According to research undertaken by OnePoll 44% of consumers are now shopping in charity shops. The research highlighted price and quality of goods as the main reasons. This increase in footfall has resulted in the surge of investment in the charity retail sector. Charities are looking to capitalise on this resurgence are deploying EPoS and gift aid systems. Not only does this help manage stock and stores more effectively, but charities are able to claim additional funds back from gift aid, which helps to deliver a quick return on investment. This is true for regional and national charities, for example St Barnabas Hospices, in Sussex are able to claim an additional £10,000 a month in gift aid whereas Cancer Research UK hope to claim £18m over 5 years.

Whilst the upsurge in charity retail is principally a result of the economic climate the resulting investment in charity EPoS systems and gift aid software is allowing charities to create more funds for their causes whilst being able to manage their retail arms more effectively. You can find out more about Cybertill’s charity retail system by clicking here or by contacting us directly.

How can such days affect the sea change in shopping behaviour? In truth there is little they can do, more and more transactions will be done online simply because it is more convenient, and record stores are now fighting iTunes and Apple. But, for these days to have a longer lasting legacy for the retailers they need to tie the consumers through a multi-channel approach. The retailer should be able to recognise customers online, in-store and offer “click and collect” or reserve and collect, making the shopping experience seamless and hassle free.

With the upcoming Independent Retailer Month, in July, there is a focus on changing behaviour patterns and getting consumers to shop local and support their high street. Again, for this to have a longer lasting legacy indies need to offer retailers a multi-channel approach that allows them to shop at their convenience, whether it be in-store or online.

Such events are laudable and focus attention on a high street that is still in a state of flux, but by adopting a multi-channel approach retailers can look to create a legacy and a healthier future by giving consumers what they want, convenience and the ability to shop on their doorsteps.

The first thing to consider with cloud computing is that although cost is a great reason to adopt it, it isn’t the ‘be all and end all’.

Commoditisation is also key as hard drive prices and general storage costs have plummeted while the fastest growing companies (Google, Facebook etc) are all digital and web based.

Turning to the issue of capacity, cloud computing has many iterations, although the two main ones are public and private.  The former offers shared infrastructure but with limited security.  The latter is dedicated to specific applications, can be scaled up and down for particular needs such as marketing campaigns and critically is far more secure.  Cloud computing does not require additional staff nor on-site servers that need to be ‘fed and watered’ and indeed the software can be bought on a subscription model freeing up support staff.

So, who is using cloud in retail?

The new Wembley Stadium opened in 2007 at a cost of £798m with a capacity of around 90,000.  The nature and variety of the events the stadium holds means it has a small window of opportunity to maximise sales.  On average, the store processes between two and four thousand transactions in a five to six hour period on its event days. Our cloud solution enables Wembley to scale up and down accordingly to meet this peak capacity.

Crucially, staff at Wembley Stadium are able to check stock levels remotely from handheld devices and make decisions on the spot.  This is important as it’s a 1 kilometre walk from one end to the other!

Wembley is a great example of cloud computing how it allows them to carry the right stock levels, scale their operations accordingly and seamlessly manage their multi-channel operations whilst being able to get closer to their customers. But cloud is no silver bullet, reliant on good broadband connections and retailers need to have failsafe systems in the event of a problem.  All of Cybertill’s servers for example are entirely secure with data centres spread across various sites in the EU and across different suppliers. What’s more we offer an emergency till mechanism that allows retailers to operate their EPoS even if broadband is unavailable.

This was a guest blog by Ian Tomlinson: Ian founded Cybertill in 2001 and today is its CEO controlling both the evolution of the software and successful expansion of the business.

1.    Cloud computing
2.    Quantity of data

Many IT departments shiver at the thought of cloud computing, it is often seen as the reason for cuts in IT. Some see it as the outsourcing of the IT department, but this can save for another blog. IT is changing the way businesses operate, some of it in house and much of it through technology, such as cloud computing. Yes, cloud computing does mean companies don’t need people to ‘feed and water’ their servers. And it also means that businesses can deploy more applications and software, quicker and more effectively and in many cases with less expense.

With cloud computing allowing more applications to be run enterprise wide, there is more need for software and applications to ‘talk’ to one another and share data. What’s more by the very nature of cloud computing it is designed to be accessed from any location where you can get the world wide web. So with more devices creating more data across the enterprise and with more applications sharing information there is now information overload. And in this mountain of data is real ‘business intelligence’ that can potentially give businesses a real competitive advantage.

So cloud may effect the IT department, but at the same time, it is creating mountains of business intelligence that can businesses should take advantage of. Research by the McKinsey Global Institute states that by being able to analyse huge amounts of data quickly could potentially offer huge benefits to businesses and other organisations. For example they predict that American healthcare could save up to $300 billion a year.

