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

Author: Mark Fletcher

A week of newsagency management benchmarks: #2 gifts to cards

Each day this week I am sharing a newsagency management benchmark which I hope you find useful. The benchmarks are not rigid, use them as a guide. I have developed them over years of working with a variety of newsagencies in many different situations.

Management benchmark #2: gifts to cards

Three years ago I was saying newsagents should aspire for gift revenue to be equal to 35% of card revenue. Today, I think that number is insufficient.

My base recommended gift revenue to card revenue ratio today is 50% while my recommended ration is 1:1. That is, I am saying your gift revenue target ought to be equal to your card revenue – preferably higher as is being achieved by many newsagents.

I mention the 50% as a base for newsagents who are yet to fully embrace the gift opportunity.

Let me be clear about gifts though. I do not include toys and plush in gifts as they are in their own department – even though you could argue plush should be in gifts.

My suggestion is you look at your gift to cards revenue ratio for the last three months. If it is below my suggested minimum target of being equal to 50% of your card revenue, work on what you need to do to get it higher … expand your range, play with shop floor placement, engage in marketing. Sure, it’s hard work. The benefits are terrific given the better margin on gifts compared to some traditional newsagency lines.

If you don’t know where to start, look at your existing data as this will provide the best guidance as to the gifts you could sell.

Don’t look at gifts as a destination. Change is vital to attracting leveraging existing traffic and attracting new traffic. And remember when buying: YOU ARE NOT YOUR CUSTOMER.

I hope this series helps newsagents look at their businesses differently and to ask questions about their performance in the context of best practice in our channel. Newsagencies with the brightest future are those where data is respected and benchmarks are set to be achieved and passed.

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Management tip

Australian made Darrell Lea liquorice on the shelves in New York

dlnycAustralian made Darrell Lea soft eating liquorice is on the shelves of supermarket and convenience outlets here in New York. I checked the packaging – yes this product is made in Australia. this is a good export story from a company that a couple of years was down and out.

astyleNear the terrific Darrell Lea product is a US made knock-off product:  soft chewing  Aussie style liquorice. The packaging has Darrell Lea elements to it.

While imitation is the best form of flattery, if I was Darrell Lea I’d feel ripped off by this Walgreens house brand product – especially given the Darrell Lea product is almost twice the price.

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confectionary

Using newspapers to sell fashion

fashionpapersA retro-style designer fashion outlet in Greenwich Village New York is using stacks of newspapers in their window to draw attention to their business. While the window display worked and got me to stop and take notice, the irony of their use of newspapers to promote fashion was not lost on me.

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Newspapers

A week of newsagency management benchmarks: #1 revenue to staff

Each day this week I am sharing a newsagency management benchmark which I hope you find useful. The benchmarks are not rigid, use them as a guide. I have developed them over years of working with a variety of newsagencies in many different situations.

Management benchmark #1: revenue to staff ratio.

First up, by revenue I mean the total value of general sales (cards, gifts, magazines stationery etc) plus your agency (such as lottery) commissions.

Based on an average gross profit performance in the based of 28% to 35%, the revenue per labour hour benchmark I suggest is $250.00.

If your gross profit is between 35% and 40% (which it should be), the revenue per labour hour benchmark is $225.00.

You could argue that rent should play a factor in the revenue per labour hour target. I could understand that. However, my goal here is to provide a blended national figure you could compare against, to enable you to look at your business against such a benchmark.

I know of businesses hitting the two figures I have quoted as well as businesses falling below. No matter where you sit, the revenue to staff benchmark ratio can be useful in rostering and managing staff as well as guiding shop floor decisions you make.

If you have a data point on which you need to improve, understanding that data point and the levers which impact it can be a tremendous help.

I certainly find using this benchmark to assess efficiency.

Note: the benchmark figures are a guide only. In reality, the revenue figure per staff hour should be higher. Also, for hours worked – include yours too.

I hope this series helps newsagents look at their businesses differently and to ask questions about their performance in the context of best practice in our channel. Newsagencies with the brightest future are those where data is respected and benchmarks are set to be achieved and passed.

