Yamin Sun

Goodwill Easter Seals Miami Valley Client Report Submitted to Sam Jones & Matthew Dillon of GESMV by The University of Dayton MBA 799 Project Team (Secondhand Flyers) Clayton Kantner Jonathan Meese Kevin Gutman Kyle Mottola Ray Spear Yamin Sun June 04, 2024 Table of Contents 1. Executive Summary:............................................................................................ 02 2. Project & Client Background:.............................................................................. 04 3. Objective of Study & Issues Addressed:.............................................................. 05 4. External Analysis:............................................................................................... 06 5. Competitor Analysis:........................................................................................... 13 6. Internal Analysis: …………………...…………………………...………….…. 15 7. Recommendations & Implementation Plans.........................................................25 8. Concluding Comments:........................................................................................ 42 9. Appendices:.......................................................................................................... 43 10. Bibliography:........................................................................................................ 55 1 Executive Summary On March 25, 2024, the University of Dayton MBA 799 Project Team 1, now known as the Second-Hand Flyers, was introduced to the Client Team, Goodwill Easter Seals – Miami Valley. In a handwritten client profile drafted by Sam Jones, the project team's instructions were made clear: Project Goal: Complete Strategic Analysis of the Entire Operation Other Specific Client Goals: 1) Increase Revenues 2) Decrease Expenses 3) New Marketplace Opportunities 4) Process Improvements Two months later, after exhaustive research, data mining, and analysis, the project team has developed a set of strategies with recommendations and implementation plans. The approach involved extensive external industry analysis, an analysis of competitors, a comprehensive internal analysis, and the development of a set of recommendations across three strategies. The recommendations were also strengthened through the development of implementation plans to help bring the recommendations to life at GESMV. Key findings from the external industry analysis, the analysis of competitors, and the internal analysis were: The secondhand goods industry includes for profit brick and mortar stores like Plato’s closet, online second-hand stores like Poshmark, Ebay, and Craigslist, and nonprofits such as Goodwill/Easter Seals and the Salvation Army. This industry, while growing, does not appear to be a financially stable industry as a whole. There are pockets that seem to be thriving primarily through brand strength and recognition such as Goodwill and others that are focused on upscale product differentiation such as Poshmark. There is a wide array of competitors in this industry. The cost of entry is fairly low, anyone can rent a small shop in a strip mall or open an online store. However, this is where the scale and brand recognition come into play. People come to Goodwill’s brick & mortar stores and ShopGoodwill.com (Goodwill’s e-commerce platform) because they know they will find a wide variety of items at exceptional prices. Internal analysis of GESMV spotlighted an exceptionally well-run business with very solid financial and business processes. However, the project team was able to identify some areas that, with some adjustments, could make a modest improvement in e-commerce revenues. Based on these analyses, the project team identified these three strategies as areas to pursue for potential e-commerce business improvement: 2 - Increase revenue at GESMV by increasing overall traffic to ShopGoodwill.com Increase revenue at GESMV by optimizing ShopGoodwill.com Increase revenues at GESMV by converting donors into ShopGoodwill.com users The project team has developed several tactical recommendations under each of these strategies with corresponding implementation plans. In general, the project team believes that if these programs are executed, GESMV should conservatively see a net increase in revenue of 5%-10% or $63,000 to $126,000 generated by the e-commerce division. 3 Project & Client Background Goodwill Easter Seals is a Non-Profit that empowers people with disabilities and other disadvantages to achieve independence. Goodwill is a pillar in the Dayton community which has extensive community outreach and has impacted lives from all over the region. People in the community support Goodwill through the donation of used goods. Goodwill does a great job of making the donation process stress free and it is clear that proceeds from donated goods go to a good cause. Some of the community programs that Goodwill supports include job readiness, disability support, and senior/child services. In 2020, over 19,547 individuals were impacted due to assistance from Goodwill Easter Seals. The Miami Valley region has over 40 brick and mortar locations and is expanding its digital footprint with ShopGoodwill online sales. Revenue made for these sales is directly reinvested into the community. 87 cents of every dollar goes back into funding programs and services. Goodwill has collaborated with the UD MBA program to obtain a fresh perspective on its operations and receive recommendations for organizational improvement. During this project, the UD MBA team spent time analyzing business operations and conducted both internal and external analyses. Key strategies have been developed to increase revenue, decrease expenses, and explore new market opportunities. One area that this project aims to improve is the limited awareness and utilization of the ShopGoodwill website. 4 Objective of Study & Issues Addressed Our primary goals and objectives are to increase profit by reducing costs through internal and external data analysis, SWOT, PESTDG, and RBV analysis. This report features tangible recommendations, each supported by data aimed at providing actionable insights. Our team is committed to helping Goodwill meet its goals, enhance operational efficiency, and ultimately boost revenue. We have several cost-effective ideas that can be implemented to increase revenue. By continually refining and adjusting existing policies and procedures, Goodwill can increase revenue, raise awareness, and engage more effectively with donors; creating a better experience for both donors and buyers. 5 External Analysis Current Industries/NAICS Codes GESMV business functions within two primary industries towards a common goal of improving the quality of life for people with disabilities, as well as disadvantaged individuals. The two industries are represented by both the sale of used merchandise retail, which GESMV uses to self-fund, and advocacy work. The following analysis pertains specifically to the funding side of GESMV’s operations. In order to self-fund, e-commerce and retail sales of used goods are the primary business and source of revenue for the firm. NAICS code 459510 Used Merchandise Retailers- establishments primarily engaged in retailing used merchandise, antiques, and secondhand goods (except motor vehicles, such as automobiles, RVs, motorcycles, and boats; motor vehicle parts; tires; and mobile homes). This industry includes establishments retailing used merchandise on an auction basis. NAICS code 813319 Other Social Advocacy Organizations- establishments primarily engaged in social advocacy (except human rights and environmental protection, conservation, and wildlife preservation). Establishments in this industry address issues, such as peace and international understanding; community action (excluding civic organizations); or advancing social causes, such as firearms safety, drunk driving prevention, or drug abuse awareness. These organizations may solicit contributions and offer memberships to support these causes. Herfindahl Index and Industry CAGR When analyzing the external environment of the industry that contains Goodwill Easterseals Miami Valley, there are two key metrics that provide insight into the health of the overall industry: the Compound Annual Growth Rate (CAGR) and the Herfindahl Index. Used together, it is possible to obtain a sense of the annual growth of the industry as well as the concentration of firms. NAICS code 459510 contains 28,415 firms across the United States, 450 in Ohio, and 43 firms in the Dayton-Springfield and Hamilton-Middletown areas combined. Out of 43 local firms, all but three bring in less than five million dollars in annual revenue. The remaining firms bring in less than 25 million dollars in annual revenue (Bizminer’s Granular Industry Financial & Market Benchmarks, n.d.). The CAGR for this industry on a national scale is -6.36% over the past five years, but the outlook is more favorable when looking at the major players, as the CAGR for firms making more than five million dollars is 2.87%. This suggests that the smaller firms are struggling to grow when examined at the national level, while larger firms are faring better overall. When narrowing the focus to Ohio only, a -2.14% CAGR for the industry and a 2.35% for larger firms shows that the outlook for smaller firms is much less bleak than on a national scale, but larger firms are not experiencing the same level of growth. At a local level, the Dayton-Springfield and Hamilton-Middletown areas are seeing an even steeper decline in industry wide growth when compared to the national level, at -5.84% and -9.89%, respectively. With declines in growth at the national, statewide, and local levels, it is apparent that the used merchandise retail industry has not been performing well over the last five years. The comparable performance of both smaller and larger firms indicates that the lack of growth is pervasive across all participants in the industry. 6 The Herfindahl Index, or the Herfindahl-Hirschman Index, is defined by Eurostat as a common metric used to determine market competitiveness relative to the size of the industry (Glossary:Herfindahl Hirschman Index (HHI), n.d.). On a zero to one hundred percent scale, zero is considered to be completely fragmented while one hundred characterizes a total monopoly. Anything under fifteen percent is seen as overly competitive while over thirty five percent raises governmental concerns. Typically, anywhere between fifteen to thirty percent is regarded as healthy (Janney, 2024). The Herfindahl Index calculations for the national, statewide, and local industry levels that contain Goodwill Easterseals Miami Valley can be found in Appendix A. Nationally, the Herfindahl Index is found to be 0.028%, demonstrating that the industry is extremely fragmented and contains a high amount of competition for all firms. On a state level, although it is an improvement when compared to the national level, a Herfindahl Index of 0.851% is still indicative of high fragmentation and competition. Locally, the Herfindahl Index is calculated as 2.50% and is again indicative of both high fragmentation and competition, albeit less-so than both the national and state levels. The index for the local level encompasses 40 of the 43 firms in the relevant geographical area. There was not enough data on the three larger firms to include those in the calculation. Upon examining the calculations used to gather the data above, it is evident that this industry is oversaturated, with smaller firms experiencing high levels of competition while also containing few firms that dominate the industry. In addition, these larger firms are much smaller relative to other industries, as there does not appear to be any firms that earn more than 25 million dollars in annual revenue. 