I have been contacted by a newsagent expressing concern about another newsagent who sells in-store and online magazines and newspaper publisher supplied items they have processed for return, for which they have received credit.
This behaviour is unethical, it gives our channel a bad name and is likely to lead to more audits of returns costing all newsagents time.
I was talking to a newsagent last week who said they don’t have time to scan their sales so they use their out of date computer system as a cash register and process magazine returns through the Gotch website.
Data is vital in guiding the best business decisions you can make. By not tracking sales you open yourself to undetectable theft, poor decisions, a less attractive business when you decide to sell, slower customer throughput and being out of date with today’s marketplace.
Retailers need to own their data situation. It is 100% on them to respect data as much as you respect cash.
A newsagent colleague recently was stolen from by an employee. The cost to the business was $2,500. The person’s story at the interview was they had been out of the workforce for a year taking time off. However, given their age and health the story did not make sense. But it was not questioned. The reality is they were working in another newsagency for much of the year and were intimately sacked because of theft. They paid money back and left without prosecution. They found a new job in a newsagency an hour from the old job and the new boss eventually discovered their dishonesty.
If there is a gap in a resume, pursue it, ask questions. If you are not sure, don’t hire them.
There are people who like working in newsagencies because of the family aspect and the last of strict controls managing cash. This can provide a window long enough for them to steal, as they did in the latest case, thousands of dollars.
Employee theft costs between three and five times more than shopper theft yet small business retailers obsess about shopper they and tend to ignore employee theft – until it hurst them.
Newsagents that are members of the Pacific magazines nexus program has access to a free email service allowing you to send an email to customers in the database you have built every two weeks.
I know form personal experience these emails work. I have had people in the newsagency as a direct result of receiving an email.
The service is free. Emails are easy to setup.
This is no brainer marketing in my view.
In the first three hours of today 50% of the shoppers entering the business were new shoppers thanks to a major promotion and the front of store pitch into the shopping mall. Here is what the ‘newsagency’ looks like today:
As the headline says, the best way to get new people into your newsagency is for the business to not look like a newsagency as a business that looks like a newsagency connects with old memories that are most likely not relevant to most shoppers today.
Sales are excellent. GP is nicely above 50%. A good number of the new shoppers are connecting with our multi layered loyalty programs and will be back.
Attracting new traffic is a complex task that required planning and excellent in-store execution. Key to success is changing shopper perception about what the business is.
I was surprised to see many eBay sellers offering the recent News Corp. Hasbro Board Games including this one that has sold 57 units so far.
Looking further at some of the sellers it is surprising the extent of their offers. I’d love to know the revenue they are generating and if this makes the promotions worthwhile in the long run.
One newsagent received a magazine bundle with part of a banana crushed on the outside of the bundle. In the middle of bundle was the rest of the banana. Sticky and messy.
This leads me to ask the question: what surprises have you found in magazine bundles?
A newsagent I spoke with yesterday told be about an unopened condom pack – seriously.
Universal Magazines has a range of journals under the brand of Signature. I was sent a pack recently. I like the product as do others in the office.
The model is a challenge. 33% GP is insufficient. GP should be 50%+. Calling what we make commission demonstrates a disconnect with our model today.
Sale or return does not help. nor does delayed billing in that it is easy to get terms like 60 days or close to without much difficulty.
At the Hong Kong Gift fair a few weeks ago I saw journals like these with a similar look and a matching quality. If I was bringing in a container I could land them for around 20% of the suggested retail price. There are wholesalers doing this and knocking on newsagent doors. Making tough competition a challenge for Universal too.
The final issue is the story. Many of us want stationery related items that fall into a broader category story. While I like the two stands Universal has for this product, it is the the size story I am looking for.
I applaud Universal for trying. next time they should listen more carefully before sourcing products.
I have heard from several newsagents in Queensland this week who are concerned at the move by Tatts to sweep retailer accounts twice a week.