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Management tip

Confronting the Scoop oversupply issue

Screen Shot 2015-04-11 at 12.30.33 amOver the weekend I emailed several contact points at Scoop about their oversupply as I wrote about here last week. The email speaks for itself. I wrote it because I’m of the view we need to hold publishers account for the oversupply we are hit with given that magazine distributors have done little to address the problem. The Scoop example is a simple one to use as there was no evidence in the sales data whatsoever warranting additional stock to be supplied to the example newsagency.

I will let you know if the folks at Scoop respond.

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Ethics

Magazine distributor IPS completes today’s trifecta of magazine oversupply of small business newsagents

A newsagent contacted me this morning to advice IPS, the Fairfax owned magazine distributor, has supplied 92 copies of Wild Boar magazine in response to sales data showing net average sales of 39 copies.

This oversupply will cost the newsagent time, labour and cash. it will cost the publisher service fees – as the distributor is paid regardless – and production costs as a result of early returns being trashed.

Do you think this oversupply by IPS is unethical?

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Ethics

Is this behaviour by magazine distributor Bauer Media’s Network Services unethical?

Screen Shot 2015-04-13 at 3.14.18 amCheck out the supply and return data for Modern Wedding Cakes & Styling for a newsagent who contacted me yesterday. They received 3 copies of edition #17 on 21/7/2014. They didn’t sell any. On 12/1/2015, Bauer sent them another two copies. They have still not sold any. Today, they receive two more copies.

Newsagents are being asked by Bauer Media to trust their new magazine supply rule. I know the newsagent I am referring to in this post does not trust them. I agree. This gross and persistent oversupply demonstrates a broken model. It is behaviour not reasonably addressed in the proposed new supply rules which have been endorsed by the ANF.

That Bauer behaves this way only to newsagents disadvantages our channel and those who shop with us. It restricts our ability to compete as it taxes us with labour, space, freight and cash overheads our competitors do not have.

Do you think what Bauer has done here is unethical?

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Ethics

Magazine distributor Gordon & Gotch fails newsagents with Valentine’s Day title

Gordon and Gotch is today (Monday) distributing Good Things Valentine’s Day. Valentine’s Day was six weeks ago. There is no sense in supplying this title now and doing so makes newsagents less competitive. It will cost those who receive it time, space, eight and cash.

Gotch would still be able to scale out this title to newsagents under the lame and ill-considered new magazine supply rules endorsed by the ANF.

Sometimes it is appropriate to supply a seasonally themed overseas title to newsagents but not for Valentine’s Day. It is a season which ends with a thud at midnight on February 14. The prospects of newsagents selling this title in reasonable number to pay for space, labour and other costs are minimal.

Do you think Gotch distributing this title to newsagents is unethical?

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Ethics

Sunday newsagency marketing advice: promote obscure

Newsagencies are habit based businesses. People step through our front door for habit based purchases daily: magazines, newspapers, tobacco, drinks, lottery products, greeting cards. This traffic, while it has some challenges, is a given.

My question today is – what are you dong to attract shoppers for non traditional, non habit based, items?

What do you sell or what could you sell that is obscure, different for your type of business? Is it something you could promote? Make the right choice and you get people looking at your business quizzically. They will probably remember you for the obscure as there is not a shop on every block selling such an obscure item.

Stocking and promote what people do not expect you will help you achieve unexpected results. This is essential as if you do what is average, what is expected, you will only achieve average results and today average is not good enough.

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marketing

Sunday newsagency management advice: plan for the economic storm

What is the worst that can happen to your newsagency business? A downturn in local industry, mass departure of residents, another newsagency or competitive business opening nearby, a collapse in consumer confidence?

These are other economic challenges could be around the corner yet too often small business newsagents are not prepared, they do not have a plan for dealing with the challenges.

I urge newsagents to take a moment and consider the worst economic activity which could hurt the business. Think about that and work back from the imaginary catastrophe on what you need to be prepared to do in order to get through it.

You can plan for an economic storm, I am sure of that. The best time for such planning is in advance of any such catastrophe hitting your business, well in advance in fact.

Those in hospital emergency departments, military, law enforcement and other public service areas plan and train for catastrophes all the time. It is essential to them being able to do their job in such circumstances. We in small business can benefit from the same planning and training.

