6 Steps to Choosing a Charity Retail System for Reduced Administration and Costs

Many charities have evolved into more commercial organisations, increasingly reliant on raising income through their network of shops and being accountable to their supporters for their operating costs and the actual percentage that is ploughed back into their cause.
Here’s the deal:

Admin is one of the biggest cost centres for a charity, a financial drain few can afford and often held to account by supporters for perceived inefficiency and wastage.
The charity sector is being forced to re-think how they increase charity retail system and operation efficiency to greatly reduce administration time and costs by following in the footsteps of their commercial retail counterpart, harnessing modern technology to intelligently and efficiently operate their retail shop networks.

Technology has made a giant leap forward since most charities first adopted electronic point of sales systems. Today’s EPoS solutions go way beyond transaction to drive multi-faceted efficiency and optimise profit.
Charity EPoS technology can and should be the driving force centred in the heart of the organisation’s system and operational architecture, uniting every element from transaction, return, inventory, gift aid, loyalty programs through to eBay and other online outlets. Improved volunteer till usability is a bonus and speeding up the till process is important in meeting basic customer experience expectations.

However, the new breed of EPoS technology is fundamentally about increasing gross profit by slashing admin, eradicating mistakes and critically streamlining everything into one tightly integrated EPoS and management platform, creating a central hub to leverage everything from price and inventory optimisation through to enhancing supporter engagement.

This new breed of charity EPoS was born from the new retail and consumer world we operate in and are continually challenged by.

Now:

What worked before is becoming inefficient, a cost drain that charities can ill afford and an admin battle to scramble together processes and plug profit leakage across the organisation ranging from new goods inventory; multi-channel stock management; data protection; instore fraud; keeping supporters engaged; and clinching maximum gift aid from an increasingly “on-the-go” and in a hurry shopper.

Operationally, things just aren’t as simple as they used to be. For many charities, staying afloat and pushing forward has meant a total review and rethink of the underlying technology systems that support their organisations. The core areas that have proved to greatly relieve charity administration are: cross-channel stock optimisation; gift aid; supporter communications; community engagement; and data security.

1.    Cross-channel stock optimisation

​When donated goods come in to a charity shop, they need to be sorted through, examined for quality, allocated a product category and then priced. This alone can be a difficult process, reliant on staff and volunteers to choose a reasonable price and for that price to then be entered correctly at the till. There’s also the additional complication of how you log the category of the item sold. Without this data, how can you know what is selling well in each of your shops?

When it comes to sorting and pricing donated stock, charities can benefit from looking to high street retailers for inspiration. This is where the technology comes into play. With the right retail software, each store can be given their own pricing guide and when the goods are sorted, the system can print out a barcode label with all the product and price information encoded enabling the volunteer to simply scan the code to process the sale.

This helps charities to bring the level of data available up to high street standards, enabling them to understand exactly what sells in each store, for what price and guarantees that the price shown is what is charged which can ultimately lead to an increase in average transaction values as well.
Using new technology including cloud-based retail systems, charities can also achieve the same level of accuracy and stock visibility for new goods across multiple channels, whether they’re selling instore, online, on eBay or all three. For example, through a more accurate picture of sales and stock, Lindsey Lodge Hospice has been able to make decisions to increase sales based on facts, improving cash flow and reducing stock holding.

As Michael Coulson, internet trading coordinator at Lindsey Lodge Hospice, explains, “We know what stock we’ve got in the warehouse, all of the shops, website and now we’re using an eBay module, that’s all integrated as well. We’re able to buy in more new goods now, so sales of those have increased 25%.”

With the necessary structure in place to operate across multiple channels, charities can also easily start selling specialist or high value donated goods online as well, from women’s designer clothing to rare books. Listing such items on their own ecommerce website or eBay enables them to reach a whole new and expanded audience, which in turn helps to achieve the best price.

Without a centralised stock system, this is likely to become another administration heavy task to manage, especially for smaller charities who may be short on staff. Some larger charities now have specialist teams that centralise these items and put them online but it’s an expensive process with goods being shipped around the country before they have been listed. It can also ruin the traditional rummage shoppers so often enjoy in stores, as they come to realise all the rare and collectable items are on eBay, subsequently reducing footfall. With a fully integrated retail system, charities can choose to keep such items in store too, expanding item market place exposure, quicker donation to sale and helping to obtain optimum prices.

