With the major multiples constantly closing in, independent retailers have already realised that building a good rapport with the local community is a powerful weapon in the battle for survival.
And while sponsoring local sports teams and donating raffle prizes are great ways of upping your reputation and earning your place in customers’ hearts, it shouldn’t be forgotten that they are also a key opportunity to raise funds.
Dean Holborn, who runs two stores under the Holborns name in Surrey, took the bull by the horns when his village’s annual fireworks display was cancelled. “It’s a really good event for local people to get together and it would have been a pity if it stopped running, so I arranged a display with the local primary school’s parent teacher association (PTA). It was a great success, but the PTA only wanted to run it every other year because of the work involved.”
Not wanting to let the locals down, Dean decided to organise the event himself. But it wasn’t just fireworks fans who benefited. “I sell fireworks at the store, so I was able to get a good price for them from my supplier, and my food-to-go supplier Country Choice provided hot food on the night,” he says. “I published a brochure telling people the time and date of the event and sold ads against it for the different local businesses at £50 per page. We had 1,000 printed and they made about £450.”
He also sold 600 tickets through the shop, making £2,800.
“I got a local artist to design the tickets and all the local groups helped out we held the event in the local cricket club’s ground, and the scout group served up food. I gave them all a share of the profit in return for their hard work, and put the rest in the pot for next time.”
This year’s fireworks display is set to be bigger than ever, with Dean targeting other businesses for sponsorship.
Of course, the more times you run an event the more established it becomes, which can mean bigger and better profits. Harry Tuffins has been running its fun day in Churchstoke, Powys, for 15 years and it has gone from strength to strength.
The latest event took place on August 1 and involved a range of events, from go-karting to sheep-shearing. It pulled in 5,000 visitors not bad at all considering that the population of Churchstoke is only 1,000. “The first time we ran the day, it made £1,000 and this year it made £36,000,” says operations director Richard Whittall.
Over the coming weeks, Tuffins will donate the proceeds to various local charities, which ensures that the retailer gets plenty of free media coverage in the local papers.
“We have use of a 60-acre country park so we have the space to put on a major event, but we also ensure that we have full backing from our suppliers they give us donations and raffle prizes for the day,” says Whittall.
Gaining support from your suppliers can be a vital part of making your initiative profitable. Guy Warner, who owns several Budgens stores in the Cotswolds, has built up an excellent working relationship with his suppliers, which he uses to his advantage in his Taste Club. “As part of a monthly giveaway called My Taste, we give each Taste Club member a free product, which is supplied to us free of charge,” explains Guy.
The gesture helps to maintain goodwill between the store and its customers, but there’s a little more to it, explains Guy. “Shoppers leave feedback online, which the suppliers really appreciate. Customers love it because they are getting something for free, and I love it because they come into the store for their free product and they end up buying lots of extra things.”
The featured product also benefits from a considerable rise in sales. “When comparing sales of a product before and after the giveaway we see anything up to a 400% increase,” says Guy.
However, if you are going to give something to people be it a free product, or putting on a community event then it’s important to make sure that what you’re doing is relevant. “The trick is to find out what makes your locals tick,” he says. “Get your ear to the ground and listen to what people want.”
One retailer who has run with this idea is Paul Fisher, who owns Fisher’s in Gerrards Cross, Buckinghamshire. He has fully embraced Nisa’s Making a Difference Locally scheme, whereby a number of suppliers have agreed to donate a few pence from the purchase of particular items sold to a local charity of the retailer’s choice.
But here’s the clever part Paul actively approaches the charity and asks them what they would like to raise funds for. Then he tells them that if all their patrons shop at his store and buy products x, y and z, he will be able to give them the money. “When I spoke to the local school, they asked for an £800 greenhouse, so I told them which products staff and teachers needed to buy at our store to help them get the money. It’s working really well so far we’ve amassed £650.”
Giving people a reason to shop regularly at the store is a win-win for both customer and retailer, but Paul doesn’t want to lose custom once the greenhouse has been paid for, so he has come up with a plan of his own. “I’m in talks with the school about parents opening credit accounts in our shop and, in return, I’ll give a percentage of what they spend straight back to the school.”
Because it is a big commitment, Paul has been careful to look at the figures to see what he can afford to give.
“I need to see how many parents there are and then work out if all the parents did a regular main shop at our store how much it would make. If we have 400 families each spending £100 a week with us, that’s £40,000. We usually make 20% profit, so we could afford to give 5% to the school. That will mean we’re giving the school £2,000 a week.”
He explains that while quite a few parents use Fisher’s for top-up shops, it would make a significant return if they were to increase this to a full shop. “If we can guarantee them coming to our store, we’ll make a decent profit and it will help us to survive when the new Tesco near us opens.”
Ethnic foods store Divine Tropical Food in Luton, Bedfordshire, has also realised the potential to make money by bonding with local schools. “I have contacted the local school about coming in and doing a presentation for the kids and their parents,” says owner Charles Osadinizu. “It’s a very multicultural school, so they celebrate all kinds of different religious events, from Ramadan to Diwali. We specialise in African foods, so they have suggested that we come in and run a tasting session during Black History month. We’ll give a presentation to the children and their parents and show them a video of how different African dishes are made.”
Obviously, it’s great for the kids to learn about a different culture, but Charles is also hoping to make a healthy profit from the event. “After they have tasted the foods and found out the ingredients, parents will have the opportunity to order the produce. We should get quite a few orders. The session will cost us about £500 and I’d expect to get a return of 20-30%.”
He adds: “There will also be the added benefit that once they have cooked with the produce they will hopefully come back for more.”
Turning a goodwill gesture into a money-spinner may involve investing a little more thought into your retail strategies, but it is well worth it if it means extra money in your pocket. And one thing’s for sure these nice guys definitely don’t finish last.