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

Author: Mark Fletcher

News Corp. newsagent remuneration review for Victoria

News Corp. today announced the results of its remuneration review for distribution newsagents.

  1. An increase in the home delivery fee newsagents are permitted to charge home delivery
    customers they bill for each News publication

    1. Metro agents: increasing from $0.205 per copy to $0.2081 per copy incl GST
    2. Country agents: increasing from $0.2563 per copy to $0.2601 per copy incl GST
  2. An increase in the amount they can charge home delivery customers as a
    postage/administration fee

    1. Increasing from $2.00 to $2.30 incl GST
    2. This can only be charged on each customer invoice if the customer elects to receive their monthly invoice as a hardcopy rather than electronic

It is appalling that a supplier can dictate the fees a small business can charge for such a labour intensive service.

Newsagents, the service providers, ought to be able to charge what they like. But, the system is the system and those in the system entered it knowing the terms.

The fee increase is disrespectful and socially irresponsible.

Victorian distribution agents looking to save money ought to consider quitting VANA, the local newsagent association as VANA is clearly not able to help them on the single most important matter, fair and equitable remuneration. Further, it has never been able to help them. Save the fees and reinvest in your business and you will be better off.

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Newspaper distribution

A fresh looking magazine offer from WH Smith

I had a good look at the magazine department at WH Smith in the Sydney International Terminal yesterday. It is impressive, far superior to what you see in WH Smith stores in the UK. Whereas in the UK they use old unwelcoming fixtures and support them with mediocre lighting, in Sydney I saw fresh fixtures you hardly notice supported by good lighting.

Here are photos. The first is of the back wall. This is what drew me in. 210 magazines. Full face display. Deep pockets negating the need for a waterfall to hold stock.

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Here is business and current affairs.

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Here is home and travel.

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And here is an overall view for context.

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While I would not allocate this much space in a more competitive situation than an airport terminal, I do like what WH Smith has done here. I hope the photos provide inspiration to newsagents considering shoplifts.

Note, not one of the fixtures is purpose built. All can be clipped in and clipped out. This is vital for any fixture in a newsagency business today.

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magazines

Credit Suisse update on Tatts

Credit Suisse has this morning issues an update on Tatts Group that newsagents may find interesting.

Tatts was unsuccessful in retaining its A$540mn pokies licence refund after the High Court upheld the Victorian Government appeal. Tatts must also pay 20 months of accrued interest and legal costs which we estimate to be A$50mn.

I wonder if media coverage of the Tatts High Court loss will be as strong as when they won. I recall some media outlets were savage toward politicians. Will they now apologise for this? I doubt it as it would not serve their political purposes.

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Lotteries

The curse of sale or return in the newsagency channel

The next time a supplier representative offers you a product on a sale or return basis, ask for more information. Ask your buy price if you take it firm sale. Ask whether other retailers with the same product are offered sale or return.

I am not talking here about product such as newspapers, magazines you’re your main card range. No, my interest is more with gifts and related items, new card spinners and toy related items.

I label sale or return as a curse because too often I see it stop retailers being retailers, managing a product on the shop floor for maximum performance – because if the background is the knowledge they can return the product if it does not work.

I think a sale or return offer makes retailers lazy. I think suppliers offer it because it is an easy to get a product into a retail business and once there it is more likely to stay.

Compare how you treat sale or return product with firm sale product. I sell plenty of retailers treating the two differently. Firm sale product is worked hard, pushed to sell through, to achieve the necessary return on inventory, space and labour for the business. This makes sense since it is your money at risk.

With sale or return, it is easy to consider that you have no risk. Without risk, where is the pressure. While some retailers will work sale or return product hard, plenty will not and this is why I say it is a curse.

Sale or return is not a benefit. I see it most often as a lazy tactic used by some suppliers because their product is not good enough to support a firm sale approach.

To newsagents I say: take the challenge of being completely responsible for your buying decisions. Chase better deals from firm sale. Work the product hard. Drive a faster return. Look at products differently as a result.

