To newspaper publishers who ask how can we help retail newsagents sell more newspapers I say stop using us to switch our customers away from our businesses. The deal stuck on the front page of The Age today is a good and frustrating example.
While I understand the role of discount home deliveries in the mix, stop using my shop to attract these customers. Instead, work with me on driving over the counter sales.
I bought a t-shirt online recently and placed on top of it in the package I received was this note.
What terrific customer service!
I don’t recall being given this advice in such an obvious and friendly way when buying t-shirts from a high street retailer. Sure, some of this information is on care instructions inside the garment – not presented in this obvious way or with the same friendly style.
What I love about the postcard the most is that it was unexpected. I was delighted to see it included and with the information shared.
High street retailers argue that their service is more personal and more connected than online yet with this t-shirt purchase I have received better and more personal service than is usual when purchasing t-shirts offline.
Smart online retailers will take business from high street retailers if they provide a more valued experience. That’s what I have had here.
On the back of the note was a bold yet simple Thank You!
I bet they thought about this long and hard at SHIRTSCOPE.COM – about how to provide an experience to the online shopper which is better than they would experience from a high street retailer. It shows in their execution from the website to shipping to how the product was packed to the customer care from this note.
We need to understand
Newsagents promoting chocolate roses for Valentine’s Day need to be careful about their stock holding and price positioning given what I have seen in Woolworths this week. Take the product in the photo – $10 for 12 chocolate roses. It would be hard for any newsagent to beat this, especially if they were to create their own roses by wrapping chocolates themselves.
The photo is from a Woolworths in Melbourne. the display is at the main entrance – you can’t miss it. The product itself is a compelling offer, one many Valentine’s Day shoppers will find compelling.
While newsagents can compete with supermarkets for Valentine’s Day gifts, doing this depends on the product mix and the narrative – like shop local or shop small business – supporting them.
Just what we need, another gluten free cookbook. We have plenty of gluten free cookbooks in our newsagencies already, more than we need – yet Bauer decided we needed this $24.95 Australian Women’s Weekly branded title. If I had control I’d have said o thanks – place your stock elsewhere, where it might be more likely to sell. We early returned the title as we have better value cookbooks from others for which we are achieving better margin.
Kudos to SBS and Pacific Magazines for continued support of newsagents when promoting Feast magazine. Every month they do this while other publishers have dropped mentioning newsagents in their ads.
This is a reason to give Feast prime placement in your magazine newsagency department. Go on, support this title as a thank you for their support of us.
Feast is a specialist title for serious food lovers and those who love the food journey. It is a wonderful title around which to pitch food related gifts and homewares.
Mid last year I was approached by XchangeIT about their consideration of changes to IT infrastructure to facilitate the elimination of labelling magazines.
I explained to XchangeIT at the time:
The XchangeIT representative put to me that newsagency software companies, like my own, profited from selling labels. I explained that while we do sell labels at Tower Systems, the margin is slim and the overall contribution to revenue less than 1% of annual sales. So, no, my thoughts are not commercially related.
If XchangeIT is concerned about newsagent productivity it should invest its time and money in ensuring fair and equitable supply of magazines. The largest overhead on a newsagency today is the labour, paper and retail space waste of oversupplied magazines. With an overall average sell through rate of around 50%, the cost to newsagents of too much stock and too many titles is clear. It is frustrating that XchangeIT remains party to management of newsagent supply in such a way that disadvantaged our channel.
This sticky label project is a distraction from the real issue at hand, the only issue at hand – to gross oversupply of magazine product to newsagents.
The XchangeIT suggestion that newsagents use additional hardware in their businesses does not make sense – it is something else to learn, that can break and that has a cost.
I see the sticky label project as a possible barrier to early returns as there is this suggested extra technology involved. The current approach is easy, lower cost, fail-safe and easy of immediate action on the shop floor.
XchangeIT is owned by the magazine distributors. Not sure about today but the ANF was also a shareholder in one XchangeIT business some years ago.
Distribution newsagents in Queensland have been advised by News Corp. of changes to the processing and handling of News Corp. newspaper returns. An outside party has been contracted to handle returns processing from the physical to the data aspects.
The change is significant as it contracts out work previously done by owls and newsagents to a third party, considerably further removing the newsagent from providing services previously core to their function. However, News says there will be no change to commission.
The good news for newsagents is that whilst the new process essentially means less work for you, there is no change to your distribution commission for Coles Supermarkets.
It does not make long term commercial sense for News to pay for work not being done.
There is no indication which party, Coles or News, is paying for the externally supplied services.
