Australian newsagent Mark Fletcher recently posted an article on his website reporting a single sale of $3,000. A real wow as the purchaser was not a regular customer to the store.
It would be easy to write this off as a remarkable fluke, but that would be a misunderstanding of how and why the sale happened.
In 2010, Mark was concerned by the outlook for the Australian newsagency channel and the challenges retailers were facing from falling sales in the newspaper and magazine category and lottery. This sounds familiar to the challenges of the UK newsagents channel.
He first identified the scale of the challenge by creating a 10-year sales and gross forecast using his best guesses for the way that he estimated that the under pressure categories would perform. Informed by his forecast, Mark chose to take a very different route to find success. He saw that convenience would not deliver the success he was looking for as there is too much competition.
His goal was to not only find products that would replace the sales that he forecast his business was likely to lose by 2020, but more importantly, to increase his store’s gross profit.
The solution he found was adding gifts and collectables, particularly plush collectables. He had seen these being sold successfully in New York. His first year sales target for gifts was $20,000. This has dramatically grown since then as the $3,000 customer illustrates.
There is plenty of evidence of the challenges that retailers face in the UK, not just in the independent sector. What are you doing to keep your business profitable?
Have you done a 10-year sales forecast to understand how the categories in your business could change? Are you hunting out new product categories that will grow your sales? Are you focusing on increasing your gross profit?
Watch: The first few minutes of this video explain Mark’s concern in 2012.
Read: Find out how Manchester retailer Mital Morar is standing out from the crowd.