Each day this week I am sharing a newsagency management benchmark which I hope you find useful. The benchmarks are not rigid, use them as a guide. I have developed them over years of working with a variety of newsagencies in many different situations.
Management benchmark #2: gifts to cards
Three years ago I was saying newsagents should aspire for gift revenue to be equal to 35% of card revenue. Today, I think that number is insufficient.
My base recommended gift revenue to card revenue ratio today is 50% while my recommended ration is 1:1. That is, I am saying your gift revenue target ought to be equal to your card revenue – preferably higher as is being achieved by many newsagents.
I mention the 50% as a base for newsagents who are yet to fully embrace the gift opportunity.
Let me be clear about gifts though. I do not include toys and plush in gifts as they are in their own department – even though you could argue plush should be in gifts.
My suggestion is you look at your gift to cards revenue ratio for the last three months. If it is below my suggested minimum target of being equal to 50% of your card revenue, work on what you need to do to get it higher … expand your range, play with shop floor placement, engage in marketing. Sure, it’s hard work. The benefits are terrific given the better margin on gifts compared to some traditional newsagency lines.
If you don’t know where to start, look at your existing data as this will provide the best guidance as to the gifts you could sell.
Don’t look at gifts as a destination. Change is vital to attracting leveraging existing traffic and attracting new traffic. And remember when buying: YOU ARE NOT YOUR CUSTOMER.
I hope this series helps newsagents look at their businesses differently and to ask questions about their performance in the context of best practice in our channel. Newsagencies with the brightest future are those where data is respected and benchmarks are set to be achieved and passed.