We have the latest issue of Women’s Health magazine in two locations to make the most of the free Carmans gourmet breakfast bar that comes with the magazine. Gifts like this are used by publishers to drive sales. If we leave the magazine in the usual location we are not leveraging the gift opportunity. This is why I suggest you place the magazine in a second high-traffic location – to make the most of the opportunity the publisher is providing you.
I have written here several times encouraging newsagents to promote selected small plush items in the card department, outlining how this low-cost up-sell pitch is easy to implement.
This is something we have been doing for more than two years. We keep doing it because it is successful. I am surprised more newsagents do not do this. As I noted, it is easy and low-cost.
The placement also works at attracting shoppers to the card department when they notice the small plush items. So, it drives plush sales as well as card sales.
Our most recent engagement with the tactic is by promoting new Beanie Kids from Korimco with new parent and new baby cards in the card department. It is working a treat.
It s vitally important we make the most of every opportunity in our newsagencies. Deeper baskets, increased margin dollars per purchase, are key factors to success. We achieve this by working every opportunity possible.
On 7.30 last night on ABC TV, in an interview with Leigh Sales, NRL star Jonathan Thurston mentioned buying a lottery ticket from the newsagents. It was a throwaway line in a terrific interview on the ABC current affairs program. Thurston’s comment demonstrates the natural connection between lotteries and newsagencies in the minds of Australians.
Here’s a Vine from the interview:
Thurston’s comment stuck with me all night. Why don’t newsagents talk up their businesses as lottery outlets to reinforce the already deep connection in the minds of Australians? While plenty do individually, why not collectively? Why not build on what many Australians already think?
Why don’t newsagents fund their own advertising promoting the newsagency channel for lottery products? It is the type of proactive marketing that, if done right, could get the attention of Tatts at a time they could be considering alternatives. It is the type of campaign that could make the channel more appealing.
The campaign could even evolve and question why you’d buy a ticket anywhere else, maybe even mocking big businesses compared to the community connected small business newsagency channel. However, any mocking or questioning would need to be careful as negative ads run the risk of looking political and turning people off.
Sure such campaigns would cost money. But surely an investment in a positive shopper traffic focused campaign would be more valuable than the vast sum spend on the negative campaign run by NANA and the ANF getting signatures for a petition to NSW politicians.
And while not all newsagents sell lottery products, enough do for the type of campaign I suggest to work.
The Thurston interview reminded me that when it comes to buying a lottery ticket people think of newsagents. That is a solid basis on which to build a campaign. If the campaign was successful at strengthening the connection and sales it could do more to infuse Tatts Group next moves than all the negative campaign of the industry associations.
Look at the Mining Tax. The miners took their campaign to TV. Sure they have more money. But money does not necessarily control the success of the campaign.
I urge those who claim to be leaders in the channel to think through this idea inspired by the Jonathan Thurston interview. Give some thought to creating TV and radio ads to pitch the local newsagency for your next lottery ticket purchase. Show the channel as a network of small business retailers working proactively together commercially rather than complaining for protection.
If you are skeptical about this, look at the numbers. Two thousand newsagents who sell lottery products each investing $200 would provide a $400,000 of funding. This would be plenty for the type of campaign I propose – for the production of multiple TVCs and their airing across the day.
The right creative could be very effective in the competitive positioning of newsagencies.
I want to share with you a true story of what happened recently in my own newsagency. It is a story of how a small everyday purchase led to something bigger and how this happened as a result of fundamental changes in how the business is run.
This story could happen in any newsagency – city, country, large, small, shopping mall, high street. I make that point so you do not dismiss the story and think it could not happen in your business. The elements of the story work together in any size business. In writing about it here I’m not getting you to do anything other than to consider that you could achieve the same in your business.
At its core, this is a story about shopper loyalty, especially shopper loyalty in a retail situation where between 25% and 30% of shoppers visiting the business are not local and therefore not likely to engage with the old-school points-based loyalty program.
A customer passing the shop noticed our greeting card range and stepped into make a purchase because of a specific need. They purchased two cards. On their receipt was a voucher for almost $2.00. As they are not usually in the shopping centre they looked around for something in which to spend the $2.00.
This is the key: the customer came in to make a quick destination purchase. The type of purchase where we did not matter. They were on the way to the car park and happened to pass buy our shop. Point 1: location is in our favour. The stepped in because they saw our greeting cards. Point 2: the floor placement of cards was key in getting them in the shop.
Having made the purchase, the customer then noticed, for the first time, what else we sold – because of the $2.00 discount voucher on their receipt. Point 3: we got them to look around and see what else we sold.