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Management tip

Farewelling an employee – witnessing an Apple ritual

clapoutThere is a tradition at Apple stores of clapping an employee when they leave the business for the last time as an employee. I witnessed it first-hand yesterday in their 5th Avenue store in New York. There were several hundred shoppers in the store at the time and around 50 to 60 employees. There was an announcement an employee was leaving to take a job elsewhere. All the employees burst into applause and clapped their colleague out the store. It was a special moment to witness.

One employee explained to me it’s like they are sending them off into the world with their blessing and good thoughts.

It was interesting to see the departure treated in such a positive way.

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Newsagency management

The best source for labour rate and public holiday information

Some newsagents retain association membership to access labour rate and public holiday information. If this is you, save yourself the money.

  1. Click here for an accurate public holiday list.
  2. Click here to access the Fair Work Ombudsman Award finder.

Here are other free resources some newsagents use associations for:

  1. Advice on checking shopper bags for possible theft.
  2. Advice from the Federal Police on reducing the impact of theft.
  3. How to do a magazine relay in your newsagency.
  4. How to address magazine oversupply.

I think newsagency associations are out of touch with the needs of newsagents. Also, given they serve two different businesses, they are conflicted and less effective for each.

Save your money – invest it in your business.

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Newsagency management

In the US for a week

I am in the US this week for a conference with elite Hallmark Gold Crown retailers in Kansas City. I have come over early to see some new retail businesses in New York and to attend East Coast COMiCON in New Jersey.

I’ll continue blogging while I am away as I have some topics to catch up on. Plus I have been writing a series for next week on newsagency management rations I hope you find useful.

While I am in the US I am plugged into business back home thanks to technology so I will comment on issues as they arrive.

I’m also contactable here as my Aussie number diverts at my cost.

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Newsagency management

What local cafes can teach us about magazines opportunities for the newsagency

cafesteachusIn a café near a newsagency I was visiting a few days ago I noticed a selection of magazines available for browsing. Talking to the newsagent there was a disconnect between the magazines they focused on and those which were popular in the café. This presented an opportunity for the newsagent to learn more about magazines the currently sell yet which could be better featured – based on data from the café owner about what is popular with their customers a few doors away.

Sometimes, marketing insights we can leverage for our business can be found in businesses with which don’t have an obvious connection.

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magazines

Supporting the Win a Car promotion from Pacific Magazines

winacarWe are promoting the Win a Car competition from Pacific Magazines with the floor display unit in prime location.

We currently have the unit next to the counter. We will change location each week to connect with different destination shoppers visiting the business.

The Win a Car promotion is something we look forward to as it attracts shoppers, drives sales and gives us new customers for our marketing database.

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magazines

Using Twitter for newsagency marketing ideas

Screen Shot 2015-04-09 at 8.46.51 amI am inspired by this tweet I found yesterday.

A colouring book as an art therapy book!

It is wonderful how comments from others can have us look at our businesses differently. What we see as an item for one purpose could be seen by others as having a completely different purpose.

Maybe we change the art department to art therapy. My mind is racing with how we can promote this.

The more we promote our businesses in non traditional ways the more we will attract people not used to walking through our door.

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Newsagency management

Thoughtful spinner adjacencies drive sales in the newsagency

spinideaSpinners get a bum rap. I like them. They offer the ability to change your pitch easily. They also allow you to disrupt traffic flow and this can help drive sales.

I  two spinners together achieve more than they might achieve when alone.

In placing spinners we do so with thought. In terms of adjacencies, we ask ourselves: who is the customer. You get less value placing two spinners which appeal to different customers next to each other than if you place two spinners which appeal to the same customer next to each other.

Moving spinners is like a dance. You need to choose your partner wisely and move them around the floor gracefully, using all the space and ensuring you both have a good time while you are at it.

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Newsagency management

Using the POS software customer display to reinforce your messages

cdispThe only place we promote discount vouchers is on the customer display as a reinforcement and reminder. This is an ideal place to reinforce the pitch as it encourages those with a voucher to get it out to use with their purchase and to those without one to look forward to receiving one. It’s an unobtrusive pitch at the right time in the transaction cycle.

Customer displays work well in reinforce messages. My advice is to not overdo it – have two or three messages in rotation. Any more and it becomes a PowerPoint presentation and they can be boring. Repetition is key for the brief moment you have a customer within range to see the customer display.