7 PESTDG The retail industry is a diverse and constantly evolving sector influenced by many external factors. Within this vast landscape, the market for used merchandise, antiques, and secondhand goods holds a unique position, shaped by a complex interplay of political, economic, social, technological, environmental, legal, and geopolitical forces. Political factors exert a significant influence on the secondhand goods industry. Government regulations and policies regarding the sale of used merchandise vary across jurisdictions, encompassing licensing requirements, health and safety standards, and taxation policies. For instance, in some regions, stringent health and safety regulations may dictate the types of secondhand goods that can be sold, impacting market offerings and operational practices. Additionally, taxation policies can influence consumer behavior, with differential tax rates on new versus used goods affecting purchasing decisions. Changes in tax policies related to charitable donations could also impact the supply of goods to organizations like Goodwill. Economic conditions play a crucial role in shaping consumer spending patterns and overall demand for secondhand goods. During economic downturns or recessions, consumers often seek more affordable alternatives to new products, leading to increased demand for used merchandise. Conversely, in times of economic prosperity, discretionary spending on luxury items such as antiques may rise as consumers perceive them as investments or status symbols. Disposable income levels and purchasing power also influence consumer preferences, with higher income groups more likely to indulge in luxury or vintage purchases. Inflation can affect operating costs and pricing strategies, influencing the profitability of secondhand retailers. Looking ahead, persistent inflationary pressures are expected to further drive consumers towards second hand markets as they seek cost-saving measures amidst rising prices for new goods. Social trends and cultural attitudes towards secondhand shopping are essential drivers of consumer behavior within the industry. Increasing awareness of sustainability and environmental concerns has led to a growing trend towards eco-friendly consumption practices, driving interest in purchasing pre-owned goods as a form of recycling and reducing waste. Demographic shifts, such as an aging population, can also impact demand for antiques and vintage items, as older consumers seek nostalgic or collectible pieces. Moreover, changing consumer perceptions of quality, authenticity, and uniqueness influence purchasing decisions within the secondhand goods market. Younger generations, particularly Millennials and Gen Z, are relatively more inclined towards sustainable living. Technological advancements have transformed the secondhand goods industry, revolutionizing the way goods are bought and sold. The rise of digital platforms and online marketplaces has expanded the reach of secondhand retailers, allowing them to tap into a global customer base. E-commerce technologies, mobile apps, and virtual reality experiences have enhanced the online shopping experience for secondhand goods, facilitating easier navigation and product discovery. Furthermore, data analytics and AI-driven recommendation systems have improved inventory management and personalized marketing strategies, enabling retailers to better cater to consumer preferences. For Goodwill, embracing these technological changes presents both a significant opportunity and a challenge, as they adapt to new ways of receiving donations and reaching customers. Environmental sustainability has emerged as a significant driver of consumer behavior within the secondhand goods market. Increasing awareness of environmental issues has led to a shift towards eco-conscious consumption practices, with consumers opting for pre-owned items 8 as a more sustainable alternative to new purchases. Regulations and consumer preferences regarding packaging materials and recycling practices further shape the environmental footprint of the industry. Geopolitical dynamics and trade policies also have a significant impact on the global supply chain and market access for secondhand goods retailers. Trade agreements and tariffs affect the import/export of antique and vintage items, with regulatory harmonization efforts influencing cross-border trade. Political instability and conflicts in key sourcing regions may disrupt supply chains and affect market availability, necessitating risk mitigation strategies for retailers operating in volatile regions. Additionally, geographical considerations such as transportation logistics and access to international markets shape the competitive landscape and strategic decisions within the industry. However, these geopolitical factors tend to have limited direct influence on the local secondhand goods industry, as most transactions and sourcing occur within local or national boundaries. The secondhand goods industry is a multifaceted sector influenced by a wide array of external factors. The overall outlook for the industry is moderately favorable. Political and economic fluctuations can create both challenges and opportunities, while sociocultural and environmental trends generally support growth. Technological advancements offer significant potential for expansion, although they require adaptation. Legal and geopolitical factors remain important considerations, with varying degrees of impact. For Goodwill, leveraging online platforms to engage Millennials and Gen Z consumers presents a dual opportunity and threat, as it may alter traditional donation and shopping patterns. Embracing these trends and technologies will be crucial for sustained success in the evolving marketplace. 9 Five Forces Bargaining Power of Buyers In the secondhand goods industry, buyers exert considerable bargaining power due to several factors. Primarily, buyers have numerous alternatives available, such as other second hand stores, online marketplaces, and new merchandise. This abundance of options increases price sensitivity as buyers can easily compare prices across multiple platforms. However, the uniqueness and rarity of certain secondhand items can moderate this power. Rare vintage items or antiques often attract buyers who are willing to pay a premium, thus reducing their price sensitivity. Additionally, a strong brand reputation and customer loyalty, as seen with established players like Goodwill, can enhance seller bargaining power. These factors help retain customers and encourage repeat business despite the competitive landscape. Bargaining Power of Suppliers Suppliers in the secondhand goods industry include individual donors, estate sales, and other thrift stores. The fragmented nature of these sources generally results in limited bargaining power for individual suppliers, as retailers can easily switch between different suppliers to meet their inventory needs. However, some suppliers, such as collectors or specialty vintage stores, may hold unique or rare items that command higher prices, granting them greater bargaining power. For organizations like Goodwill, the brand's strong reputation and extensive network of donation centers provide a significant advantage in attracting a steady stream of donated goods. This strong donor base is crucial for maintaining inventory levels and meeting consumer demand. Threat of New Entrants The threat of new entrants in the secondhand goods industry is relatively low due to several factors. While the barriers to entry, such as initial capital requirements, are lower compared to other industries, established players like Goodwill benefit from economies of scale in sourcing, pricing, and marketing. These advantages allow them to offer competitive prices and attract a loyal customer base. Brand recognition and trust also play crucial roles. Established brands have spent years building credibility and customer loyalty, which new entrants will find challenging to match quickly. However, the rise of online platforms and digital marketplaces has lowered some barriers, allowing new entrants to access global markets and reach customers without needing physical storefronts. Despite this, the competition for donors and inventory remains a significant barrier, with established brands like Goodwill holding a distinct advantage. Threat of Substitutes The primary substitutes for secondhand goods are new merchandise and replicas of vintage items. Consumers might opt for new products if they perceive higher value, better quality, or greater convenience. Retail outlets and online marketplaces selling new merchandise present significant competition, especially for consumers seeking the latest trends or brand-new items. However, the unique value propositions of secondhand goods, such as affordability, authenticity, and sustainability, often mitigate this threat. Vintage and antique items, for 10 example, have intrinsic value and historical significance that new products cannot replicate. This appeal attracts collectors and enthusiasts who prioritize authenticity over newness, thereby reducing the impact of substitutes. Intensity of Competitive Rivalry The intensity of competitive rivalry in the secondhand goods industry is high, driven by factors such as market concentration, differentiation strategies, and pricing dynamics. The industry comprises a diverse range of players, from large retail chains to individual sellers and online marketplaces. Competition is fierce, particularly in terms of pricing, as buyers in the secondhand market are often motivated by affordability and value. Differentiation strategies, such as offering curated collections or specialized expertise, can help sellers stand out. However, for Goodwill, the focus on volume rather than curation aligns with their operational model and customer base. The rise of online platforms has intensified competition by lowering entry barriers and increasing market access for sellers. As a result, businesses must continually innovate and differentiate to maintain a competitive edge. External Dimensions The secondhand goods industry also faces external threats from upscale brands that resell their own items, further intensifying competition. These brands leverage their existing customer bases and reputation to attract consumers, posing a challenge to traditional secondhand retailers. However, larger organizations like Goodwill, with their established presence and strong donor networks, are better positioned to navigate these challenges compared to newer or smaller firms. Overall, the secondhand goods industry operates in a moderately favorable environment, especially for established players like Goodwill. While the bargaining power of buyers and suppliers, the threat of new entrants, and the intensity of competitive rivalry pose significant challenges, the unique value propositions of secondhand goods and the brand advantages of established players offer substantial opportunities. The industry is more favorable for larger organizations with strong brand recognition and extensive donor networks, while newer and smaller firms may find it less profitable. Understanding these competitive forces and leveraging strategic advantages will be crucial for sustained growth and success in the evolving marketplace. The second-hand retail industry is currently undergoing several changes. The increase in the number of up-scale second hand online stores such as POSHMARK and for Gen-Z Depop (an Etsy company). Fashion Icons like Bella Hadid, Kendall Jenner and Rihanna “have shown, buying pre-loved fashion means you’re likely to be the only person in the room to have that piece – making it extra special.” Additionally, High-end fashion retailers have also added “preloved” items to their online retail sites. Surprisingly, a favorite Valentino’s outlet site now features “preloved” items. Also new to the industry are “for-profit” stores soliciting for donations of clothing. For example savers.com says “We are a for-profit company that champions reuse. Shopping in our stores doesn’t support any nonprofit, but donating your reusable goods does. We pay nonprofits for your stuff, helping them fund programs in our communities.” 11 Summary of the General Operating Environment As many may not know, Goodwill has a different approach from many other nonprofits. One strategy Goodwill does as the CEO stated “Think before you Donate and Goodwill is owned by the Community”. This allows for the community to have a positive impact through donations that then allow for Goodwill to invest their profit back into resources for the communities they serve. Numerous services are available such as job training, placement, helping those with disabilities and even those that struggle with addiction and recovery. Each Goodwill organization is locally controlled which in return allows for services to be tailored and provided to what makes the most sense to that community. 87 cent per dollar of profit is currently being repurposed into the current community through numerous areas. Goodwill has seen an increase in E-commerce by 134% in the last three years of business sales. With a project set of 14% continued growth. Goodwill has continued to focus on e-commerce and dedication on making the community a stronger community with developmental organizations. Through the continued service of giving to the community Goodwill will continue to grow positively through environmental acknowledgement as well as our generation and of the upcoming generation focused on how business positively impacts communities and environments. As stated above online has taken over the way businesses can be successful or be detrimental to society. As we focus on Goodwill we have to focus on the digital footprint to enhance future sustainability and growth. 