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

Author: Mark Fletcher

From the vault (July 2005): CONSUMER HABIT IS THE RISK NEWSAGENTS NEED TO ADDRESS TO BUILD NEWSPAPER AND OTHER SALES

I published this blog post here in July 2005. I think it’s relevant today as habit based shoppers remain important to our businesses.

While I talk about newspapers, card customers are, in the main, habit based shoppers, as are plenty of our other shoppers.

CONSUMER HABIT IS THE RISK NEWSAGENTS NEED TO ADDRESS TO BUILD NEWSPAPER AND OTHER SALES

The high number of newspapers and lottery products sold alone in newsagencies has been troubling me. Not only because of the risk to the newsagency retail channel in Australia if sales fall but also because of the lack of efficiency as a result of the traffic.

I have been looking for some research on why people buy newspapers but have had no luck so far. I’m guessing that the research has been undertaken by publishers and others for their own use and will not reach the public domain for that reason. My bet is that the purchase is as much or more about habit, like the morning coffee, than news content.

Looking at the way newspapers are promoted and the focus on competitions more so than news content suggests that it’s about habit. Competitions focus on maintaining and, hopefully, building habit. Content is not as important as the coupon or add on gift.

Lottery television commercials focus on habit. That and the fear of not having your ticket in when your numbers come up.

The risk for newsagencies is that they (we) are not part of the habit equation. Some of our products are but we are not. As consumers are able to satisfy their habit at more and more outlets it is reasonable to expect that the auto pilot will adjust and fewer will trek to the newsagency on auto pilot.

We need to promote ourselves as part of satisfying habit demand. The newsagency needs to provide the fix rather than the product. Promoting ourselves this way makes us more interesting to suppliers (current and prospective).

We can make the habit connect through competitions, as used by publishers and through emotional connect commercials, like independent grocers. My preference, however, would be that we find a way within our shops to collectively and universally across our channel make the habit connection and build on this to shore up current traffic and hopefully build more traffic moving forward.

Today, in 2022, I think there are other steps we can take to nurture habit. These include more diversity in what we sell and through a carefully celibately loyalty offer.

Our channel was built on offering what people wanted. They came to us for what we sold. We need to work harder and smarter at guiding people to what they ‘want’ and we need to do this around habit related opportunities.

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Newsagency management

Tower Systems promoting newsagents

My Tower Systems newsagency software company has produced another video promoting local newsagents and has been playing it via YouTube. So far, the sponsored video has more than 7,600 views – this is in 1 day.

The goal of the video is to remind people of value offered through local Aussie newsagents.

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magazines

Blending cards for a cohesive Father’s Day pitch

While some suppliers prefer you to keep their greeting cards on their seasonal stands, we have found it more successful to blend products so all cards for each caption are places together.

This means, for example, someone buying for Grandpa, will find all options together, rather than having to browse across two stands.

Here is what we have done for one of our shops:

While we do have stands from 2 companies, the cards themselves are blended. Some Henderson product is on the Hallmark stands and some Hallmark product is on the Henderson stands. Our experience doing this tells us it will result in better sales, for us and our suppliers … and this is what matters.

We are grateful to have had Father’s day out early. People are buying cards now, and gifts.

Our Father’s Day card pitch is on the lease line, to draw attention of shoppers walking past, to or from the car park.

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Greeting Cards

A chilling reminder

We have HEPA filters in our shops and last week we reminded customers why we wear masks.

I get that there are plenty of Aussies who don’t want to read or see anything to do with Covid. It’s fascinating seeing those views change when a loved-one gets it for the second or third time and struggles.

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Social responsibility

The supplier offer of cash in return for a long term agreement may not be good for your business

I was talking to a newsagent yesterday about their card situation. Their card sales are down 11.5% in 2022 so far compared to 2019 (pre Covid). They have seen me talk of double digit growth in newsagencies over the same period and wanted some advice.

They are half way through a contract with their card company. Because of the up-front money they received from the card company, it was called an advance on the projected rebate, they are locked in.

The problem for them is that the cards are not doing as well as projected in their newsagency. This means they are falling behind, which means the contract will likely need to be extended, unless they pay back the advance plus some costs associated with it.

They took the cash up front offer from the card company because they wanted extra working capital. It was pitched to them as an interest free loan and while it does not have a traditional interest component, the card performance has a cost that is, l in my opinion, higher than interest.

The cards this newsagency needs are card that perform well. That is not what they have, and they are locked in, which is distressing for them. Looking at their data at a pocket level, more than half the pockets are seriously under performing.

Newsagents beware.