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Newsagency challenges

Storytelling is magazine placement

IMG_7233The decisions we make in placing magazines on our retail shelves represent a kind of storytelling. Look at the current issues of The Australian Women’s Weekly and Mindfood next to each other.

Each features Helen Mirren on the cover, and for similar reasons related to age. Whereas an average retailer will put the titles in their usual spot, most likely separately. A smart retailer places them next to each other, telling more of a story and, hopefully, driving sales.

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magazines

Updated newsagency performance benchmarks

Further to a discussion here, I decided to publish updated newsagency performance benchmark targets, to reflect the rapidly changing nature of our channel. These are some of the benchmarks I have provided to newsXpress members, but not all.

I say rapidly changing nature of our channel because that is what we are seeing. The traffic mix is changing as is the mix of what successful newsagents sell.

The benchmarks below are guidelines. They are subject to change as the suggested business model evolves.

It is important to have a goal, a target and that is what these benchmarks represent in my view:

  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% as shown through the Newsagency benchmark Studies. I think the goal today has to be at least 45%.
  2. 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. NOTE: Gift is gift, not toy, collectible or other items. They have their own benchmarks.
  3. Revenue per employee – $250 an hour minimum.
  4. 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.
  5. Overall revenue mix percentage targets: Cards: 25%; Gifts/toys/plush: 25%; Stat: 10%; magazines/newspapers: 20%; other: 15%.
  6. FLOORSPACE ALLOCATION: Cards: 25%; Gifts: 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.
  7. Mark-up goals: Stationery: 125%; Gifts 110%.
  8. 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.
  9. 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.

These benchmark figures don’t all need to be considered together. You can pick one, measure, work on it, measure and adjust as the numbers indicate. The goal is to continually improve to pass the benchmark and work on the next.

I acknowledge these benchmarks are not close to what newsagent associations have recommended or would recommend. My focus is on the future whereas their focus tends to be on old-school products and services. Success in the future comes from diverging dramatically from the past including past benchmarks.

If you have any questions about any benchmark, please contact me. I’d be glad to help.

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Gifts

News Corp. change is another data challenge for newsagents to handle

IMG_0929Next month, News Corp. introduces changes in the handling of newspaper subscription payments by distribution newsagents. this is the next step in a project started years ago in South Australia.

On April 11 they are moving all subscriptions for News Corp product from a mixture of Pay at Publisher (Office Pay) and Pay at Newsagent (Carrier Collect) to Office Pay. This will affect around 300 newsagents as the News letter notes.

While affected newsagents will be able to handle data changes manually, it will save them time if their newsagency software companies make this easier and faster for them. That is what Tower Systems will do. Other software companies are welcome to note their planned processes here.

This is another reason to offer Touch Networks services as this is how accounts are paid. I am proud to have connected Touch and News years ago to facilitate this in-store payment method. Prior to then, the News payment model did not have an in-store payment option.

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newsagent software

The new looking magazine department

I am often asked for photos of changes made to the layout of the newsagency based on what I write here or when I speak at meetings and seminars.

This photo, takes this past Saturday, shows part of the magazine department. It runs down this fixture to the back wall where we have 250+ full face pockets.

The display area to the left of the main magazine fixture changes regularly as does what is in front of the magazine fixture to the front of the store.

We also adjust the layout of the magazines regularly.

The key point I want to make here: everything changes, nothing stays the same. I think this is essential in retail today. Shoppers are more fickle than ever. We need to keep our stores fresh and appealing. We need to push back on those few customers who complain about product location changes.

We to lay our businesses out to maximise the return we achieve.

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Click on the image for a high res version.

I have focused on the magazine department in this image as it is the part of the business many newsagents continue to be reluctant to change. Some do, but not enough.

We are in a fight with supermarkets and other retailers. If we do not change our in-store offer we will lose the battle. Range and supply volume – they are topics for another day. This post is about the part of magazines over which we have control – how we lay them out in our businesses.

