A blog on issues affecting Australia's newsagents, media and small business generally. More ...

Author: Mark Fletcher

Follow the money: Invest for growth in your newsagency

One of the challenges facing legacy product suppliers to the newsagency channel is the success many of us are having with new product suppliers.

It is only natural that newsagents, like other business people, prefer to invest in traffic, GP and, ultimately, bottom line P&L growth.

Therefore, newsagents are more likely to invest in products and infrastructure supporting products that fit the growth story. It is also why newsagents are less likely to invest in legacy products and the requirements of legacy product suppliers. It is why legacy suppliers struggle to get attention of newsagents.

The extent of transition in the newsagency channel is encouraging. Newsagents embracing new categories and through these new suppliers. It is leading to shop layout and fixture changes as well as technology changes as newsagents pitch new products and categories through their technology in ways that help attract new shoppers.

Our legacy suppliers who historically have relied on bully tactics and being required products are coming, slowly, to realise the new world, that their products are not as needed, that the expensive and anti-competitive processes are not appreciated by newsagents. Well, some at least. There are others who continue their ignorant bullying ways.

We are in a golden era of change in our channel. There are winners and losers. Market forces are at work, and this is a good thing.

When contemplating a request from any supplier, consider the new traffic, GP growth and bottom line benefits. If the request does not improve these then maybe ignore it. The suppliers of legacy products who handcuff you to anti-competitive processes may one day get the message.

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Management tip

Should newsagents refuse to sell today’s Daily Telegraph?

The front page if today’s Daily Telegraph is nothing but political propaganda in my personal opinion. It pushes an agenda that has nothing to do with news of the day. The front page story is fantasy fiction, designed to rally readers to an opinion about the Labour party that News Corp. wants.

This is not journalism. It is not what newspaper publishers should put out. It is the pushing of an ignorant fear based agenda, something News  worldwide has a track record for.

There are no facts in this piece. 

This game by News Corp. is considered more important than key stories of the day, news stories.

It is typical for a selfish publisher that runs its agenda ahead of reporting the news, reporting the facts.

You only have to look at their coverage of the NBN over the years. The originally proposed NBN could have been the Snowy Mountains Scheme for our time. It would have delivered a productivity boost off of which plenty of companies could have thrives, It could have fostered start-ups that could have changed towns and cities.

Instead, this publisher ran a campaign that resulted in the junk NBN we have today, something that is holding our economy back.

Yes, these are my opinions. However, I have some experience with which to form the opinions and some knowledge of what has been done in some US states, New Zealand and Estonia. Experience running a software company that serves 3,500+ small business retail businesses that rely on fast and easy internet access.

Newspaper publishers should not run agendas.

Shame on politicians for pandering to them, to get to be part of the News Corp. agenda.

If I was a newsagent in NSW I suspect I would not offer the Daily Telegraph for sale today.

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Ethics

Different standards from Tatts on digital marketing screens

I visited a newsagency with Tatts last week that was forced to install two screens, even though financially the business could not justify the spend and Tatts could not provide any indication of the commercial value too the business of the spend.

Yesterday, I visited another newsagency that does, I estimate, at least four times the lottery turnover of the earlier business, yet they have been required by Tatts to install only one screen.

While the second business has less space, they do have room for two screens. Close to two thirds of GP for the business comes from Tatts.

There appears to be an inconsistency from Tatts in the screen requirement, one screen versus two screens.

If the trigger is revenue, the second business I mention should have two screens. If the trigger is commercial value to be gained from the screens, the second business I visited should have two screens. But they have one. And the business that could not afford two screens has them, and there is no evidence they offer value.

How Tatts has been able to get away with demanding small business retailers make capital investment in technology not involved in vending the product and without any documented business case is dreadful.

I continue to be glad I do not have Tatts in my businesses.

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Lotteries

Ridiculous House of Wellness ad catalogue

It is frustrating newsagents continue to be asked to hand out The House of Wellness ‘supplement’ with the Herald Sun when the publication is nothing but a glorified Chemist Warehouse ad platform. It feels nothing like a value-add supplement. Rather it wastes space and labour.

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Newspapers

New wage rates and penalty rates in place

Click here for a copy of the new General Retail Award rates from Fairwork. It is important you take time to think about what you will do in your business about this. It is not as simple as applying the new rates, especially the lower penalty rates.

