Magazine article Marketing

Helen Dickinson on Retail: In-Store Extras May Yet Pay Their Way

Magazine article Marketing

Helen Dickinson on Retail: In-Store Extras May Yet Pay Their Way

Article excerpt

Much has been written about the challenges faced by privately-owned convenience stores and newsagents. Over recent years these have grown as the supermarkets have made their presence felt on the high street with smaller format stores that sell ready-meals alongside newspapers, confectionery and tobacco.

There is no doubt that pressure has come to bear on many of these independents as they fight for share in a highly competitive part of the retail market. But the most enlightened among them have mounted something of a fight-back by recognising that they still have a role to play if they are able to provide facilities and services not available at the compact supermarkets.

The key to attracting customers to their stores is through having a differentiated proposition. One point of difference on which they have capitalised is payment terminals from brands such as PayPoint and Payzone, which are now installed in many small, independent stores.

Linked into the tills, they allow customers to top up mobile-phone credit and pay household bills while the retailer takes a small commission for each transaction processed. Rather like the National Lottery terminals, they are regarded as drivers of footfall - the idea being that customers will make a purchase in the store while they are there settling bills or topping up their phone.

Despite the benefits, such terminals have not enjoyed a universally warm reception from retailers. Some shop owners have complained that many shoppers fail to make a purchase at the time of paying their bills, while queues of people waiting to use the terminals can sometimes put off others who just want to make a quick purchase of a loaf of bread or a pint of milk.

There is also the thorny issue of how much commission retailers receive - one particularly contentious case being mobile top-ups, where certain networks have been seeking to reduce the levels paid to retailers on transactions.

On the plus side, the terminal operators have been adding services, many of which provide higher commission rates than those already available. These include international cash transfers and sales of travel season tickets. In the future these terminals could also represent an opportunity for small retailers to be involved in selling financial services.

The fact that consumers are no longer able to buy TV licences over the counter at their local Post Office,with PayPoint having won the six-year contract for handling such payments last month, is indicative of how its services have been expanding. …

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