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magazines

Using an easel to promote the Easter season in the newsagency

IMG_7150With more and more retailers using easels and noticeboards to signpost seasons, we are doing this for easter, with this placement of the Easter poster next to easter cards. Out of shot, to the left of the cards, is Easter gifts.

For a while now I have thought that hanging posters is not always ideal. Some seasons lend themselves to a different approach – such as what we are trying with Easter at the front of the newsagency this year.

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newsagency marketing

Newsagents dealing well with the Network Services shut down

Help desk call traffic more than trebled for my newsagency software company today as newsagents updated data managed by their software reflecting the transfer of many magazine titles from Network to Gotch. All in all it was an orderly process. With 1,750+ newsagents using the software it could have gone any one of a number of ways.

While I expect help desk calls to remain high all week and into next week, today was the day of proving the process and testing the value of all of the preparation communication including that from Network.

Small business newsagents can be proud that they are handling significant change with calm professionalism.

Newsagent suppliers ought to take note. What is happening this week is newsagents demonstrating they can deal with challenges of a technical complexity. How newsagents have gone about this is another reason to support our channel ahead of supermarkets and other mass retailers.

Newsagent associations ought to take note. This is all being done without you.

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magazine distribution

Lunch Lady issue #2 coming

Screen Shot 2016-02-29 at 7.49.44 amIssue #2 of Lunch Lady launches March 3. Issue #1 sold well thanks to terrific social media and word of mouth engagement. This is a niche title people love and they will get to their local newsagency for a copy. It is the type of niche title we can use to leverage our positioning as magazine specialists.

The image shows the cover of issue #2. Here is a note from Louise Bannister, publisher of Lunch Lady:

We are about to release Lunch Lady NUMBER TWO which is very exciting. Launch through newsagents is March 3rd.

We had great sales results from many newsagents who put issue one out on shelves.

We have worked really hard with our readers through social media to gauge where their local newsagents are and as a result have done a very tight allocations list for issue two.

Our social media accounts have increased significantly since the first issue from 5k to over 20k. We will be driving our readers
to newsagents through social media. Any support on getting the Lunch Lady message out there is much appreciated.

A good description of what Lunch Lady is ::

Lunch Lady is a quarterly for people who used to read frankie magazine but are now grown up, have kids and are searching for a funny,
unique, creative NEW parenting magazine (which is packed with kid friendly recipes).

SOME READER LETTERS::
“I stumbled upon the magazine in my local West End news agency. There it was. The colours catching my eye amongst the sea of tiered perfect binding.I guess I just really wanted to write to you to say, I feel like we are pals. Pals through pages, tasty ideas and grubby paws. I am enjoying the read so very much, you should be immensely proud of what you have created. I’m also now a walking marketing machine telling everyone and everything my affections for your publication.”

“ Ladies, I just wanted to say well done! Read some blurb on your new mag on Instagram, went out and found it this morning. The look, the feel = excitement!! So came home and read it from cover to cover – lalalalalaloved it! Definitely the most interesting read on the shelf right now!”s

“Hi Lara, Lou and Kate,
I hope you’re all really well.
Congratulations on the launch of Lunch Lady – I LOVE IT! For years I have been thinking, when is there going to be a cool parenting magazine?? And now there is one. So thank you, from this young mum, who struggles to find anything online/in print that’s actually relevant to my parenting world. THANK YOU!”

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magazines

Here is why I don’t have mainstream Easter chocolates in the newsagency

IMG_7195Coles is promoting Easter confectionery at 25% off in-store on in the media, trashing the margin opportunity for other retailers, especially small business retailers who can’t strong-arm suppliers to discount to allow 25% off retail to be profitable.

So rather than compete with Coles, Woolworths and other mass retailers and the price games they play, I pitch other products for seasons like Easter, products the majors tent to not pitch or, at least, not discount like this.

I wish we had politicians in this country with the requisite guts to dilute the market power of Coles and Woolworths. The pressure they put on suppliers and primary producers is not socially responsible.

