Many convenience stores have an ATM either outside or inside the store, and most retailers assume that by giving customers access to cash they’ll spend more. A new report appears to prove that assumption to be true
by Kevin Scott
There’s a clear benefit to having a cash machine attached to your shop – it makes you money. Okay, it’s not a huge amount but ATM commission is effectively payment for driving people towards your shop, arming them with fistfuls of cash next to a shop selling all manner of desirable FMCG goodies. But beyond this, what are the actual benefits of an ATM? Well, a new report titled ‘The Value of Cash and published by research company Populus on behalf of independent cash machine operator Cardtronics UK has showed that cash remains king in convenience with over 90% of all payment in local shops being made with cash. does the theory hold?
Retailers have always suspected that by giving customers access to cash at the same place they purchase there goods, they are more likely to spend and return to spend again. This report goes a long way to proving this theory to be true. Jonathan Simpson-Dent, Managing Director of Cardtronics Europe, says: “We’ve always been given anecdotal evidence to suggest that a cash point is able to offer shop owners a boost to their business but now for the first time, we’ve been able to prove and quantify it.” number crunching Let’s look at the numbers then: a huge majority of 71% of shoppers consider a cash point an important service. So much so that 47% of shoppers wouldn’t come back to the shop if the cash point was removed or broken – equating to a loss of on average £11.49 per customer who wouldn’t return. Bear that in mind next time you pop an ‘out of order’ sign on your faulty ATM. Cash machine users were also were also shown to spend an average of 68p more than non cash machine users, which over the course of months and years adds up to a lot. The report also suggests that local retailers could be set to benefit from a further £6.08 on average simply by offering additional services in their stores.
Overall, those who spend their withdrawn money on site, spend on average £13.09. This seems like a very high figure, but there’s no doubting that ATMs encourage spend. They have also proved to be an additional pull for repeat visits, with 82% of customers interviewed using the cash point at least once a week. What is more, over a quarter (26%) of consumers said the cash machine in store is the one they always use. the local angle Let’s remember the importance of ‘local’ in local retailer as well. The ability to carry out many activities in one local shop is clearly of key importance to shoppers, with over half (56%) of customers walking to the store instead of travelling longer distances to a larger supermarket or town centre. In store services that were popular with shoppers included PayPoint, the Lottery and Collect+. Locals spend up to £24.58 and £11.03 when they go to the shop to use PayPoint and the Lottery, respectively.