clearly justifying the return on investment from a financial viewpoint, for customer expectations, and from offering a service that no other part of the charity can.
Q: Does having an online sector change the demographic of your sales e.g. do you have to change the type of stock you put online as for example more of the younger generation shops online?
A: Yes, very much. The BHF has very different customer groups purchasing online to those purchasing in shops. Customers who purchase online are often supporters of the charity and are purchasing branded goods as a means of showing their friends and family that they are supporting the BHF, whereas customers buying from shops are less interested in the BHF and more driven by price of products. Because of this the online shop has a very different range of products than physical shops, and as different visitors come to the online shop at different times of year we see the average age of customers change from twenties and thirties in the spring when people are taking part in fundraising events to much older in the autumn when Christmas cards are the key products.
Q: What do you think could be done to strengthen the charity shop sales, both online and in physical stores? (prompt: increase awareness)
A: The bigger things that increase sales are always more products and more marketing. And then there are other factors that have a lesser impact such as customer service, conversion rate optimisation on the website, etc., etc. Physical shops being able to promote and/or sell their products online would greatly increase their awareness, but whether awareness leads to purchase and so has the return on investment to justify showing the products online is unproven.
Q: Do you have to receive any additional training for working in the online market for your charity? (prompt: is there anything different you should learn?)
A: Charity Ecommerce is too niche for a specific training course and too generalist for one course to cover all aspects (commercial, platforms, customer service, marketing, logistics). I have a qualification in digital marketing and have completed small courses on things like Google Analytics but mostly learning is done on the job. I think to be successful in charity ecommerce a person needs to be a generalist rather than a specialist. Larger retailers ecommerce teams would be made up of marketing specialists, user experience specialists, designers, buyers and merchandisers, etc., etc., but ecommerce teams in charities are often just one or two people who have to do everything related to running the business, from financial planning and reporting to site design, from product development to marketing.
Q: How would you describe the value of a physical shop within the community?
A: I think charity shops have a place in the community as they provide a means for better off members of society to help less well off by donating belongings they no longer want, provide a means for the less well off to buy quality goods at low prices, and provide volunteering opportunities for people who want to give something back to their community and those who may not have other opportunities to spend time with people. Charity shops also have a significant environmental impact as they prevent millions of tons of goods going into landfill sites every year. And in the case of the BHF, our charity shops help to fund life saving research that directly benefits every member of society.
Q: What challenges do charity shops face to keep up with the market? Are there any difficulties faced by physical shops that are eased by having an online shop? How do you address these problems/challenges? What initiatives are in place to help?
A: Charity shops exist in their own market somewhat, but are still affected by other retailers in the low price clothing market. However, it’s shops like Primark, which doesn’t have an ecommerce business, that have contributed to keeping the high streets of our towns and cities alive and so helping to increase footfall in high street charity shops.
For the BHF, because the physical shop customers are very different to the online shop customers there is nothing that ecommerce does to ease the difficulties faced by the shops.
The challenges the shops face are broadly around getting volunteers to run the shop, getting stock donated, and getting customers. There are support functions such as marketing to help with these challenges but they are unique to charity shops and not something other retailers have to deal with.
Q: Do you feel like charity shops are able to compete with the likes of Primark/amazon for cheaper products? Is there repetition of services or is it more unique goods?
A: Yes, charities are able to compete with mainstream retailers because they are selling something unique. People don’t buy from the BHF Online Shop to get a product at the lowest price, they buy branded products they can’t get anywhere else because they want to show their friends and family that they are supporting a charity, and to feel good about giving their support. It’s this ‘feel good factor’ that charities are selling, and retailers can’t compete with that. Charities often struggle to communicate this to their customers, and there are far fewer people who want to support a charity than want to shop with Amazon, which is why charities will never be able to fully scale in the way Amazon did, but charities and retailers operate in different emotional spaces for customers.
Q: Are there any other changes that you’ve seen to your charity/ the charity sector since you have been working there?
A: Over the past few years the charity sector has seen more change than in the past few decades. It begun down the road of digital transformation and trying to figure out how to work more digitally, fundraise in a way that meets customer expectations, and tackle risks from cyber security.