Newspaper sales basket penetration 2003-2005, 120 newsagencies. Source: Tower Systems.
Newspapers are losing their importance to shopping centre newsagents according to our analysis of three years of sales data from 120 newsagencies. This research covers 8 million shopping baskets worth of data.
The fall could be due to newsagents not promoting newspapers as well as they used to; overall falling newspaper sales; or newspapers now being sold in other outlets such as petrol stations, supermarkets, coffee shops etc.
No matter what the reason, the figures are concerning. My theory is that shopping centre newsagencies are showing the fall because that’s where the most significant competitor action is. Take my shop at Forest Hill in Victoria for example. We now have newspapers in Big W, Starbucks, Coles and Safeway as well as my own two newsagency outlets.
Publishers treat their retail outlets differently. Newsagents are full service and provide the best in store display and over the counter support for newspapers. They are a core product. Other outlets offer newspapers as the add on and treat them as such in terms of real-estate and promotional support. Yet newsagents are recognised for their effort by publishers putting product in more and more outlets.
The publishers are wrong to pursue growth or at least stem circulation falls by putting their products into other outlets.
Newspaper sales are challenged, there’s no doubt about that. Going into more outlets with a confusing value proposition message (i.e. Starbucks you can get The Age for 50 cents whereas at my newsagents 30 feet away it’s full price) only hurts sales.
Newspaper publishers ought to reduce outlets and focus on building a mutually valuable relationship with small business newsagents. They could immediately boost sales by offering a reward for consumer loyalty. Newsagents would get behind this. The result would be retail customers purchasing the newspaper more days in the week than at present.
Publishers have put tremendous effort into chasing home delivery customers over the last 10 to 15 years and neglected loyal retail customers. By association they have neglected retail newsagents. The home delivery marketplace has a high acquisition cost and a high churn whereas retail does not. Over the counter sales are about convenience, comfort and service. A smart publisher would reward newsagents for delivering on these and boosting sales appropriately.
Newspaper sales growth can be achieved if the publishers engage with newsagents, reward consumer loyalty and reward newsagent success.