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

Author: Mark Fletcher

Telstra outage hurting small business retail including newsagents

Newsagents across Australia have been hit again by faults with the Telstra network. Retailers are affected where they run the business through a server located outside the business. They are also affected when EFTPOS terminals do not have phone line access.

I know of one business that had no EFTPOS for five days. They spent countless hours on the phone to Telstra only to receive different advice each time, none of it satisfactory.

The experience is a reminder of the importance of having appropriate contingencies in place so the business can continue to trade should the primary network be down.

Telstra ought to be on the front foot regarding compensation. Free data is not the answer here as many small business retailers I have spoken with have lost money through the register, money many will not get back unless Telstra pays compensation.

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Ethics

Nextra and newsXpress support Red Nose Day

IMG_0140The Nextra and newsXpress marketing groups are carrying the flag for Red Nose Day within the newsagency channel.

In my own business I am also promoting engagement with Red Nose Day online on social media. This is receiving support from red Nose day ambassadors, extending the reach of the link between the brand of my shop and the Red Nose Day brand.

Red Nose Day is an excellent cause.

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marketing

Checking out Dollar Tree in the US

In Las Vegas last week I got to a Dollar Tree store. Dollar Tree is a chain of more than 13,000 stores across the US where everything is $1. It is like the Reject Shop in Australia but more focussed on a price point and much bigger.

I have seen Dollar Tree evolve over the years. I visited again last week to see their current greeting card offer.

The images below show a broad range, satisfying any card giving occasion. While some cards are $1.00 each others are two for $1.00.

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The cards are from American Greetings.

Will we see anything like this here in Australia? I expect so. You only have to look at the success of Aldi to understand the support for a value offer in Australia.

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Greeting Cards

Sunday newsagency management tip: say no to reps who just turn up

Reps who turn up in your newsagency without an appointment can take up valuable time. My advice is – no appointment, no meeting. They soon get the message.

While some people like the interruption of a rep visit or the free coffee that could come from listening to them in a nearby cafe, the reality is many rep visits are a waste of time.

Any visit ought to run to a set time, have a specific goal and be at a time you approve. Otherwise it could cost you more than it should.

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Management tip

Sunday newsagency marketing tip: connect with platforms that promote you

Some smart and engaged local newspapers and magazines actively support their display advertisers with a promise to share Facebook posts and re-tweet tweets.

What this means is you run an ad and beyond the ad itself, what you post on social media can reach a wider audience as they promote you.

In one situation recently a newsagent reached 500 people on their business Facebook page and the share by an engaged local publisher helped them reach another 6,000. That single share brought in excellent new traffic business.

Sometimes, the value of an ad spend comes not from the ad itself.

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marketing

Fact checking Mathias Cormann’s claims about Bill Shorten and newsagents

On May 13, Mathias Cormann, Liberal senator for Western Australia and current Finance Minister tweeted: Bill Shorten confirms that he opposes tax cuts for newsagents, bakers, chemists and many other small businesses around Australia. here is a screen cap from Twitter

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The tweet was retweeted 19 times including by the official Twitter accounts of the Liberal party and the National party, follow politicians and others.

This tweet mentioning newsagents reached over 200,000 people.

I was curious about the tweet as I had not heard of opposition to tax cuts for newsagents from Bill Shorten, so I asked Mathias Cormann as question in report to his tweet, on Twitter: Can you please provide evidence of this claim?  I figured since he put the claim out there on Twitter this was the best place to engage with simon it as Twitter is a platform enabling conversations after all.

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I genuinely expected a response quickly. Cormann did not respond. In fact, I waited a week and then tweeted Cormann again:  I know you’re busy chasing re-election but we pay your wage. Please provide evidence of your claim. .

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As of this morning, Saturday, May 21, Cormann has not responded nor have any of his political allies engaged further on this thread.

All I want is the evidence on which Mr Cormann has based his claim. If you read the thread you will see people attacking Cormann on the issue, themselves making political statements. My two tweets do not make nor are they intended to make any political statement. I have only one question – please provide evidence supporting your claim.

Any politician engaging on social media ought to be prepared to respond to queries on social media. I consider a tweet to be like someone standing on a street corner, on a box, making a speech to anyone within earshot.

On Twitter, I am within earshot of Mr Cormann. I am in the crowd listening to him. He has made a statement and I asked him a question as anyone could do in a crowd listening to him on a street corner.

It is disappointing Mr Cormann has ignored my one simple question.

So, I hit the internet to try and find evidence supporting Cormann’s claim. The only evidence I could find related to Bill Shorten’s budget reply speech where he says Labor supports tax cuts for small businesses. he goes on to say: Labor will support a tax cut for small business – but unlike the Prime Minister – we will not use this as camouflage for a massive tax cut to big multinationals.

