Company Context

Out of the Closet is a nonprofit thrift retail chain operated by the AIDS Healthcare Foundation. Stores generate revenue from donated goods and use the retail footprint to support both community impact and healthcare-related services. One Los Angeles location has seen flat in-store sales and slowing donation volume over the last 12 months, despite steady foot traffic and a favorable neighborhood mix of young professionals, students, and value-oriented families.

Strategic Situation

You are advising the regional director on how to increase donor engagement and/or retail sales at this location over the next 6 months. Management is open to changes across marketing, store operations, donor experience, partnerships, and pricing/promotion, but wants a focused plan rather than a broad list of ideas. The core question is whether the store should prioritize increasing donation inflow, improving conversion and basket size from shoppers, or pursuing a combined strategy.

The location competes with Goodwill, The Salvation Army, Buffalo Exchange, local vintage stores, Facebook Marketplace, and Buy Nothing groups. Unlike many competitors, Out of the Closet also has a mission-driven brand and a cause-based value proposition, but store leadership believes that this message is not translating consistently into either repeat donations or repeat purchases.

Data Points

Additional facts:

• 65% of donations come from within a 5-mile radius.
• 40% of shoppers say they were unaware that proceeds support HIV-related services.
• Staff can support only limited operational changes without adding more than 2 full-time equivalents.
• The store has 3,800 email contacts and 11,000 Instagram followers, but low engagement.

Deliverables

1. Diagnose the most important drivers behind underperformance in donor engagement and sales.
2. Size the opportunity across donations, conversion rate, and average basket value.
3. Recommend where management should focus first: donor acquisition/retention, shopper conversion, basket expansion, or a combined approach.
4. Propose a practical go-to-market plan for the next 6 months, including channels, partnerships, and in-store changes.
5. Define success metrics and how you would track whether the strategy is working.

Constraints

• Total pilot budget is capped at $60,000 over 6 months.
• Recommendation must be implementable with at most 2 additional FTEs.
• Leadership wants measurable results within one quarter, with full pilot evaluation by month 6.
• The nonprofit mission must remain central; tactics that could damage brand trust or donor goodwill are off-limits.