With the Reject Shop, Coles, eight discount variety stores, Target, K-Mart and twelve gift shops in the centre, it is important our Christmas pitch is different otherwise price is what people compare. This owl is part of a unique range of premium Christmas decorations we have this year. It is working a treat. The owl reflects our view that competing starts with product sourcing.
Nowhere is the difference between newsagency businesses more evident than in the magazine department of a newsagency in the Northern Territory. Comparing this to most suburban east coast newsagencies highlights the difference.
In Humpty Doo in the Northern territory yesterday, I was in a good locally-focussed newsagency business where magazines play an important traffic driving role.
The photo shows the two main magazine units. Both sides are full of magazines.
What is interesting is that the commitment to magazines has not held the owners back from being proactive in other categories, new traffic driving categories.
The situation is helped by limited support for magazines in nearby supermarkets and the usual top sellers only in nearby petrol outlets.
In the shop yesterday I found myself thinking about what I wrote recently calling for magazine publishers to pull back from supermarkets, to make newsagencies magazine specialists.
The more newsagencies I see away from the competition we see in the city the more I am convinced that newsagents can grow magazine sales through genuine commercial partnership with publishers.
In case you missed it, here is the nub of the post:
My proposal is simple – make newsagents the magazine specialists by only supplying them.
This single move, of choosing to place titles exclusively in the newsagency channel, would encourage newsagent support. I am not talking here about one or two titles. No, I am talking about hundreds of titles, popular titles, titles in the top 200 even. Place these exclusively in the newsagency channel and you change the game, you get the attention of newsagents, you push back against the supermarkets and you respect your product.
While I am confident that a bold move such as I outline here would benefit publishers and newsagents it would need careful negotiating, involving many titles and requiring thoughtful newsagent engagement. And, yes, there would need to be a discussion on margin. Rent and labour in retail are considerable expenses and titles not paying their way serve no purpose in any retail business. However, margin can be considered in various forms. For example, there could be a base stocking fee or some other levy to support the category.
If sought after product is only available in one channel then the two main parties to such a relationship, the publisher and newsagents, ought to benefit. We would have a shared commercial objective, far more so than exists today.
In the meantime, it was good this week to see newsagencies in NT representing the channel well.
Don’t.
Your window is a window for a purpose. It is there to show people inside your shop, to entice them in. Cover it with magazine posters and you block the view.
It could be worse. You could be covering your window promoting magazines available from other retailers. That makes your window a billboard for the publisher more so that a marketing tool for your shop.
You can grow magazine sales without sticking posters up anywhere, especially on your windows.
Victorian taxi drivers have done a u-turn in dealing with Uber. Their focus now is to improve their service and be more competitive rather than expecting politicians to protect them. The CEO of their association spoke to this with the The Guardian:
“In 2015, if we’re not providing a service people want to use, then the amount of competition will see our industry decline,” Samuel said.
“We won’t let that occur. We’ve been around for about 150 years and have responded to many challenges over that time, and we’ll do it again.”
And then this:
“But there have been some shortfalls from drivers, and we’re trying to weed out those drivers,” he said.
The position reflected by the association is along the lines of what I have said recently about newsagents, tatts and the supermarket challenge.
The best way for any business to be successful in any negotiation is to be what the other side wants, and more.
The best way to win in any competitive situation is to be better than the competitor.
If the numbers don’t work, the best approach could be to walk away.
Being better does not have to mean being cheaper.
I urge newsagents to read about the dispute between taxi drivers and Uber and to consider the latest moves. I think it speaks to challenges we face.
The landlord at a Liverpool UK shopping mall is introducing a fast lane to better manage pedestrian traffic. This is brilliant news. The next step is training to keep people walking in an orderly fashion and not cutting across others or walking out of shops looking away from oncoming traffic and blaming people who plough into them.
We have sourced a terrific range of premium Christmas wreaths to feature in-store and in our Christmas marketing for the newsagency this year.
While we are promoting the Christmas wreaths in-store, it is online where we are using the wreaths to change how people see the newsagency.
I think it is important we do this – redefine our newsagency businesses through products we choose to carry. Every time we have success with a product that is not a traditional newsagency product is a win – it also shows us what is possible.