12 Competitor Analysis Market Position In the competitive landscape of the Dayton, Ohio region, GESMV faces opportunities for improvement in its marketing strategy across various fronts. While GESMV enjoys a strong reputation for its comprehensive services and deep community roots, there are areas where its marketing efforts could be enhanced to further solidify its unique position within the community. Some of Dayton Goodwill's competitors include Saint Vincent De Paul, Restore, Plato's Closet and Play it Again Sports. All of which are different in their own ways to compete and some are not even non-profits however are still competitors nonetheless. Briefly, as for Plato’s Closet they entice donors by buying your donations (encourages donors to keep coming back to donate) if they meet the criteria, something that Goodwill does not do. As for Saint Vincent De Paul, they also rely heavily on donations, grants, funding from the people and fundraising. Play it again sports works much like Plato’s Closet where they will buy used, trade and resell higher. However, what sets them apart is that they mainly focus only on sports gear and equipment creating a diverse market. Firstly, by articulating its mission and impact in a more compelling and concise manner, GESMV can capture the attention and support of community members, donors, and partners more effectively. Secondly, GESMV should explore avenues for increasing its visibility and reach within the community. While its existing marketing channels may be effective to some extent, there is room for expansion and diversification to engage with a broader audience. Embracing digital marketing strategies, enhancing social media presence, and exploring partnerships with local media outlets could amplify GESMV's outreach efforts and attract new stakeholders. Overall, by prioritizing improvements in its marketing strategy, GESMV can further differentiate itself in the competitive landscape of the Dayton, Ohio region, positioning itself as a leader in empowering individuals and fostering inclusivity within the community. Low Cost Vs. Broad Porter's generic strategies highlight ways to improve your spending. Goodwill has done this efficiently over the years while improving over time. Porter shows that to stay competitive you need to stay on the edge. As we have highlighted throughout our report we are able to see that Goodwill has low costs with their goods that are turned around and are sold for an increased profit. Goodwill has also taken the approach of creating bids to increase the value of products that otherwise would have been sold for sometimes less. Goodwill having secondhand retailing space they are within a broad low cost strategy approach while highlighting low costs creates a niche for their services. What also separates them from other thrift stores is that Goodwill reinvests the money that is earned into their people and community. Therefore, encouraging people to donate and buy their goods. Creating an online platform has helped increase revenue by millions at a low cost to help sell and not be disposed of. Goodwill creates an affordable place for middle and low class families to buy goods at a great discount for upscale items creating a niche within the market for consumers in those classes. Finally, through Porter’s research we have learned that to have success in either strategy, you have to offer something different than the rest of your competitors. Goodwill is doing just 13 that by reducing costs for upscale goods, reinvesting in the community, creating blue bin events and online bidding wars. Competitor Environment Summary- Favorable or Unfavorable Goodwill is showing a favorable market according to data given. With being a non-profit organization goodwill receives all donations free and turns around with a resale value higher than what was spent receiving. Through optimization of e-commerce to limit closing bids to meet with the most online consumers at that time of closing. By doing so will increase bidding wars and ultimately subjectively increase sales per item. From the received data we got from Goodwill was showing that costs spent are less than costs utilized. Showing millions of dollars in profit, while this is nice there are several optimizations that can take place to increase revenue further at little to no additional costs. In another term to show favorable through competitor environments aside from the most obvious of receiving goods from donors to be resold on e-commerce and brick and mortars.We see that projected expenses are lower than what was initially stated,which increases overall revenue. Following Humphrey’s SWOT analysis as we have shown later in this report you see exactly what sets Goodwill apart from competitors within their market share. Which makes this extremely important because when done correctly you are able to become a reputable and profitable business. What makes this even more crucial is being a nonprofit organization that relies heavily on donors. So, as a team you have to optimize and set standards to consumers that also reflect onto donors. Furthermore; throughout our report we have gathered additional information and data on how to positively assess decisions to impact donors to become consumers as well, especially through e-commerce. 14 Internal Analysis RBV Analysis Tangible Resources: ● Physical Assets: GESMV owns and operates a network of retail stores and donation centers across the Ohio region. These physical locations serve as vital hubs for community engagement, revenue generation, and donation collection. ● Financial Resources: GESMV's financial stability is supported by diverse revenue streams, including proceeds from retail sales, donations from individuals and businesses, grants from government and private sources, and revenue from contracts and partnerships with local organizations. Intangible Resources: ● Brand Reputation: GESMV has cultivated a strong brand reputation over decades of service, known for its commitment to supporting individuals with disabilities and other barriers to employment. Its brand is synonymous with trust, reliability, and social impact within the community. ● Intellectual Property: While GESMV's intellectual property may not be in the form of patented technology, it possesses valuable knowledge and expertise in areas such as vocational training, disability services, and social entrepreneurship, accumulated through years of experience and innovation. Human Capital: ● Skilled Workforce: GESMV employs a diverse and skilled workforce comprising professionals from various backgrounds, including vocational trainers, social workers, retail managers, educators, and administrative staff. These individuals bring expertise, passion, and dedication to their roles, driving the organization's mission forward. ● Mission-Driven Culture: GESMV fosters a culture centered around its mission of empowering individuals with disabilities and barriers to employment. Employees, volunteers, and stakeholders are united by a shared commitment to making a positive difference in the lives of others, fueling the organization's success. Organizational Capabilities: ● Retail Operations: GESMV excels in managing retail operations, from sourcing and sorting donated goods to merchandising, sales, and customer service. Its retail stores provide not only a revenue stream but also serve as platforms for community engagement and employment opportunities. ● Vocational Training: GESMV's vocational training programs are designed to equip individuals with the skills, knowledge, and resources needed to succeed in the workforce. These programs leverage the organization's expertise in curriculum development, instructional design, and job placement services, empowering participants to achieve economic independence. Innovation and Learning: ● Program Innovation: GESMV demonstrates a commitment to innovation by continually refining and expanding its programs and services to meet the evolving needs of the community. This includes introducing new training initiatives, 15 exploring innovative partnerships, and adopting emerging technologies to enhance service delivery. ● Continuous Improvement: GESMV prioritizes learning and continuous improvement across all aspects of its operations. Through stakeholder feedback mechanisms, performance evaluations, and internal training programs, the organization identifies areas for enhancement and implements strategies to optimize effectiveness and efficiency. The RBV analysis of GESMV highlights several key strengths that the organization can leverage for sustained growth and impact. The combination of robust physical and financial resources ensures a stable foundation for operations and expansion. The strong brand reputation and intellectual property related to vocational training and disability services differentiate GESMV in the market, fostering trust and loyalty within the community. The skilled and mission-driven workforce is a critical asset, driving the organization's initiatives with passion and expertise. Organizational capabilities in retail operations and vocational training provide dual avenues for revenue generation and social impact. The commitment to innovation and continuous improvement positions GESMV to adapt to changing needs and maintain its relevance and effectiveness. These insights suggest that GESMV should continue to invest in its human capital and organizational capabilities, enhance its brand reputation through strategic marketing and community engagement, and explore new program innovations and partnerships to further its mission. By capitalizing on these strengths, GESMV can strengthen its competitive position and maximize its positive impact on the community. 16 Industry Financial Outlook To help contextualize how GESMV is performing compared to its competitors, a comprehensive financial analysis can be performed on the used merchandise industry. The following two pages of analysis focus on the industry as a whole. By utilizing the Bizminer financial database, ratios examining liquidity, profitability, efficiency, the cash conversion cycle, and leverage can be calculated to help determine the firm’s effectiveness. In an attempt to correlate as closely as possible to the real world geographical area that GESMV conducts its operations, analysis must be restricted to the Dayton-Springfield and Hamilton-Middletown areas. Upon further examination, because there does not appear to be a significant difference between the two areas, data can be averaged as a simplification. To help ensure data relevancy as of May 2024, only years 2022 and 2023 will be examined in the proceeding financial analysis, with results compiled in table 1 located in appendix E. Through computation of the current ratio, quick ratio, net working capital, and net working capital to total assets, insight into how easily companies in this industry can cover their short term liabilities can be gained. First, when examining current ratios of around two, it suggests that the industry is capable of meeting their short term liabilities. A current ratio of around one and a half to three is usually indicative of a healthy company (Kibet, n.d.). To gain a better sense of the availability of the industry’s most liquid assets, the quick ratio can be examined. A 0.99 in 2022 and 0.98 in 2023 indicates that most of the industry’s assets are tied up in inventory, and as a result the remaining assets would not be able to cover all outstanding short term liabilities- as the quick ratio is less than one. Net working capital is another indicator of financial solubility, and it appears to be healthy in both 2022 and 2023, as it is positive. However, since it declined over that time, it may be worth monitoring in 2024 and beyond to see if it continues to descend. The net working capital to total assets suggests that 35% of the industries total assets are liquid in both 2022 and 2023. Next, it is helpful to examine profitability ratios, which include gross profit margin, operating profit margin, and net profit margin. A gross profit margin around 39% suggests that the industry is performing okay off of sales alone if operating expenses are not high. Unfortunately, operating profit margins that are at or below 0% as shown in the below table suggest that operating expenses are extremely high for this industry. A net profit margin less than 0% for both 2022 and 2023 show that firms in this industry have not been able to turn a profit, as they are not earning the revenues required to cover expenses. The efficiency ratios are also important to examine, as they help provide insight into how effectively a company utilizes its assets. These ratios include sales to total assets, operating return on assets, and return on assets. The sales to total assets ratio, otherwise known as total asset turnover, is a measure of how a company’s sales are influenced by its assets. It is apparent that overall, the industry generates sales very effectively- around four times the industry average for total assets. Operating return on assets, which typically measures how a company’s operating profit margin compares to its total assets, is not an effective measure in this case in either 2022 or 2023 due to the operating loss attributed to the large amount of operating expenses. Regular return on assets, which is often a very reliable indicator of financial strength, is also not useful due to the industry operating at a net loss in 2022 and 2023. 17 When examining the cash conversion cycle in the context of this industry, it is important to examine ratios such as sales to cash and purchase to payment to determine how quickly firms are receiving cash from their sales, as well as how quickly firms are paying vendors for their goods or services. Looking at sales to cash versus purchase to payment, it appears that the industry receives cash from sales over two and a half times faster than they pay their debts, suggesting that there is less cash readily available to pay suppliers. Leverage ratios such as debt to assets, current liabilities to total debt, and interest coverage provide insight into how the industry is utilizing its debt. First, an analysis of debt to assets shows that on average, around 65% of the industry’s assets are financed with debt. With respect to current liabilities to total debt, a value around 54% for both 2022 and 2023 suggests that a large amount of its debt is due to be repaid in the short term. Interest coverage ratios below 1.0 show that firms in this industry are unable to fully pay their interest expense with their operating profit. Overall, the industry that contains GESMV appears to be unhealthy when examining a few key ratios summarizing the liquidity, profitability, efficiency, the cash conversion cycle, and leverage of the industry. With respect to the liquidity ratios, it appears that a majority of assets are tied up in inventory, and cause firms to be less efficient in paying off their debts. The profitability ratios paint an even worse picture as both the operating profit margin and the net profit margin are both negative due to a high amount of operating expenses. Looking at the efficiency ratios, the outlook does not improve. While sales are shown to be high, these ratios are not very effective since the industry generally has operated at a loss in 2022 and 2023. This is reinforced upon examination of sales to cash and purchase to payment in the cash conversion cycle, which suggests that there is less cash available to pay suppliers since it takes around 40 days to pay suppliers, but only 14 days to receive cash from sales. Finally, the leverage ratios suggest a large amount of debt that needs to be repaid in the short term, and profits that cannot even fully cover interest expenses on these debts. Therefore, it does not appear that the industry containing GESMV is financially healthy. 