Adding up to profit
At a time when driving footfall through the door has never been more essential; ShelfLife examines the retail add-ons that add up to extra custom.
Print15 August 2009
Retail add-ons generate footfall, create differentiation, and ultimately lead to more sales. These days, retailers are increasingly adopting such add-ons. Tesco Ireland has capitalised on the trend of staying in as the ‘new going out’ by trialling The Movie Booth DVD vending machines in Dublin and Wexford stores, with a nationwide roll-out anticipated if this proves successful. Choices, which offers DVDs, games and music for sale and rentals, has also reported a rise in trade, as cash-strapped customers opt to enjoy a cheaper night in.
Mintel reports that a large proportion of consumers own digital and mobile phone cameras, which are increasingly being used to document their everyday lives instead of just special occasions. Printers, specialist inks and papers are still relatively expensive however, providing an opportunity for retail instant processing options to flourish. Internet kiosks are also proving popular, especially for students.
Profit through self serve
Kepak Convenience Foods (KCF), a strong driving force in Ireland’s hot snacking market, is looking to introduce a new profit opportunity for retailers that want to capitalise on the growing demand for hot food. The company is teaming up with a number of retailers in August to replace hot food usually served from deli counters, which are expensive to run, with self serve, hot food units.
“The current economic climate highlights the need for food suppliers and retailers to work together to explore new and innovative ways of increasing sales,” says KCF commercial manager Adrian Lawlor. “We are confident that the self serve option for hot food will not only cut operational costs but also lead to an increase in sales.”
The trials will include the installation of a microwave, enabling hot snacking products such as Rustlers and UGO’s Deli Café, and other fresh, chilled products including pies and pasties, to be heated in a matter of seconds. KCF has already conducted lengthy trials in England and Scotland; one outlet increased sales of hot snacking products by 300% in just four weeks.
Retailer Rav Garcha, who runs four busy stores, installed a Rustlers branded microwave in his flagship store located behind a school, providing an opportunity to tap into the busy after school rush. He commented: “The microwave takes up very little space, is economical and has had a major impact. Sales of the top three Rustlers products [The Flame Grilled Quarter Pounder, Chicken Sandwich and BBQ Rib] have more than doubled, rising from an average of one case of product per week to two or three cases. I am now looking to put a microwave into all of my stores.”
KCF will be publishing the results of its trials in the coming months.
Recession buster on the cards
Dome is the market-leader within the calling card industry, offering a range of products that provide an easy and cost effective way to make international phone calls. The current economic climate has lead Dome to introduce further rate-reducing, cost-saving measures for their customers by creating a ‘Recession Buster’ campaign for its Century 2000 and Global Caller calling cards.
Dome has also launched two new international calling cards, Chat and Monster Minutes, both of which are available on terminals offering free credit and more value for money. Dome believes that these offers will help improve retail footfall and, along with its active sales and merchandising team, will continue to find new ways for customers to save money on calls.
For more information visit www.dometelecom.com, email info@dometelecom.com or phone 01 887 0200.
Get in the zone
Payzone, Ireland’s largest branded consumer payments acceptance network, is focused on delivering a range of services that drive immediate footfall into the retail channel. The principal services offered by Payzone are pre-paid mobile top-up, tolling and congestion charges, utility bill payment, rent and waste payments and general payment collection, and financial services including stored value cards schemes, money transfer services and internet payment vouchers.
With over 3,500 retailers currently benefiting from these Payzone services in Ireland, it enjoys a healthy level of transaction volume. Payzone is constantly investing in the innovation of new products that deliver immediate volume transactions to retail. Within the last 12 months, the company has delivered a number of new innovations to retail; M50 tolling, Prepaid Gascard, Parking Tag, Prepaid Waste and Payzone Worldwide Money. Payzone retailers have welcomed new customers into their stores as a result of these services.
Questions and answers with…
Kevin O’Shea
Sales manager, Choices IE
Has demand for Choices’ DVDs, games and music, risen during the current economic climate?
“Whilst there is always a demand for both our retail and rental offerings, there is no doubting that the current economic situation has generated even more interest than usual. We firmly believe that retailers, although looking to tighten costs, are also shrewd enough to seek out an offer that will coincide with their customers habits in more difficult financial times. Our ‘Big Night In’ package can deliver something different, within the FMCG sector.”
To what extent does the installation of Choices drive footfall into a store?
“The beauty of our system, especially rental, is that it virtually guarantees to drive additional footfall. By providing a service built around DVD rental, in the correct demographic, a retailer can benefit from an offering that builds customer loyalty, and drives incremental sales, without ever compromising the core values of their business.”
Does Choices offer a competitive package?
“Our rental and retail packages are the most competitive in the marketplace currently. As the industry leader in Ireland, we work very closely with all our customers, from the smallest independents up to the largest groups. This has armed us with the knowledge that both cost and space are two of the biggest factors that determine a retailer’s decisions. Bearing this in mind, we can offer the most cost effective packages and promotions, coupled with a variety of modern retail racking solutions, free of charge.”
What margin does Choices deliver for retailers?
“Our retail range can deliver strong margins, up to 30%, depending on the offer. Rental packages, on the other hand, by their nature can deliver not only limitless revenues, but also added incremental sales right across all other departments such as wines, beers, confectionary, frozen foods, and adult snacks, amongst others.
“In conclusion, it is worth remembering that customers’ shopping habits have changed. More people, more often, are deciding to have a ‘Big Night In.’ If you are ready to benefit from this new trend, why not get in touch with us and see how we can help to drive that extra revenue in what are difficult economic times.
Questions and answers with…
Greg Cunningham
Hähnel Industries
Hähnel supplies instant photo processing kiosks to the retail sector: what level of demand exists for such kiosks in Ireland presently?
“The demand is high but retailers believe that setup cost is much higher than it is, so up to now it has not been on the radar. Three years ago it would have cost between €10, 000 and €20,000 to add instant photo to a store, now you can have instant photo for less than €1,500.”
To what extent do such kiosks drive footfall into convenience stores/ supermarkets?
“Instant and one hour photo has long been a driver of footfall into shopping centres, and high streets. It is a service which is in demand now more than ever due to the proliferation of digital cameras and camera phones; so footfall increases when photo is added.”
How compact and flexible are the photo kiosks?
“The smallest unit is an 11” by 15” counter top model. The most common kiosk for convenience stores/supermarkets is the Supersnaplab CR 20 with a footprint of 18” by 20”. It can produce three sizes of print, the standard 6” by 4”, 7” by 5”, and 8” by 6” enlargements from any memory card, bluetooth phone, CD/DVD, even directly from the camera.”
How much would it cost a retailer to introduce this photo kiosk?
“Systems start from €1,500 excluding VAT. The most effective unit for small to medium sized stores is the Sony CR 20 kiosk which comes with an initial stock paper and a service contract at around €3,000 plus VAT.”
What margin do such solutions deliver for retailers?
“The Snaplab CR 20 has a print cost as low as 14c per print. The price to the customer is between 30c and 50c depending on the amount of prints. This gives a net margin of between 44% and 66%. A retailer could do a special offer on 100 prints for 25c each and still have a net margin of 32%. Based on five customers a day printing 20 standard prints each, the initial setup cost will be recouped within 105 working days and the annual profit after payback is over €10,500.
Michael Sheridan of Sheridans Centra, Newport, is just one satisfied customer of Hähnel. He notes of his store’s photo processing kiosk: “It is user-friendly for customer and retailer. It’s great to have this service here for our customers instead of queing at a pharmacy or photo bar.”
For further information contact Greg Cunningham on 086 2606259 or email greg@hahnel.ie
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