While it frustrates traditional newsagency suppliers, more often than not new traffic generating products are being found from suppliers that do not have a track record supplying newsagents.
While only time will tell if the wreaths work at challenging shopper perceptions, people are commenting already. The real measure of success, of course, is the revenue they generate.
We have placed the 5 Seconds of Summer 2016 calendar at the front of the display. This Aussie band is a top seller in Australia, the US and the US. This band is hot and we can leverage their success to attract shoppers – and that is what we are doing.
I love calendar season for opportunities like this. Across more than a hundred calendar titles we are able to tap into special interests, like a love for the band 5 Seconds of Summer and through this find new shoppers. It works a treat.
Christmas unfolds in retail over time, reaching its peak in the last two weeks. We kicked off the season with our boxed card offer. Then, last week, we added a Christmas tree as the main feature on our premium decorations table. The tree is working a treat with people purchasing decorations off the tree. We went for a tree to show off products how they would look in a home and to warm the shop for the season.
This year we have focused on premium decorations from a supplier not supplying any other shop with the same products in our centre.
Here’s what the front of the shop looks like at the moment.
Walking 400 metres or so to my car from the newsagency yesterday carrying the brightly coloured extra large plush item you can see in the photo, I was stopped twice by people asking where I bought the item.
The first to stop me was a guy looking for a present for his girlfriend and the second was from a grandmother looking for something for a grandchild. Several others along he way pointed and commented.
The experience reminded me of the opportunities we all have to show off items we sell when we carry them to our car or elsewhere. It’s like a moving billboard without clogging traffic. It provides people a safe way to ask about the item – as they will not expect a sales push.
We have these opportunities carrying products into our businesses and our from them. It works best with large bright products – like this large plush item.
Not that there is spare time in a busy day, but if there was – maybe get someone to walk around with a large item and a walking billboard. My thought here is that only a certain numb er of people near your shop enter your shop. It is likely you have items they would purchase if they knew you had them. This tip is about showing them. It only works, however, with items easily seen and understood and even then only if they can see it comes from your shop or they ask you where you ‘bought’ it.
This is a free marketing idea. You don’t have to pay a local paper, Facebook, Google or any media company to run your ‘ad’. You or someone working for you becomes the ad.
There are plenty of items we sell in our newsagencies that people will purchase on impulse at the counter. deck calendar refills are one of those. The best place for these in the newsagency right now is at the counter. In fact, I suspect many newsagents could make more off these than any chocolate bar taking up the same space at the counter.
We have these refills at the counter, with diaries and with calendars.
A small investment of management time checking where you have yours could result in an immediate increase in sales. Once you have checked, think what other everyday impulse purchase items you could better place in the business.
While you will not retire on the additional money you make, every extra dollar spent with you is valuable, especially if it is not a dollar a shopper planned to spend with you.
Small steps are vital in growing any business.
If you have stock items that have not sold for more than six months and there is no prospect of them selling, consider giving them away. dead stock is like a ball and chain, it holds you back and gives off the wrong message. Giving it away could save you money.
Use your computer system to see what you could give away – it will take no time at all.
Someone asked recently about why our diary sales were strong. We went out early with financial year diaries and then into 2016 diaries. What helps is that the display itself has to be walked around to get to the back end of the store where we have newspapers, magazines and stationery. Also, card shoppers come down their main aisle and pass diaries on the way to the counter.
Traffic direction is a key to sales being up 196% year on year off a good base.
The photo is from this morning. It shows one side of this diary display and does not show a secondary location.
Amazon, the online giant credited with driving many bookshops out of business, has opened a physical shop in the US. The move is not an endorsement of the old bookshop. From what I read it is a nextgen offer from the continually innovating Amazon.
Counter confectionery is ready for a shake up. With c-stores, petrol outlets, supermarkets and newsagents all offering the same brands, I think there is an opportunity for a point of difference. I have looked at many different offers recently in a range of retailers from different suppliers. This photo is one example. I like that almost all the products on offer are mints. Indeed, I suspect inside each tin is exactly the same mints. But the product is not the mints, it is the tin. The tin enables shoppers to purchase the mints as gifts – and that is what I like here – turning the counter based confectionery purchase into a gift purchase … and an impulse gift purchase at that.