18 GESMV Internal Financial Outlook Through the utilization of the internal documentation and financial data provided by the GESMV client team, it is possible to determine whether the overall health of GESMV has similar trends to the overall industry found in the Dayton-Springfield and Hamilton-Middletown Geographical areas. The following three pages narrows the focus of the financial analysis to GESMV specifically. While a breakdown of current assets and current liabilities was not available for analysis, the information that was provided allows for the determination of key takeaways such as a cash flow analysis, as well as the liquidity, profitability, efficiency, cash conversion cycle, and leverage ratios that can be compared to industry results to provide useful financial insight. To calculate these ratios, cash, accounts receivable, inventory, prepaid expenses & other assets, and current investments were considered current assets. Accounts payable and accrued liabilities were chosen as the current liabilities. By combining this data, the calculated current ratios matched up with what was reported by GESMV. To help ensure data relevancy as of May 2024, as in the industry analysis, only years 2022 and 2023 will be examined, with results also compiled in table 1. In addition, data on incremental sales growth from one to ten percent is provided in table 2, located in appendix E, to explore the feasibility of GESMV to operate solely on internal funding based on potential sales goals for operations in 2024. In conducting the cash flow analysis from 2022 to 2023, changes affecting the nonrestricted cash account, operations, physical operations, and financing were examined to determine the amount of available cash to invest back into the firm, if any. Due to the firm’s existence as a nonprofit organization, some of the contributing factors normally included in this calculation were unavailable. However, looking at the non-restricted cash and operations accounts, there is an increase of $196,812.00 and $8,576,895.00, respectively, calculated from available data. This means that there appears to be $8,773,707.00 available to self-finance all sales growth expenses and pay off any outstanding debt. It may also be possible for GESMV to use this amount towards purchasing additional capital expenditures, but the available cash may be insufficient to cover larger capital expenditures outright. As done with the industry analysis, liquidity ratios such as the current ratio, quick ratio, net working capital, and net working capital to total assets are examined to demonstrate how well GESMV can cover its short term liabilities. The current ratios for GESMV in 2022 and 2023, provided by the client, are 1.76 and 1.44 respectively. The large drop appears to be a result of the decrease in current investments- as there is a decrease of almost one and a half million dollars from 2022 to 2023. However, both ratios are still indicative of a healthy company. Looking at the quick ratio, it is also evident that a significant amount of the firm’s current assets are represented as inventory, as the quick ratio drops to below one in 2023. However, the overall industry appears to keep a lot more inventory than GESMV, as the quick ratio drops much more significantly than the firm in question in both 2022 and 2023. While the firm's assets may be more diversified than the overall industry, they may experience difficulties paying off their short term liabilities without liquidating their inventory. With respect to net working capital, GESMV is similar to the industry in that they are both positive. It is apparent that GESMV is a major player due to the differences in magnitude of the respective net working capitals. Another major difference between GESMV and the industry is the ratio of its net working capital to total assetsa value of around two to four percent suggests that only a small amount of the firm's total assets are liquid- suggesting that most are tied up in facilities and equipment. 19 Looking next at profitability ratios for the firm, provided financial data allowed for gross, operating, and net profit margin to be examined for both 2022 and 2023. GESMV has a much higher gross profit margin than the industry, due to extremely high revenues and extremely low cost of goods sold. The low cost of goods sold is a direct result of the firm’s sale of secondhand, donated goods. In addition, both the operating and net profit margins are much more favorable than the industry. On average, the industry does not turn a profit- suggesting that GESMV is much more efficient in their operations and does not have as high of an operations expense as the rest of the industry. With respect to the efficiency ratios, the provided data from the client allowed for the computation of sales to total assets, operating return on assets, and return on assets. Looking at sales to total assets, it is evident that GESMV does not generate sales as effectively as the rest of the industry- as the firm is lower than the industry average by a factor of ten. However, this finding is juxtaposed with the firm’s operating return on assets as well as its return on assets. Both metrics suggest good income generation from the firm’s assets, and show that GESMV is operating at a profit where the industry on average is operating at a loss. When focusing on the sales to cash element of the cash conversion cycle like in the industry analysis, it is apparent that GESMV was receiving cash from sales about a week later than the industry average in 2022, but returned much closer to the industry average in 2023. With respect to the purchase to payment element of the cash conversion cycle, because sales are much greater than cost of goods sold, purchase to payment is not a reliable metric to evaluate GESMV. This is likely due to the sale of donated goods, unlike a traditional retailer. The financial data provided from the client enables the successful calculation of the following leverage ratios: debt to assets, current liabilities to total debt, and interest coverage. For GESMV, debt to assets is much lower than the industry, suggesting that less of the firm’s assets are financed with debt. Furthermore, the calculation of the current liabilities to total debt ratio shows that of this lower total debt amount financing assets, the firm has a short term debt obligation that is more than three times smaller than the industry in both 2022 and 2023. Using GESMV’s provided interest expense for both 2022 and 2023, interest coverage was calculated to be 50.40 in 2022 and 40.44 in 2023. This means that GESMV is able to comfortably pay the interest on its outstanding debt, which is a favorable outlook compared to the industry. Data for the industry shows that on average, firms are unable to fully cover the interest expense in either 2022 or 2023 a single time, while GESMV can comfortably cover large multiples of their interest expense. Data from the additional funds needed analysis in table two attempts to convey how much additional funding would be needed to achieve one to ten percent higher sales in 2024. Additionally, with the provided GESMV 2024 budget, the required sales growth level to achieve the desired revenues in 2024 was also calculated, as it was within the one to ten percent sales projections. Using this analysis method, all other numerical data such as total assets, net income, current assets, accounts payable, and accrued liabilities remained the same. As evidenced by table two, a 7.66% sales growth will require over $8 million dollars of additional funding. Fortunately, because GESMV does not pay a dividend, they will be able to grow internally at their return on assets rate for 2023. Because their return on assets was calculated to be 8.24% in 2023, their projected level of sales growth for 2024 is achievable. After examining the key ratios discussed above, it is evident that GESMV is healthy when compared to the overall industry. The liquidity ratios illustrate that while net working 20 capital to total assets is significantly lower than the industry average, net working capital and the current/quick ratio are indicative of a healthy company. In both 2022 and 2023, GESMV has a healthy current ratio, and their quick ratio does not drop as much as the industry average when inventory is removed from the equation. The firm also has a strong net working capital number overall. The profitability ratios grade out in favor of GESMV versus the industry, as the industry does not appear to be profitable with GESMV being an exception. For the efficiency ratios, while sales are not generated by GESMV as effectively as the industry, they are able to have a positive return on their assets- different from the industry as a whole. The cash conversion cycle ratio, specifically sales to cash, appears to be aligned with the industry average. Because GESMV has a remarkably low cost of goods sold, purchase to payment is not a reliable metric. With respect to the leverage ratios, data is also favorable. Less debt is needed to finance the company’s assets, there is less short term debt, and the company is able to comfortably pay their interest expenses. Because GESMV does not pay a dividend, their projected sales growth for 2024 is achievable based on their return on assets being greater than their required additional funds for 2023. After examining the organization’s cash flows, the ratio analysis, and the additional funds needed analysis, it is apparent that GESMV is very healthy compared to its classifying industry. When examining the different groups of financial ratios in the context of the financial performance of GESMV, the financial performance can be concluded as positive due to a few particularly important ratios. These ratios include the net profit margin, return on assets, and relationship between the current ratio and quick ratio. Net profit margin is important because it demonstrates leftover funds after accounting for all available business expenses. Most notably, GESMV’s net profit is above 20% for both 2022 and 2023, while the industry’s is negative, suggesting that operating expenses are greater than revenues. Return on assets is important because it suggests how efficiently assets are being utilized to generate profits. While the return on assets of GESMV is around ten percent, the industry’s is negative, again showing that they are not turning a profit. Lastly, the relationship between the current ratio and quick ratio is important for a few reasons: the current ratio conveys the relative health of a firm, the quick ratio conveys the health with only a company’s most liquid assets, and the drop from one to the other shows what proportion of the assets is tied to less liquid inventory. In the case of GESMV versus the rest of the industry, while GESMV has both lower current ratios in 2022 and 2023 and a lower quick ratio in 2023, the difference in the two ratios is less than the industry- suggesting that more of the firm’s assets are liquid compared to the entire industry. By examining these four ratios, as well as the others discussed in the preceding paragraphs, it can be concluded that GESMV is healthy. 21 Two Elements to Growth Ansoff Matrix Lead Ansoff Matrix option is Market Penetration. Use existing products to compete in existing markets by 1)Increasing Awareness, 2)Increasing Donations 3)Optimizing current processes/execution. 22 TOWS Matrix For GESMV, there is potential room for growth in the weakness/opportunity quadrant to improve online presence and sales: Threats: Regional thrift stores and second hand online market. Opportunities: Turning donors into buyers. Weaknesses: Finding accurate market value for profitable items, timing of online bidding close times. Strengths: Consistently operating, sorting, and distributing at high volumes. 1) Strength-Opportunities: GESMV thrives at operating, sorting, and distributing goods at high volumes. This gives the opportunity to consistently offer a wide variety of products to their customer base 2) Weakness-Opportunities: Trends show that GESMV struggles at accurately pricing their items. These opportunities give ShopGoodwill the chance to grow their online target market and convert some of the people who donate into online buyers. 3) Strength-Threats: GESMV thrives at operating, sorting, and distributing goods at high volumes. This gives competitors an opening to excel with a selection of curated goods. 4) Weakness-Threats: Trends show that GESMV provides high arbitrage opportunities when selling items well below market value. Both traditional competitors as well as individuals may undercut GESMV and sell goods on their own for a larger profit. 23 GESMV is a business built on a strong foundation that provides widespread brand recognition. The e-commerce portion of the business is also thriving due to the utilization of the Orange County online auction platform. The external analysis, competitive assessment, and internal analysis suggest that GESMV can strengthen their position in the industry compared to their competitors. Particularly, both the Ansoff and TOWS analysis point towards making minor modifications to the e-commerce program, discussed in the following sections, which will yield noticeable increases in total revenue and profit for GESMV and potentially increase more donors into buyers. 