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confectionary

Another example of the appeal of retro magazines

IMG_7193A cool pub venue in Melbourne has old magazine covers on wallpaper plastered all over the wall including the very cool image of an old New Idea cover.

I mention this today as it connects with my post a couple of days ago about Mojo ’60s. There are plenty of opportunities in the retro space in products we can sell including circulation product. At the gift fair in Sydney last week many suppliers were promoting retro product. I need this retro wallpaper as a backdrop.

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magazines

Sunday newsagency marketing tip: merchandise products to sell

Here is a before and after photo of a display unit of cool erasers we have in the newsagency. The photo on the left shows how the product arrived in-store and was initially displayed. The product on the right shows how the same display box looks with a simple change. You can now see what this product is. That simple change alone ought to boost sales.

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We need to obsess about these things otherwise we condemn ourselves to average sales. Retail is detail. Engage in the detail and you are chasing a better result.

When I talked about this with a newsagent a few weeks ago they told me they didn’t have time for this. They were dismissing as if concerning themselves with this level of detail was beneath them. Any newsagent who wants to maximise their return will care about the detail I am writing about here.

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marketing

Loving retro in the newsagency

IMG_7165Retro products are easy to sell right now so I love it when a magazine offers a retro cover like the last ever issue of Cleo and this copy of Mojo I noticed in the newsagency today. the cover gives us an opportunity to promote the magazine outside the usual magazine department placement with other product from this year in the gift department. There are many gift suppliers playing to the interest in retro, we are spoilt for choice. Being able to leverage this with magazines is a bonus for the gifts and for the magazines.

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magazines

Newsagency software user meetings

My newsagency software company announced capital city user meetings a couple of weeks ago. Included in the free sessions will be retail management advice. These are not sales events – rather the goal is to help small business retailers leverage their IT investment for even better outcomes. The start time is 8am so as to not interrupt too much of the day.

I will be at all sessions and would welcome an opportunity to catch up with anyone on any topic.

FYI here are the details:

Launceston User Meeting
Date: 07/03/2016 Time: 8:00am
Venue: Quality Hotel Colonial Launceston
Address: 31 Elizabeth St Launceston TAS 7250
Breakfast: Coffee, Tea and Egg & Bacon Muffins on arrival
Parking: Limited Free onsite parking

Hobart User Meeting
Date: 08/03/2016 Time: 8:00am
Venue: Hotel Grand Chancellor
Address: 1 Davey St Hobart Hobart TAS 7000
Breakfast: Tea, Coffee and Swiss cheese and ham croissants on arrival
Parking: Onsite Parking available charges may apply, let the parking assistant know you are attending a meeting. Marketplace Car Park is open 24 hours and there is metered parking within close proximity to the hotel.

Melbourne User Meeting
Date: 09/03/2016 Time: 8:00am – 11:00am
Venue: Hawthorn Art Centre, Mayor’s Room
Address: 360 Burwood Rd Hawthorn VIC 3122
Breakfast: Tea, Coffee and mini tomato and cheese croissants on arrival
Parking: Free onsite parking – enter via Kent Street

Brisbane User Meeting
Date: 10/03/2016 Time: 8:00am – 11:00am
Venue: Quality Inn Airport Heritage
Address: 620 Kingsford Smith Drive Hamilton QLD
Breakfast: Tea, Coffee, selection of biscuits, slices, cakes and muffins on arrival
Parking: Limited free onsite parking and free street parking

Adelaide User Meeting
Date: 11/03/2016 Time: 8:00am – 11:00am
Venue: Rydges South Park
Address: 1 South Terrace Adelaide SA 5000
Breakfast: Tea, Coffee, egg and bacon muffin as well as fresh fruit served on arrival
Parking: Limited Free onsite parking as well as 2 to 3 hour free street parking