The offer of cash up front for a long term contract may not be in your best interests, no matter how much you want / need that cash.

Of course there are some on the card supplier side who will talk the opportunity up and pitch it as a partnership designed to help you. What they want, the only thing they want, is a rooftop locked in. It’s what they sell you that matters and while they do want you to sell cards, having you locked in is even more important. Shock, horror: their interests are likely not aligned with yours.

There are many factors that determine card performance in a newsagency. Range is one. Newsagent engagement is another. Out of store marketing is another. Data based decisions is another. These decisions and engagements are best done on the basis of business and not because of a financial handcuff.

Back in 1996 when I bought my first newsagency I did accept card company money I return for a card supply agreement. Today, no matter the circumstances, I’d not agree to such an arrangement as I cannot see any benefit for the business.

The newsagent I spoke with on the weekend does have some avenues they can explore if they can prove that the agreement provided by the card company is holding their business back. Making their case in a small business claims forum would rely on their card sales data and them being able to show that it is worse than newsagents in similar socio-economic situation with cards from another supplier. If they were able to make that case, the agreement could be re-cast by the member hearing such a case, to make them more equitable for the newsagent. However, I suspect that the card company may agree to a resolution through mediation as they would not want the matter publicly aired.

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Ethics

What does newsXpress offer newsagents for its $175 a month membership fee?

A newsagent contacted me earlier this week asking why it didn’t help with leases and why it restricted the card company members could buy from. I explained that newsXpress does help with lease negotiation and that there is no restriction on the card company newsXpress members buy from. It turned out they had been misinformed by someone. Hmm…

Anyway, that call prompted me to make this new video in which I talk about what is included for the $175 a month membership fee to be part of this vibrant and proactive community of newsagents.

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newsagency marketing

Is shoplifting on the rise in Australia?

In 3 different shops in inner Melbourne this week I heard stories of increased shoplifting.

The first is a premium food outlet. They have their meat now in a locked cabinet. They were having hundreds of dollars worth stolen and while their CCTV helped the police with an arrest, they felt they had to take that action.

Another was a charity shop. A staffer there said that it felt like theft had increased 5-fold.

The third was a premium card and gift shop on the high street. The owner is so upset that it’s making them re-think their plans for the business.

Okay, three stories does not make it a trend. But, in each case they said it was noticeably up this year compared to recent years.

I mention it today because several newsagents raised it with me last month, too … that they felt theft had increased in their shops.

I wonder if it is a trend, and if so, how retailers will react. Sure we can post CCTV photos and the like. But thinking about the premium food shop – putting meat – steaks, sausages, chicken behind a locked see-through door  … do we consider that? It feels utterly impractical.

Of course, the first step is to accurately measure theft, through the regular processes around cards and magazines. Those processes indicate theft without extra work. And, for other product categories, a regular spot stock count check could be helpful.

Knowing if we have a problem is the start of finding a solution.

Many retailers do not engage with processes available to them to identify theft. I think it’s because if they don’t have the evidence, it’s not happening. But, of course, it is happening … in every shop. The only think in question is how much?

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theft

A beautiful and rare set of magazine numbers

Okay, for context:

  • This compares 2022 with 2019. Jan-June.
  • We took over in December and did a part relay to refresh positioning.
  • We particularly focussed on special interest, craft & hobbies, crosswords, children’s and music.
  • We actively promote magazine range, especially fringe titles, on social media.
  • We pitch magazines we want to feature next to newspapers.
  • We have a loyalty offer, which is being appreciated.
  • We also do some other things, but I don’t want to give too much away.

Yes, I hate that the GP is only 25% and that too many magazine publishers are holding cover prices back and therefore holding our income back. I also don’t like the old school treatment of us. But, with a product category doing close to $500K on a full year, it’s important to us, and, we are successfully leveraging magazine shoppers into other purchases.

Oh, I say the numbers are rare in that for many newsagents comparing the same 6 months, the results are between down 15% and up 5%.

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magazines

Now, this will be interesting

Story (PR?) from News corp today.

Aussies will be able to play some of the world’s biggest lotteries from newsagents

As of Monday Aussies are able to try their luck in some of the world’s biggest lotteries.

July 4, 2022 – 5:12PM
NCA NewsWire

Aussies will from Monday be able to play in the world’s biggest lotteries from more than 1400 newsagents across the country.

A new partnership between Australian-owned The Lottery Office and payment platform blueshyft means players can now deposit funds at the selected agencies, which they can then use to enter the draws.

The lotteries include the Italian Super Jackpot ($AUD 357 million), European Millions ($AUD 332 million) and USA Mega Lotto ($AUD 543 million).

