Is more stock actually hurting your bottom line?
The latest analysis of 50 comparable retail locations reveals a fascinating trend: Growth is not about the size of the range, but the efficiency of the “Pocket.”
While many of 125 newsagents for which I have data saw a healthy 10.1% increase in total sales this year, the real story lies in the “Sales per Pocket” metric. Here are 3 key takeaways for any retailer managing high-volume inventory:
- The “Sweet Spot” is in the Middle: Mid-sized stores are significantly outperforming larger footprint locations in efficiency. The biggest stores often suffer from a “Long Tail” problem—where the bottom 15% of stock is simply taking up space without earning its keep. Big is not always best.
- Everyday Essentials are Powering Growth: While seasonal peaks get all the glory, “Everyday” category sales are up 12.7%. The most successful stores are those using this consistent foot traffic to “trade up” customers into premium tiers.
- The Father’s Day Blueprint: In the data is evidence of a massive 24.1% jump in Father’s Day performance in a bunch of stores. Christmas, too, was impressive, with terrific growth in a decent number of stores..
The strategy that’s working: Focussing on a better yield is delivering results. By rationalising slow-moving lines and replacing them with high-margin trending gifts, we are proving that you can sell more by actually carrying less. Supporting this with local in-store activation is key: competitions that local customers can win, giving customers reasons to consider buying cards when they might otherwise, that visit, not have considered this.
All of this means more focus on card pockets – by you more so than your supplier. You pay for the retail space and the stock so it makes sense that you management investment of your assets.
Success with cards starts with your engagement as the retailer. Be in control. Make decisions based on the data.
Never sign a contract that gives the supplier complete control. Their business needs and your business needs to not align, despite the sales pitch they might give.
The newsagencies achieving results I have covered here don’t have long term lock-in contracts with card suppliers.
What I have covered here in this post is only a small amount from a far more comprehensive report looking at same store card performance in newsagencies for which I have data. I’ve kept it brief so as to not lose your attention and in the hope that you go back into your business, looking at your card results.
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Mark Fletcher founded newsagency software company Tower Systems and is the CEO of newsXpress, a marketing group serving innovative newsagents who continuously evolve their businesses to be enjoyable, relevant and successful. You can reach him on mark@newsxpress.com.au or 0418 321 338.