When I have written here about disruption, this is what I mean. Changing the offer, changing the newsagency story, disrupting what you deliver as opposed to what people expect, getting people to thin about your business differently.
We can do this. we can change what the newsagency is, what our newsagency is and we can do it in a way that is appropriate to the needs of our customers.
The mints are one small example. The opportunities for challenging expectations exist right through our businesses.
The other reason to love these mints is that you will not see them supermarkets, c-stores and petrol outlets. we have to do more to pull our businesses away from these channels that have taken a percentage of newsagency shoppers over the years. We separate ourselves from them through the products we stock. I think starting this at the counter is a good move.
I pulled out of traditional candy at the counter of my newsagency two years ago. I’m happy with the result in the context of impulse purchases, margin and differentiation.
While a tin of mints will not define a newsagency business, it is another brick in the wall of change and change is essential in my view. We need to embrace every opportunity to change shopper perception and there is no better place to make such a move for change than at the sales counter.
Woolworths shoppers have been venting frustration with changes to the loyalty program. The comments on Twitter, Facebook and elsewhere remind of the personal connection people have with loyalty programs.
From what I understand I’d have to spend $100 a week for five weeks at Woolworths to get a free magazine whereas in my newsagency shoppers can get this value spending well under $100.
September quarter results reveal a mixed bag of results for newsagents. The gap in results between businesses is wider than ever and the performance of print media products more concerning than ever.
While some newsagents are generating ne traffic from new products to the traditional newsagency, not enough are doing this.
Change is essential. Too many newsagents and traditional newsagency suppliers are operating business as usual model. This is driving the downward trend I see at the core of the benchmark results for many newsagencies. The only way to arrest this is to drive change – in supplier relationships and in newsagencies.
Here are the headline numbers for the benchmark study:
Benchmark results by key departments:
Product mix shift. The shift in product mix continues. For example, the gift and related maximum single item price point I have seen this quarter is $1,000.
Traffic shift. Whereas the newsagency channel was built in print media products, they are less likely to be the destination purchase than today. I suspect this is a consequence of deregulation, of publishers facilitating access in supermarkets, c-stores and other locations.
In my own newsagency: My key category numbers off a good base, are: Books: up 1,000+% due to adult colouring. Diaries: up 196%. Cards up 25% with Everyday Counter up 38%. Cards account for 23.78% of sales; Gifts up 35% and account for 11% of sales; Magazines up 5% and weeklies down 5%; Stationery down 8%, Plush up 28% and accounting for 8.24% of sales. Traffic: no change; Average Sale Value: up 8%; Average Item Value: up 11%.
Here is data from another newsagency embracing growth strategies: Books: up 1,000+% due to adult colouring. Diaries: up 187%. Cards up 29% with Everyday Counter up 22%; Gifts up 47% and account for 13% of sales; Magazines up 7% and weeklies up 5%; Stationery up 7%, Plush up 24% and accounting for 8.6% of sales. Traffic: down 3%; Average Sale Value: up 9%; Average Item Value: up 11%.
CONTEXT
In the benchmark pool for this quarter, there are newsagencies with gift revenue of more than $50,000 and others with gift revenue under $500.00. To look at this in another way, there are newsagencies with gift revenue equal to or greater than card revenue and others with gift revenue equal to 5% or less than card revenue. I could share similar ratio analysis for plush, toys and selected other high margin categories.
NEWSAGENTS, IT IS YOUR FUTURE TO OWN
I urge newsagents to focus on traffic in gifts, plush, toys, homewares, fashion, ink and office furniture opportunities. You have to buy well and promote even better. More often than not your suppliers will not be traditional newsagency suppliers.
We have more control over our businesses than ever before. What we do with this is up to us. The trends affecting us are obvious. Our future is ours to own.
Please take this benchmark report as a call to action.
We have to be disruptors if we’re going to grow.
This is James Murdoch as quoted in a report in today’s Australian Financial Review. The quote equally applies to newsagents. We have to be disruptors ourselves. Some of us are, but not enough.
Being a disruptor means breaking free from expectations associated with your shingle. It means new suppliers, new products and new traffic. It means changing how you run your business and how you think about your business.
It means identifying less with the traditionalists who share your shingle.