Newsagents, in turn, receive commissions for deposits made and accounts created via the blueshyft platform.

The Lottery Office CEO Jaclyn Wood said the company expected the blueshyft deal would boost the confidence of lottery players keen to try their hand at playing major jackpots, but hesitant to deposit funds online.

“This will give The Lottery Office’s existing customers additional flexibility to make payments, but also open up a new channel for us to engage with new players,” she said.

Ms Wood said blueshyft had partnered with more than 20 companies including Ladbrokes, FedEx and News Corp to offer payments via an iOS terminal in newsagents since 2015.

It had processed more than 1.4 million transactions in the 2021/22 financial year, showing Australians were rapidly adopting the platform.

Ms Wood said the deal was also a win for newsagents, giving them a new and risk-free revenue stream.

“For any deposit made in-store, the newsagent will receive a percentage or dollar amount, whichever is greater,” she said.

“For every qualified new customer that comes to us via the newsagency, the newsagent receives an attractive referral payment.”

I have no interest in this or anything connected with Blueshyft in my newsagencies. Their type of agency business has no future in our channel in my view.

Maybe News Corp. could update their story to say at SOME newsagents.

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Lotteries

Mid year toy preview vital for toy retailers

Newsagents selling toys should try and get to the mid year Toy preview on this week in Sydney and next week in Melbourne. There will be plenty of new products on show. Here is the note the Toy Association sent out 2 weeks ago about the events.

The Previews are the first industry trade fairs in over 2 years so now is the time to get back to face-to-face; meet with new suppliers and catch up with existing business contacts.

Both the Sydney and Melbourne Previews have completely sold out of exhibitor space which means they are events not to be missed!

If you haven’t already, we encourage you to register online to save time later. Registration is FREE and takes just one minute to complete.

Full details of the Previews are below:

Sydney Mid-Year Preview
Wednesday 6 July: 9AM – 5PM
Thursday 7 July: 9AM – 3PM
Rydges Parramatta – 116-118 James Ruse Drive, Rosehill NSW 2142

Click HERE to register for the Sydney Preview. 

To view a list of Sydney Preview exhibitors, click HERE.

Melbourne Mid-Year Preview 
Tuesday 12 July: 9AM – 5PM
Wednesday 13 July: 9AM – 3PM
Amora Hotel Riverwalk – 649 Bridge Rd, Richmond VIC 3121

Click HERE to register for the Melbourne Preview. 

To view a list of Melbourne Preview exhibitors, click HERE.

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Newsagency opportunities

Promoting cards outside the newsagency

If a newsagency business contacts me with concerns about card performance, the first thing I look is out of store marketing of cards. Usually, there is none, which is surprising given the margin for cards and that social media promotion of the category is proven time and again to work.

Here’s a simple video I made for my own shops. It’s one piece ion a collection of greeting card marketing collateral made in the last week. the total time investment in making the video is less than 5 minutes.

It’s not a Hollywood blockbuster, but it does the job.

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Greeting Cards

Washington Post: Every week, two more newspapers close — and ‘news deserts’ grow larger

The Washington Post published a story a few days ago about newspaper closures in the US.

Every week, two more newspapers close — and ‘news deserts’ grow larger

In poorer, less-wired parts of the U.S., it’s harder to find credible news about your local community. That has dire implications for democracy.

Perspective by Margaret Sullivan
Columnist
June 29, 2022 at 10:30 a.m. EDT

Penelope Muse Abernathy may be the nation’s foremost expert on what media researchers call “news deserts”— and she’s worried.

News deserts are communities lacking a news source that provides meaningful and trustworthy local reporting on issues such as health, government and the environment. It’s a vacuum that leaves residents ignorant of what’s going on in their world, incapable of fully participating as informed citizens. What’s their local government up to? Who deserves their vote? How are their tax dollars being spent? All are questions that go unanswered in a news desert.

Local newspapers are hardly the only news sources that can do the job, but they are the ones that have traditionally filled that role. And they are disappearing.

One-third of American newspapers that existed roughly two decades ago will be out of business by 2025, according to research made public Wednesday from Northwestern University’s Medill School, where Abernathy is a visiting professor.

Already, some 2,500 dailies and weeklies have shuttered since 2005; there are fewer than 6,500 left. Every week, two more disappear. And although many digital-only news sites have cropped up around the nation, most communities that lost a local newspaper will not get a print or digital replacement.

“What’s discouraging is that this trend plays into, and worsens, the whole divide we see in America,” Abernathy, the report’s principal author, told me this week.