24 Recommendations & Implementation Plans GESMV approached The Secondhand Flyers with the goal of completing a strategic analysis of the entire e-commerce operation while focusing on increasing revenues, decreasing expenses, finding new marketplace opportunities, as well as suggesting any process improvements. Through analyzing pertinent information such as financial documents and product performance, it is apparent that increasing revenues could have the most impactful short and long term benefits to GESMV. As explored in the external analysis, the external environment to the firm is favorable with respect to the lower level of performance of others in the same industry as GESMV. Local competition is not performing as well as the firm, especially when the internal analysis is taken into account. Overall, GESMV is performing well despite the rest of the field. When examining the current tactics contained within the e-commerce area of GESMV’s business strategy, it is evident that there is ample opportunity for growth. As stated in the preceding TOWS analysis, GESMV can be placed into the weakness-opportunity quadrant- as the e-commerce department has potential to grow into a major strength for the firm. Therefore, to help increase revenues for GESMV and improve the profitability of the e-commerce department, three main strategies will be presented and expanded upon by way of multiple recommendations for each strategy. Each recommendation will be further expanded upon to develop clear strategies and next steps for GESMV. These strategies are: Strategy 1) Strategy 2) Strategy 3) Increasing Overall Traffic to ShopGoodwill.com Optimizing ShopGoodwill.com Converting Donors Into ShopGoodwill.com Users Strategy 1: Increasing Overall Traffic to ShopGoodwill Recommendation 1.1: Building Awareness through QR Codes Building Awareness through digital and in-store promotion synergy, QR Code integration, social media engagement, targeted product flyers, strategic partnerships and influencer collaborations, donor loyalty program, paid advertising and search engine optimizations (SEO), as well as community involvement and content marketing. Objective is to enhance Goodwill’s digital presence, increase high-quality donations, and strengthen community engagement to drive higher sales and support Goodwill’s mission. To increase profits through Goodwill’s e-commerce chain, Goodwill must attract its customers to the website. To track the success of the QR marketing you can use Google Analytics 4 (GA4) to add UTM tracking parameters to the QR code link. Since you have a dedicated landing page, the traffic can be measured outside of requesting analysis from Goodwill.com orange county. The UTM (Urchin Tracking Module) parameters are a simple code that can be added to the end of a URL to track the performance of campaigns. When someone scans, Google will record the UTM parameter text and. report on your Google Analytics account. Without the UTM, analytics tools will not be able to identify an individual QR campaign and the traffic would be displayed as direct. 25 Implementation Plan 1.1 A combination of the following strategies should be taken into consideration when building a loyal online community: ● Design two pedestal signs to be placed on the checkout stands at each of the Goodwill stores: one for Goodwill’s online shopping platform (see Appendix F) and another one for its social media accounts (see Appendix G). Through Appendix F’s pedestal, Goodwill is informing its shoppers about their online shopping platform and potentially igniting interest in shopping from the comfort of their own home. Through Appendix G’s pedestal, Goodwill should encourage its customers to share purchases and experiences on social media with branded hashtags. Showcasing positive reviews and testimonials builds trust and encourages new visitors. ○ Several studies have reported on the QR code’s increased growth and usage frequency, especially after the pandemic accelerated the need for contactless interactions. Nearly 60% of U.S. consumers believe QR codes will become a permanent part of their smartphone use. The number of U.S. adults using QR code scanners is expected to exceed 100 million by 2025, up from 88.9 million in 2022. Although younger adults (aged 18-29) are the most likely to use QR codes, the technology is also becoming popular among older demographics. About 44% of consumers aged between 45 and 64 have reported using marketing-related QR codes recently (websiteplanet.com). These insights suggest that QR codes are becoming an integral part of consumer interaction, driven by their convenience and the widespread availability of built-in QR scanners on smartphones (scanova.io). ○ By featuring customer stories and photos on Goodwill’s website and social media platforms, Goodwill makes its content relatable and appealing. When browsing through GESMV Instagram and Facebook pages, the frequency of posts on both platforms does not raise any concerns; however, it is noticeable that customer stories and photos appear very rarely. It is advisable to attract followers’ attention to Goodwill’s “giving back to the community” events via story highlights. ○ QR campaign example: In this example you would be able to track the specific campaign, the location it was scanned from, and the medium it is on. website url | campaign ID | campaign source | campaign medium gesmv.org | online | Wapakoneta | pedestal https://www.gesmv.org?utm_source=Wapakoneta&utm_medium=pedastal&utm_id=online ● Distribute targeted product QR flyers (Appendix H) to customers at the point of checkout at the store and to donors upon receipt of a donation. You are able to get a dual benefit 26 with the flyer by turning donors into shoppers and encouraging donors to provide items that are highly marketable for the online sales platform. Best of all you are able to track if the strategy is generating some new visitor volume. By specifying which items are most needed, Goodwill can ensure they receive high-demand products, leading to faster sales turnover, more efficient resource allocation and operational efficiency, as well as higher revenue. Additionally, a curated list helps manage inventory1 more effectively, reducing storage costs. The ideal donations for online sales are items that currently fit the the following criteria: ○ Estimated MSRP value over $50- Since minimum bid is set at $12.99 for an auction lot and shipping typically accounts for $6-$10. You should be able to offer a value consideration of at least 40-60% for a used item ○ Shipping ability- Ideal items are able to fit into the standard boxes sizes that the automated bx building machine or smaller than 12x16x8” From donors’ perspective, it makes it easier to contribute, increasing the volume and quality of donations. Lastly, sharing a needs list can serve as a marketing tool, raising awareness about Goodwill’s mission and encouraging more community involvement and donations. ● QR links to Partner with influencers/bloggers who are passionate about sustainability, DIY, upcycling and thrifting to promote Goodwill’s online auctions. Similarly, collaborate with other organizations to host events and cross-promote each other’s services. Examples of organizations may include, but are not limited to: ○ Habitat for Humanity: donation drives and promoting sustainable living though repurposing; ○ Dress for Success: provide professional attire through second-hand donations; ○ Local Chambers of Commerce: participate in community events, expos, and fairs to promote Goodwill’s mission and online auctions; ○ Community Centers/Libraries: conduct joint workshops that highlight Goodwill’s services and online presence; ○ Universities/Colleges/Schools/PTAs: collaborate on sustainability projects, student thrift fashion shows, and donation drives; ○ Sierra Club: partner for joint campaign focused on sustainability and eco-friendly shopping; ○ The Environmental Defense Fund: promote recycling, upcycling and reducing waste through second-hand shopping; ○ eBay: partner on special auction events and cross-promote online sales, highlighting the unique finds available on both platforms; ○ Etsy: collaborate with Etsy sellers who specialize in vintage goods to promote Goodwill’s auctions and marketplace; By integrating these strategies, Goodwill will enhance its digital footprint, attract highquality donations, engage with a broader and more diverse audience, and ultimately drive higher sales and support for its mission. 27 Recommendation 1.2: Refine Email Marketing Campaign While potentially counterintuitive at first, experts in the marketing field are confident that email marketing is the most profitable method of marketing, as it generates high revenues for a relatively low cost (Larson & Draper, 2024). For any online retail site, it may be difficult to create an engaging email marketing campaign that balances strategy and creativity while differentiating itself from spam. Regarding the relationship between email marketing for ShopGoodwill and GESMV, the difficulty of setting up a successful email marketing campaign is influenced by two important factors. Not only is it difficult to promote an online secondhand auction website, but it is also an online secondhand auction website that is controlled entirely by Goodwill Orange County and not GESMV. Because the email marketing campaign for ShopGoodwill is controlled by Goodwill Orange County, GESMV may not have the ability to independently control the email marketing campaigns. If that is the case, the following paragraphs in recommendation 1.2 contain suggestions that the GESMV team can take to Goodwill Orange County to help increase website traffic for ShopGoodwill. The existing email marketing campaigns already function well. After opting in to receive special offers and promotional emails, registered users receive all emails from a consistent email address, most of the emails are personalized to appeal to the user, emails appear to be sent at least once a week to maintain interest, and seasonal emails are sent at appropriate times. Therefore, if this recommendation is examined using the TOWS analysis, it can be placed firmly in the strength-opportunity quadrant. With relatively minor improvements, the email marketing strategy can be used to drive increased levels of traffic to ShopGoodwill as a result of improved open rates, click-through rates, and click to open rates that should lead to more bids on ShopGoodwill listings. Upon registration completion for a ShopGoodwill account, users receive a “Welcome to ShopGoodwill!” email. While this is an attractive and personalized email with Goodwill’s mission for ShopGoodwill placed without the need to scroll down further in the email, the callto-action button should be placed in this same area of the email as well to drive people to the website and increase conversions as a function of the click through rate and the click to open rate. Furthermore, it is important that the users interact with a useful and informative landing page after clicking on the call-to-action button. A new user may be overwhelmed by the auction site, so it may be beneficial to design an interactive landing page that teaches people the basics of how to navigate the website and place bids. With a better fundamental understanding of how ShopGoodwill functions, users are more likely to return and even spread the word to their family and friends. Once a customer has been established, it is important to keep them coming back to the website to increase the amount of auction participants. To increase customer retention, there are a few more refinements that can be made to the emails themselves. First, users will be more incentivized to repeatedly return to the site for promotional offerings. In addition to the highlighted items already focused on in the personalized emails, promotional offerings that are paired with the highlighted items such as free shipping or discount coupon codes for a certain amount off on a winning bid may further encourage repeat shopping. In addition, not only is it important to call out these enticing offerings in the body of the email itself, but it is also important to capture users’ interest with attention-grabbing subject lines. For example, a subject 28 line that calls for the user to take advantage of a special offer may be what pushes a potential buyer over the edge and back to ShopGoodwill. GESMV is performing well in spite of their field, and improving their e-commerce division may elevate the firm even further. While their email marketing strategy functions well, there are a number of opportunities where it can be improved in a relatively short time period, as stated above. While these improvements would normally be fairly straightforward to implement, GESMV’s inability to adjust their email marketing strategy directly due to their lack of control may hinder the effectiveness of this recommendation. In the event that this is the case, a potential alternative would be to request email addresses for users in the Miami Valley Geographical area from Orange County Goodwill. With these email addresses, GESMV would be able to create their own email marketing campaign that involves the ShopGoodwill users that reside in the Miami Valley area. With an independent marketing campaign, GESMV can control metrics such as email frequency or subject matter by interpreting feedback such as email open rates, click-through rates, conversion rates, and average order value for their specific users. With this data, GESMV may be able to better cater to users who are more closely affected by the marketing efforts of GESMV. If a separate email campaign is not possible, it may be worth inquiring as to what user data Goodwill Orange County takes advantage of to structure their email marketing campaigns. With knowledge as to how Goodwill Orange County structures their campaigns, GESMV can use this information to make further improvements to their own marketing strategies in the future. Implementation Plan 1.2 The current email marketing methods used to keep current ShopGoodwill customers engaged with the website are set up well. The emails themselves are generally aligned with email marketing best practices- containing key components such as a consistent sender, personalization, and engaging material so that individuals who are a part of the distribution list know what to expect when they receive a ShopGoodwill email. Therefore, this places email marketing for the organization firmly within the strength-opportunity quadrant of the TOWS analysis. If Goodwill Orange County is willing to work with GESMV on refining their email marketing strategy, increasing the value of the onboarding content to the user, adding more highimpact subject lines, and offering coupon codes, the emails would be more effective in capturing the interest of users. If Goodwill Orange County is not willing to work with GESMV, but instead is willing to offer contact information of local users, GESMV can use this information to form their own email marketing strategy, enabling them to take advantage of these recommendations to elevate the interest of their consumers. For this recommendation, an example of the possible steps taken for implementation are as follows: 1) Contact Goodwill Orange County to discuss whether it would be more effective to revise the current email marketing plan or to explore obtaining email addresses of users in the same geographical area as GESMV. 