News explains the reasoning for the move with:
Coles Supermarkets recognise the complexity and challenges for both store staff and the servicing Newsagents. Appointing a third party enables one individual person the responsibility for the entire returns component thereby minimizing the risk of non-compliance. The appointed third party also brings a technological solution to eliminate paper forms, faxes, manual data entry, etc.
It is disappointing News has not taken up the opportunity to eliminate more paper forms, faxes and manual data entry for newsagents.
I’m in Perth and drove past a pharmacy offering no appointment sick certificates for employees – on a billboard on the main road.
I thought it was a joke. It is not. Pharmacists can issue medical certificates for minor conditions. This pharmacy is promoting that service in a way that appears to encourage sickies.
I wish I had a photo to show you it. The billboard is bright, like they are selling the day off. It is also situated on a road you;d travel to a nice beach, very convenient.
Sick days are are right but they need to be respected. Make it too easy to get the day off and the right can be abused as employers can find with some employees magically using the exact number of days available just in time for the anniversary.
While don’t think we need to reduce the sick/personal leave allowance, there should not be promotion of an easy route to getting a medical certificate. Further, I’d be happy for pharmacists to not have the right to produce these.
I’m opening this thread for a newsagent concerned about the collateral received from News Corp. for promoting the Disney story books. They say the one blow up character and two posters are not enough for what appears to be a big promotion.
My advice if you’re concerned about the collateral received is to contact News.
If you comment here and want more collateral, include your store details so News Corp. people reading this can contact you.
This is the first time I have noticed the blow up collateral. It’s a good idea but challenging to display if you don’t fill it with helium as some are finding.
The counter decals provided by Hallmark for promoting the picnic hamper giveaway for Valentine’s Day are terrific as they provide us with a reminder at the point of purchase of the promotion. We have ours placed next to the hamper – to help us pitch the purchase of Valentine’s Day cards.
Have you bought a Valentine’s Day card you – you could win this picnic hamper – this is the type of pitch that could help you drive Valentine’s Day card sales.
One of the best ways to increase sales is to ask. Too often in Australian newsagencies we do not ask.
One way to make it easier to ask is to have an opportunity. In our case this Valentine’s Day, the opportunity to win the picnic hamper is an ideal opportunity.
The Melbourne Gift Fair which ended Tuesday was a small event, a fraction of the size other Melbourne and Sydney fairs – but it was good value. It was easier to get around, less crowded – meaning one noticed more. I found it particularly useful for talking to suppliers of products you rarely see in a newsagency. As the fair was not as busy they were open to conversations about the type of business we are trying to create and why they need to consider us outside of what they think the shingle stands for.
I am a fan of smaller trade shows as they are easier to digest. If I had my way, events the size of the recent Melbourne fair would be done in Adelaide, Perth and Tasmania – as newsagencies, gift shops and homewares stores in those states would support them.
The massive Sydney and Melbourne fairs are challenging, particularly to small retailers looking for change for their businesses.
The US media is full of reports that US stationery / office products giant Staples is in talks to purchase smaller rival Office Depot for a reported US$6.3B.
The merging of the two businesses, if it proceeded, would create a company of extraordinary size and might.
Staples in Australia owns what was Corporate Express. We have little understanding here of what they have they done in the US in the retail stationery space. Imagine Officeworks but better: more aggressive, more locations, more engaged with small business customers.
Almost every day there is optimism reflected in one or more posts here. While one or two think the benchmark results published today are negative, the results are actually positive because of the good news being experienced by some newsagents.
Optimism is in the eye of the beholder.
One of several items of good news in the results in the card department in my own newsagency. In a shopping centre with plenty of competition from majors as well as independents, card sales are up 16% year on year.
Others can achieve and are achieving similar success.
This is good news for the channel as it shows that independent newsagency businesses can compete – even when selling the same Hallmark cards that are in two supermarkets, two majors and several independents. Our independent newsagency competes on service and value and the result is 16% year on year growth.
This is good news as other newsagents can achieve this too. Sure it’s hard work and involved detailed business planning and running your own race sometimes against what a supplier wants. The results speak for themselves.
It’s not too late for newsagents to reinvent their businesses and to chase their own optimism.
Australian small business Newsagents had a tough December quarter according to the latest newsagency sales benchmark study. Key performance indicators show traffic and revenue are down for many businesses in the channel.
Long-term core traffic drivers of magazines, newspapers and tobacco are challenges for newsagents. They can be lifted but it takes newsagents breaking free from the past.
Newer categories of gifts, toys and ink are growing for many.
The good news is the continuing trend – some newsagencies are growing faster than many retail businesses.
Here are the headline numbers:
Now more than ever, newsagency businesses are not all the same. The gap between those in decline and those growing is greater than ever. Newsagents make choices every day that can help a business grow or hold it back.