In this he is referring to the re-definition of small businesses to be those earning up $10M and the proposed ramping up of tax cuts through to bigger businesses as laid out in the Coalition government budget.

I searched the Internet using a range of search strings and the only reference I could find to Mr Shorten and newsagents was one unrelated story in the AFR.

The only justification Mr Cormann might rely on is the budget response speech. However that does not stack up for the vast majority of newsagents fall within the $2M turnover threshold supported by Labor on the matter of tax cuts.

It frustrates me when any politician from any party makes a claim about an opponent for which there is no evidence to support the claim. My frustration turns to despair for our country when a simple question to a politician asking for evidence of such a claim is ignored.

All I can conclude is that Mr Cormann does not have the evidence to support his claim that Labour opposes tax cuts for newsagents, bakers, chemists and many other small businesses.

Mr Cormann was happy to take the claim yet has not had the respect of democracy to show the claim is true.

All this matters to me because small business is a key topic in this election. This agenda was set in the Government’s budget. They put small business on the table in the policy debate. Labor joined them in talking about small business.

Any politician talking about their opponents and their small business policy ought to be prepared to back claims about opponents with facts. Regardless of who one votes for, the truth matters.

Footnote: turnover will only include agency commission. So, for lottery products, transport tickets, phonecard sales, mobile phone top up etc. you only include commission in your turnover figure.

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Ethics

Walmart customer service focus

Walmart helps banana shoppers choose bananas that are safe to eat based on the colour of the bananas. My first reaction was who needs this and then I realised that regardless of whether I need it or not, it is a customer service that costs Walmart little yet puts them in a good light.

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This made we think of opportunities in newsagencies for demystifying things we sell. Officeworks is doing some of this in the stationery space already.

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Customer Service

Steven Lowey of Westfield on the new landlord model and the Westfield Cloud

IMG_0063Steven Lowey of Westfield spoke at Shoptalk 2016 Tuesday in Las Vegas, introducing us to the Westfield Cloud, what he calls a connective tissue between shops and shoppers. he went on to call it a cultural shift in sharing data.

Westfield has a centre in London where they are trialling the technology live, connecting retailers and shoppers in a way never done by landlords until now.

Westfield has made an extraordinary investment in developing technology and partnering with tech companies to address knowing who is shopping in a centre, where they are, the retailers they like and retailers they may visit.

The example video shown looked futuristic – however, this is what is being trialled by Westfield in London now.

They have solved issues common in shopping centres of tracking shoppers by their phones by retrofitting technology to track and engage shoppers. While this opens considerable privacy issues for the company it does present retailers a completely fresh type of engagement with people in a centre.

Those of us in Westfield centres could have an opportunity soon enough to spend more money with the company to leverage shoppers in or near our centres in a fresh way, a smart way based on information Westfield knows about shoppers, information are unlikely to know. This is one small part of the Westfield innovation that could change shopping mall retailing in the next phase of retail innovation.

While there are privacy issues, retailers, big retailers especially, see tapping into shopper proximity and other data as key to personalising shopping experiences in ays big retailers are challenged with.

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newsagency of the future

SHOPTALK 2016

I have been in Las Vegas this week at Shoptalk, a retail / tech conference that dig deep into online and offline retail, considering different models, trends and the shopper experience.

Shoptalk was different to many conferences I have attended – there was very little PowerPoint, sessions were short and on topic, there was considerable honesty about trends and speedhunps and there was an honesty about the place of the various type of retail including high street and online.

Most conferences run from 9 to 4 or 5 in the afternoon. Shoptalk ran from 8 to 6. This is interesting as the long day speaks to the focus of the organisers, participating speakers and attendees to the speed and scope of change relaxing to retail right now. It was a high energy conference with many announcements, plenty of start-ups represented and some extraordinary technology on show.

The other difference is in attendee engagement. Most the the 3,000 attendees engaged from start to end. This is rare for tech conferences.

While I am not planning on sharing insights here at this time I will note that at the end of one session, I said to a colleague – I feel like my head is exploding.  Over the course of 100 minutes, four presenters from international companies reset boundaries of what could be possible for high street retailers engaging online.

The big challenge for independent small business retailers is how to remain relevant in such a rapidly changing world, especially a world that is generations removed from what you may be transacting in today.

More soon on this.

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Newsagency management

A heartwarming newsagency transformation

I am grateful for the opportunity to visit a newsagency in the Northern Territory last week that I first go to see late last year. What I saw last Wednesday was a different business. I wish I had a before photo to show. In it you would see a traditional newsagency – clean, neat but traditional, not doing anything to attract new shoppers.