What’s more with the proliferation of social media, especially Twitter, Facebook and FourSquare to name but a few, this allows marketing departments to reach very specific target audiences instantly. On Twitter, last year, the high street fashion retailer, Reiss, was trending and began a mini marketing campaign, due to Catherine Middleton sporting one of their outfits when meeting the visiting Obama’s. This in turn helped double the company’s profits. Now imagine marketing departments being able to react instantly region by region, or store by store to a rich seam of local trends that is mined by marketing analysts to optimise sales in each store. What’s more linking to social media means marketing messages are instant and viral.

So the bulked up IT department might slim down or they might be renamed as marketing analysts, but the cocktail of cloud and data finally kills mass marketing, as businesses will really be able to offer one-to-one marketing messages with greater visibility of return on investment.

The last few years has seen retailers leak their Black Friday offers online and to the press in an effort to increase both awareness and sales. Walmart, Best Buy and amazingly Amazon selling smart phones for 1 cent have all been at this year. But this also potentially poses an issue to retailers in the UK. The internet has broken down barriers, so you can buy clothes, technology products, whatever you like from anywhere. And Amazon in the UK has started having a ‘UK Black Friday’, where they have a fire sale of selected lines. Will other retailers in the UK follow suit and have a fire sale before their pre-Christmas sale to try and cash in on this growing phenomenon.

Some retailers are already doing this, but in the next few years begin to expect much more the pre-sale fanfare of the UK’s Black Friday. The main difference in the UK, is that will be more of an online phenomenon, as of course Black Friday is not a holiday in the UK. (That said it is not a holiday in the US but many workers are given the day off as they go shopping).  So ecommerce spikes may abound, as people shop online, as UK retailers look for further opportunities to drive sales.

First there was retail, then mail order, then ecommerce. Some retailers managed to combine the three sales channels with varying degrees of success and they became multi-channel retailers. Arguably the biggest challenge to this status quo was the pure single channel players, specifically ecommerce companies. They appeared to have the edge over bricks and mortar retailers with lower overheads so they could offer consumers lower prices. But of course people still want to touch and feel things they are going to buy, especially big ticket items.

But, there now seems to be a shift as online only businesses look to open retail a retail presence, think Google and PayPal. Will this trend continue, and will more brands to look to open up new channels, as cross channel retailers are able to create a competitive advantage over their ecommerce rivals.

Cross Channel is not Multi-Channel
Multi-channel simply implies a retailer has several routes to market, it does not infer the seamless integration of those channels. There is now a cultural shift appearing whereby retailers are combining these sales channels to their advantage, especially over pure play ecommerce businesses, and getting them to work together, becoming cross channel retailers. Cross channel retailers such as Aurora and Argos are now able to fulfil orders the same day, often within hours of the order being placed, by using stock from across their stores and online delivery services of Shutl.

Cloud Computing and Cross Channel Retail
More and more retailers will turn to cross channel retail to satisfy consumer demand and to properly integrate their sales channels. Behind this growth will be cloud computing. Cloud based retail systems offer key advantages over traditional systems. They offer real time information and a single customer and product file, which makes customer orders and notes clearly visible across a retailer’s sales channels and stock visible in real time, essential for cross channel retail. What’s more cloud based retail systems are simple to deploy, it transforms the culture of retail systems to a utility service, something that can be switched on and off, transferred and accessed from any location. This in turn helps control costs and deliver a quicker return on investment.
 
Much of the need to adopt the cross channel model is driven by consumers. Consumers are becoming more fickle, less brand loyal, and more demanding. First longer opening times, even ecommerce stores extended deadlines for next day delivery. But now they see an item and they want it. This is where cross channel retailers will prosper, they combine all sales channels to offer a seamless service to a consumer! Multi-channel was the noughties retail revolution and cross channel-channel will be define this decade’s retail trends.

This is not Portas’ only suggestion as she looks to turn around failing high streets and incentivise more independents with her High Street Review, as she was appointed as a Retail Tsar by the coalition.

Portas has recently toured the country looking at what issues different high streets face before drawing up her review of the high street. On one visit to Rotherham Portas was shown the size of the task facing the review. Rotherham, according to many, has never recovered from the building of shopping mall Meadowhall just three miles away. This has resulted in many shops on Rotherham high street being empty for 10 years and more.

With the recent economic malaise more charity shops have appeared on the high street, taking advantage of greater availability of premises. Accurate figures on this are hard to come by, but according to the Charity Retail Association there are approximately 7,500 charity shops in the UK, whilst Local Data Company believe there are 8,500. To actually track growth Civil Society’s survey of charity shops is possibly the best tool. In 2010, 78 charities responded to their survey, and they had a combined 5,375 shops in the UK. In 2011, 75 charities responded, and they had a combined 6,045 shops. This represents a year on year increase of 12.5% and on average 8.6 more stores per charity in 2011. (Please see comments below blog on these stats, as these are not true like for like figures).

