I have analysed data relating to almost 5,000,000 shopping baskets and while the analysis is not yet complete and not all data has been collected, it is timely to share some information.
This data has come from 80 newsagencies. Considering the four key departments of cards, magazines, newspapers and stationery here are the percentage basket penetrations for each for 2005 vs 2004. I have not included lottery product sales because of the number of newsagents not selling the product.
While the percentage differences between 2005 and 2004 do not seem that great, in the rural magazine area, for example, the difference equates to 40,926 more magazines sold.
There are a couple of contexts in which we can consider this basket data: Suppliers want deeper penetration as this reflects improved efficiency in the channel; Newsagents want penetration spread across all categories they carry, commensurate with the capital at risk, the floor space allocated and the operational overhead expended.
Regardless of the view taken, basket penetration reflects the success of the category in the context of all sales. On any view the higher the penetration the better. Of concern is the drop in basket penetration for the magazine category comparing 2005 with 2004 in suburban newsagencies. Newspaper basket penetration increased over the same period. In rural newsagencies, over the same period the only change was a small increase in newspaper basket penetration.
Using the figures in the table above and looking at specific newsagencies there are some at each extreme of the measurement. For example, in 2005, looking at the suburban data there is a newsagency achieving 5% penetration for magazines and one achieving 41%.
The benchmark allows this type of store by store comparison and therefore consideration of high achievers compared to relative under achievers.
The basket penetration data collected also allows day of week views and supplier views, both taking analysis into more complex yet valuable areas. The data also allows for analysis of single unit sales and single category sales. That is, baskets containing one item and baskets containing only items one category. The single unit sale data is providing the most concern at present. This shows a concerning reliance on newspapers as traffic generators yet poor success at extracting add on sales from the shopping visit.
There is, of course, a risk of too much data.
At this point our focus is on the basket penetration numbers. For the four departments of cards, magazines, newspapers and stationery we can see the importance of these to rural and suburban newsagencies and develop strategies to increase penetration.
Raw and early as this data is, the next stage of this project is to understand the differences between the locations and see whether there are learnings for those low in penetration for any given category which, when applied, lift their penetrat