Five things you can do to leverage low-margin value high-volume shop traffic

Many retail newsagencies are traffic and margin poor businesses. Such businesses are high-risk businesses as most low margin products and services are delivering less traffic year on year … high-risk of financial failure.

In addition to low margin products and services experiencing traffic decline year on year, minimal or no retail price movement see a decline in margin in real terms. Further, too often we see the percentage cut by suppliers for selfish reasons, further diluting the value to the retailer.

But it is not all bad news with low margin products and services. If they are generating good traffic, the opportunity is to be proactive in leveraging that traffic. Here is a list of five must-do things to leverage this low value traffic in your business.

1. Place at least one offer / stand at the door facing people as they leave. If you have room, have one stand / offer either side. Make sure the offer is easily understood and relevant.
2. Use a portable table for pricing stock and other stock work and place this with a staff member doing the work during busy periods between the door and the destination for most traffic.
3. For the highest volume items, like newspapers, weekly magazines and lotteries in a retail newsagency, always pitch other products such that these destination shoppers see the other products.
4. Always have an offer at the counter unrelated to the low margin destination purchase. Get creative as to how you pitch this at the lottery counter if you have Tatts.
5. Establish a floor unit to guide counter traffic. the right type of unit is best used for holing products people are likely to purchase on impulse while standing in line to make their destination purchase. All sorts of retailers do this, even if they do not have the shopper to warrant such a floor unit. The impulse purchases should make the space valuable for you. if Tatts complains, explaining it is about best practice traffic management.

My advice is do all five of these things. If you don’t do some or all you are most likely only benefiting from destination business from low-margin high-traffic products and services and there is no upside in that.

For the record, margin poor products and services are those with a GP percentage of less than 50% in my view.

This post shows how to turn a negative into a positive. I hope it helps.

FTYI this advice is an example of one of many types advice newsXpress provides its members.