The customer did a 180 degree turn and saw a locked glass cabinet of beautiful collectible bears. This was in the right place at the right time as they had been looking for a gift for a child. Money was not an issue. They wanted something to last a lifetime. They purchased a $500.00 bear.
This purchase would not have been made had they not been given the $2.00 voucher on their receipt. The voucher is what got them to notice what else we sold.
Fast forward several weeks and this customer who said they don’t usually come to the shopping centre was back for another $500.00 purchase. Now, several more weeks later, the customer has another $500.00 order placed.
I can directly trace more than $1,500.00 in sales back to the $2.00 voucher.
The software produced the voucher based on rules I established. The initial staff member serving the customer made a brief professional pitch highlighting the voucher. These are both important factors as they are at the core of a structured consistent approach to what has become the most lucrative loyalty program I have seen in my 30+ years involved in retail as a retailer myself and working with retailers in many different channels.
While most times vouchers are handed out they are not redeemed, they are redeemed enough to make them worthwhile. They are redeemed for good margin product as they get people looking at the shop for the first time and discovering items to purchase they were not in our four walls to consider.
The discount vouchers are disruptive. People respond in unpredictable ways.
Best of all, the discount vouchers are profitable.
For this story to work in a newsagency you need to have the right products, placed strategically in-store. Your staff need to make the right pitch. Plus, you need to be attracting people who don’t know and probably don’t care what shop they are in.
If you have read this post and thought it does not relate to you, that you could not do this in your business I say you are wrong. I am certain the approach I have shared with you could work in any newsagency in any situation. I urge you to not hold your business back.
While I have suggested here previously that newsagents create a video of their business, I’ve not explained the multiple benefits of this. The main benefit is it helps you see your business as others see it. I have noticed myself that I see things in my newsagency when watching back a video I have shot, things I missed in-store.
From a marketing perspective, the video can give you something to put on social media, to pitch your business. But don’t do this unless the shop looks stunning and the video is exciting. Check out this video of Splurge, a gift shop in Sun Prairie Wisconsin. It pitches the business and the products available well.
While my next tip is a marketing tip suggesting you create a promotional video, this tip is about how others see your business. Consider inviting shoppers or staff to film the shop and share their videos with you.
The goal here is for their videos to show you things about your business you do not see for yourself.
Start safe and have one or two staff shoot videos on their phones. See what you learn from this. Be open to what they focus on in their videos – this is your shop through there eyes.
A quick review of trading for the AFL Grand Final public holiday yesterday in Victoria it looks like we have another Australia Day type public holiday. Traffic was down at shopping centres to Australia Day levels with people opting to use the day to party or get out of the city for the weekend. Revenue was down 25% on the usual Friday.
As with Australia Day, the day before was considerably bigger as people preloaded shopping.
While net across the two days we’re on par, the disruption to trade by this new public holiday is something to work through.
Now that I have seen how the day plays out I’ll plan better for next year – for the day before and for the day itself.
I encourage other Victorian newsagents to share their thoughts.
Following my visit to the Harrogate Gift Fair in the UK two months ago I was asked to write about the experience and value of the trip for Better Retailing. I share here in full what I wrote as it touches on topics relevant to Australian newsagents:
The Home & Gift Harrogate trade show in the UK in July was busy. Across halls and pavilions, gift and homewares retailers packed stands looking at products to stock through Autumn and Winter.
Suppliers offered greeting cards, gifts, toys, calendars, homewares, outdoor products, jewellery, spa products and plenty more. The product mix was similar to what I see at Gift Fairs in Australia where my business is based.
In my two days at the Fair I did to encounter one newsagent. This surprised me as newsagents make up a third of all attendees at gift fairs in Australia now – and that number is growing.
I had travelled for thirty hours to get to Harrogate. I was looking for unique products through which I could explore even more change in my established newsagency business.
While plenty was on offer that would fit in my newsagency business, visiting newsagents in Leeds and Manchester after the Harrogate Fair I realised why UK newsagents were not in attendance.
The majority of UK newsagents have chosen to either remain in the traditional newsagent space or adopt a convenience model. Both are challenged. The traditional newsagent business model has no upside for most while the convenience model faces competition from the large supermarket groups.
Talking with several newsagents I think the traditional model and the convenience model represent relatively easy decisions – or decisions they at least understand. I can appreciate that it is too difficult to change the floor space allocation of your business to products your retail channel has either never sold or only sold in a passive way.
If I was running a high street newsagent in the UK right now I would embrace opportunities I saw at Harrogate and dramatically change the direction of the business. I would leverage traffic generating opportunities, build a strong core and surround this with better margin products than crisps, lottery products and drinks.