In March I wrote about why I will not apply the lower penalty rates in shops I own.  In case you missed it, here is what I wrote then and stand by today:

Why I am not embracing the reduced Sunday penalty rates in my retail business

Here are my reasons for deciding to not embrace the Sunday penalty rates decision in my retail businesses:

  1. I value my employees. To pay them less as a result of the decision could suggest to them they are worth less. I have hated it when suppliers reduced margin or commission and argued then that they value me and my business less.
  2. I want to be competitive for good labour. Paying a competitive rate is key to this.
  3. The business reward. It is open to employees who are now told their pay will not be cut to return the favour to the business.
  4. Competition. A range of competitor business have made a similar announcement.
  5. While of economy fairness. While I agree with the decision, it should only be taken as a whole of economy review that fairly adjusts economic touch-points for all and not only salaried workers.
  6. Weighing everything up it is the right thing to do.

This is not a permanent decision. It is possible I will modify my position as the marketplace situation evolves. If I did and thereby embraced a saving in labour costs, I anticipate through would be invested in more hours.

All business owners need to reach their own conclusions on this matter. Unfortunately, as a country we are bereft of leadership on broader issues that should be confronted in any economic setting adjustment as has been done with Sunday penalty rates.

Think about what you feel is right for your business. This has to be a personal decision. The goal of this post is to encourage you to make your own decision, regardless of what the actual decision is.
I say make your own decision as there are implications for what you decide.

If, for example, you decide to not cut Sunday rates, there should be a benefit from employee engagement, as appreciation for your support. So, I would encourage discussion if this is your decision.

If, on the other hand, you decide to cut penalty rates, explain why this is important for the business and how that connects back to employees.

Unfortunately, this issue is highly politicised as a battle between classes. The reality in small business retail and small business generally is there is rarely a class. Indeed, employers often make much less than many in their workforce are paid.

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Management tip

Sunday newsagency management tip: stop and think about why you scan sales

Too many newsagents use software in their businesses as a glorified cash register. They track stock in, scale sales, scan returns and that is it. Rarely do they manage the business by the numbers.

Next time you scan an item being purchased at th counter, think why? Think about whether you actually use all the data being collected and cultivated.

My challenge today is that you actually use it.

I am prompted to write this because if data I see in a report from a retail business I know of. They have excellent data, that chronicles the steady decline of the business and shows no action to arrest the decline. This is a business that uses their software as a glorified cash register. What a waste.

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Management tip

Is shopper theft on the increase?

I have heard from more retailers in the last two weeks about shopper than at any time in recent years. It leads me to ask the question:

Is shopper theft on then increase?

Please comment and provide information about what you are experiencing.

In my own situation, we spot stock take key parts of the business, those valued items near the front of the shop and items people are known to covet. Our magazine arrivals and electronic returns process shows if any theft of magazines has occurred, and has done for years.

The bigger challenge is with higher value specialty items for which we consider security to be good. A theft yesterday tells us security needs to be better. I is that experience and what others have told me over the last couple of weeks that got me asking the question.

One newsagent told me abut the customer who brought one card to the counter but “forgot: about the three cards in the baby pram. Another told me about the customer who put  gift card in their broken arm sling and was disappointed to learn it would not work unless activated. Another told me about a customer who loaded four reams of paper under their supermarket shopping bags in a trolly.

While these stories are frustrating, it is the stories we do not hear about, the theft discovered long after it have been done, that frustrate the most. This is where how and when you check your stock matters.

With so much business now done online and accurate stock on hand data key to business success, theft can embarrass the business more than ever.

Have you found shopper theft to be on the increase?

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theft

New newsagency benchmark study launched

I have emailed newsagent ts this morning with an invitation to participate in he Q2 newsagency sales benchmark study:

I am preparing a fresh benchmark study for the newsagency channel to look at the latest sales trends overall and in key product categories for the second quarter of 2017. This quarterly newsagency sales performance study will help newsagents see the future based on the data trends. Click here for my last report.

How to participate.

  1. Please run a Monthly Sales Comparison Report for 01/04/2017 – 30/06/2017 compared to 01/04/2016 – 30/06/2016.
  2. Tick the category box. IMPORTANT.
  3. Tick to exclude home delivery and sub agent data.
  4. DO NOT tick the supplier box.
  5. Preview the report on the screen. Save as a PDF and email this to me at mark@towersystems.com.au.
  6. Read the report yourself and see what it shows you about your business.
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Newsagency benchmark

Suppliers need to be better at handling out of stocks

Suppliers to retailers of everyday lines – you know, the lines they are known for and that you purchase from them on a regular basis – have an obligation to ensure this items are always in stock.

Too often now I hear stories from newsagents of core suppliers not maintaining adequate stock levels of these everyday items.

The consequences of these out of stock situations can be serious for newsagents and the suppliers.

Newsagents with a gap on the shelves can look elsewhere – to another supplier or even to another product to fill the space. I know of one instance where a supplier out of stock caused the newsagent to look more carefully at return on inventory investment and return on space and found the product to be borderline successful based on the evidence. They quit the category and the supplier and introduced a new category … and that was the start o=f increased success for the business.

