Following my post a couple of days ago about the 5% annual rent increase faced by most newsagents in shopping centres comes the news that a newsagent of at least 20 years standing is facing the loss of his business because he will not agree to the landlord’s offer of a new lease at a 35% premium to the current rent.
I can see no justification for such an increase. The newsagent is fighting – but this takes time, money and stamina.
Coles runs a consistent campaign offering magazines for purchase through its online store, encouraging shoppers to add magazines to their online supermarket shopping purchase. It makes sense and is sure to see Coles achieve incremental magazine business as a result. What strikes me about this is not that they offer magazines to their online shoppers but that they do it consistently. This tells me that it works for them.
I am not suggesting newsagents do this. No, it’s more about being aware of how others are promoting magazines. Our points of difference are range and browser friendliness. We need to play to these strengths.
I love this display promoting the latest issue of frankie magazine. It connects with the magazine by reflecting a non traditional style for a magazine display.
I am lucky to have creative people in my stores who create displays like this of their own accord.
With frankie sales up 20.73% in the January through June audit over last year, this is a magazine newsagents should promote.
frankie rewards promotional effort with sales – right through the on-sale. We order more stock if we sell out because it will sell right up to the last week. You don;t have to a display like we have done, even prominent placement in three or four pockets in a high traffic area of women’s titles will help you find sales.
Beyond the year on year sales growth, frankie is important as it attracts the younger shopper. We need this type of shopper. They are loyal too – once they know you stock the title they will come back.
Footnote: Borders used to do very well with the title. If you are near a Borders give frankie special attention.
We are promoting the latest issue of Gourmet Traveller magazine with this in-location display.
I especially like how the team had used the cover run-ons to cap the display and the banner promoting the 2012 Restaurant Guide in front of the display. This draws attention to this issue.
This promotion of Gourmet Traveller is the only in-location display which we have in this aisle at the moment – we try and keep it that way.
We are promoting the latest issue of Girlfriend magazine with this aisle end display.
To combats any complaint about browsing the bagged issue we are setting aside a copy of browsing. This will be the last copy we sell should this issue perform that well.
We are planning a promotion of teen girl magazines in a week or so and will therefore follow up this feature display with placement of Girlfriend in that display … giving the title more support through the on-sale.
Our craft magazine unit sales are up 52% year on year since July 1. More than half of this increase is due to the co-location of a small selection of titles on one of our impulse magazine stands which features weekly titles.
While I complain here about structural issues with the magazine distribution model, on the shop floor I and my teams pursue growth, leveraging existing good traffic for impulse purchases. That is exactly what is happening here. Shoppers browse the popular weeklies on the top section of the display and enough notice what is below and buy from this to deliver at least half of the exceptional growth we are seeing.
Not that it is needed but this is proof that newsagents can grow magazine sales – by being tactical and obsessively engaged with the magazine department. By using high traffic areas of the business: weekly magazines, very popular monthly titles, newspapers, lotteries, seasonal promotions and other ‘hot’ parts of the business we can leverage existing traffic for growth of magazines … as I have done for craft titles as well as other categories.
By having an impulse unit like this we have flexibility outside our usual magazine department.
In addition to the sales of craft titles, there is the benefit of reinforcing my business as the go to place for special interest titles. For many of the titles in the small display, newsagencies are the only outlet. This is why obsession about some of these niches is vital to our health.
So here is my challenge to newsagents: if you see your business as a specialist magazine retailer, ask yourself what you are doing, regularly and obsessively, to chase impulse purchase business, especially in the categories which are unique to your business? If the answer is nothing then you need to start, right away. No excuses about not having space. No complaints about slip margin or not having time.
If you want magazine sales growth you have to chase it, it will not hunt you down.
Yes, retail is tough. However, I do not subscribe to the view that because it is tough we do less or act in an average way. Acting average delivers average results and for magazines that is a decline.
I bet that every newsagency in Australia today has traffic it can leverage for incremental growth. The challenge is to be a professional newsagent and chase this.
Footnote: the stand off of which we are achieving this growth is located half way into the business, at the edge of the dance floor, but facing off to the side. We are not leveraging front of store traffic to achieve this growth.
Check out the placement of an outpost which confronted the team at one of my newsagencies when they came into work on Monday. A toy and book outpost by a fly-in fly-out tenant – in the shopping mall, right in front of our business which happens to have a toy and book offer at the front of the store facing into the mall.
Thankfully, the landlord moved them on Monday night. This should never have happened though. Landlords should take more care with placement of fly-in fly-out tenants.
