In just six weeks in 2004, DSL sold 1.8 million solar lights from garage forecourts up and down the country. Talk about having the right product at the right price, in the right place at the right time."They were just stab-in-the-ground solar lights selling at £3.99 but they generated retail sales of nearly £7m," explains Linda Horton, southern UK area manager.
All DSL’s products are tried and tested before they’re offered for sale. "We tried these lights out at different price points at different times of the year and for six weeks in 2004 they turned into our best promotion ever," says Horton.
For any retailers worried about giving over precious shop space to non-food items like solar lights, Horton has the answer. It’s called her profit achiever report, which she whips out to prove to any retailers doubtful about stocking DSL’s lines. She reckons the report proves that, where stocked, DSL lines are usually in the top three most profitable lines within a forecourt. "It’s all about incremental sales and the retailer really has nothing to lose. Our aim is not to sell to the retailer but to the consumer - we provide goods that will sell. Everything is provided sale or return so if we weren’t confident we’d go bust."
Interestingly, unlike other suppliers in this market, she says DSL doesn’t sell on margin: "We offer a minimum margin of 25%. Other companies might offer more but our products will sell better and retailers will make more. Take the solar lights, other companies are selling them at £4.99 but ours are priced at £3.99 and they sell. If the price points aren’t correct they won’t sell. It’s all about volume as well as margin."
DSL promotions last for six weeks and retailers who sign up have a maximum of two products per pump crowner plus a counter display stand by the till. "Currently we have a candle one side of the pump crowner and a lighter on the other side. But we’ll soon be switching to a cuddly bear for Valentine’s then hair brushes for Mother’s day," explains Horton.
Prices start at a ’cheap and cheerful’ £1.99. "January is always a quiet month," she says, "which is why we’re selling a candle for £2.49. But at Christmas we had tiny black and white TVs for £14.99 and remote control cars that went for £30."
DSL sells AA-branded goods, which apparently always sell well because of the brand name. As for other goods, Horton says it’s all about keeping on top of trends. "You’ve got to be quick, in and out so you don’t get left with loads of stock. We had hands-free phone kits at just the right time and last October, when the new legislation concerning booster seats for children came in, we were there with them at the right time."
Retailers are not expected to hold a mountain of stock. If they put in an order by 3pm one day they’ll get it next day by courier.
Maxol has been offering DSL promotions for six years and more recently the company started using G7’s range as well. Fergal Harrington, brand development manager at Maxol, says: "We give the offers good advertising prominence on our roadside poster units, on our pump top displays and on our website. The offers have proven very popular. They undoubtedly drive footfall into our forecourts and we often receive enquiries from customers wishing to know ’what will be coming next?’. Word of mouth is very effective as our customers tell their friends and families about the offers available.
"For both retailers and customers, these promotions are a ’win win’ situation. To the customer the promotional offer represents real value for money in an otherwise increasingly expensive transaction. We believe the customer feels more satisfied with the whole transaction than if only fuel was offered. From the retailer’s point of view, the offers provide an incentive for their customers to increase their fuel spend and they also provide them with an additional profitable revenue stream. Plus we find it a great benefit to be able to concentrate our marketing efforts on network-wide promotions rather than coming up with promotional offers for individual stations on an ad hoc basis."
Garry Campbell, managing director at G7, says his company offers an upscale option in the forecourt and shop promotions sector. "Specific focus on product design and working directly with dedicated manufacturers are essential strategies to produce a high-quality range. Our pursuit of best manufacturing practices ensures that our product ranges are compliant with newly-introduced EU legislation governing component content."
Recently-introduced EU legislation includes the Restriction of Hazardous Substances (RoHS) in electrical and electronic products, which Campbell says now demands a higher standard of production quality. "Retailers should be aware of this legislation and their responsibilities. If in doubt they need to ask their supplier to provide evidence of appropriate certification."
He says G7 focuses on value rather than price, to offer consumers impulse purchases in the £4.99-£9.99 range. "Retail prices in this range offer a higher return from valuable retail locations."