Walking along high streets where I saw two and three newsagents near each other and with supermarket group local stores nearby I could see the benefits of not playing in that competitive oceans and, instead, offering shoppers something different that would make my business stand out.
The biggest successes I am enjoying in my newsagencies right now are not traditional to the newsagency channel. The ideas have come from exploring ideas from other retail channels and finessing these so they could work in a newsagency. The result is a new type of business that challenges the newsagency shingle but that also gives me the traffic, revenue and gross profit growth I want for a bright future.
Harrogate was packed with opportunities. UK newsagents ought to explore more outside what is usual for their channel. There are other retail channels newsagents can take on and win from. All it takes is being open to the opportunity of success.
As I wrote two weeks ago, Malcolm Turnbull brings optimism the leadership of Australia.
Malcolm Turnbull is an explainer, he provides context, he understands the importance of narrative. Whether you agree with his politics or not, and I don’t on a number of policy topics, he at least explains his position in an accessible and considerate way. His approach helps win more to his thinking and lose fewer because of it.
Despite his promise to not wreck and to not undermine Tony Abbott has been methodically doing both these things thanks to select compliant media outlets happy to provide a stage from which Tony can whinge. He has been running the type of campaign he used to win government – pitching the negative and demonstrating poor leadership.
Shame on Ray Hadley, Neil Mitchell, Andrew Bolt, Mark Kenny and others. It’s like you blokes lust for the negative pitch of Abbott rather than the positive message of inclusive conversation on issues that matter being pursued by the new Turnbull government.
While I do not advocate media censorship, I do advocate a professional approach to editing. This is what these shock jocks and journalists ought to so re Abbott – edit. By edit I mean deny him a platform for now. In a year, maybe then, but not now, not while he is like the kid who is complaining for misbehaving.
Yes, I appreciate this has nothing to do with small business newsagencies. Except, it does. The confidence of Australians matters to us. Tony Abbott’s whining tour of select compliant media outlets is doing nothing to boost consumer confidence.
In the traditional Australian newsagency around 40% of products sold have a gross profit of 50% or more.
By traditional, I mean the business with around 30% of floorspace with magazines and papers, 30% with cards, 25% with stationery and 15% a mix of other.
The good news is plenty newsagencies are not traditional.
Looking at data from the last quarter in my own newsagency, 69.5% of revenue is from items for which gross profit is above 50%.
Any newsagent can achieve numbers like this through careful planning, an embrace of change and a disregard for the barriers of the newsagency shingle.
Focussing on GP through inventory ranging and management can inoculate from regulation issues over which you have not control.
Newsagent associations in Australia are not helping their newsagents with their talking down of the channel by claiming damage will be done if this or that protection is not offered.
For much of the last year they have run a negative campaign about lotteries on the east Coast and the issue of whether tatts places products into supermarket owned businesses.
NANA, the NSW Association lead and the ANF nationally supported the claim newsagencies would close. This is what is feeding into media attention on any matter affecting our channel right now.
This week it was the closure of Taylor Square newsagency that brought out journalists asking if this was a tipping point. Last week journalists were asking if the closure of Zoo magazine was a tipping point. I am gad I was approached so I could provide my opinions on both news items.
While the campaigns by the associations have raised awareness of the newsagency channel, the awareness is about imminent demise if this or that does not happen. Embedded in the claims by the associations is that newsagency businesses are on the edge, close to collapse if one more thing does not go their way.
The image of our businesses as fragile is an image created and promoted by the newsagency associations.
Shame on them for talking us down and for using the claim of fragility to support regulatory protection. This is not leadership – it a declaration of defeat. Plain dumb. And now, in the press and on social media this week, we are seeing the success of the association campaigns, we are seeing that people get that the channel is fragile and will collapse if one more thing does not go our way.
The newsagency channel is not fragile. Newsagency businesses are not fragile. Okay, some are. But these businesses are not the channel.
There are many strong and growing newsagencies. Newsagencies succeeding at attracting new shoppers and selling more to existing shoppers. Some are doing it without lottery products. Others have moved away fro legacy products into appealing ne product categories. Others finely balance between the traditional and the not so traditional.
Rather than talk about these successes, we again see this week calls for protection and the threat of closure.
What an utter failure of leadership and a waste of millions of dollars of newsagent funds in supporting these industry associations.
I urge newsagents enjoying good times to talk about them: to the local paper, on facebook, on Twitter. Talk about growth, a bright future and your relevance in your local area. Talk up your business and the channel. You don’t have to share the secrets of your success – but certainly share the good news of your success.