Not everyone is as lucky as us with a landlord who listens and responds fairly.
VANA is funding radio commercials, in-store signage and an outdoor advertising campaign around the theme – Love Your Newsagent. This is a ballsy thing for an Association to undertake. It demonstrates in a practical way their assistance for newsagents. Click on the link above to the website with more details about the campaign.
The ANF gave this campaign good presence at the ANF Conference in Melbourne this week.
Here is a video which explains how Victorian newsagents can engage.
Kudos to VANA for this initiative. It’s a good start. Hopefully more associations engage in such practical in support of newsagents.
I am writing this blog post for newsagent suppliers. There are plenty of newsagents in shopping centres who face a minimum annual rental increase of 5% every year. If a newsagent paid $300,000 in base rent last year, this year they will pay $17,500 more.
I know of newsagents paying considerably more than $300,000 a year in rent.
Newsagent suppliers – how would you react if your largest fixed cost increased by 5% every year and if this fixed cost accounted for between 40% and 50% of your gross profit?
You would look at how you could increase your gross profit? Of course!
Retailers can increase gross profit by increasing customer traffic, increasing sales (through more traffic and getting existing customers to buy more) and or by increasing prices.
Newsagents can chase more traffic and sales efficiency but for many products they do not have control over margin.
Newsagents are in the hands of their suppliers on the margin front. Are you taking note suppliers.
On top of this, many newsagent suppliers also control many operating costs for newsagents by controlling supply levers: greeting cards, magazines, newspapers.
I’d note that it is unfair to list greeting cards here as the margin for newsagents from this category can be three times the margin from newspapers and magazines. Plus newsagents can achieve a higher margin by increasing sales.
One way newsagents can address the 5% rental increase each year is by carrying less of the products over which they have little or no control and expanding into other areas where they can exert more control. Unless suppliers of these products improve how they do business with newsagents they will see floor space cut and have no choice but to reduce supply.
While we have seen more newsagent suppliers try and understand these and other challenges newsagents, especially shopping centre newsagents, face, I would like to see more suppliers engage.
Ask yourself, how would you react if your largest fixed cost increased by 5% every year? This is a big challenge for newsagents.
News Chairman and CEO John Hartigan and Fairfax CEO Greg Hywood are set to speak at the national conference of the Australian Newsagents’ Federation tomorrow. They will also answer some questions in what is certain to be an important session for newsagents.
Both News and Fairfax are working through considerable changes to newspaper home delivery, having undertaken more than a year of consultation. Rumours about changes to newspaper distribution dominate discussions among newsagents, including discussions so far at the conference. Hartigan and Hywood will each speak briefly and take questions in a moderated session.
Hopefully the session tomorrow will provide some guidance for distribution newsagents seeking clarity on the future of this important part of their businesses. The ANF should be proud of getting both to this conference.
Unfortunately I will be overseas and unable to be at this important session.
Unity between the ANF and state associations is on show in Melbourne at the ANF Conference this week. While I could only attend for half of Monday and the welcome function on Sunday evening, a shared purpose was evident not only among representatives of the associations but also newsagents and suppliers.
The level of cooperation is a far cry from the divisiveness of years gone by.
It will be exciting to see what is achieved by working together for the good of the newsagency channel.
The conference itself was smaller than in the past, completely appropriate for the times. The program was practical with excellent learning opportunities for newsagents and suppliers. Importantly, there was no waste of newsagent and newsagent supplier funds as happened years ago.
It was terrific to hear that WA Lotteries and SA Lotteries each offered grants of $1,000 to help newsagents fund attending the ANF Conference in Melbourne this week. They offered more $1,000 grants than were taken up unfortunately. It’s not often that we see newsagency suppliers offering such practical financial assistance for newsagents to participate in industry events.
Kudos to both organisations for providing such practical assistance and encouragement to newsagents for professional development.
We are promoting a range of health related magazine titles at the counter this week. We are using the popular Diabetic Living to draw attention to the display – but we have a good range of titles on offer here. Up behind the counter, at eye level, we still have Annette Sym’s range of Symply Too Good To Be True cookbooks. Both displays support each other in terms of the healthy lifestyle theme.
Both displays will come down at the end of the week. I am sure that the effort will have been worth it in terms of sales.
We have to get magazines out from the traditional magazine department and into the store if we are to lift sales from average for everyone else. With supermarkets and others reinventing their approach to magazines, we need to be more engaged as a channel.