I can’t say for sure that the customer display is a factor in success with discount vouchers but I am happy with our use of this customer touch-point in reinforcing the voucher message. It shows an integration of behavior and promotion – something sometimes missed in small business retail.

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Newsagency management

Pleasure from Coles magazine placement

iout'I know I shouldn’t have but I did get pleasure from this placement I saw at a Coles supermarket Wednesday. They covered Inside Out with Clean Eating with a cover shot of Pete Evans the controversial paleo diet promoter. I like that Inside Out is covered as this title is $2.00 less in Coles than elsewhere. I also like the dumb placement – pitching paleo food next to Barbie magazine. Some would say such an adjacency makes absolute sense.

When will magazine publishers realise that supermarkets don;t care about professionally managing magazines?

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magazines

Newsagents: check if you have been oversupplied Scoop too

scoop8Check out this oversupply of Scoop magazine by Network Services yesterday. This newsagent received two copies on November 6 last year and has not sold any. The allocations experts at Network decided to send another copy.

What a waste! This oversupply makes the small business newsagent less competitive.

There is no evidence to suggest this newsagent will sell the extra copy yet it has been sent – by a company newsagents are expected to trust to get supply right.

It is no wonder newsagents are doubtful of the motives behind the proposed new magazine supply rules.

Network ought to be ashamed of yet another example of oversupply which makes newsagents less competitive.

At least you get to top the magazine for return – but what a waste of paper discarding the rest.

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magazine distribution

Why newsagents are moving on from some gift suppliers

A gift supplier asked me yesterday why their sales to newsagents were falling yet gift sales in newsagencies were increasing. I explained the simple answer – newsagents want a point of difference as suppliers not offering this may get business early on but lose it as newsagents want to enhance their offer.

In a country town a couple of months ago I met with a newsagent who got into gifts a while back, they arranged for a supplier rep to call on them – it was their first visit to the town. Two years later the supplier rep had three accounts in the town and was disappointed when the newsagent said they would not order from them again.

While I understand suppliers want volume, there are other alternatives. As many newsagents themselves are showing, they can make more money out of fewer, more valuable, customers than out of higher volume lower value customers.

To gift wholesalers concerned about declining sales to newsagents I say look at how you sell. If you are opening accounts in locations competitive with the newsagent then either rely on those locations or place product with the newsagent who supports their desire for a point of difference.

Another factor is in the buying by the wholesalers themselves. It is frustrating to see the same range from three different wholesalers. Differentiation is vital today.

The longer a newsagent is in the gift space the more discerning their buying becomes. Wholesalers need to understand this.

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Newsagency management

The monthly partworks shopper valuable for the newsagency

monthlypworksWe have a number of partworks customers who shop with us monthly we don’t mind as they pay for new parts as they arrive by credit card. The monthly visit is to collect issues we have for them. If they skip a month it’s okay as we have been paid.

With more newsagents pulling out of partworks we are finding more customers prepared to drive a distance to collect series they are passionate about.

Serving this customer is all about making it easy for them. This includes easy payment, clean storage, good communication on arrivals and chasing issues which may have been missed.

With partworks customers more valuable for other purchases compared to regular magazine customers, these are services we are happy to provide.

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partworks

The Walking Dead opportunity is set to grow again

wdWith the latest series of The Walking Dead TV show set to debut in Australia, interest in licenced products is set to increase. We have had this licenced range for a long time and have embraced extensions as they are released. What is fascinating I that the licence appeals to guys and girls of a broad age range. People purchase the products as gifts as well as for their own use, on impulse and as a destination purchase. While getting into it now is late in the day, the opportunity is there for newsagents looking to expand beyond the traditional.

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Newsagency opportunities

Early returning Cosmopolitan Bride

cbrideWith a sell through of 30% and less, Cosmopolitan Bride is a challenged title for us in the crowded wedding space. The challenge would be okay if supply was cut by 50%. Since this is not happening, we have taken to early returning early in the on-sale to manage space and cash.

I cannot understand the deliberate oversupply of a title like this when there is no evidence in the sales data that we even cover our core costs of carrying the title.

Check your supply versus your average sales.

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magazine distribution
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