Bad news sells. This is why the shrill campaigns of the associations plays so well with the media. Those of us who are optimistic about the future of the newsagency channel need to talk about this to counter the work of those being paid to represent newsagents. We need to pitch our good news for the truth it is and for the future of the channel in the Australian psyche.
Unfortunately, newsagents are allowing the associations to get away with poor leadership. Some agree because they want protection from regulation while others shrug their shoulders and do not want to have to become involved to fix it. Me, I refuse to support it and have not been an association member for years.
I have seen four or five card shops in New York this week with displays of greeting cards and wrap in their shopfront windows. Yes, they are pitching cards to people on the street. I have written about this several times before – that we ought to promote cards outside the card department, we should use them to drive traffic for our businesses. A display like you can see in this photo pitches the shop as a card specialist whereas a spinner of cards does not.
State News is a rare business in the US, the closest type of store to an Australian newsagency. They sell newspapers, magazines, cards, stationery, candy, party goods, toys, plush and more. Check out the pen department. It is at the counter. It drives impulse purchases. A placement like this in a newsagency in Australia would be disruptive for sure.
I emailed newsagents this morning seeking data for the Q3 2015 newsagency sales benchmark study. You can read the results of the Q2 study here. I am excited to see trends and generally check on the health of the channel.
Q3 2015 NEWSAGENCY SALES BENCHMARK STUDY.
I am preparing a fresh benchmark study for the newsagency channel to look at the latest sales trends overall and in key product categories. This study will help newsagents see the future based on the data trends. It will also reveal the difference between emerging newsagency model changes. Click here for my last report.How to participate.
- Please run a Monthly Sales Comparison Report for 01/07/2015 – 30/09/2015 compared to 01/07/2014 – 30/09/2014.
- Tick the category box.
- Tick to exclude home delivery and sub agent data.
- DO NOT tick the supplier box.
- Preview the report on the screen. Save as a PDF and email this to me at mark@towersystems.com.au.
I will email the results to all participating newsagents and publish the results on the Australian Newsagency Blog as a community service.
Tower Systems serves in excess of 1,860+ newsagents with best practice newsagency software.
Plenty of newsagents are changing their businesses, bringing new products – indeed, whole new categories, reconfiguring floor space, removing newsagency-like fixtures, hiring non newsagency experienced staff and promoting outside the business.
I get to see the scope of change in data newsagents share when they reach out for advice or submit data for the sales benchmark studies I undertake. This is encouraging to see, exciting in fact.
But I wonder if the change I am seeing is enough. The failure to change played a role in the closure of Taylor Square Newsagency last week as I wrote here yesterday.
Today I am thinking about newsagent who have changed their businesses. Take the newsagency that has grown overall non agency Gross Profit from 29% to 34%, reduced operating costs and positioned the business so it is making a reasonable profit. Is this enough? Has the newsagent done enough to secure their future?
I am asking because of a discussion I am having with the owner of the newsagency at the moment. They know I am writing about it here without sharing any identifying information.
The owner thinks they have made enough changes, that they can keep doing what we are doing. They think this because after years of break even trading, the 2014/15 financial year was nicely profitable and 2015/16 will be profitable with their steady as she goes approach.
I can understand this thinking as their position today is considerably better than last year and the years before.
While they have made good moves and are seeing good results, they need to reach for more. They need to have a higher goal of GP growth, they need to see more new faces coming into the business, they need to trade more outside what is traditional for a newsagency.
I want them to push harder because I think trading conditions will be harder, more challenging … economically, retail, competition wise operating cost pressure and the cost of finance. I think it is healthy to expect tougher conditions and to respond as early as possible before such conditions eventuate. And if they do not eventuate, you have a better business anyway.
If your newsagency business is doing okay, if your numbers are improving, if you are profitable, I urge you to not rest on laurels. I urge you to push harder, chase more growth, reach way outside your business in pursuit of new traffic as this is where your brightest future is.
The reason for doing this is simple: the more profitable your newsagency the more valuable the business will be to a purchaser when you come to sell it or the more use it will be in funding your own future lifestyle.
If you are going and are happy with your business, ask yourself: can you do better and if so, what’s the plan?
The plan needs to be broadly based, driving the appeal of the business across age groups, interests and genders. Unlike some expect, it will be a plan of many small steps rather than one big move. It will be local and personal. It will take you on a journey further away from the newsagency shingle.
Most important: the plan will not stop. A great result as being seen in the newsagency I am working with at the moment does not mean you can rest. Indeed, it ought to encourage you to push harder. That is the point of this post.
