UK PayPoint experience valuable for Aussie newsagents to consider
Newsagents the world over are told by some existing and would-be suppliers: you will win because this product / service will drive foot traffic. We know from our own basket analysis data in Australia this is not true for transport ticket top-up, newspapers, lottery products and bill payment. They are all inefficient in terms of basket mix yet suppliers continue to beat the foot traffic boost drum.
Newsagents in the UK are concerned about foot traffic (footfall) in their current challenges with the PayPoint bill payment and parcel service according to an article at BetterRetailing. The article is interesting as it puts data on the table in analysing the knock-on benefits of PayPoint in a business.
Where newsagents are asked to take on low margin products or services there needs to be more than a claim by a supplier about foot traffic. They need to back the claim with evidence and to agree or a reasonable KPI below which the fee they pay increases to make offering the service financially viable to newsagents. That said, my preference is that from the get go the fee paid represents fair compensation for costs of servicing the transaction including labour, prime space costs and opportunity cost relevant to what else could be achieved with that space – plus a margin.
Foot traffic of itself is not useful for any business. The traffic must be relevant to the business. Newsagents ought to be wary of a foot traffic benefit claim where there is no analysis of the deeper value of the specific traffic expected to be generated.
Western Union to launch kiosks in UK newsagents
Retail Times reports Western Union will place kiosks in 300 UK WH Smith stores.
Shame Herald Sun
Another dumb headline coverup on the front page of the Herald Sun newspaper today. That said, I guess it is not really a headline – hey have obscured the headline for another of their anti-labor pieces. If only this newspaper would publish fair and balanced coverage of news rather than biased nonsense. Regardless, covering front page headlines with a post-it note type ad is nuts in my view.
Newsagent opportunity: ABC shops to be phased out
In another example of the challenges for book, music and filmed entertainment retailing, the ABC has announced it will phase out its shops.
While challenging news for ABC staff, this move presents opportunities for some newsagents. In our shops every day we serve customers who like that they browse and purchase in store rather than online. While the ABC announcement says it will focus on digital strategies, I suspect they will want retailers to offer in-0store purchases for plenty of their lines.
Updated advice on doing a magazine relay in your newsagency
In the three years since I published my article How to do a magazine relay in your newsagency plenty has changed. In this post I provide up to date advice. I hope you find it useful.
Before you start the relay, consider the amount of space you want to allocate to magazines. Do not allocate space to fit what you are sent. Allocate space to make money.
Today’s newsagency needs somewhere between 15% and 25% of floor space allocated for magazines. With the category one of the least valuable in pure gross profit terms efficient use of space is key.
Once you have your floor space allocation and know your fixture situation you will have a pocket count.
Now you can get down to your relay.
The relay you do in your business is your relay. There is no right or wrong way. There is also no end point. What you do today will need refining next week and the week after. So, do not over think what you want to do as that would be a waste of time.
The goal of the relay has to be to disrupt magazine traffic in pursuit of an increase in sales. What I mean is: change everything, upset customers and staff, sell more magazines as people discover titles they did not know you had.
PLANNING
Determine your zones shopper: garden, food, men, women, sports etc. In some locations you will full face titles while in other locations you will fit three titles into two pockets and in others as many as six titles into two pockets. The categories where I use less than one pocket per title is: special interest, British weeklies, food, comics and some craft segments.
Yes, customers looking for a destination title for which you receive a small quantity will look for the title. Save money, use less space for these titles.
Look at the percentage of sales delivered by each magazine category and look at sales trends for the categories. Tote up broad groups. For example the percentage of sales for women’s weeklies, women’s interests, crafts & hobbies, crosswords, home & lifestyle and food & wine. If your newsagency is like mine, this grouping will account for more than 50% of your magazine sales.
Use your data to broadly map out a plan.
NOW, THE MAGAZINE RELAY
I suggest it is done by one person, an owner, working alone.
- Take every magazine off the shelves. That’s right. If you are going to do this you have to commit and taking every magazine off the shelves is a commitment. Also, take down all magazine posters.
- Clean the shelves. What an opportunity!
- Build the women’s zone. From the busiest section in. If it is an aisle, start with women’s weeklies on one side and fashion (marie claire, Cleo, Cosmo, Vogue) on the other. Concentrate on one side first, the weeklies. Respect top sellers, give New Idea, Women’s Day, Famous, NW, Who, OK!, That’s Life and Take 5 prime position.
- Place a half or full column of crossword titles next to the weeklies.