2) If Goodwill Orange County is willing to work with GESMV to improve their email marketing efforts, they can be improved as follows: 29 a) Strengthening the subject line of the email, and/or redesign the structure of the email itself by moving the “Get Started!” call to action button up in the email so that users do not have to scroll, expectantly increasing clicks. b) Design a new, interactive landing page that users are taken to after clicking, “Get Started!”, that teaches them the basics of how to navigate the website, place bids, and view all of the exciting products ShopGoodwill has to offer! In this new landing page, restating the purpose of ShopGoodwill and how it functions to fund GESMV programs would be a great way to remind users of the organization’s mission. 3) If Goodwill Orange County is unwilling to collaborate with GESMV, it will be necessary to request email addresses of local users. 4) With this information, GESMV can create an independent email marketing distribution list that includes the suggested improvements while incorporating elements from the Orange County emails. The only aspect GESMV would likely not be able to enhance is the onboarding process, which remains under the control of Goodwill Orange County. Through the utilization of these implementation steps, GESMV should be able to observe an uptick in ShopGoodwill user traffic for the Dayton area, thereby improving the strength of their e-commerce department. Regarding the relevant costs for this recommendation, they should be minimal for GESMV other than time invested if Goodwill Orange County agrees to work with GESMV. If the two work together to revise the structure of their emails and landing page, the costs will go to Goodwill Orange County since they are the owners of this content. If Goodwill Orange County does not agree to work with GESMV, costs to GESMV will likely be higher if they decide to create their own email marketing content. According to a 2024 article by WebFX, an email marketing campaign conducted in-house via a tool or paid platform will cost around $750-$1,000 a month for the service alone (How Much Does Email Marketing Cost in 2024?, 2024). These costs do not include time invested, but these resources could likely be handled by preexisting marketing personnel. Forecasted gains for this recommendation include the potential for increased traffic and completed auctions on ShopGoodwill.com and can be approximated using industry metrics. For the retail industry in 2021, the average email open rate was 17.1%, the average click to open rate was 5.8%, and the average click through rate was only 0.7% (Campaign Monitor, 2022). Relative to GESMV and without data provided from Goodwill Orange County, it is assumed that the total number of registered users local to the Miami Valley geographical area is 10,000. With the above metrics, 10,000 total users results in 1,710 opened emails and 99 successful clicks to the website out of the total number of opened emails. In terms of click through rate, there were 70 successful clicks to the website out of 10,000 total emails sent. Focusing on strengthening the impact of the subject lines will increase the email open rate, while additional focus on the body of the email and improving the onboarding landing page will increase the click to open rate, as the emails will be more appealing to both new and appealing users. In case the retail industry is not enough of an accurate representation of ShopGoodwill, the average email open rate for the nonprofit industry was 26.6% in 2021, while the click to open rate was 10.2% (Campaign Monitor, 2022). If the email open rate and click to open rate for the firm were to increase by just half of the difference between the retail and nonprofit industries, to 21.85% and 8%, respectively, the email open rate and click to open rates would rise to 2,185 30 opened emails and 175 successful clicks to the website. The 76 click difference to open rate increase creates opportunities for the higher traffic to increase bid volume- potentially raising the amount of total auctions completed, the average selling price, and the total revenue earned from ShopGoodwill. If each new click results in another completed auction with an average selling price of $54.13, as reported by GESMV in 2023, the firm could receive around $4,100 in additional revenue. This increase in traffic will help offset the costs associated with a revised email marketing campaign. 31 Recommendation 1.3: Spotlight Top Items Found on ShopGoodwill One of the greatest strengths of ShopGoodwill is the opportunity that shoppers have to find high quality, high value items up for auction. Highly sought after collectible items such as rare Lego sets, appraised jewelry, and antique video recording equipment can be found for a fraction of its regular price; and are just a few of the items currently available for sale. These items and others like them have the potential to attract more new users to the ShopGoodwill site if people who are regulars of the brick and mortar stores are exposed to these enticing offerings. There is also potential to encourage existing ShopGoodwill users to return to the site to take advantage of the kinds of listings that they may previously have been unaware of. Therefore, this recommendation can be placed in the weakness-opportunity quadrant of the TOWS analysis, as this has potential to be a major driver for increasing user traffic. GESMV has the opportunity to further improve the success of their e-commerce division by marketing the items on ShopGoodwill that have the highest amount of interest from its community of users. While the implementation of the following paragraphs of recommendation 1.3 into the brick and mortar environment should be straightforward, their as-mentioned inability to control their own email marketing strategy may make the implementation of the email marketing aspect of the recommendation more difficult without the help of Goodwill Orange County or without the existence of GESMV’s own email marketing efforts. In marketing the high value items listed on ShopGoodwill, there are two potential target markets- existing ShopGoodwill users, and current patrons of the brick and mortar stores. With respect to existing ShopGoodwill users, there is an opportunity to take advantage of the ShopGoodwill email marketing using both the subject line as well as the body of the email. Pertaining to the subject line, advertising the presence of high-value items currently listed on the site should generate email openings, and then the body of the email could advertise the top five items listed for sale on ShopGoodwill in terms of bids. While not always guaranteed to be accurate to users’ tastes, highly sought after items with substantial bid volume are likely to appeal to a wide breadth of users. Concerning the second potential target market, current patrons of brick and mortar stores, there is opportunity to combine with the QR code recommendation, or function as a standalone marketing tool. Goodwill patrons would scan the QR codes to access ShopGoodwill, and in doing so would also see the top five items listed for sale in terms of bids. This would be an effective way to generate customer interest, as they may see items that would entice them to set up an account. Additionally, as a standalone function, a screen can be placed in the store that displays live updates of the top items listed on ShopGoodwill. This would compliment promotional material placed around the store, and increase the amount of impressions on the brick and mortar patrons as they enter and exit the store. In case this recommendation is not pursued, a viable alternative would be to post about the products that have high bid volume on all GESMV social media channels- including detailed information on the items in question as well as sign up information for ShopGoodwill. This will help garner exposure for the website, increasing interest among those who already follow the ShopGoodwill or GESMV social media channels. While this may help GESMV reach a wider audience and will also give them more control, there may be less interest on social media because of the sheer amount of content that social media users are exposed to on a daily basis. Furthermore, they are not necessarily returning ShopGoodwill users as are the email subscribers, and they may not have enough of their attention occupied by Goodwill in order to be driven to 32 sign up like an in-store patron would be when presented with a live bid screen in addition to a QR code for a quick signup. Implementation Plan 1.3 On ShopGoodwill, a user has the ability to find extremely rare or high quality items. However, it can sometimes be difficult to be made aware of these items, either by finding them organically, or by being notified of the presence of these rare items by the website itself. Because of this, spotlighting top items found on ShopGoodwill can be placed into the weaknessopportunity quadrant of the TOWS analysis. This is because this has the potential to be a huge draw for traffic to the website, but is not currently being utilized to its full potential. To elevate this portion of ShopGoodwill, GESMV can potentially target existing ShopGoodwill users as well as patrons of the brick and mortar Goodwill stores in the Miami Valley area. With respect to existing ShopGoodwill users, GESMV can take advantage of the existing email marketing tactics to advertise these items utilizing both the subject line and the bodies of the emails. The pathway for this recommendation depends on whether or not Goodwill Orange county is willing to work with GESMV, as mentioned in a previous paragraph. To also address brick and mortar shoppers, this recommendation can either function alongside the QR code recommendation as an additional component to get people to sign up for ShopGoodwill.com, or exist as a live display featuring top items that exist on ShopGoodwill. Together with the marketing material, customer awareness of ShopGoodwill amongst the brick and mortar shoppers would increase. Possible steps taken for this recommendation are as follows: 1) Similar to the last recommendation for tweaking marketing email structure, decide which pathway to take depending on whether Goodwill Orange County is interested in working with GESMV. 2) If working with Goodwill Orange County: a) Revise the current email templates or create a new one that advertises the presence of high-value items currently listed on the site to help incentivize users to open the email itself. b) Once open, the body of the email can advertise the top five items listed for sale on ShopGoodwill in terms of bids to help encourage registered users to return to the site. 3) If working independently from Goodwill Orange County, steps 2a and 2b can be applied to GESMV’s own marketing emails. 4) To address the brick and mortar portion of the recommendation, combine with the QR code recommendation so that when a shopper scans a QR code, one of the components that appear are the top five items currently listed for sale on ShopGoodwill in terms of bids. 5) To implement a live updating screen that is separate from the QR codes, place a screen in a prominent location in the Goodwill Store. 