Most newsagencies have a party section. Some go deep into this category selling costumes, balloon features and more. It is a space our channel was well known for decades ago, one today that has moved to specialist retail. In the US I have seen some amazing party shops, like this one on 14th Street in New York that I visited today. While the population density is different, you can over come that to an extent by creating an offer people will travel to shop.
Today’s Australian Financial Review has a report into the closure of Taylor Square Newsagency and implications for our channel. Misa Han interviewed the owner of Taylor Square, myself, the owner of newsXpress Bell Park and Greg Handley, the President of NANA, the NSW / ACT newsagent association.
I am disappointed at what Greg Handley is reported to have said.
Newsagent peak body estimates more than one in three newsagencies may face closure if Coles and Woolworths enter the lottery market.
“Newsagents cannot match Coles and Woolworths with their bargaining powers. They could do the same thing with what they’ve done with vegetables and say you get $1 milk if you buy lottery tickets,” Newsagents Association of NSW and ACT president Greg Handley said.
“It’s not that it’s protecting newsagents, it’s for small business. The rationale behind it is to keep a process that where those people have paid good money on a fee for the right to sell the lotteries, they made the lotteries products very profitable for the NSW government and in the process the NSW government got a lot of money when it sold that to Tatts.”
Mr Handley said newsagents typically rely on lottery sales for somewhere between 20 to 85 per cent of their profit.
What a defeatist message. It’s a dinosaur view about the extinction of our channel, a view I do not share. Hardly had a perfect opportunity to show leadership for newsagents and instead used the we deserve protection argument. Between the lines in his argument is a call for newsagents to quit NANA and invest their money in more proactive pursuits.
I had a long interview with the journalist. She wanted to fully understand the issues and look at this from multiple sides. I am happy the optimism I hear from so many newsXpress newsagents is reflected in the article.
I also wrote here about the closure of Taylor Square Newsagency this morning.
Taylor Square newsagency in Sydney closed Friday last week after decades of service to Darlinghurst locals, many who partied in the area and many more who travelled there for their unparalleled range of magazines. The Piggott family were passionate about magazines.
The report cites the NSW government lockout laws as a major cause of the closure.
While I understand the impact of the lockout laws on overnight traffic, they would have less effect on the main part of the trading day from 7am to 6pm when most business is done.
While I am sure the lockout laws played a role as did the messy and drawn out changes to Oxford Street, I think other factors played a role – magazine sales, newspaper sales, the positioning of the business in a changing retail environment and out of store engagement by the business.
The biggest challenge faced by Mark and John Piggott is the same faced by many newsagents – how to drive the relevance of the newsagency in a rapidly changing world. We talked about this in the context of the business many times over the years. Our discussions were based on an assessment of their own business data, evident trends forecast in their data, trends that lead to the closure Friday of the business.
I wish this business had not closed. I wish John and Mark were running a reinvigorated and reinvented business today. I wish they were running a new Taylor Square Newsagency that was known for innovation as well as maintaining a stunning range of magazines.
Several times over the years I pitched structural changes to Mark and John including:
I appreciate these four points are not as simple as they look. Embedded in each is fundamental structural change to the business to make it relevant to today. Take the second item, several times I looked at this business point two alone should have resulted in more than 50% floorspace change by bringing in completely new product categories to open the appeal of the business beyond those who still remember what a newsagency was from the 1950s and 1960s. Those customers are dying, we need businesses that are relevant to the those spending money today. They don’t care about the newsagency of yesteryear, they care about what they like today – regardless of the shingle under which they purchase it.
It is not my intent with this post to come across as someone dancing on the fresh grave of Taylor Square Newsagency. Rather, I want newsagents to use news of the closure to shake themselves into realising that it is not too late to change and that change does not mean ignoring key categories at the core of a successful newsagency, categories we need such as magazines, newspapers, greeting cards and stationery.
It takes guts to embrace and chase change. The sooner you engage with this the better. From where I stand, the best encouragement you will get will not come from traditional sources of newsagency management advice such as your industry association of the National Newsagent magazine – they are rooted in the past.
My inspiration comes from looking far outside the channel at trade shows for other channels, at other retailers and at trends online. We have to have the guts to play outside the limitations of our shingle. We have to have the foresight to see a business beyond the traditional. We have to chase customers never thought we could attract.
But most of all we have to do something.
Complaining is not a management activity.
Here is my top-level practical advice for any newsagent contemplating closing:
There are plenty of newsagents enjoying good results and feeling optimistic. I think anyone can.