- Next to weeklies place, in order, pockets of Better Homes and Gardens followed by Australian Women’s Weekly, British women’s magazines (yes, all of them), country living titles, home and living titles, food, wedding with a waterfall of the major title and hair. For me, space wise, that sees out one side of the aisle.
- On the opposite side, directly across from and facing women’s weeklies, I have fashion young, fashion older and I end this with a waterfall of Frankie. Next is women’s health starting with younger target titles and blending to older ones. Next is pregnancy and baby followed by crosswords. This usually rounds out that side.
- This is my women’s aisle.
- Using key titles as borders and features at the same time.
- I look for one space on each side for an in-location display, where I take between four and six pockets for a poster supporting a title. This can ease the visual conflict of a mass of titles and drive incremental business for a good title to boot.
What I do in women’s is the same for the other zones I create. I do each zone separately and try and get into the head space of the shopper of the zone – using the most popular titles to act as beacons, or signposts, for the zone.
I also take note of covers and give really good covers, eye catching covers, time in the spotlight.
I am careful what I place next to top selling titles. This is a prime spot, next to the popular titles. Choose wisely. Choose titles that naturally fit next to the big titles, titles shoppers are likely to browse and purchase on impulse.
If I am not sure about where to put a title I put it aside and move on.
I take extra time with special interest and hobby titles. For example, I put railways and model railroad titles near each other but I am careful to ensure that they are separated as they appeal to two shoppers and only occasionally do you see titles from both segments in the same basket.
Within the zones I look for and respect specialisation. For example, within men’s lifestyle and sports I create a clean space for the quality serious fitness titles like Coach, Men’s Health and Men’s Fitness.
REVIEW, FEEDBACK, FOLLOW UP
You’re not done when you think you are done. Track sales, listen to your team and your customers. Tweak where you feel it is necessary.
Bring new issues to the fore. Continue to be engaged in how your magazine department looks.
Continue to look at your sales data. If there is no lift be open to further change.
FINAL WORDS
Doing a magazine relay can be like doing one of those kid’s puzzles – you move them around and around until you have the completed image. That image can look and feel like a work of art once you are done.
I can’t stress enough the importance and value of a magazine relay to your business and you personally. This is you placing your stamp on the business. It is you breaking free from being a conveyer belt newsagent. It is you taking ownership of your business.
If you have made it this far, thanks for reading. Magazines really are a point of difference which we need to work harder at embracing – despite the challenges of the distribution system.
I’d be happy to answer questions or discuss magazine relays with anyone: mark@towersystems.com.au or 0418 321 338.
Over to you…
Test driving self-checkout at WH Smith
WH Smith has self-checkout units in many of their retail locations and today I used one for the first time. The experience is as you would expect – the same as we have with our supermarkets in Australia. I purchased a newspaper and found the multiple steps tedious. However, it was faster than the line for human service at the counter. But then the human service is what retail is all about. The smile, comments extra help are what differentiate shopping with us from online.
I think we should want to encourage more human interaction and not less. But WH Smith is a massive company with a good track record so for them this must be an appropriate offer for them to have in their shops.
WH Smith appear to manage counter staff allocation as our supermarkets manage human checkout operation – to a minimum.
There must be a point at which a self-checkout terminal is cheaper than human labour. However, I expect this would be years as the terminals are not cheap.
You’ll find the best cards in the UK
I don’t know if it is the highly competitive marketplace or more due to a concentration of creative designers, card shops in the UK have the best cards of any retail I have seen around the world. Between Scribbler, Paperchase, Clintons, Hallmark stores, WH Smith and many independent card shops in the premium space there is considerable competition. Even at the discount (value) end there is extraordinary competition.
At the Harrogate Gift Fair over the last two days I have seen close to twenty independent card suppliers – all with unique designs. British card retailers are spoilt for choice in terms of range and quality.
The standard of small independent greeting card lines I have seen here is superior to what we see from independent card publishers in Australia. From humour to artistic to locally themed, they do it well.
Here’s how they pitch free water with a newspaper in the UK
Here is a photo of the floor display unit promoting the free bottle of water with The Telegraph at WH Smith outlets that I mentioned in my previous blog post. I have loaded a larger version so you can click on the image to see it in detail.
While I am not a fan of the stand – it looks ugly, outdated – I do like that the water and the newspaper are together and that there is space on the stand for a further up-sell (Mentos). I also like that there is a choice of water.