This was a good newsagency but not growing, not exploring opportunities outside of magazines, newspapers, lotteries, cards and stationery. As the business is right next to a supermarket with all these items it needed to differentiate.

The business I saw Wednesday last week was different.

The best word I can use to describe what I was is: optimistic. Yes, this business looked and felt optimistic.

I am not sure the optimism I saw it is captured in this photo I took though.

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The refreshed and refocused business is attracting new shoppers through ranging different, non traditional, products and displaying them in an appealing way. It is also leveraging existing traffic for greater efficiency.

The photos faces into the newsagency from the entrance. That space you see, the dance floor, is a fresh space changing every two weeks, making the business more appealing than ever and making a fresh pitch to reflect change, to combat store-blindness of regulars. The space you see provides a fresh appeal. Products are zoned, shop ability is high.

Some key changes are not seen in this photo though. The windows out of shot of the photo are pitching products that appeal to demos not usually that well served in newsagencies, demos that are shopping with the shop.

I think the biggest change is in the approach to business. This business and those in it are having a go at finding a brighter future. That is reflected in buying, displays and promotion. They are doing things now they would not have done a year ago. And each thing do, each new product they carry, each marketing pitch they make, they learn from whether it is financially successful or not.

And as I write this I think about that uniquely Aussie thing of having a go as I think it is key to the mindset and to the optimism I am seeing.

Not so much in this newsagency but in some I have seen recently, some newsagents have lost the energy to have a go. Those who do have a go and who encounter a good response, financial or not, are encouraged to have a go more and more and this is what ultimately results in valuable change and an optimistic outlook.

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Newsagency management

Leveraging Finding Dory in the newsagency

IMG_9935We have Finding Dory licenced products ranging across several departments in-store and are using these online and on the lease line in-store to attract traffic.

My experience with licences is that range is essential to success. A display unit of cards works okay but place it with activity books and other products and you gain more attention. It also helps you promote a range that is different to what other retailers may do.

The other move I have found helps drive success with licences is having more than one location in-store. There is good research supporting the importance of several touchpoints to guide sales success.

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Gifts

Money gift card holders

The range of money/ gift card holders in the US for all major seasons is far superior to what we have in Australia. It’s a missed opportunity for us. My experience is money holders usually sell out first at Christmas.  Here are three designs from an extensive range for graduation in the US this year.

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Greeting Cards

Finding ways to draw attention to magazines in the newsagency

IMG_9915 (1)We are always looking for fresh ways to draw attention to magazines in the newsagency, to have people stop and take notice instead of walking on by to their in-store destination.

While a common activity in a newsagency is to feature magazines at the counter or on the lease line facing outside the shop, another activity that we find works is the placement of other products that themselves draw the attention of shoppers.

The photo shows a placement of carefully selected plush items at the base of the crossword display. The plush items are on the floor, to attract attention of kids and those who buy for kids. While looking at the plush items enough shoppers are noticing the crossword range to make the tactical placement worthwhile.

I see this activity, the placement of products with magazines to draw attention to magazines, as a marketing activity for the newsagency.

This location is at the rear of the business, in an out of the way corner – so it was important for us to draw attention of people in the shop who are not there to intending to purchase crossword titles. The placement is about interrupting their attention, but to do so with some subtlety.

We have done this before, placed products from other departments with, next to or in front of magazines to draw attention to magazines. I think it is important, indeed more important today with magazines not generating the foot traffic they used to years ago. We have to work harder at drawing traffic, including from people in our shops.

While a large magazine department with an excellent range is important and makes a destination purchase statement, we need to cleverly engage with all shoppers in the store to have them notice magazines.

What works for you will be different to what works for me. The thinking around the plush item selection was the number of families shopping with us as well as the number of retirees, who purchase for grandkids and great grandkids.

The magazine categories where I see this type of attention-grabbing placement working are: crosswords (of course), craft, auto, food and fashion. Each of these is on my list because of good allied product available to draw attention of the appropriate shopper.

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magazines

Wonderful new Hallmark card range

IMG_0003I like this new (small) range from Hallmark, promoting hand drawn art. We are not placing the small range in regular fixtures as the cover needs to be seen to be appreciated. We have it in a feature section in the card department. One customer purchased several from the range on the weekend, commenting about how different they looked.

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Greeting Cards

The importance of the new driver opportunity for newsagents

IMG_9978I am confident a survey in Australia asking people where they would purchase learner driver handbooks and L and P plates of different types would show newsagencies as one of the top destination stores, if not the absolute top. We can better own this opportunity.