6) Connect this screen to an internal network so that it can be used to display a live ShopGoodwill tracker to highlight the items that are receiving the most interest on ShopGoodwill.com. 33 7) By combining this with existing ShopGoodwill marketing material in store, the display of this information will help generate interest amongst patrons. GESMV should notice an increased amount of ShopGoodwill traffic if these steps are followed, which will have a positive impact on the e-commerce department’s bottom line, and on the success of GESMV as a whole. In terms of the relevant costs for this recommendation, they should again be minimal for GESMV in terms of the email marketing portion other than time invested if Goodwill Orange County agrees to work with GESMV, with costs for GESMV being higher if they take the independent route. Because this recommendation again discussed updating the subject lines and body of the marketing emails as in recommendation #2 for the increasing ShopGoodwill traffic strategy, this time with the top items by bid volume, the same costs for the in-house tool or outside service should be considered. For the brick and mortar option complimenting the QR codes, associated costs will be contained to whatever will be needed to set up these electronic marketing tools, as in the above recommendation #1. If the standalone option is chosen, purchasing costs of a screen and a computer to connect to the display should be around fifteen hundred dollars per store as a one-time fee, with the current prices of a basic desktop computer (Desktop Work Pc - Best Buy, n.d.) and TV (Tv - Best Buy, n.d.). Additionally, the cost of the time invested to develop a dashboard to display the top items on ShopGoodwill is also relevant, but will not be explored in this analysis. Potential gains for this recommendation are similar to recommendation two. Specifically, adjusting the email marketing strategy to include the top items on ShopGoodwill called out in the subject lines and bodies of the emails will result in an increase in bid volume and in overall traffic- raising total auctions completed, average selling price, and total revenue earned by GESMV with comparable metrics to recommendation #2. With respect to the brick and mortar option, ShopGoodwill traffic will increase with brick and mortar marketing. A landmark study originally conducted by the International Council of Shopping Centers in 2018, which was repeated in 2023, shows a direct correlation between increasing online sales and opening a brick and mortar store. In 2023, the ICSC calculated a 6.9% increase in online sales after opening a store. Additionally, a user’s “cart” increases in size with a new store opening (ICSC the Halo Effect III: Where the Halo Shines, n.d.). If it is assumed that brick and mortar marketing resulted in a similar increase in online traffic, with a baseline of 10,000 registered users in the GESMV geographical area, an extra 690 users would register for ShopGoodwill. These 690 users, who were captured by the marketing of the items with the highest bid volume on ShopGoodwill, will be more likely to participate in bidding on the high value items. Not only will bids in general increase as more people access the site, bids on the high value items will increase and drive up the average selling price for the site overall as the items continue to gain value. If each new registered user wins one auction on ShopGoodwill at the average selling price, that would result in an additional $37,000 dollars in revenue. Like in recommendation 2, this would also help offset the costs associated with a revised email marketing campaign and a revised brick and mortar marketing campaign. 34 Recommendation 1.4: Coordinate Themed Days or Sales Develop an email newsletter to keep subscribers informed about new items, special sales, and donation drives, with links back to the website. It is highly recommended to create “themed days/sales” to regularly attract specific customer segments looking for related items. The theme creates a memorable and unique branding for the sale, attracting more attention from potential buyers. Implementation Plan 1.4 For instance, on the first Saturday of every month, the “String & Steals Saturday” theme will generate excitement and anticipation among guitar players, encouraging them to visit Goodwill’s online store to see what exclusive offerings are available. Creating a sense of urgency with limited time offers on guitars, motivates customers to make quicker purchasing decisions, driving online sales. Leveraging the “Strings & Steals Saturday”, Goodwill should create targeted marketing campaigns on social media, email newsletters and other online platforms, reaching guitar enthusiasts specifically interested in this type of event. Strategy 2: Optimize ShopGoodwill Recommendation 2.1: Facilitate market competition by having auction end times end at an optimum period between 8pm and 10pm. Currently auctions end between midnight and noon with the majority falling between 2:30am and 9:00am when the fewest people can be expected to be online to engage in an auction. 35 Since attempt 1 represents 61% of items sold at GW online, even a modest 5% increase in final auction price would result in a 3% increase in overall online revenue. This is a very conservative estimate since it does not take into account the increased likelihood of a bidding war nor the increase in user retention resulting from increase satisfaction in being able to participate in the auction (we theorize that attrition among users is high because user get frustrated by continually having auctions end at such odd hours). Implementation Plan 2.1: The easiest way to implement this plan is to create a table that allows the user to easily determine what would be an optimum auction end time. An employee can look at the curren time and the table to quickly set the ending time between 8pm and 10pm. The table should be designed in such as way that end times are evenly distributed between 8pm and 10pm. This recommendation should be able to be implemented with no involvement from corporate/Orange County. Recommendation 2.2: Facilitate market competition by having soft close auction end times. The current auction process has a hard close at a specific time so many bidders wait until the last seconds to submit their bid and hope that it is high enough to meet other bidders - this is more like a silent auction as other people do not know the bid. In a soft close auction, the bidding is extended for 1-2 minutes from the time of the last bid until there is no further bidding. This results in greater competition and a higher final bid price. There is a lot of discussion pro and con with regard to soft close auction, however we feel in an environment where there is little opportunity to provide good quality curation soft close auction reduces the possibility the item will be “sniped” at a price well below the market value. Similar to recommendation 1 even a 5% increase in final bid price would translate to a 3% increase in overall online revenue. Again this is a very conservative estimate. Implementation Plan 2.2: To implement this plan, soft auction capability will need to be added to the existing Orange County based auction systems. At this moment we can not track down the cost of adding this capability. It may be possible that the capability already exists in the software but the capability has not been activated. It is suggested that once capability is established a rigorous testing program should be implemented looking at the duration of the soft close extension and how different product categories can be impacted by soft close of the auction. It is also suggested that follow-up research is done among the user base before and after the incorporation of soft-close to determine how well the feature is received. It is possible that some current users would leave because they are only interested in sniping items at a low price. Recommendation 2.3: Add a rounding feature to the payment form to allow for an additional donation. If someone bid $12.53 for an item ask if they would be willing to round up to $13.00 with the additional $0.47 going as an additional donation to support the efforts of GESMV. If on 36 average people donated an additional $0.50 on an item this would translate into an increase in revenues of $12,000. Implementation Plan 2.3: To implement this plan, the current payment system will need to be updated to include a line for rounding up or providing an additional donation. Most likely this programming change will need to be added to the existing Orange County based auction systems. Recommendation 2.4: Alert bidders not only when they have been out bid on an item but to also make them aware when an item is ending soon. This will remind them that they have interest in an item and can easily participate in the auction until it is over. This should also involve more people in the active bidding process increasing competition resulting in high prices. Similar to recommendation 1 even a 5% increase in final bid price would translate to a 3% increase in overall online revenue. Again this is a very conservative estimate. Implementation Plan 2.4: To implement this plan, the current notification system will need to be updated to include the ability to notify by app, email, or possibly text that an auction someone has expressed an interest in will be closing soon. Most likely this programming change will need to be added to the existing Orange County based auction systems. Recommendation 2.5: After an auction is over send an email to people who did not have a winning bid giving them a reminder of the general mission of GESMV and request a donation. Implementation Plan 2.5: To implement this plan, the capability to automatically send a donation request will need to be added to the existing system. Most likely this programming change will need to be added to the existing Orange County based auction systems. 37 Strategy 3: Convert Donors into ShopGoodwill Users Recommendation 3.1: Seamless Integration of Verbal Reminders at the Receiving Door As the receiver of goods at the receiving door, it is crucial to enhance interactions with donors by seamlessly integrating verbal reminders about our online platform. Utilizing a friendly and approachable tone, you can inquire, "Have you had the opportunity to explore the diverse offerings on shopgoodwill.com?" This strategy not only fosters a positive donor experience but also serves to promote our online presence in a natural and engaging manner. This simple, openended question is designed to pique the interest of donors. By highlighting the variety of offerings on shopgoodwill.com, we encourage donors to explore another dimension of our services. This curiosity can lead to increased traffic to our online platform, where donors might find valuable items and unique deals, further enhancing their engagement with Goodwill. When donors are made aware of shopgoodwill.com, they are presented with an alternative means of supporting our mission. Not only can they donate goods, but they can also contribute by purchasing items online. This dual engagement amplifies their impact on our community initiatives, as proceeds from online sales are reinvested into programs that provide job training, employment placement services, and other essential community support. Consistently incorporating this reminder into conversations underscores the accessibility and convenience of shopgoodwill.com. Donors may appreciate knowing that they can support Goodwill from the comfort of their homes, making it easier for them to participate in our mission. This convenience can lead to more frequent engagement, both in terms of donations and purchases. By actively promoting shopgoodwill.com, we increase its visibility and utilization. This, in turn, boosts the revenue generated from online sales, allowing us to reinvest more funds into community initiatives. The more people we reach, the greater our ability to provide meaningful support to those in need. In conclusion, incorporating a friendly reminder about shopgoodwill.com during donor interactions at the receiving door is a strategic move that benefits both Goodwill and our donors. This approach not only sparks curiosity and promotes our mission but also enhances the accessibility and convenience of supporting Goodwill, ultimately amplifying our impact on the community. ● Standard Operating Procedure located in Appendix Implementation Plan 3.1 Summary: The recommendation suggests seamlessly integrating verbal reminders into interactions with donors at the receiving door. By inquiring about their exploration of shopgoodwill.com in a friendly tone, we aim to spark curiosity and encourage them to consider online shopping as an 38 alternative means of supporting Goodwill's mission. Consistently incorporating this reminder into conversations can promote the accessibility and convenience of shopgoodwill.com, thereby amplifying its impact on community initiatives. Steps for Implementation: 1. Training Staff: Provide training sessions to receiving staff on incorporating verbal reminders into interactions with donors. Emphasize the importance of maintaining a friendly and approachable tone. 2. Script Development: Develop a standardized script for verbal reminders to ensure consistency in communication. 3. Implementation: Begin integrating verbal reminders into interactions with donors immediately upon completion of training. 4. Monitoring and Feedback: Regularly monitor staff interactions and gather feedback from donors to assess the effectiveness of the verbal reminders. Costs and Forecasted Gains: ● Costs: Minimal costs associated with staff training and script development. ● Forecasted Gains: Increased patronage and online sales through shopgoodwill.com, leading to potential revenue growth for Goodwill. Enhanced donor engagement and satisfaction can also contribute to long-term gains. Plans for Recommendation 3.1: ● Roll out training sessions for receiving staff. ● Develop and distribute the standardized script for verbal reminders. ● Monitor implementation and gather feedback for continuous improvement. 