This post today is at their request, to open the topic for discussion by those who already experience this and those who expect it to commence soon.
Please share your experiences.
I was surprised to see Darrell Lea liquorice at Officeworks in Pitt Street Sydney yesterday. The Officeworks price is $1.00 per pack higher than I can easily find it elsewhere. So much of the Officeworks low prices claim in their expensive ad campaigns.
The other surprise was the placement of the product in a dump bin, next to what look like cheap products. This is not the type of representation I expect to see for a quality brand.
Dump bins in Australian retail typically suggest a deal. This is not a deal.
If you sell Darrell Lea and have an Officeworks nearby, be aware.
newsXpress kicks off a national TV campaign today, launching its EXCLUSIVE National Beanie Boo Week, to coincide with the launch of six exclusive to newsXpress Beanie Boos. Here is the call to action TVC:
This campaign is not costing newsXpress members anything. In addition to the TVC, newsXpress has provided members free stock to give away, A1 posters for in-store, flyers for local distribution, a colouring competition and more. Do a Google search for Beanie Boos and see our online strategy. The store-connected newsXpress site is the second highest ranked Australian site – ahead of Toys R Us and KidStuff.
The Beanie Boo TV commercial and National Beanie Boo Week campaign by newsXpress are part of an integrated campaign of transformation. Regulars here would know I think transformation is mission critical for newsagents.
Through careful targeting, newsXpress guides members to find new shoppers in four valuable and specific demographics with little overlap. This is all about finding new traffic, which is vital for any newsagency business.
Through new products and some exclusive products, in-store engagement, online marketing and other activities, newsXpress is helping members not only find new traffic but to lift overall business GP.
The newsXpress online strategy is driving in-store traffic as well as online sales. In a few hours yesterday, for example, one of our six public websites generated more than $1,000 in sales for several newsXpress stores and led to calls and emails to newsXpress members seeking out products.
My opinion is the old-school traditional newsagency has no future. Further, the old-school traditional retail business website has no future. The brand focus is paying off with local newsXpress businesses being found easily when people are searching on their phones and online for popular brands.
I am a Director of newsXpress.
I took this photo in a newsagency recently. This business tries hard to display magazines well yet every week they are sent far more than they can reasonable display.
Magazine publishers take a look – you cause this.
This is one section of the magazine department. There are two others like this.
No wonder there are newsagency businesses without a magazine department.
I am shocked that in 2016 there are still newsagents who store their newspaper wrapping machine in the shop window – blocking a view inside the shop and not using the window to display products for sale.
This is crazy! Yet is is happening today.
No matter how small the town and how little passing traffic you get, a shop window ought to be treated with respect and offer a window on the retail business. It is the most valuable retail real estate after all.
Using a street frontage window as storage space is ridiculous, clearly not the kind of move you would expect from a retailer.
The answer to my question How does a wrapping machine in the shop window drive traffic? is: it doesn’t. To me, a wrapping machine in the window says this shop is not worth visiting, whatsoever. The shop must be old-school to of date and more focussed on one retail activity. Surely it cannot have any products of interest.
I was surprised to see this newsagent exclusive adult colouring magazine pack with free felt Paper Mate pens. I say surprised because I’d not heard about it. Usually, good national promotions get noticed. I only discovered the pack last week. I like the pack and that it is exclusive to newsagency businesses.
While adult colouring is not the segment it once was, there is enough remaining interest for quality titles to warrant some regular space allocation.
This has been a challenging quarter for newsagents. The overall traffic decline is one of the largest in recent benchmark studies.
The decline is due to declines in traffic for core newsagency lines: newspapers, magazines, tobacco and stationery. The increase in transaction count for lotteries is not driving an increase in non lottery product purchases. Indeed, lotteries is one of the most inefficient product categories in newsagencies – by this I mean, people purchase lottery products and nothing else in a visit, like the majority of newspaper purchases.
The good news in the survey is the improved performance in newsagency businesses embracing change. New traffic drivers are working and expansion in gifts, toys and other better margin categories are improving the overall GP story in these businesses.
