Not only are in-store services welcomed by c-store shoppers, they are expected. Elton Birden, managing director of cash machine manufacturer NCR, says that customers now expect their local c-store to provide a range of in-store services as they lead busier lives. "When shoppers go into a store, they want to be able to get cash or pay bills as well as buy their groceries. A lot of retailers who contact us for a cash machine installation have done so because their customers have been asking them to get one in," he says.
Providing in-store services also brings people into your store more often and encourages them to spend more, points out PayPoint head of corporate affairs Peter Brooker. "People who pay bills through PayPoint in a store go into it five times a week, that's 25% more than those who don't pay bills in-store. And the average PayPoint user will spend an additional £12.08 on top of their services bill, more than twice the spend of a non-PayPoint user."
Payzone UK managing director Bill Thomson agrees that the potential from in-store services is massive. "Providing a wide range of services will attract customers to stores and provide added footfall, which in turn may lead to linked sales and impulse purchases. The concept of in-store services is not dissimilar to newspapers - they are low-margin products, but provide significant footfall and linked purchases."
Camelot media relations manager Rob Dwight believes that having the National Lottery is a guaranteed way to increase the number of customers through your door. He says: "The lottery is a proven driver of footfall in stores - our research shows that one in five customers visit c-stores because they want to buy a National Lottery ticket. On top of this, lottery shoppers visit their store more frequently and spend on average 45% more than non-lottery shoppers."
Helen McInnes, retail specialist at NCR, offers another benefit of in-store services: "Not only do they create additional footfall which generates extra sales, they also create goodwill between a retailer and their customers. Once customers realise that you offer services as well as goods in one place they'll be inclined to visit you more often."
McInnes adds that retailers looking to install a cash machine in their store can reap huge benefits. "According to research by HIM, the average customer spends £5.64 in a convenience store. This is increased by 65% if the store has a cash machine in it," she says.
Those retailers who have decided to install a machine, but who are struggling with the dilemma of whether to have a machine that issues a charge for use, should consider the economic climate before deciding, says Graham Mott, senior spokesman for ATM network Link. "In the past six months the number of free-to-use cash machines installed in c-stores has grown and there has been a move away from ATMs that cost the user money," says Mott.
"Even though people want access to their money, they don't want to have to pay an additional charge for it. Those retailers who install the free-to-use machines have an advantage over those with fee-paying machines, especially if the store is located in a high street where another ATM may be only a short distance away."
Another benefit of having a cash machine in-store is that a retailer can recycle their takings through it, saving time and banking charges. "Our free-to-use cash machine service offers reduced costs to retailers by allowing them to lodge their money in the ATM on a daily basis, rather than taking it to the bank," says Gerard Ring, head of business development at ATM supplier Hanco.
The bleak economic picture may also have an affect on other in-store services, such as prepaid mobile phones. NCR's Birden predicts: "We're going to see a lot of people on bill pay mobile phones changing to a prepaid mobile phone as it helps them manage their money better and know exactly how much is going out. This can only be good for retailers who provide prepaid mobile phone top-ups."
The real thing
PayPoint's Brooker adds that cash is becoming more popular as a method of payment for bills as consumers are watching exactly where their money's going. "There's a greater desire to pay by cash; people are looking to cut down on direct debits as they can surprise you. Cash provides a better opportunity to manage your finances," he says.
One potential threat to retailers and in-store services is the increase in online payment options for top-ups and bills. However, service providers say that they aren't worried and believe consumers will continue to use their local store for these services. Says McInnes: "80% of mobile phone top-ups still take place in-store so they remain popular. This is down to people wanting to be able to buy top-ups quickly and without any hassle."
Service provider Payzone isn't worried about losing out to internet sales, either. "Our core market is still the cash-user and the internet is still not able to adequately deal with this market," says Payzone's Thomson. "We believe cash acceptance terminals remain ideally suited to service this market."
PayPoint has embraced the web by offering a service that allows people to pay for online purchases in their local PayPoint outlet. Its PayCash system lets customers order items online and print off a voucher that they bring to the PayPoint retailer where they can pay for it in cash. Once the transaction has been completed at the retailer's side, the item is sent to the purchaser. "This system is proving very popular with people who don't want to give out their credit card details, or who may not even have one," says Brooker.
PayPoint is currently looking into integrating its terminals with a store's epos system to make processes quicker and easier for retailers. "With this system, a customer doesn't have to be moved to a specific PayPoint terminal and can use the services from any till," says Brooker. "Also, it makes the alignment between the PayPoint terminal and the store's accounts at the end of the day a lot quicker."
Birden believes that there is more room for innovation within the in-store services market. He says: "The introduction of a multi-functional kiosk at which you can top up your phone, withdraw cash, play the National Lottery and rent a DVD is not far off. People have less time on their hands and will want this convenience."
He adds that a contact-less credit system could also be successful in the retail market. "There is potential for a system where a customer keeps credit in their phone and uses it to make small payments via Bluetooth. The market is close to going down that route and I believe it will be popular with customers who are making small purchases and don't want to carry cash."
With new in-store services being introduced regularly, c-store retailers willing to embrace them can reap the financial benefits of providing all of their customers' needs under one roof.
l Cash machine network Link has joined forces with independent charity Crimestoppers to offer rewards for information relating to cash-machine crime. According to Link, 199 cash machines were attacked in 2008, up 18.5% on the previous year's figure. Link is offering the public rewards of up to £25,000 for information, and any retailer who has suffered an ATM attack can obtain Crimestoppers posters, leaflets and take-away cards.
l Payzone and the Co-operative Group now offer shoppers the chance to pay their council tax and rent in stores. More than 650 local authorities, housing authorities and credit unions will be connected to the Payzone network, enabling customers to pay them direct. Payzone bill payments director Linda Cook says: "Customers will find paying bills at local stores more convenient as they can now pay at the same time as buying a paper, or topping up their gas, electricity or mobile phone."
"I decided to install a Hanco free-to-use machine in my store because my customers weren't happy when we had to close our Post Office cash machine, and the only other ATM in walking distance charges for use.
"It was installed about a month ago, but already I'm seeing more customers. People appreciate the convenience of a cash machine on my premises, particularly one that's free to use.
"I can recycle my cash takings through it so I don't need to withdraw or pay in separate funds. Not only does this save me money in bank charges, but cuts the number of times I have to go back and forth to the bank. Hopefully, the free-to-use machine will create happy customers, which will lead to more sales for me."
Velummylum Sivasubramania, Costcutter, Hertfordshire