Mediaweek last week ran an interview with Brian Evans, new COO for Fairfax. Evans was quoted as saying:
“We would like to have a stronger marketing relationship with newsagents and we’d like them to embrace our product. We would like to be treated like Lotto where there are huge signs up and we support promotions. I think newsagents do a very good job for us and it’s a very cost effective way of selling newspapers. Like any relationship it gets a bit tired and it needs to be jazzed up a bit.”
Hmmm. Newspaper publishers have driven newsagents to focus on their category linearly. Lottery companies and, to a lesser extent, magazine distributors have done the same thing. This linear approach to newsagencies has created freeways of traffic. Customers come in, buy their product, don’t get off the freeway and don’t shop the shop.
Newsagencies have excellent traffic. But too much of it is freeway type traffic.
If newspaper publishers, Lotto companies, magazine distributors, greeting card publishers and stationery wholesalers worked together they could come up with an important and timely format change for newsagencies which would generate incremental sales in these five core categories. Achieving this would mean that value is added back to the newsagency shingle and this is more important than a huge sign for The Age or the Sydney Morning Herald or the Herald Sun.
There is anecdotal evidence of significant sales success being earned in newsagencies where effort is put into cross category promotion. (Promotion which is usually against supplier rules but which benefits them.) This suggests that sales growth is there for the asking based on existing traffic flow.
Rather than pursuing incremental sales outside the newsagency retail channel, Brian Evans and the team at Fairfax ought to understand the freeway like traffic flow in a newsagency and then talk with the Lotteries and other folks. Co-operation between newsagency suppliers and active support from newsagents could generate the sales boost everyone is looking for.
Newsagents achieving sales growth are doing so without expensive shop fits. My research suggests that there are several simple and immediate steps which cold be taken to address the issues with freeway traffic. The feedback from these steps could then drive more structural change in retail newsagencies.
On average, newspapers are sold alone 55% of the time in newsagencies. Newsagents will say this is because they are shackled from cross promoting other product with newspapers. Others will say it’s because of poor retail. A retail expert I have spoken with says it’s because of placement/display rules newsagents have to live with. If Brian Evans could find a way to help newsagents leverage newspaper traffic into more business he could expect to receive reciprocal growth from other categories.