Sydney User Meeting
Date: 15/03/2016 Time: 8:00am – 11:00am
Venue: Novotel Sydney Olympic Park
Address: Olympic boulevard Sydney Olympic Park NSW 212
Breakfast: Tea, Coffee and ham and cheese croissants on arrival
Parking: Hotel car park fees apply: All day rate $25.00, or $13.00 for 1 hour, every additional hour charged at $5.00. Additional parking is available in P3, accessible from Sarah Durack Ave or P8 accessible from Herb Elliot Ave at a rate of $5.00 per hour

Canberra User Meeting
Date: 16/03/2016 Time: 8:00am – 11:00am
Venue: Mercure Canberra
Address: Cnr Ainsille & Limestone Ave Braddon ACT 2612
Breakfast: Tea, Coffee and a chefs selection of breakfast items on arrival
Parking: Free onsite parking at the front and back of hotel

Perth User Meeting
Date: 17/03/2016 Time: 8:00am – 11:00am
Venue: Assured Ascot Quays Apartment Hotel, Marina Room
Address: 150 Great Eastern Highway Ascot WA 6104
Breakfast: Tea, Coffee, whole fruits and warm muffins served on arrival
Parking: Free onsite parking available

Gold Coast User Meeting
Date: 30/03/2016
Time: 8:00am – 11:00am
Venue: Mantra Twin Towns
Address: Wharf Street Tweed Heads NSW
Breakfast: Coffee, Tea, Mini ham and cheese croissants and mini Danish on arrival
Parking: Free Parking available across the road from the conference centre at Mantra Twin Towns, there is a walk away connecting the hotel to the conference centre as well as a lift

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Newsagency management

Tubs working for roll-wrap in the newsagency

12041812_945204358920273_1053677316_nWe are chasing growth in sales of roll-wrap by using tubs placed below the flat wrap in one of my stores. While the photo makes the product look untidy, the in-store impression is there is plenty from which to choose. This is what we have gone for with the change.

I think the more we own product layout and placement in our businesses the better for our businesses.

We also have roll wrap at the counter plenty of time and elsewhere as we seek to surprise shoppers with the opportunity. I think plenty of roll wrap purchases are on impulse. Key to this is placement.

We should not rely on suppliers for initiatives as they are not retailers, they are not in our shops seeing what we see and talking with our customers. No, the best people to know what is best for your business is you and your team in the business.

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Newsagency management

Suppliers ought to carry more responsibility for out of stocks

Suppliers ought not accept an order from a retailer unless they are able to fulfil the order. This is not too much to ask, especially in this era of being always on, always connected.

It is frustrating placing an order to only have part of it arrive months later and not be able to tell a full story in-store.

Some suppliers are worse than others. The best way to deal with them is to complain once, louder the second time and cut them off the third time.

Suppliers need to have the systems and processes in place to stop this from happening, to stop taking orders when at the head office they know from forward orders or warehouse management that the orders cannot be filled. Anything less is not good enough.

I see this problems with big and small suppliers. It happens too often. Indeed, it peaks following major trade shows where some suppliers manually gather orders and take a week to key them in and see what their actual commitment is.

Once supplier told me they could not fulfil as my order and the order from a few others pushed them to another container and they did not want to risk it. What a way to run a business!

In the case of an out of stock where the supplier accepts unsullied goods as a backorder and has a need to send out a catch-up order, the supplier ought to carry the freight cost of this and not push the retailer to get to a minimum spend.

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Newsagency management

Reclaiming magazine space in the newsagency

IMG_7104I was in a newsagency this week where a magazine relay resulted in this four square metres of retail space was reclaimed from magazines delivering 25% GP for gifts delivering 50%+ GP. No titles were cut. Rather, a more efficient allocation of space was achieved through smarter space management. This is smart newsagency management – respecting a core low margin category in a way that lowers the overhead cost of the category on the business.

Magazine publishers should look at this as newsagents have to make moves like this given the margin dollars being achieved from magazines continue to fall in a marketplace where rent and labour costs are increasing. Are you listening? 

15 likes
magazines
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