There is no doubt change is afoot in the newsagency channel. There is considerable evidence in this latest benchmark study of greater difference between businesses. The gap between those performing the best and those performing the worst is the biggest I have ever seen.
The data pool for this survey is the broadest I have had in the last two years in terms of different rooftops represented and number. I am grateful to the bigger pool of 170+ newsagents participating.
There is good news in these benchmark results, especially for newsagents who are working their business as retailers.
Benchmark results by key departments:
Here are some insights from analysis of the data:
DOES THE NEWSAGENCY CHANNEL HAVE A FUTURE?
Given the number of poor performing businesses in the channel it is looking more likely that the channel as a channel does not have a future. In this situation it could be replaced by multiple channels trading under different names. It all depends how each of the marketing groups position themselves over the next year or two.
Urgent change is vital to the future of newsagency businesses. Change on the shop floor to inventory range, shop layout and how those who work in the shop sell.
BLAME.
I blame every supplier who agitated, facilitated and supported in any way the move of papers and magazines into other retail businesses. That move alone in the 1990s put the channel on the path it is on today. As the migration of traffic and revenue to these other businesses made the impact for newsagents of digital disruption a far greater burden to bear.
Today, some of these same suppliers treat newsagents as if still in a regulated environment, effectively making newsagents less competitive than the other outlets they supply. Shame on them.
What these suppliers have today in the newsagency channel is a careful what you wish for moment. Yet most are in denial.
THE ERA OF THE AGENT IS OVER.
Relying on a small percentage of a sale acting as an agent was never a long term business model as it relies on the generosity of the supplier. As we have seen in recent years with falling commission from transport tickets, phone recharge, phone cards and, in real terms, lottery products, agency business has become less valuable.
While there are some who love being an agent for Ladbrokes and other services, you have to ask where the long-term benefit is as these customers are unlikely to be the loyal customers a retail business needs for the long term. I don’t see a long term benefit.
Newsagents who transitioned to being retailers have fared better. There are many success stories including those from businesses that have sustained a considerable decline in revenue but increased profit thanks to a managed GP shift.
It is hard work being an engaged retailer compared to an agent. However, the rewards are greater as you are building a business that attracts loyal shoppers. This is why we should not fear the breakdown of the channel as a channel.
OPTIMISTIC.
I am optimistic for my own newsagency businesses and for the businesses of many newsagents. Well considered changes implemented without high capital cost can attract new shoppers. The right products can bring people back to the business regularly. New customer bases can be found, valuable customer bases where we rely less on competing with supermarkets and others.
Good retailers can make a bright future.
HOW TO USE THESE RESULTS
Look at your own situation. Compare your year on year results with those detailed here. If you are doing worse, act. If you are doing better, celebrate briefly and then get back to it.
There is no time to lose. We are in a period of extraordinary change and challenge on many fronts and the best way to confront change and challenge is to lean in and bring it on.
The business owners of any newsagency are the single most important influence on their results.
WHY I DO THIS STUDY
My interest in the study is as a newsagent and as a supplier to the channel through Tower Systems and through newsXpress. I want the channel to grow for selfish reasons and because it has been my life since 1981. I am invested.
BENCHMARK GOALS
I am often asked for benchmark goals newsagents ought to aim for. Here are some benchmarks I have developed in my work with newsXpress and through Tower Systems:
Mark Fletcher.
Email | mark@towersystems.com.au
M | 0418 321 338
Marketing advice from newsagency suppliers is usually advice that best suits the supplier. This is all about their products being presented in a consistent way. Following their advice can mute your voice, your point of difference.
My advice today is don’t blindly promote as a supplier suggests. Promote in a way that best suits your specific business.
Theft is a cost of doing business in retail. Don’t let theft divert your attention from the bigger picture. Don’t let it get you putting up signs that turn customers off. Don’t let it get you hiding stock from customers.