I know in my newsagency most purchases of these items are destination purchases. They are a good traffic driver for us.

Thinking about this on the weekend, as a result of serving a customer, I realised we (I) do not do enough to leverage the opportunity. While we have a good range of product, in a stable location, well displayed and easily shopped, we are not promoting the opportunity outside the location or outside the newsagency.

While we could rest on our laurels and maintain good sales by doing what we do today, I wonder if there is an opportunity to increase sales of what is a staple category for every newsagency by promoting the opportunity outside the business and promoting it better inside the business through a front of store feature from time to time.

These are products people need and that, for the most part, have not been replaced by a digital alternative. They also allow us to connect our businesses to an interesting mix of people beyond what is obvious. For example, selling to new migrants presents a new opportunity. However, unless we seek they out they may not think of us.

My own plan is to run a front of store display to coincide with a promotion of gifts for new drivers, cards for new drivers as well as these instruction books and L plates and P plates. Linked with the display will be out of store promotion, on social media, connecting the learner driver and new driver opportunity in my local area with the newsagency.

I think this type of marketing, for products for which we think we are already well-known, is vital to our businesses, to shore up the community knowledge and connect with some who may not have us top of mind for these products.

Marketing like I am suggesting is inexpensive, under $10 – and well worth it even if it finds one or two new shoppers.

Whereas in the past we relied on traffic for a small number of mega categories in our businesses, today our future relies on leveraging many categories, each delivering small amounts of traffic. Promoting learner driver manuals and P and L plates is an important, if small, marketing activity for any newsagent.

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Management tip

Magazine unit sales in newsagencies decline 10.7% in March quarter

RETAIL NEWSAGENCY SALES BENCHMARK STUDY: JAN–MAR 2016 vs. 2015

This year on year same-store newsagency sales benchmark study is an analysis of basket data from 163 newsagencies: city and country, shopping centre and high street, banner groups (Newspower, Nextra, newsXpress) and independent.

2016 has kicked off with a challenging first quarter for many newsagents, traffic and revenue are down year on year and still too few are embracing categories outside what has been traditional for the channel.

Too many newsagents are drifting, waiting for something to happen rather than forcing change in their businesses.

  • Customer traffic. 67% of newsagents report average decline of 1.8%.
  • Overall sales. 75% reported an average revenue decline of 1.3%.
  • Basket depth. 62% report a 1.8% decrease in basket size.
  • Basket dollar value. 68% report a decrease in basket value of 1.9%.
  • Discounting. 33% of respondents use a structured loyalty offer such as points or some other discount.

Benchmark results by key departments:

  1. Magazines. 82% of report an average decline in unit sales of 10.7%. The average decline in weeklies was 10.9%.
  2. Newspapers. 78% report average decline in over the counter unit sales of 6.9%. The decline was somewhat contained by promotions but nowhere near as much as has happened with promotions in the past.
  3. Greeting cards. 62% of report average revenue decline of 3.2%. This is concerning.
  4. Lotteries. 62% of those with lotteries report average decline of 2% in transactions.
  5. Stationery. 73% of newsagents report a decline, with an average of 5.4%.
  6. Ink. 28% of stores report ink separately. Of these, 54% reported increase of 3%.
  7. Gifts. Of the 61% with gifts, 67% report average growth of 6.2%.
  8. Tobacco. Of the 42% with tobacco, 82% report an average decline of 17%.
  9. Confectionery. 63% of stores reported an average decline of 5%.
  10. Toys. Of the 20% with toys, 62% report growth of 5%.

Data from the newsagents included in the study indicate extraordinary differences between businesses at either end of the performance scale.

For example, in one newsagency, magazine sales are down 35%, cards are down 13%, stationery is down 11%. The business does not sell gifts, toys or anything outside the very traditional core newsagency mix. This business is in serious trouble.

In another newsagency, magazine sales are down 22%, cards are down .5%, gifts are up 17% and account for more revenue than cards. Toys are up 250% as a result of this being a relatively new category for the business. What the business is losing in one category it is gaining in another because of deliberate decisions being taken.

There is good news for newsagents working on their businesses, pursuing new traffic. I see this working in many situations.

In terms of magazines, looking closely at a subset of businesses in the benchmark study, I can see no evidence of in-store marketing for magazine driving sales. Businesses with excellent aisle-end displays experienced results similar to those businesses that did little or no in-store promotion.

In the last study, I saw results for a store that reflected a considerable turnaround. I made a video of the story: https://youtu.be/f-YilFlFG68 This same store has delivered excellent results this quarter, achieving further growth.