39 Recommendation 3.2: Implementation of a Voucher Printing System at the Receiving Dock The implementation of a voucher printing system at the receiving dock has the potential to significantly enhance the overall patron experience. By offering the convenience of printing vouchers for online purchases immediately after donation, we can create a seamless and rewarding experience for our donors. This initiative can seamlessly integrate the donation process with the opportunity to shop online at shopgoodwill.com. When donors receive a voucher at the time of donation, they are more likely to visit our online platform and explore the diverse offerings available. This integration not only highlights the variety of items available on shopgoodwill.com but also encourages donors to become customers, thereby increasing their engagement with Goodwill.The added convenience of receiving an immediate reward for their donation improves customer satisfaction. Donors will appreciate the tangible acknowledgment of their contribution and the ease with which they can use the voucher to make online purchases. This positive experience fosters goodwill and encourages repeat donations and shopping, strengthening their relationship with our organization. By encouraging increased patronage, this system supports Goodwill's mission. The vouchers act as an incentive for donors to return to our online platform, thereby boosting sales and generating more funds for our community initiatives. This increased support helps us reinvest more into programs that provide job training, employment placement services, and other essential community services. In conclusion, implementing a voucher printing system at the receiving dock is a strategic move that enhances the patron experience by offering immediate rewards and convenience. This approach not only integrates the donation process with online shopping but also boosts customer satisfaction and encourages increased support for Goodwill's mission, ultimately amplifying our community impact. ● Standard Operating Procedure located in Appendix Implementation Plan 3.2 Summary: The recommendation proposes implementing a voucher printing system at the receiving dock to enhance the patron experience. This system would allow donors to print vouchers for online purchases immediately after donation, seamlessly integrating the donation process with online shopping at shopgoodwill.com. Steps for Implementation: 1. Research and Procurement: Research voucher printing systems suitable for the receiving 40 2. 3. 4. 5. 6. dock environment. Procure necessary hardware and software. Installation: Install the voucher printing system at the receiving dock in a convenient location for donors. Training Staff: Provide training to receiving staff on operating the voucher printing system and assisting donors in printing vouchers. Promotion: Promote the availability of voucher printing services to donors through signage and verbal communication. Implementation: Launch the voucher printing system and begin offering the service to donors immediately. Monitoring and Maintenance: Regularly monitor the system for any technical issues and provide maintenance as needed. Costs and Forecasted Gains: ● Costs: Initial investment in hardware, software, and staff training. ● Forecasted Gains: Increased patron satisfaction and convenience, leading to higher patronage and online sales. Potential for additional revenue from increased online purchases. Plans for Recommendation 3.2: ● ● ● ● ● Research and procure suitable voucher printing systems. Install and configure the system at the receiving dock. Conduct training sessions for receiving staff. Promote the availability of voucher printing services to donors. Monitor the system's performance and provide ongoing maintenance and support. Strategy 4: Increase Revenues at GESMV by Providing Better Curation of Items to be Sent to Auction. The team considered the option of improving curation of items to be sent to auction but determined that this is not the best time to implement such a tactic. To do so would require hiring a person trained and skilled at quickly curating items before placing them at auction. The team however believes that with the recent improvements in AI for identifying items and determining their original value that in the near future (3 years maybe) this process might be done by simply taking a picture of the item with an app (yet to be developed). 41 Concluding Comments When classifying GESMV into appropriate industries, it is evident that due to its functioning as both a secondhand goods retailer and an organization that advocates for disadvantaged individuals, GESMV fits well into NAICS classifications 459510 and 813319. The external analysis suggests that while a number of outside influences are moderately favorable in 2024 and beyond, the industry containing GESMV contains vast amounts of competition and intense fragmentation at national, state, and local levels. An analysis of competitors to GESMV shows that direct competition is usually smaller and does not closely resemble the firm’s business model. The internal analysis of GESMV suggests a strong organization with respect to both qualitative and quantitative factors. GESMV possesses a strong culture, practices, and economic health that will enable the company to continue to grow even though the industry may not be following the same trends. The Ansoff Matrix suggests a market penetration strategy with respect to the ShopGoodwill portion of the GESMV business model by increasing customer awareness, increasing customer donations, as well as optimizing the organization’s current processes. The TOWS matrix suggests that the e-commerce business is in the weaknessopportunity quadrant. Therefore, there is ample opportunity for GESMV to improve this section of its business by implementing a number of key recommendations. The strength of the e-commerce portion of GESMV can best be improved using a three pronged approach- increasing overall traffic to ShopGoodwill, optimizing ShopGoodwill processes, and converting donors to ShopGoodwill users. With the support of Goodwill Orange County, utilizing QR codes in brick and mortar locations, refining the email marketing strategy, spotlighting top items, and coordinating themed days and sales will help increase ShopGoodwill traffic. Strategically setting auction end times, having dynamic auction closes, rounding payments for additional donations, rounding up on purchases to increase donations, alerting users to closing soon auctions, and donation reminders should help increase effectiveness of ShopGoodwill overall. Verbal reminders and discount vouchers for donations at the receiving door should help drive donors to use ShopGoodwill in an attempt to bring more traffic to the auction site- increasing revenues for GESMV. If these recommendations are implemented, The Secondhand Flyers believe GESMV will see increased revenues and increased profitability overall thanks to their e-commerce division. This increased profitability will help GESMV grow in their industry financially, while also ensuring they are able to make a positive impact on an increasingly large number of individuals in need for years to come. 42 Appendix Appendix A- Herfindahl Index for National, State, and Local Levels National State Local 43 Appendix B- Goodwill Southwestern Ohio Territories 44 Appendix C - Standard Operating Procedures for SGW Receivers Standard Operating Procedure (SOP) for Language Usage by Goodwill Receiving Staff Objective: To ensure consistent and professional communication from both new and existing employees of Goodwill regarding the utilization of shopgoodwill.com for online shopping. Procedure: Introduction: Begin the conversation by greeting the donor courteously. Identification of Donor Status: Determine whether the individual is a new or existing donor. New: If the individual is a new employee, proceed with providing general information about shopgoodwill.com. Existing : If the individual is an existing employee, proceed with a reminder or reinforcement about shopgoodwill.com. Verbal Communication: Choose an appropriate moment during the conversation to introduce the topic. Use the following verbiage: "Have you tried shopping online at shopgoodwill.com?" Ensure a friendly and inviting tone while asking the question. Provide Information: Upon inquiry, provide brief details about shopgoodwill.com. Emphasize the benefits of shopping online at shopgoodwill.com, such as: Wide selection of unique items. Convenient shopping experience. Supporting Goodwill's mission. Mention any current promotions or special deals if applicable. 45 Answering Queries: Be prepared to address any questions or concerns the employee may have regarding shopgoodwill.com. Provide accurate information and clarify any doubts. Encouragement: Encourage the donor to explore shopgoodwill.com and try online shopping if they haven't already. Highlight the positive experiences of other employees or customers who have used the platform. Closing: Conclude the conversation with appreciation for the donors’ time and attention. Offer further assistance or information if needed. Note: Ensure that the communication is conducted in a respectful and non-intrusive manner. Adapt the language and tone according to the individual's receptiveness and level of familiarity with online shopping. Follow up with the employee later to inquire about their experience or address any additional questions they may have. 46 Appendix D - Standard Operating Procedures for Vouchers Standard Operating Procedure (SOP) for Printing Vouchers for Online Purchases at the Receiving Dock Objective: To ensure efficient and accurate printing of vouchers for online purchases at the receiving dock of our Goodwill location, facilitating a seamless transition for donors to shop online at shopgoodwill.com. Procedure: Initiation of Process: When a donor completes their donation transaction at the receiving dock, inform them about the option to print a voucher for online purchases. Inform the donor that the voucher will be printed immediately for their convenience. Accessing the Voucher Printing System: Navigate to the designated computer terminal or device with access to the voucher printing system. Log in to the system using the authorized credentials provided by Goodwill management. Input Donor Information: Enter the necessary donor information into the voucher printing system accurately. Collect essential details such as donor name, contact information (optional), and donation details (if applicable). Generating the Voucher: Select the option to generate a voucher for online purchases within the system. Ensure that all selected options and information are correct before proceeding. 47 Printing the Voucher: Initiate the printing process for the generated voucher. Ensure that the printer is operational and properly loaded with paper. Verify the quality of the printed voucher to ensure readability and accuracy. Handing Over the Voucher to the Donor: Retrieve the printed voucher from the printer. Thank the donor for their contribution and hand them the printed voucher along with any relevant receipts or documentation. Providing Additional Assistance: Offer assistance or answer any questions the donor may have regarding the printed voucher or the online shopping process. Direct the donor to relevant resources or personnel for further assistance if needed. Completion of Process: Log out of the voucher printing system to maintain security and privacy. Ensure that the printer area is tidy and ready for the next transaction. Note: Follow data privacy and security protocols when handling donor information. Maintain professionalism and courtesy throughout the process to enhance donor satisfaction. Regularly monitor the voucher printing system for any technical issues and report them promptly to the appropriate personnel for resolution. 48 Appendix E- Financial Information Industry Average Industry Average- Ratio GESMV 2022 GESMV 2023 Current Ratio Quick Ratio Net Working Capital (NWC) NWC to Total Assets Sales to Cash Purchase to Payment Debt to Assets Current Liabilities to Total Debt Interest Coverage Gross Profit Margin (GPM) Operating Profit Margin (OPM) Net Profit Margin (NPM) Sales to Total Assets Operating Return on Assets Return on Assets (ROA) 1.76 1.30 1.44 0.95 $4,188,136.00 $2,602,626.00 $41,411.50 $36,388.00 3.93% 2.34% 35.04% 35.24% 22.47 Days 17.97 Days 14.11 Days 14.18 Days NA NA 39.23 Days 39.40 Days 32.95% 31.90% 64.57% 65.19% 15.79% 16.35% 53.51% 54.01% 50.40 Times 40.44 Times 0.60 Times 0.72 Times 95.26% 95.37% 38.48% 39.04% 29.85% 25.62% -0.29% 0.02% 25.89% 21.32% -1.21% -1.34% 38.35% 38.62% 396% 404% 11.45% 9.90% -1.14% 0.08% 9.93% 8.24% –4.78% -5.43% Table 1- Financial Analysis GESMV v. Industry 2022 & 2023 49 Funds 2024 Growth Sales GESMV Sales Growth Level (%) Projected Sales ($) Additional Funds Needed ($) 1 43,381,357.00 1,054,057.74 2 43,810,876.00 2,108,115.48 3 44,240,394.00 3,162,173.22 4 44,669,913.00 4,216,230.96 5 45,099,431.00 5,270,288.70 6 45,528,949.00 6,324,346.44 7 45,958,468.00 7,378,404.18 7.66* 46,240,984.00* 8,071,712.01 8 46,387,986.00 8,432,461.92 9 46,817,505.00 9,486,519.66 10 47,247,023.00 10,540,577.40 Table 2Additional Needed for Sales *Projected Growth for in 2024 50 Appendix F- Pedestal with QR Code 51 52 Appendix G- Social Media Pedestal 53 Appendix H - Flyer with Desired Donations 54 Bibliography Bizminer’s Granular Industry Financial & Market Benchmarks. (n.d.). Bizminer. https://bizminer.com/ Carter, M. (2018, February 28). If You Think Goodwill Charges Too Much for Used Clothing, You Need to Read This. Country Living. https://www.countryliving.com/shopping/a-/is-goodwill-a-nonprofit/ Campaign Monitor. (2022). 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