Newsagents are not shingle loyal today, nor should they be in today’s marketplace. This puts suppliers at greater risk of losing business if they are out of stock.

I am not naming suppliers as they know who they are. The time for their excuses are gone. They need to fix their inventory gaps or budget for more sales decline.

My message to suppliers who have more and more out of stock – get your situation sorted out or you will lose more business.

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Newsagency management

The challenge of selling a newsagency business with Tatts

Tatts Group is in a powerful position when a newsagency business with a Tatts agency is for sale as they have to approve the purchaser.

From what I see and hear, the Tatts approval process is opaque. I hear of people approved who are dreadful retailers with few skills and no plan and I hear of people rejected with good retail skills and a good plan.

There does not seem to be a consistent approach by Tatts to people approving. Worse still is that there is no independent review process. Tatts is in the box seat. They can make or break the sale of you’re business. You better not upset them is what many tatts retailers think I suspect. tatts folk are a fragile group as we have seen.

The biggest challenge is for the vendor who is in the situation of completing the hard work to find a purchaser with the money and then being confronted by a rejection by Tatts, from what I hear a rejection often without clear advice as to the reasons for the rejection.

My advice for the best possible outcome is that the vendor and the purchaser work together on the application and the accompanying business plan, and that this is reviewed by a professional third party with experience – not an accountant and not a solicitor as in my experience they are clueless about these matters.

Put in the work on your submission prior to the first submission and you could save month, even a year, of delays.

The application quality demonstrates how much both parties want the transaction to proceed. A good application also provides the best basis for appeal should the inconsistent and fractured processes used by tatts result in a rejection.

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Ethics

The warrior against ‘fake news’ promotes fake news

A fake cover of Time magazine has been discovered on display at gold clubs owned by Trump’s business. Time has request the fake cover be removed. I find it hilarious that Trump of all people has a fake magazine cover featuring him displayed in  his businesses. This is the person who bemoans fake news published by mainstream news outlets, like Time. This story is another example of the strange times in which we live. What a jerk.

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magazines

MALWARE WARNING.

A new malware attack on computers is sweeping the world. It has hit the UK government, big businesses (shutting down the Cadbury factory in Tasmania) and small businesses. Please protect your business. Here is our advice.

  1. Tell all who use your computers to not open any emails that look suspicious in any way.
  2. Do not click on any links unless you are 100% sure.
  3. Do not open attachments unless you are 100% sure.
  4. Make sure you have the latest Windows update running on every computer.
  5. Never connect a computer to your network unless you are sure it is clean.
  6. Advise all employees of these requirements.

The easiest way to recover is if you use a professional cloud backup.

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Newsagency management

Beware those who want you to fail

There are people who have left the newsagency channel yet remain interested and sometimes and criticise newsagents and their suppliers. Some of them come across with the attitude of I failed so you must fail too.

There are others i the channel who have adopted a path different to yours yet seek to talk down success you may report as it challenges their own narrative.

I think it is important to ignore these folks, for your own peace of mind and for the benefit of your business.

Those who have left the channel are done with the channel, they have walked away, closed their businesses, sold their businesses or quit their newsagency supplier jobs. We should wish them all the best and encourage them to turn their back for whatever is next for them.

The obsession of some about the channel they left is sad to see. It is dangerous too as there are some who do listen to them, and their businesses suffer as a consequence.

Those still in the channel but following a different path to yours should watch their path as that is more important to them than how you might be going along your path.

The newsagency channel and retail are changing at a rapid pace, faster than any time I can recall in my years of engagement with the channel and retail. That faster pace makes the opinions of those who have left and those not evolving sufficiently irrelevant. This is what I say ignore them.

Attention is best spent on what we each of us see in front of us, in the context of our businesses. There is plenty to see. Online and offline. And, I expect the pace of change to keep increasing, for the future.

Online is fascinating is that its horizon is far wider than the narrow path we see as the proprietor of a physical store.

What we sell and how we sell it has fundamentally changed, forever. In just the last six months there has been a seismic shift that engaged newsagents are seeing and embracing.

Be wary of those who talk you down and talk engaged newsagents down. Their negative talk will not serve you well. Rather it is likely aimed at you joining them in their pity party.

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Ethics

Nostalgia

I saw this nice bit of history for sale in a store on Smith Street Collingwood on the weekend.

From back at a time when newspapers published news and were less engaged in pushing proprietor serving and other agendas. #thosewerethedays

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Newspapers

Uncensored magazine

Uncensored can be a challenging magazine to display. This issue could easily sit with the newspapers instead of fringe titles. It could also be promoted online – depending who you want to attract. That it continues to be published speaks to diversity.

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magazines

A strange newspaper story

Published on news.com.au today:

Vic woman arrested for dumping newspapers

A woman is expected to be charged with “aggravated littering” for allegedly dumping large quantities of newspapers across at least six Melbourne suburbs.