Books, water and candy used to drive newspaper sales in the UK
WH Smith outlets at transport locations I have seen in the UK over the last week all had offers to drive newspaper sales.
The most substantial was this boo discounted by 50% when purchased with The Telegraph paper. Given the pricing being used by many bookshops it’s not much of a deal.
The most common offer was free water with a newspaper purchase.
Curiously, I did not notice these offers in high street newsagents I visited. I suspect this is because the newspaper purchase in a transit location is more an impulse purchase and because of the challenge of dealing with independent retailers compared to a network like WH Smith.
We are seeing more of these newspaper related promotional offers in Australia. News Corp. is the leader in this field. They are demonstrating considerable flexibility as to the products they promote with.
How 3M could increase sales in the newsagency channel
3M products are brilliantly represented in stationery outlets in the UK, especially the Ryman Stationers outlets. There, they have floor display units with terrific seasonal value propositions as well as good ranges on the regular shelving – satisfying broad demand.
We don’t see promotions like this from 3M in newsagencies. I am not sure if the problem is at 3M or at GNS. Regardless, we are not pitching 3M in a manner that is competitive with Officeworks. This costs us revenue. It also costs 3M revenue.
I’d like to see the company develop appropriate floor display offers with newsagents and pitch these as a package to our channel with a target of, say, 1,000 engaged retail newsagency businesses. The most efficient way for it to do this would be through each of the newsagency marketing groups.
Stationer banner groups in Australia already do this with a range of suppliers. If we don’t we will lose even more stationery sales.
Transurban stops using Australia Post – an opportunity for newsagents
Some newsagents are seeing more traffic thanks to Australia Post no longer doing Transurban (Citylink in Victoria, Go via in Queensland and eventually Roam in Sydney) account top-ups.
The challenge for newsagents is the 55 cent fee they get for what can be a sizeable transaction. The impact is around banking, to ensure money is ninth business account in time for the sweep by Touch.
If the top-up is paid for by a card, the newsagent will have to charge a fee to cover costs of the card. otherwise they lose money.
My understanding is the 55 cent fee is set by Transurban. Certainly that is where I would start in ,lobbying about this. I have raised it afresh with Touch and will share here what they come back with.
I first raised this with Touch early this month – that’s how I found out more about the move away from Australia Post.
Cards in the window could drive card sales for newsagents
Every card shop I have seen in the UK this trip has cards in the window. Our channel accounts for 35% of all greeting cards sold in Australia yet we rarely promote cards in our windows. We are lazy. We are missing an opportunity here.
I wonder what we could do for sales with creative window displays featuring cards.
The photo shows one window from a gift shop in Harrogate in North Yorkshire. They claim it is the biggest card and gift shop in the area. Despite being well known for their range of cards, here they are using valuable window space to promote cards. I think we should do more of this in our businesses.
Specialist magazines in specialty retail
In the UK over the last few days I have seen plenty of specialist magazines not in newsagencies or other traditional magazine outlets but, instead, in specialty retail. I saw Kinfolk earlier today in a gift / fashion / coffee house in Harrogate. It looked completely at home.
While this type of specialty retail placement is challenging and expensive for publishers to reach, it does place the title closer to the target shopper.
With more newsagents in the gift space, especially the niche fashion gift space, this photo serves to show how a niche magazine like Kinfolk could be placed with gifts, away from the magazine department.
WH Smith volume offers could challenge Aussie newsagents
I have been in fifteen or so WH Smith stores so far on this UK trip and in every one they have several stationery value propositions including this 3 for 2 deal promoting new colourful ranges.
Their pricing approach is like we see in Australia from Typo, Smiggle and Kikki.k. While 3 for 2 sounds like a deal, I expect they knew they were doing this from the outset, 3 for 2 is their goal price. It’s not a deal. But consumers will not see it that way.
What WH Smith is doing in the UK is more important than ever to Australian newsagents as this group now owns Supanews, Wild, it’s own WH Smith outlets, Zoodle plus hospital retail outlets. If reports are true there will be more WH Smith outlets in Australia in coming months.
If they get enough stores in the traditional newsagency space and operate all with discipline they could set a standard shoppers will expect in several product categories such as this everyday stationery space.
The value of taking time with magazine placement
Check out the placement of The Monthly and Harvard Business Review in a newsagency I visited last week.
While the display looked okay, there was nothing wrong with it, I thought it could be more successful, especially for The Monthly, the title I expect they will sell many more copies of each issue. Given the cost of magazine pockets, maximising return is vital.
So I switched the titles.
