How to deal with product inefficiency

I regularly undertake a sales performance and benchmarking exercise for over 100 Australian newsagencies; most of whom operate Tower POS systems in their businesses.

Shopping baskets are one of the areas that I analyse and I have seen that newspapers and lottery products continue to be inefficient for newsagency businesses. Between 70% and 90% of purchases with either is for that category only: a newspaper alone or a lottery ticket or two and nothing else.

Too often newsagents blame customers and or suppliers for the inefficiency. This is a mistake. The reason for inefficiency lies in the business itself.

If sales of your top selling items are inefficient, then you must embrace responsibility. Complaining will not change the situation. Act.

Here is one tip that I have found works. When you are closed for the day, run masking or gaffer tape on the floor from the door to where customers go to get their newspaper. Next, run tape from there to the counter. Finally, run tape from the counter to the door.

Walk along the tape. Look at what’s along that route. Look at what customers see. Look at what you are promoting along the way and at each destination point: papers, counter, doorway.

Look at the floor, how are you using that?

If your lottery sales are inefficient do the same thing.

Don’t remove the tape and go home until you have an action plan of things to do to make newspapers and or lottery product sales more efficient. Next, act on the plan first thing in the morning.

I know that the sales mix in a UK convenience store is different from my Australian colleagues. You may have milk and other products as daily footfall drivers. So look at them and how efficient you are at driving basket size from the customers that purchase these products. The exercise that I cover here is valid for any business that has dominant product groups in their range.

A good action plan will involve a series of small steps. I would suggest posters on the floor, maybe a game, with one or two stop points where you feature a product. I’d have an over the counter promotional offer. I’d also have an offer at the door. Plus, regardless of what suppliers say, I’d have impulse purchase items right next to the popular inefficient products – including at the lottery counter. If what you do doesn’t work, go through the process again. This is what a retailer would do. A shopkeeper would stay behind the counter and complain.

Product inefficiency is a challenge for the retailer to resolve.