It would be wrong to make a common statement about how they (we) are doing as there is no common situation.
Benchmark results by key departments:
The strong are getting stronger and the weak are getting weaker. There is no geographic or demographic trend to this.
Product mix shift. The shift in product mix I have seen over the last two quarters is continuing. Within the expanding gift categories I can see some newsagents selling more expensive gifts. It is fascinating seeing these changes taking place.
I have not included my newsagency in this study. Here’s why: My numbers are outside the average and I did not want them to skew the results. I don’t mean this to sound arrogant.
My numbers all off a good base, are: Cards up 16% with Everyday Counter up 21% and it accounting for 32.02% of all sales, Diaries up 83%, Gifts up 69%, Magazines up 2%, Women’s Weeklies magazines (New Idea, Who, Woman’s Day, Famous etc) up 9%, Plush up 6% and accounting for 8.2% of overall sales and Toys up 42%. This business does not have lotteries and does not sell tobacco products.
Traffic is up 6%. Average sale value – up 8%. Average items per sale – up 3%. Overall average GP – up 14%. Each of these measurement points compounds on the other, delivering a very strong result for the business.
This growth is as a result of careful planning and pursuing what we stand for. This newsagency is in an outer suburban Westfield centre in Melbourne with around 300 stores including majors, another newsagency, two Coles supermarkets, Wild, Typo, several large independent card shops and twelve gifts shops. Competition is strong.
I include my own data here for comparison and to illustrate that I walk the walk with newsagents. When I encourage newsagents to try things it is because I do so my own business. I put my money where my mouth is.
What we do in this business any newsagent can do. Growth is achievable.
Newsagencies are good businesses to own. It would be wrong to say that the declines reported in this study reflect badly on the future of the channel. I think the results reflect badly on some operators, newsagents not chasing change.
The best type of newsagency to own is the one where you have the most control over what you sell and where you generate traffic for several product categories where average gross profit is 50% or higher.
The most important advice I have for newsagents has not changed: Run your business today as if today is your pay day. Too many newsagents continue to run their businesses as if their pay day is when they sell – this will not happen.
This year on year same-store newsagency sales benchmark study is an analysis of basket data from 167 newsagencies: city and country, shopping centre and high street, banner groups (Newspower, Nextra, newsXpress) and independent. To be included, a newsagency must have been using the industry standard Tower Systems newsagency software for both analysis periods and be compliant with industry data standards. NOTE: I have done these benchmark studies for many years, drawing on my experience with the Tower newsagent community. Around 63% of newsagents with a computer system use Tower. I have eliminated data from businesses where I knew that unique local factors impacted on the sales data.
The publisher of Boar It Up Ya is promoting newsagents ion social media in advance of the next issue.
Local publishers who specifically support our channel ought to be applauded, supported and loved by newsagents.
The support from Boar It Up Ya deserves support from us to encourage other publishers to do this. This social media support is more valuable than points in a publisher loyalty program.
In the October – December 2014 newsagency sales benchmark study, the findings from which will be released tomorrow, the number of newsagents selling cigarettes has declined. 38% of the 169 newsagency businesses in the study do not sell cigarettes. This is up from 29% in the same study a year earlier.
Put another way, the results of the latest newsagency sales benchmark study reveal that 30% of the newsagencies have quit cigarettes over the last year. I doubt this is reflective of the whole channel as many (but not all) newsagents who participate in the benchmark study are either transforming their businesses or preparing to.
There are several factors playing into this move by newsagents: concern about public health, falling sales, tougher competition and better margin elsewhere.
A consequence of the regulation of tobacco products is that supermarkets tend to do it better. They have a big service counter at the entrance – a cigarette counter I’d call it. The size is such that it promotes it better than your average newsagency business can behind or under the counter. Cigarettes at a supermarket are more noticeable than in a newsagency.
The focus on health through retail changes, packaging changes and intensified health warnings provide for little or no upside in from a pure retail sales perspective. If there is no upside in a product and no mechanism through which a retailer can engage to drive sales then it is time to consider quitting.
I have seen newsagencies recently remove their cigarette cupboards from behind the counter and replace them with a new display space for gifts or other higher margin lines and report a better return on lease space as a result. As more newsagents share stories about such transformation more will follow.
From my benchmark study and accompanying basket analysis I have developed a couple of benchmark data points for my discussions with newsagents. Cigarettes sales of under $2,000 a week warrant careful consideration. An inefficiency rating of 50% or more – the percentage of times when cigarettes are purchased and nothing else – ought to intensify focus.
