The services mission is one that has divided retailers over the years. While it doesn’t generate huge margins or commission for them, it does potentially bring more customers to the store and create opportunity for store owners to attract new regular customers off the back of this visit.
Also likely to buy
2. Cigarettes & Tobacco
5. Soft drinks
“Services remain a key driver of footfall to convenience stores, though their ‘value’ to the store is often questioned by retailers,” says HIM’s Littler. “Shoppers visiting convenience on a ‘services’ mission, ie are primarily there to use a service, spend £2.5bn in convenience annually, specifically on shop items, and make up 5% of convenience footfall.”
Even though it’s a source of contention for retailers, it is a unique service to the convenience industry, and one that Littler says they should be capitalising on.
“Without the right services in-store, convenience stores will be missing out on this spend,” she says. “Services are also a footfall driver which many other retail channels do not have, with the discounters and to some degree the supermarkets having not yet moved fully into this arena. The biggest footfall-driving services within convenience currently are post office, cash machine and electronic bill payment such as PayPoint.”
PayPoint retail director Andrew Goddard says retailers need to remind customers about the services available and that the services supplier can help with that. “According to HIM, the majority of customers who use PayPoint are on a mission to buy something else, so it’s important to make sure that the external and internal signage that we provide free of charge is always visible and free of obstructions so passing customers who are unfamiliar with your shop can immediately see they can use PayPoint at your shop at the same time they are buying other goods.”
According to Gary Jennison, managing director at Payzone UK, retailers may need to take the services customer mission to their shoppers.
“Retailers should prompt customers to use the Payzone services at the till, asking if they would like to top-up their mobile phone or buy a Health Lottery ticket for example,” he says. “This will encourage the customer to use the services and also promotes the services on offer.”
He agrees that retailers should make it as obvious as possible and look at alternative means of communication. “Social media is growing increasingly popular and is a simple way for a retailer to advertise the products and services that they can offer,” says Jennison.
Littler adds that forward-thinking retailers should be examining what the services of the future will be. “Services which shoppers are interested in seeing in convenience stores in the future include collection points for goods ordered online, booking for local entertainment and click & collect.”
Goddard says that retailers should make best use of every service offered to them. “PayPoint is constantly introducing new schemes, particularly new CashOut schemes and good SIM deals, so make sure you read all our bulletins and newsletters,” he says. “These have details about the schemes and often include POS to publicise them in your shop or a barcode that you can scan to order them.”
“We offer PayPoint, Payzone, the National Lottery and Health Lottery in our stores, and every one of them is an opportunity to gain a new customer.
“Services can be broken down into planned and impulsive purchases - bill payment services are planned while services like the Health Lottery are more impulsive so focus on marketing the impulsive ones more.
“Have a look at services that may get customers to come back. We have a laundry service so customers are in the store when they drop their items off and when they pick them up so there are two selling opportunities with that particular service.
“Don’t take on more than you can handle though. The commissions on services aren’t going to be massive so don’t let them take over your business. Even with parcel services, a retailer could get over-run with parcels that are taking up valuable space so look at what will work in your area and suit your customers.”
Chaz Chahal. Costcutter Bromsgrove and Kidderminister