In my own newsagency: key category numbers off a good base, are: Diaries: up 219%. Cards up 17%. Gifts up 25% and account for 16% of sales; Magazines down 3% and weeklies down 3%; Stationery up 3%, Plush up 33%. Traffic: down 6%; Average Sale Value: up 10%; Average Item Value: up 5%. Revenue up 4%. This business has no agency products.

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 newsagency marketing group newsXpress and through my newsagency software company Tower Systems:

  1. Gross profit: this is the goal gross profit for all product sales not taking into account any revenue or costs related to any agency business. The traditional newsagency average is 28% to 32%. For a newsagency focused on the future, the goal has to be at least 45%.
  1. Ratio of Gift revenue to Card revenue: 50% minimum. The goal ought to be 100% or more. If you do $100K a year in cards, target to do $100K in gifts, or more.
  2. Revenue per employee – $250 an hour minimum.
  3. Revenue PSQM $4,500 – $8,500 depending on country versus city / high street to shopping centre and depending of the product mix. Higher GP lower revenue required.
  4. Overall revenue mix percentage targets: Cards: 25%; Gifts/toys/plush: 25%; Stat: 10%; magazines/newspapers: 20%; other: 15%.
  5. FLOORSPACE ALLOCATION: Cards: 25%; Gifts/toys/plush: 25%; Stat: 8%; magazines/newspapers: 15%; other products: 15%; office/back room / counter: 12%. It’s rare you make money from an office or store room.
  6. Mark-up goals: Stationery: 125%; Gifts 110%; plush: 110%.
  7. Occupancy cost: between 9% and 11% of revenue where revenue is product revenue plus commission from agency lines. Location and situation are a big factor in this benchmark. For example, a large shopping centre business will have a higher cost than a high street situation. NOTE: It is easy to say the landlord is responsible for this ratio. As the retailer you are responsible for margin and revenue.
  8. Labour cost: between 9% and 11% of revenue where revenue is product revenue plus commission from agency lines. Labour cost should include fair market costs for all who work in the business. (See above).
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Newsagency benchmark

Sunday newsagency challenge: get rid of department keys

Department keys used in newsagencies running any of the newsagency POS software packages result in poor business data. Every time you use a department key you deny the business the opportunity to reasonably track data. There is not a single situation I can think of in a newsagency today where use of a department key is warranted.

Newsagencies using department keys are more open to employee theft.

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Newsagency challenges

Sunday newsagency marketing tip: the Turtles are back!

IMG_9926Are you making the most of the imminent return of the Teenage Mutant Ninja Turtles in a new movie? This photo shows the display at the counter of the newsagency. We have a range of TMNT products from several suppliers. The range is being promoted online to attract people who might not usually think of us for TMNT product.

I love the green trim used on the display, this connects with the key colour used in TMNT creative over the years.

If you are thinking this is not for you, TMNT has a broad appeal from those discovering it for the first time through the new movie to kids who started with the brand in in the 1980s through the first comic or the TV series. We are seeing people interested ranging from five (or younger) through to mid thirties.

This is my marketing tip today because some of the most successful marketing at the moment is through licences.

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marketing

Sunday newsagency management tip: leveraging being local

You know the pitch: Local businesses create jobs. They provide opportunities for school leavers and university graduates.

Local businesses share the local narrative. Through what we all do and how we do it we share the fabric of our communities.

Local businesses contribute to the local and Australian economies. We pay local government, state and federal taxes. These taxes pay for schools, health services roads and more.

Online businesses and many overseas businesses don’t serve and support your local community the way you do and my businesses do.

You are sure to want people to do business with you not out of pity but because of what you do and how you do it. Here ware practical ways encode local connections in a valuable way:

  1. Share local product information – on your shopper receipts. If there is a care or use element that can have a local connection or focus for a product, include this information in an auto-generated not on your receipt.
  2. When you sell a locally made item, have that information pop-up so your team member can thank a customer for buying a local product.
  3. Include country of origin on product data for products you sell.
  4. At every touch point opportunity, on receipts, product labels, at the counter and elsewhere seize opportunities to add value, local value, value from you in the form of information, advice and comments that your competitors, especially online competitors will not an cannot offer when they sell similar items.
  5. Include being local in your tag line on receipts and with your logo: Local and proud of it! Or something like this.
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Management tip

Laughing at the newsagency counter on a Saturday

IMG_9929I never thought I would see this in a newsagency the customer said with a smile today. She then showed the soap to her shopping companion who listed some people they could give the soap to.

It made my day for it showed the tactical counter placement being noticed and gave us another customer who will not think of us as being traditional.

There is no future in being a traditional newsagency.

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newsagency of the future
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