The neediest areas — those that are more remote, poorer and less wired — are the ones that get hurt the worst. Most of the new investment and innovation pouring into the media sector, as valuable and needed as it is, doesn’t reach these regions.

Be sure to read the article.

Here in Australia, when I would write about challenges to newspapers, some from publishing companies would respond saying I was ignorant, wrong or irrelevant. Whatever. The reality is that the purpose of newspapers has changed. What we are witnessing is the management of the softest crash landing they can manage – for themselves. yes, they are focussed on the impact on their businesses, with little or no regard to the businesses that have partnered with them for 100+ years.

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Media disruption

Collecting data for a 6 month newsagency sales benchmark study

Yesterday I put out a call for data for a jan – June 2022 to 2021 newsagency sales comparison benchmark study and the responses have been flowing in.

I am collating data for a benchmark study This time we are looking at how 2022 is travelling so far compared to last year.

How to participate.

  1. Please run a Monthly Sales Comparison Report for 01/01/2022 – 30/06/2022  compared to 01/01/2021 – 30/06/2021.

  2. Tick the category box. IMPORTANT.

  3. Tick to exclude home delivery and sub agent data.

  4. DO NOT tick the supplier box.

  5. Preview the report on the screen. Save as a PDF.

  6. Email these reports direct to me at mark@towersystems.com.au.

  7. Read the report yourself and see what it shows you about your business.

I decided to check our this year is compared to last, and ignore a comparison to pre-Covid 2019 because I am interested in the more recent changes in what is selling in newsagencies, to see if Covid changes stuck.

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Newsagency benchmark

Newsagents: always scan out greeting cards you return

If you do not scan greeting cards that are being returned you negatively impact the quality of your stock on hand data. You also condemn the business to relying on card companies for performance data, when this should 100% be managed within your business.

It doesn’t take long and adds value to your data asset.

Once you take down cards for return, take a brief moment to scan them out using your POS software. Then, you can rely on your data for business planning and decisions.

Seriously, this is any easy win for any newsagent.

Newsagents who do not scan out returns out themselves as disinterested in accurate data and that lays a negative cloud over their business in my view, it leaves their card suppliers as having the most complete data, which may not always be in the best interests of the retail business.

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Newsagency management

Websites for newsagents

Here is a video I made last week in which I and a colleague discuss websites for newsagents and how the newsXpress / Tower partnership delivers.

Being online is critical, but maybe not for the reason you think. People use websites to browse. Not being online means you’re not reaching those browsers. I have heard of people driving hours to pickup something they found online.

When people search online they are searching for an outcome, not for a business. Think on that … many small business retailers go online with the goal of making their physical business easily found. My advice is focus of what the shopper wants, what they will search for.

The other comment I’d make is you are not your customer. What you might do re online shopping is not what others might do re online. I would never have any retail business today without an online presence.

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newsagency of the future

Time running out on lower cost card postage overseas

While newsagents with LPOs will know about this, it could be news to others:

On Tuesday, 31 May to 31 July 2022, a promotion will commence at all Post Offices nationally of an International Greeting Card postage rate of $3.00, this will apply to greetings cards and post cards.

The purpose of the promotion is to address feedback from Post Office teams and customers regarding lightweight envelopes and greeting cards sent internationally being charged as a large letter, which is a significantly higher rate than the small letter rate.

To be eligible for the International Greeting Card postage rate of $3.00, the envelope must,
·                Be no heavier than a maximum 50gm
·                Be no thicker than a maximum of 5mm
·                Be no larger than 260mm x 360mm
·                Have contents that are card(s) only. Note, multiple cards can be included however the maximum weight, thickness and size restrictions must not be exceeded.
·                Be endorsed with Card Only or similar on the envelope by the sender.

Please note,
·                If one of the above conditions is exceeded, the large letter rate will apply.
·                If the card(s) is not heavier than 50gms, small letter rate should apply for Zone 1 ($2.50) and Zone 2 ($2.70) customers.

Postage can be provided by using international stamps or by generating a label via Postage Assessment and the International greeting card should be streamed as a standard letter.

This is a good message to promote.

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Greeting Cards

The People’s Friend delayed

Thankfully, the UK publisher shared this on Twitter.

The People’s Friend
@TheFriendMag

If you’re in Australia, unfortunately there has been some shipment delays. We’ve been advised that #7916 will be on sale June 30 and it will resume weekly after that.

The People’s Friend often outsells several other weekly magazines in plenty of newsagencies. It’s readers are loyal, and valuable beyond d the purchase of the title. It’s an efficient item to stock.

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magazines
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