Being a disruptor means you becoming your own competitor.
Being a disruptor means you stop complaining about others taking business from you and you taking business from others.
Taxi drivers are waging a campaign for compensation over the introduction of the competitive Uber service. Ross Greenwood has has a bit to say about this on Macquarie radio. Taxi drivers have step and association and a website to make their case.
If the federal government provides any form of compensation for the introduction of Uber, newsagents ought to urgently make representations for the situation of taxi drivers today is the same as newsagents faced in 1999 with the federal government facilitated removal of our monopoly.
Prior to 1999, newsagents had a ACCC authorised government facilitated monopoly for the distribution of newspapers and magazines. Many purchased their businesses with the knowledge of the monopoly. banks funded the purchases with the knowledge. Immediately the monopoly was removed newsagencies were worth less, goodwill dropped.
Newsagents received no compensation. Some newsagents at the time claimed this wad due to poor representation as it was not long after the federal government paid pharmacists to close to reduce oversupply.
My question today is – what do newsagents think about the claim by taxi drivers they deserve compensation for the watering-down of the protection they have had?
I love Mad magazine for the nostalgia and for the humor. Every issue I read gives me a laugh. The covers are appropriately seasonal or topical, providing good opportunities to promote with related product – like this issue with Halloween product. I wish it sold better though – kids today don’t know what they are missing!
I received an advance copy of Lunch Lady magazine, a new title from the team that created Frankie. Lunch Lady launches in newsagencies and some specialty retailers later this month. It is a niche title, appealing to those who love good food,preparing good food, good writing and who want something beyond a magazine.
While family is a focus throughout the magazine, Lunch Lady would be equally appreciated by those without a family.
Like Frankie was, Lunch Lady is difficult to categorise. It is certainly a title to use to show-off your specialisation. It would make an excellent gift or a ,over appreciation to food titles in a kitchen.
Being a quarterly will be a challenge for some. My approach will be to push hard in the first weeks of the on-sale so the long on-sale is not an issue. I have often to take ten copies as I expect it to perform well.
Here is more information from Gotch.
I was fortunate to participate in a flight to Longreach, Queensland, on Saturday, raising funds for the Western Queensland Drought Appeal. A key message from speeches made on the day was regional and rural Australia needs visitors. In Longreach especially, tourism is vital given the impact of the four year drought.
I have thought about this a lot since Saturday along with stories I hear from many newsagents in regional and rural Australia about the tough local conditions caused by drought, high unemployment and other factors.
In every situation I can think of, growth in tourism could help.
To urgently encourage tourism to regional and rural Australia I’d like the federal government to offer travel subsidies for families to travel away from the cities, to regions where their tourist dollars will do good for local economies.
The subsidies could be for family flights to regional Australia, accommodation in country towns in bed and breakfast, farm stay or local motel accommodation. I’d love to see local restaurants and find experiences subsidised along with local tourist attractions.
I’d love to see subsidies for city versus country kids sporting tournaments that would bring families from cities to country towns.
I would not want to see subsidies any foreign owned company or any business above a certain size or with a head office in a city – except for airlines to get people to their destination.
This needs to be a regional / rural Australia first initiative, targeting getting people to travel the country, spending locally and boosting the local economies that are struggling.
What this has to do with newsagents is that there is a newsagency in every town. They could be part of managing the program locally. When helps local towns helps local newsagents. Helping newsagents helps a quintessentially Australian business.
I tried to purchase a ticket in tonight’s $25 million OzLotto jackpot this afternoon in Melbourne only to find the five newsagencies I tried closed.
Jackpots are vital to driving purchases by first tine and infrequent lottery ticket customers. Being closed when a jackpot is on sale is poor form. You choose to be a lottery agent and in doing so accept the obligations associated with this.
To those who say I should not write about this here because it could bring the issue to the attention of tatts I say – they would know from terminal activity.
To the newsagents in Melbourne who have been open all day – well done.
Everyone trading under a brand is connected and responsible for customer perception associated with the brand. For a typical newsagency, the key brands are: Tatts, the major newspaper, a marketing group (if you are in one) and all newsagents.
Maybe NANA and the ANF should lobby newsagents with the same vigour and cash with which they lobbied the NSW politicians.