Whether to sell cigarettes or not is a personal choice newsagents get to make for themselves. My advice is to be guided by your own business performance data, layer this with a realistic assessment of competition and then consider the opportunity of the freed space. Whatever you do, you must do it competitively and in ways which financially benefits the business from a growth, return on investment and return on floorspace perspectives.
I stopped selling cigarettes in my newsagency in 1998. Our sales then were around $1,500 a week. 65% of sales were inefficient – cigarettes and nothing else and of the remaining 35%, the majority companion products were newspapers. Our stock holding was $3,500, labour cost each week around two hours and shrinkage running at 2%. The numbers were not working so we quit. It did not affect newspaper sales or any other sales. Indeed, the space we saved was put to better use which generated a better return.
I’ve received two calls in the last few days about supermarkets and the harm they are doing to small businesses like newsagencies. Each caller made contact as they wanted offer support for newsagents, they wanted to know what they could do to help and what we were doing to fight back against the market power of the supermarkets.
I get calls because of what I write here all the time – but not often from people who are not newsagents or connected with newsagency suppliers. These two callers were everyday people who only connect with newsagencies when they shop.
To the second caller, in response to their question when they asked how they could help, I said stop shopping at one of the major supermarkets. Their response was they could’t afford and didn’t have time to shop at the butcher, greengrocer, baker and the like instead of a single shop.
And therein lies the challenge.
People are emotionally connected to the idea of small and independent retail businesses but when it comes to time and money, the savings of both get them spending at the two major supermarket chains in growing numbers. This is the challenge for small business retailers – to address what matters most to people, to serve the selfishness of Australian shoppers.
Franchising is another magazine I wish I could cut. If I’m lucky I sell one copy but that is rare. This infrequent sale has not been enough to get Network Services to reduce my supply to one or even to cut it altogether in favour of a more successful title. The performance of Franchising reinforces why we need control over they titles we are sent.
Have your say on this topic if you want control over the magazines you receive.
Crossword magazine sales are up 6% year on year for us and while this is a terrific result compared to the channel average, we continue to embrace opportunities for more growth. Over the weekend, for example, we had four pockets space next to British magazines and so placed four crossword titles there. We did this because of observations of people purchasing British magazines often purchase crossword titles in the same transaction.
Data and observations can help us make better business decisions.
Bauer Media is trialling a price increase for Woman’s Day to $4.40 in Western Australia while at the same time offering it through Coles for half price and continuing to chase sales by including it in a discount pack at 33% off.
What makes the WA price increase trial worse is the poor and after the event communication by the company and their appalling handling of the trial from an operational perspective – disrupting customer service in retail and home delivery newsagencies because of a fundamental lack of understanding of how newsagents manage each of Woman’s Day through their businesses for home delivery and cutaway customers.
Bauer created a new title code for the eight week trial, disconnecting from the usual title code which is used in newsagency software systems for managing deliveries and putaways. From what I understand they did not tell newsagents until after it started.
If what I am told is true, those isresponsible for newsagent liaison for this trial ought to be reprimanded for a botched job as they have failed newsagents and their customers.
I’ve heard from a newsagent this week about the Lyoness loyalty program. They wanted to know what I thought. I first wrote about the Lyoness in 2013 here. The ACCC has taken action against the operator of the scheme. The Wikipedia page on the Lyoness has more history.
The Sydney Morning Herald published an article about Lyoness earlier this month.
I’m raising it here again today to provide newsagents links to articles which may be of interest. While I have never used it, from what I read, Lyoness not for me. I’ve got other strategies that are working well to drive sales and shopped loyalty.
To Newsagents asking what they should do I say stay away at least until the ACCC action is concluded and a result known. From all I read, it looks to me like a pyramid scheme with your income dependent on those you attract, layering on layers.
Further to my post two days ago about a possible new approach to magazine distribution, the supply this week of Menace To Society by Bauer Media’s Network Services to newsagents is a good example of why we need control. This is a title serving a narrow and declining in size niche. In my own newsagency it is a niche of no interest or value to us. If I had control, I’d have said no to the title. But network does to give me the opportunity to say no.
Network demand we take on the debt yet they give us no reasonable mechanism through which to control this. It’s unethical in my view.
The current issue of Lula magazine looks cool. The different covers make it especially appealing. While not a local title – it’s from the UK – it fits on our shelves as a title offering a good point of difference in the niche area serving women from the late teens through to the early thirties – this is an important demo for newsagents.
We’re supporting the current issue of Lula with extra pockets for a few days next to Frankie.
The win by the Asian Cup Socceroos last night, the Queensland election result and the situation of Tony Abbott’s leadership status are all good newspaper stories. Each presents us with opportunities to drive impulse purchases – opportunities to not be shopkeepers waiting for people to come to you but to be retailers pitching papers to customers.