[MrFoof]

What was more surprising to me is the realization by corporate that 40% of the in-store SKUs in their US stores (in a given location) only sold through 1 or fewer units per month. That means if a franchise store got shipped a box of 12 units of a SKU, it might take a year or more to sell that box through.

What kills me is they're possibly just realizing this in 2024. What on earth has the corporate analytics team been doing all this time to not make that sort of opportunity cost screamingly obvious? Even if the margin is good, you're moving no volume.

I realize that it's probably cleaning products and other shelf stable items, but that just blew my mind.

[EE84M3i]

Potentially it's items that move very very low volume but provide significant value by being available? For example, 7/11 in Japan sells underwear and shirts, with a bit of a selection even. No one is buying these except in an emergency, but having it there is a lifesaver. I also wouldn't be surprised if the average 7/11 location moved less than 1 unit a month of some of the whiskies they have available.

However surely this is a small fraction of all the products they sell.

[MrFoof]

>Potentially it's items that move very very low volume but provide significant value by being available?

That doesn't matter, and exactly why corporate brought it up. Again, opportunity cost.

I asked my nearest 7-Eleven manager (I never go to convenience stores, so I just went in to the closest one) about how many customers he gets a month, and he said about 8,000. How many SKUs? About 2500. So for 40% of his SKUs, of the 8000 customers that walk in, 1 of 8000 is willing to buy a specific one of those 1000 items (at that elevated price) from that store. That's 1000 SKUs that could be at least partially replaced with something with far better sell-through. Shelf space isn't free. Backroom space isn't free. That's dedicated square footage, he's paying a lease on every single month, forever, for stuff that doesn't move.

The guy isn't running a convenience store out of the goodness of his heart. There's a supermarket 3 blocks away selling the same items for far less money, so it's not like he's selling something you can't get just a 3-minute further walk (or 1-minute drive) away.

I asked him about slow selling items. "Oh, you saw the video too?!" He was fully onboard with corporate support to not just get much better sell-through (and ergo, revenue), but having a reason for more people to come into the store, especially on a regular basis, and not simply getting things because, "they happen to already be here."

This location in particular WASN'T with a service station out front (inner city location). So for the manager, a way to get more regular customers, that are coming in to buy things they want -- possibly if they can't get it as easily (or at all) nearby -- is a HUGE potential win for him. That might help him get hundreds more customers every month, which might buy other things as well.

[throwawaymaths]

> What on earth has the corporate analytics team been doing

7-11 is franchised with a ton of autonomy given to franchisees (relative to other franchises) so as long as the fees keep coming in, corporate doesn't care.

Also, corporate is owned by a Japanese company so it's likely to be kind of "old-fashioned" in a way, and the US entities are a whole ocean away.

[wodenokoto]

The Japanese franchise was successful _because_ they measured their sales. They were pioneers in the field. Story goes that in the 80s and 90s the register had a row for customer type, so each sale was attached to “school boy” or “middle aged male”, etc.

[ksec]

>What on earth has the corporate analytics team been doing all this time to not make that sort of opportunity cost screamingly obvious?

This is assuming there is an analytics team / department. I think people in tech may be surprised how Tech hasn't really caught on in many of the industry, especially those that are not Fortune 2000.