G7’s new products for 2007 include an FM transmitter, which enables users to play their iPod, MP3 player or WalkMan through their in-car sound system. Priced at £9.95, the XP88 FM transmitter is said to deliver crystal clear sound quality with no background hiss. Campbell says Vizion Eyewear was specifically developed for the forecourt sector as a high-performing alternative to the traditional sunglass carousel. "Average unit sales of Vizion Eyewear exceed 200 pairs per site, with some customers selling two or three times this volume," he says. This year there are new EVO-2 styles made from high-quality polycarbonate, with full UV Class 3 protection. They come complete with case and lens cloth.
Meanwhile, Asiffa Gadatra, director, of Spot Promotions prides herself on being able to sell products at very competitive prices. "We have Elle-branded umbrellas which retailers can sell for £3.99, but the rrp is £19.99."
Spot’s price range runs from 99p to £9.99 with margins of up to 35%. "We deliver the goods, pick up the returns, put up the pump crowners - we do everything for the retailer."
She sources from all over the world and says she’s very particular about quality. For 2007 she promises new products ’that people will not have seen before’.
Finally Asif Ayub, sales director of Fast Trak, boasts of a 300% growth in business in the past year.
He’s obviously keen to sell his products but has this advice to retailers: "If your pump top looks like a Christmas tree it can be overkill - you’ve got to get the display right. Our most successful customers are those that take our full service. This includes merchandisers on site to instantly get the promotion started. Without merchandisers you can lose money with stock sat in the storeroom."
He says his company goes for high sales all year round: "The best ones are those that catch the customers’ imagination at the right time of year, such as alcohol breath testers at Christmas time, solar rock lights in the summer and pet blankets in the winter. But our greatest success has been with our gadgets such as wireless MP3/iPod connectors and four-way USB hubs.
"We see our audience as ’customers who know a bargain when they see one’. So we aim to deliver them prices that even the superstores can’t provide.
All in all, it seems there are some pretty convincing reasons to give these non-food promotions a try.
=== Case study: ANF Group ===
Ferhana Munshi, director of the ANF Group, has six sites in the north west and uses Spot Promotions. "The products are very good. They’re very eye-catching and give us fantastic returns," she says.
"Spot looks after us very well; we get personal attention. For instance if I ring them up, they’ll come out and see us the next day. They supply us with pump crowners and actually put them on for us, change them regularly and keep everything neat and tidy."
She says pet blankets always sell very well and congratulates Spot on having the right products at the right time. "We had hands-free mobile phone kits when the car ban came in and child booster seats when the new law came in. Plus if we give Spot an idea for a product they’ll listen to us because we have regular contact with the public and know what people want."
Typically product prices range from £1.99 to £20 but Ferhana says the best sellers tend to be the cheaper £1.99-£2.99 items. "At Christmas we had big remote-control cars and we sold quite a few of them as last-minute gifts."
She says it’s important to have the products on display inside the store so customers can touch and feel them before they buy. "We have lovely teddy-bear-shaped hot water bottles and fleecy blankets at the moment, which are selling well in the cold weather.
"Spot really does offer a fantastic one-to-one service. We have no worries with them; we can order as much or as little as we need and on the rare occasion that a customer complains about a product - Spot always takes it back with no quibble and no fuss."
=== Case study: Chaddlewood Services ===
"We’d been using DSL for a few years then we changed because we were promised extra margin, but the new supplier’s items didn’t sell half as well so we went back to DSL," says Annette Boston, Chaddlewood Service Station in Plymouth
"They give us an absolutely first-class service and are probably one of our best suppliers."
At the moment Annette is selling lighters and scented candles but will soon be swapping these for a Valentine’s Day bear.
"The DSL rep comes in and tells us about the next promotion and gives us a picture of it and a barcode so we can get it put into our system. They then send us the headers for us to put on the pumps - and those take us minutes to change.
"We have a counter display in the shop so people can actually see the goods before they buy them and the stock is behind the counter so it doesn’t take up any shelf space at all.
"We’ve never refused any of the items DSL has offered us. To be honest sometimes I’ve thought ’nobody’s ever going to buy that’ but somebody always does because we all have different tastes.
"The first promotion we ever did was on an Oxford English dictionary and I thought who wants one of those? But they went really well."
She says one of the most popular items has been a jet spray for hose pipes: "We’ve had this in two or three times and it’s always flown out the door. First aid kits always go well too.
"To be honest we don’t make massive profits on these items but it’s more than we’re making on fuel!"