Here is the result of the switch. You get the full effect of the cover art of The Monthly, you get context for the story tease: Of clowns and treasurers…
I think this simple single pocket switch will result in a better return for the business with more copies of The Monthly sold but without denying sales of Harvard Business Review.
It is important we do more than put magazines out. Our magazine department is s reflection on us. Placement of titles is our curation of the range. It can be a valuable point of difference for us.
The change in consumer engagement with magazines ought to drive changes in our engagement with the category. More thoughtful placement is one such important change I recommend.
Checking out the new Art Therapy partwork
I got to see issue #17 of Art Therapy, the partwork from Hachette that will be distributed in Australia soon. I am surprised they are up to issue #17 in the UK. based on art therapy product sales I would have preferred to have had this title two months ago. I am sure it will sell well in Australia if we get it soon.
Sunday newsagency challenge: replace EVERYTHING at your counter
Remove everything you sell at your counter from the counter and replace it with completely different products that are usually not at your counter.
This idea is designed to disrupt you and your customers.
Track the results for a week and see how they compare to what you usually sell from the counter.
If you keep doing what is usual you will get the usual result. Disruption will always inform future decisions.
I may try this new series for the next few weeks and see how it goes. I’ll post a different challenge each week to disrupt the traditional newsagency.
Sunday newsagency management tip: stop being your customer
Many gift shops close because the owners stocked the shops based on what they like rather than what customers in the area will like.
You are not your customer.
This is especially true with gift buying. My experience is you will make more money with items you would not buy for yourself than from the items you love.
It is tough to disconnect from what you love when buying but you must.
I have had newsagents say they cannot sell items worth more than $20 who go on to find they can. I have also had newsagents say they cannot sell homewares who have found they can.
Please don’t let your prejudices and tastes hold you back from what you can achieve.
Sunday newsagency marketing tip: run a competition on social media
Facebook is proving to be the best competition platform I have used in years. Entry is easy as is picking a winner and letting everyone know who won.
It is especially useful for attracting new shoppers. I know of plenty of new shoppers now visiting as a result of a competition I ran of Facebook.
The key is to not be overt about the competition.
Write about a cool new product you have in store and at the end of the post say we will give two away to anyone who tags a friend in a comment to this post.
In one case recently I attracted over 500 comments / entries for a $10 spend via a boosted highly targeted post. A secondary benefit was many additional likes of the business page.
While competitions in-store have their place, out of store competitions run in a style appropriate o the target consumer is the best way to attach your business to lovers of the brand or product.
It is vital we market our businesses outside our four walls as new traffic is mission critical to us with several key traditional newsagency product categories flat or in decline.
Discount newspaper bundles in the UK
Check out the discount newspaper bundle I saw at a WH Smith outlet in Manchester this morning: the Daily Express and the Daily Star newspapers bagged together for £1, a 49p discount. We are seeing a version of this with the News Corp bundling trials in Australia at the moment. Bagged bundles may make selling easier.
More discount magazines in the UK
There are plenty of discount magazine packs for sale in the UK with packs of two and three titles. In one WH Smith outlet yesterday there were four packs. From what I have seen, the discount packs are only in the weekly magazine space from what I can see. This is different to what Bauer does in Australia.
The free / pay mix for the Manchester Evening News
This photo shows a newspaper stand out the front of a newsagent I visited in Manchester late Friday afternoon. The Manchester Evening News is free on Thursday and Friday and paid for Monday, Tuesday, Wednesday and Saturday. All through downtown Manchester there were bundles and bundles of the paper for people to take from as well as stands like this out the front of newsagents.
It is an interesting move. I would have thought it would confuse people – but then I have not looked at all the editions to see the differences in value.
In the UK for a gift fair
I am in the UK for Home & Gift Harrogate, a massive trade show in Leeds starting Sunday featuring gifts, homewares and cards. With many suppliers sourcing products based on UK trends I wanted to get closer to the source.
Another mobile lottery ticket app
OzLotteries is promoting their mobile app to people who are mobile. I noticed the ad in my Twitter feed a couple of days ago.
I downloaded the app and checked it out. Sure enough, you can purchase tickets anytime anywhere.
All they need to do is attract a user who is travelling and I expect they will stay once the return from their travels. The ticket purchase process is fast and easy – faster than visiting a shop and making a purchase.
Newsagents need to be aware of innovations such as this when undertaking their own business planning.
It is this type of innovation was more concerned about when saying newsagents in NSW were spending too much on the supermarket situation.