I see too many retailers obsessing about theft to a point where their obsession costs the business more than the theft they are trying to avoid.
This photo shows what used to be the newspaper stand in this newsagency I visited in in Queensland. The old newspaper stand went from floor to ceiling and reached out toward the front of the store by at least 1.2 metres. The location is just inside the entrance to the small 70 square metre shop in a shopping centre – prime and expensive space. This old newspaper stand location is easily seen from outside the front of the shop, it is perfect for attracting shoppers.
The newspaper stand was completely removed from the business and papers put in a more space efficient stand, still at the front of the shop. The new stand takes up a quarter of the space and is situated in less-expensive real estate at the front.
In the place of the old newspaper stand is the stand of gift items you can see in the photo. This stand has been setup to facilitate easy change.
Take a look at how this change is working:
Newspaper sales in the business have not been harmed by the move.
Yesterday morning, an office worker who works nearby noticed the gifts, and spent $175.00 in a single purchase from the new stand. They came back and spent another $65.00 in a second transaction. This is a new customer for the business purchasing new items for the business. Te total gross profit from the two transactions was $108.00.
This newsagent would need to sell 453 copies of their local daily newspaper to achieve $108.00 in gross profit.
The value of the move goes beyond the two transactions yesterday.
Newspapers are available in more than thirty outlets within a five minute walk of this newsagency. They are also regularly given away metres away from the business by the publisher. The gifts in the stand are not so easily available. Indeed, you wold need to drive to find the closest competitor.
This new customer discovered yesterday as a result of the strategic move to move the newspaper stand is set to be far more valuable to the business over the long term than a newspaper customer won by the stand being in this same location.
The story here presents an argument to use to the newspaper publisher rep who may pressure you to not remove their stand or the magazine publisher who may challenge you considering moving the front of store prime retail space currently allocated to magazines.
This post is about strategy, strategy for finding new traffic, strategy for growing the overall GP of your business, strategy for attracting shoppers who will return to make more valuable purchases.
Every newsagent can do what this newsagent I visited yesterday has done. Every newsagent can transition their business. The steps do not need to be big or bold. They can be often and small.
Yes, this is a newsXpress business, yes, the strategies they are engaging with are newsXpress strategies. yes, I am a director of newsXpress. There is enough information in this post to inspire anyone on moves like I have outlined – regardless of the group you are in.
While some in the channel say rip out your newspaper stand and leave it at that, the better advice is to present viable long-term alternatives to re-locating newspapers to elsewhere and replacing them with a stand that enables moves like I have outlined here.
Any change requires you to think beyond a single move. You need to plan. This is where newsagency marketing groups should shine.
While I will publish the July – September newsagency sales benchmark results Monday, I note the following results for magazines:
These results are in line with the audit results as published at Mumbrella today.
I will have more to say on this on Monday once the report is completed.
If you ever needed evidence that Lottoland is targeting newsagents more so than Tatts, check out their latest TV commercial that has just started airing:
My question for newsagents with lotteries is: what are you doing about this?
Lottoland is attacking the small business newsagency channel as they see it as the weakest link in them gaining a stronger foothold in Australia. I hope you can see that – that they are targeting you ahead of the products you sell. And … Tatts does not appear to be in your corner.
As a newsXpress Director I can advise I have written to authorities about the misrepresentation of newsagents in the Lottoland TVCs, engaged with TV Standards, approached Lottoland Australia and approached Lottoland Europe. I have also written to the Chief Minister of the Northern territory where Lottoland has its licence. while I have little to show for the effort, the effort itself is important.
Also, in this place, representing all newsagents, I have written about Lottoland with some of those posts being picked up by news outlets.
I could be wrong but I suspect my effort is the only effort on behalf of newsagents on this. If others have engaged, please share what you have done.
This is not something to grumble about. No, it is something on which to act.
If you are in a marketing group, ask what they have done. If you are paying money to the ANF (ALNA), ask what they have done on your behalf.