The 54-year-old Narre Warren woman was arrested on Monday after allegedly dumping bundles of newspapers over several weeks in Beaconsfield Upper, Narre Warren North, Pakenham Upper, Cockatoo, Yarra Glen and Yea.

She has been released and is expected to be charged on summons with obtaining financial advantage by deception and three counts of aggravated littering, police say.

I’d love to know more about this story, plenty more.

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Newspaper distribution

Leveraging the Back to the Future DeLorean partwork

With the TVC on air right now, pitching this partwork launch at the front of the business is vital, right now as people will look for it. That is what we are doing – front of store display and placement with pop culture products.

I get the the partworks supply model inn Australia is as broken as ever and that there is no will by partworks publishers to solve this.

Sure there will be words of comfort if we complain to Gotch but the reality is nothing has changed for partworks.

So, the best approach is to promote the hell out of any launch so that the first issue is a success for the business, attracting new shoppers, encouraging them to taste other parts of the  business. That is what we are doing.

I like this DeLorean partwork. It will work well. However, we can no longer be certain of supply right through. We will sign people up if they ask but we will not push hard for them to sign up, not like we used to.

I have reached this conclusion having seen the web address prominently promoted on the front of issue one and having gone to the website, to see what is pitched there. Here is their offer for subscribers:

EXCLUSIVE BENEFITS FOR SUBSCRIBERS…
Never miss an issue
Delivery direct to your door
Eaglemoss customer guarantee receive these 3 superb gifts absolutely free and never miss an issue!
You can cancel at any time
Free delivery (uk only)
Dedicated customer service email

It is the near miss an issue promise with which newsagents cannot compete – because of the poor supply model by the publishers and distributor,. Shame on them for using us as they do and then ensuring people stop using us. It is galling.

I know of plenty newsagents who would take on partworks and actively promote them if there was a guarantee they would never miss an issue.

We can’t compete with the publisher as their actions disadvantage us.

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Ethics

Dumping fidget spinners

Amart Sports are dumping fidget spinners with a multi buy offer at the counter. The chap I spoke with said they were not moving, even with the additional 20% off on the weekend.

This product really has run its race in retail. Make sure you are not left with stock.

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Newsagency management

Sunday newsagency management tip: are you ready for EOFY?

It is the end of the financial year in a few days, are you ready? At the very basic level, here is what you should do at the close of business on June 30:

  1. Take a backup. Mark it your June 30 back up. Store it in a safe place.
  2. Run a stock listing report. Include all stock with a quantity on hand of 1 or more. Save this as a PDF. Email the report to yourself as an extra backup.
  3. Print a customer debtors report. Email the report to yourself as an extra backup.

If you have accurate stock on hand data, through well managed stock moment management, you will not need to do an EOFY stock take.

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Management tip

Sunday newsagency marketing tip: optimism sells

Without a doubt, pitching optimism in-store and online works a treat. It is easy to do this through the products we stock. Customers love it, they love the optimistic product at the counter, the happy Facebook post the range of optimistic products in their own section among gifts.

There are plenty of gift and other niche product suppliers of wonderful optimistic and happy products that work in this situation.

Take the journal in the photo, placed at the counter it picked up, browsed and, often, purchased. It is a perfect product through which we can make a pitch about the business that is outside what customers expect of us.

Stocking products like this is a good example of how our inventory decisions can play perfectly into a marketing plan designed to recast the appeal of the business.

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marketing

Cards and wrap driving traffic and basket depth growth

We are experiencing terrific year on year growth in card sales. The May numbers on a same-store year-on-year comparison basis are terrific.

Looking across this you have May 2017 in the numbers to the left. next, you have May 2016. Then, you have the variance.

Unit sales and revenue are tracking very well.

Unit sales are up 24% and revenue is up 30%. These results are more than four times the industry average right now.

Looking at the business, which is in a highly competitive space, I see the results as being driven by:

  1. An easily shopped display located from the entrance of the business, offering a good view of the products.
  2. Engaged staff.
  3. Shop floor service.
  4. regular social media promotion.
  5. Instant gratification loyalty.
  6. Longer term shopper loyalty.
  7. Counter offer for impulse purchase of cards.
  8. Store exit offer pitching cards.

Cards are an easy sell in newsagencies if they are done right and maintained daily to be best-practice. My view is the list above reflects what I see as being done right.

Too often newsagents rely on card company reps to manage cards. They are not retailers. They rarely have the skills necessary to drive the success you can have with cards.

The more you engage yourselves in-store the more success you can have.

There is growth here for the taking by engaged newsagents.  This is an opportunity for a self made good new story for all of us, in every situation, regardless of location or population.

14 likes
giftwrap
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