One newsagent a week ago asked me if I could look at his data and see what affect the loss of his paper rounds would have on their business. Although it is a country newsagency, they feel within five years they will lose their territory. Although they had a gut feel, but they wanted me to give them a second opinion.
The situation is that they do about a million dollars a year of which $600,000 a year is of newsagency items, and the rest is lotto. Account customers make up about 24.9% of total sales. Most of the customer account sales are for newspaper deliveries.
Although what our software does very well in providing information in the shop though many reports for shop layout, product placement, periods open, group sell, etc etc etc. This is not much good for speculative stuff.
For something like this you need what it is called is big data and data mining. What happens is a computer goes through your data using artificial intelligence, machine learning and statistics looking for patterns, trying to find something. It is all very fascinating and is a rather unique service we offer our clients.
So I looked through their data and was given pages and pages that looked like this.
In English, overall the computer seems to feel that for every dollar lost in customer accounts about 37 cents in retail will be lost to them in other departments. This 37 cents would include 3 cents in newspaper counter sales, a 10 cent drop in magazine sales, 8 cents in stationery and most of the rest in lotto assuming that nothing else's changes.
One point should be added is that things will change as if deliveries stop, the owner will be reducing the shop hours; this will affect sales too, but that is another story.