Oxfam has recently reported a sharp increase in sales from its high street shops. With much of the high street struggling (for example, Marks & Spencer recently reported a near 7% decline in sales) Oxfam has seen a growth of 5%, taking its retail sales last year to £90m.
This is a common theme amongst many charity shops with The Charity Retail Association highlighting that sales at charity shops rose 3% in the first quarter of 2012, compared with the same period last year (commercial outlets on the high street have seen a 0.1% drop in like-for-like sales in quarter one).
Looking closely at Oxfam’s operations it is clear that a number of factors have contributed to the organisation’s success:
1: Fashion Trends – Oxfam has benefited from changes in fashion trends which has seen vintage clothing becoming high fashionable (especially with young people). This is highlighted by Audrey Tayloy, one half of the Kate & Aud vintage boutique, who points out that “everyone is after vintage now.”
2: The Recession – Oxfam has taken advantaged of a sharp economic downturn which has impacted positively on sales of second hand goods and clothing.
3: Quality products – Oxfam offers quality (albeit second hand) products at a fraction of the price of high street stores. As leading thrift merchant Jen Holmes highlights ‘the charity shops are brilliant…with some amazing items’ (pointing to a Hermes purse she picked up for around five pounds).
4: Online infrastructure – Oxfam has recognised the growing trend for online shopping and opened an online second hand shopping section on their website, ideal for busy consumers who are time poor.
5: A good cause – As highlighted by Tayana Simons ‘charity shops give the consumer the assurance of knowing that with their purchase they are…most importantly donating their money to a good cause’.
So what lessons should charities be learning from the ‘Oxfam Experience’, which combines its charitable work with running a highly successful enterprise:
1: Take advantage of trends – In providing an enterprise service charities must ensure that their research is spot on at identifying and taking advantaged of trends which increase demand for certain services or products.
2: Quality products – Although charities may feel that offering a product linked to a charitable cause will persuade some consumers to change their current buying habits, backing this up with poor quality services/goods will not. A high quality product is an essential starting point for any charitable enterprise.
3: Price – Consumers are fickle and are unlikely to pay ‘over the odds’ for services or products just because they are linked to a charitable cause. Cash is king in the world of the consumer.
4: Accessibility – Charities need to make sure their services are accessible to the widest possible consumer base (either through the use of online infrastructure and marketing or through an accessible high street presence). A quality product which nobody can purchase is no use to anyone.
5: A good cause – The need to back up a high quality enterprise with a good and emotive cause is key to persuading consumers to use purchase your service/product as apposed to a competitor. It is crucial that organisations communicate their cause effectively and are transparent about where any profits will be distributed.
Innovation and enterprise is key to helping charities diversify their income streams in a climate where statutory and voluntary grants are in increasing decline, a strategic decision which Cause4 applauds. Do you agree with the key points of success raised above? Are there are other factors which you feel could be key in developing a successful charitable enterprise? Please let us know.