The high street is ever changing and a reflection of society and the economy. With low consumer confidence and a stalling economy, yes the high street does need invigoration, and charity shops and discount shops have become more prevalent on the high street, as the above figures suggest. But, there is a cultural shift on the high street, which is probably best symbolised by Primark opening concessions in Selfridges. One of the most exclusive names of the UK high street allowing one of the cheapest, if not the cheapest, fashion retailers to open a concession. More and more people are looking for a bargain, dictated by the economy, as shoppers become more thrifty and all retailers are having to respond accordingly.

The economy and people’s changing needs have resulted in the rise in numbers of charity shops. Without them many more high streets would be blighted by many more boarded up, empty retail premises. And of course over recent years charity shops have transformed themselves in what they sell and how they market and merchandise their stores. Many have invested in retail EPoS systems, and this has attracted a greater footfall, ironically much of this is because of Mary Portas. It appears now pinpointing charity shops as the one of the main reasons for turning consumers off the high street is somewhat short sighted, and missing the bigger picture.

The high street is in trouble, but the biggest factor is the economy. When this recovers so will the high street, so how can the high street be re-invigorated in between? Well one issue is if people aren’t confident in the economy there is very little that will tempt them to the shops. But, focusing on consumers and what they want from their local high street, might be a good starting point in conjunction with tax breaks and incentives to attract retailers back to the high street might be a more compelling solution than side stepping the main issues and targeting charity retailers.

There are some basic steps that retailers can put in place to help them re-open as quickly as possible and keep their customers up to date. Arguably the information about the business that helps it function is as important as the stock. Such information will help them identify stock holding to help with insurance claims, back orders from customers, outstanding orders from suppliers, customer details, stock levels at central warehouses, ecommerce orders and much more. Such information is critical to any business continuity, lose that and it becomes incredibly difficult to move forward, therefore it must be a priority that this information is protected and safe.

Those retailers that have traditional EPoS systems in their business, where the software and data is loaded on the till hardware in store, should at the end of every day ensure all data is backed up. And that the back up is stored securely off site. They will also need to have a back office server or PC off site too, so if the worse happens, they can load the backed up data on to the back office server. This can be a little labouriuos and irksome, but once loaded, they should have most, if not all,of the information to hand.

Those retailers with cloud based EPoS systems are inherently more flexible, as their system and all data and records are hosted in the ‘cloud’ (the web) for them. So the software and data is not held locally in store, so it is immaterial if their hardware is destroyed as they can access the system from any location and device with internet access. So everything is to hand just as if they were looking at the information in store.

Of course we all hope that backed up data is never needed, but the recent riots in England have shown that retailers must plan for all eventualties.

Contrast that to the good the internet can do for politicians and businesses, for example look at how Barrack Obama used the internet to raise funds from hundreds and thousands donors for his presidential campaign. It was the largest funded campaign ever and the majority of it was collected a few dollars at a time online. Then there is the rise and rise of online fashion retailer ASOS.

What can independent retailers learn from this? For me it is ‘ignore the internet at your peril’. Online retail sales are the one constant positive in a gloomy retail market, for example in April online sales rose by 12.5% compared to UK retail sales that were up 4.6%. Consistently ecommerce posts healthy growth figures that helps prop up high street retail figures. There are businesses that believe they don’t need an ecommerce site. This is so frustrating on many fronts, for example how many times have you been in a store and seen something and not bought it, only to go online later that day and buy it. There are hundreds of reasons for independents to set up an ecommerce business. And when speaking to independents there seems one overriding reason for not being online and that is FEAR. It is now easier and cheaper to set up an ecommerce site than ever before.

For example, Cybertill clients can manage their ecommerce site directly from the EPoS system. They can add and remove products simply by ticking a box, and the stock levels are all in real time so you only ever sell what you have in stock. This also removes the ongoing cost of having someone manage your site for you. This is just one way of creating an ecommerce site as there are many, many more options. Today, there is no reason why an independent retailer cannot be online taking advantage of the world wide web.

Some questions remain unanswered, for example when will the funding be cut, and how long will charities have to find alternative funding? Can a charity that has had say 50% of funding cut be given sufficient time to source alternative funding. Of course charities can look internally for cost savings, but many are lean organisations so there will be limited opportunities.

One area that many charities, both national and smaller regional charities have been able to exploit is gift aid. Those charities that have a retail presence have been able to raise substantial funds through gift aid. For example a small hospice in the south of England that has 11 stores generates over £100,000 each year through gift aid, so there are real opportunities out there.

That said what other options are open to charities, rely on volunteers to work that was originally done by paid staff? One could argue that whilst the government is ring fencing International Aid, should there be lobbying for them to ring fence charity funding paid by local councils? Whatever happens next charities need to look to for innovative new ways to plug the shortfall, whilst gift aid is not a complete panacea it certainly offers some answers to the stark issues facing charities.