​2.    Getting to grips with gift aid

Managing gift aid claims and encouraging staff and volunteers to actively promote gift aid can be a big obstacle for many charities, big and small. Gift aid is a valued income stream but adds another level of complexity to charity retail. The charity has to capture the details of the supporter donating goods, enrol them for gift aid, link the goods to that donor and then record the sale against them for a gift aid claim to take place.

This can be a huge administrative burden and is especially complicated when done manually. By finding the right software solution for your charity, a lot of the gift aid claiming process can be automated, simplified and help improve your engagement with supporters, making them feel involved and valued.

For example:

The registration process can be speeded up by using postcode verification to capture their details on the till or via a tablet. Using the same data, supporter cards can be issued and used for all future donations with quick and simple printing of single barcodes to be attached to the individually recognised supporter donations, which also includes all the essential supporter gift aid information as well.

Creating a structured process ensures no gift aid sales are ever missed by capturing data accurately and allocating sales to the right department and price. It also encourages volunteers to ask more supporters about becoming a gift aid donor when they know it’s a simple process. In fact, Sense recently reported a 31% uplift in gift aided sales, a dramatic increase achieved simply through volunteers promoting it more following the implementation of an integrated gift aid and EPoS solution.

Adrian Darkin, trading director at Sense, explains, “Interaction with people is so important. Technology has moved on from what it used to be and customer expectations have moved on as well. Customers want a professional transaction and customer interaction in charity retail now, so it’s important for us to train staff to use the new technology and increase customer engagement.”

3.    Better supporter and volunteer communications through united divisions

Charity retail technology nowadays can significantly increase revenue through unifying store and fundraising supporter databases. Why shouldn’t a store customer who spends money with the charity in store or donates to the charity be rewarded? Many charities are now giving supporters their own card which can serve multiple purposes. It can hold their gift aid data along with supporter loyalty points. With all this customer information, charities can keep in contact with supporters through personalised communications, such as reminder emails about what good work their donations are enabling the charity to do.

4.    Enhancing data security

There is one other area of day-to-day instore operations that technology can improve and that is security. It is often initially assumed that theft would not be an issue within a charity store environment, however some less scrupulous people have been known to target charity stores as historically they’ve not had security systems in place.

This is another area where technology can revolutionise security by providing data on all aspects of the store through stock control, detailed analysis of sales and staff operations, all endeavouring to massively reduce if not eradicate fraud within the charity store. With everything logged on a system including set prices for goods, it’s much harder for staff and volunteers to alter prices on goods, whether it’s on purpose or by mistake.

5.    Selecting the right technology at the right time for you

Reviewing current and future technology systems and needs goes beyond just IT. It’s about keeping focused on the organisation’s strategic commercial objectives including the long and short term investment costs calculated against the financial admin savings and gross profit potential.
Changing and rolling out new solutions can be expensive in both time and money. There is a wide choice of technology vendors in the charity sector and their solutions take on a wide variety of shapes, sizes, functionality, scalability and flexibility to shape around your specific charity.
From better stock control to automated processes, technology can dramatically reduce administration time in charity stores, all while increasing accuracy, improving security and bringing in more revenue.

You might be wondering:

What questions should I be asking myself and others when choosing a charity retail system? Here are some key points to consider –

• What will you be doing in two, three or event five years’ time? Will the system be able address these plans?
• Is the system user friendly enough for your staff and volunteers?
• Does the software provider offer suitable training plans?
• Where will your data be stored and how secure is it?
• Can the system address fraud?
• How simple is the gift aid process and can it be integrated within one barcode with the price and category?
• Does the system automatically adjust to HMRC changes for gift aid?
• What reporting tools are offered for retail, fundraising and finance?
• Can it help you operate across multiple channels easily?
• Can it help you improve supporter communications with a CRM database, supporter cards etc?
• Is the software automatically updated and if so, how frequently?
• Can you have access to the provider’s product roadmap for a full view of future developments?
• What sort of return on investment can you expect and within what timescale?

6. Thinking about the future of charity retail

The administration pain point of charities can be relieved by the right charity EPoS system with many national and local charities already reaping the financial and time-saving benefits of automation, synchronisation and real time streaming of data, intelligent reporting and an improved point of sale customer experience.

Reviewing what we need today and tomorrow and rethinking how we do things in the modern world of retail and prolific growth of technology applications and functionality, will be the key driver to re-shaping the future success and protection of charity retail revenue.

For further insight, why not download our guide ‘How are you Protecting and Increasing your Charity’s Retail Revenue? 5 ways to embrace the new age of multi-channel retailing’?