This move we made at the counter for health related titles was pretty simple. It;s working for us. I’d encourage all newsagent to try it.
We have been promoting the latest issue of Home Beautiful magazine with this simple in-location display. We’ll leave the display up for two weeks depending on stock availability. Home Beautiful is one of those magazine titles which sells through the on-sale and not just in the first few days … making on-going promotion worthwhile.
Our 2011 Father’s Day Book Sale has driven excellent sales in the first few days. The table is at the front of the newsagency, facing into the shopping mall. On the front of the display is a selection of books targeting the Father’s Day shopper. However, the bulk of the display is books for other occasions. The range covers books for children, men, women, food, hobbyists … its very broad.
The table is tidied a couple of times each day and the feature displays refreshed each week.
We have been doing Father’s Day book sales in my newsagencies for years now. Next to Easter, it is the best book sale season for us. Not so much because of Father’s Day but because people are starting to buy for Christmas.
On Saturday I blogged about a letter I received from the Attorney General’s Department about classified material (porn magazines). I mention it again today to make sure that newsagents read this and are across the obligations and associated risks.
Newsagents should display New Idea prominently this week to support the fund raising they are undertaking for the Cancer Council. Click here for additional collateral.
One of my newsagencies is in a centre which used to boast a Borders store. My research suggests that the closure of Borders has added between $150 and $200 a day to our sales. This is across several categories with magazines the core beneficiary.
We positioned ourselves to make the most of the opportunity by starting some months ago by enhancing the range of magazines we carry. This project continues thanks in part to the arrival of IPS.
We have not made any major move into books because we do not have the space – this newsagency is just 135 square metres. So, we continue with our commitment to remainder books and seasonal book sales. We enjoy good success from that.
While it’s not ideal to profit from someone else’s misery, I’m happy to have the opportunity to leverage good news from the closure of Borders.
I’d encourage other newsagents near a now closed Borders store to seek out similar opportunities.
In addition to the placement out the front of the newsagency, acing into the mall, we have The Block and Better Homes and Gardens placed at the counter, between our two main newspapers.
My reasoning behind this is that there will be some shoppers who did not see the titles at the entrance yet who will purchase either or both titles on impulse. Thanks to this simple placement at the counter we have achieved additional sales of both titles. Very nice indeed.
We can act in an average way with magazines, high profile brands especially, and achieve average results. By acting as a specialist, we can achieve above average results. This is what we need to to if we are to make the most of magazine opportunities especially.
This is the impulse purchase placement we had at the left side of the entrance to one of my newsagencies over the weekend. We were using the Better Homes and Gardens brand along with The Block brand to draw attention to other products.
Better Homes and Gardens always works well when placed in this location, especially on weekends – it attracts browsers and plenty of these convert to shoppers. With The Block finale on TV this weekend it made sense to cap the ACP impulse stand with this one-shot title – we have been able to get more stock after selling out.
I know from feedback that newsagents come here looking for ideas. This is a good one. Choose popular brand titles and use them at the front of your business to attract shoppers. This tactical placement is far more valuable and beneficial than sticking magazine posters on your window. Dress the front of your shop for the weekend. leverage of what is popular.
The first day of the GNS Market Fair in Melbourne yesterday was terrific. While there will be some who say the numbers were down, my experience was that the quality and level of engagement was up.
I floated between the Tower Systems and newsXpress stands and these were located across from the VANA stand. You can tell a lot about a newsagency trade show by the business of the association stand. The VANA stand was constantly busy. I know that both Tower and newsXpress had a good first day too.
Newsagents attending the GNS Market Fair yesterday were upbeat … I saw lots of smiles.
People considering the purchase of any business (including a newsagency) look at, among other things, the upside opportunity for the business. While they will often have their own view of the upside, they also often ask the vendor what upside they see. Having an answer is important.
This is a good question for newsagents to consider: What is the upside for your newsagency?
Your answer to this question could be vital in building the confidence and interest of a prospective purchaser.
Beyond that, however, your answer to this most important of questions could open your eyes to opportunities which have need been top of mind for you. I say this because the next logical question is – if these are genuine upside opportunities for the future, why not engage with them in your newsagency now?
Think about it. Take your time. Let the question – What is the upside for your newsagency? – rest with you for a few days and nights. Make notes of every idea which comes to you. Talk to others and make notes of their comments. Think about this question as if the answer is critical to you being able to sell your newsagency, that your answer will unlock excitement in your prospective buyer. It could / should unlock excitement for you on things you can do in your business.
When you have an answer, which is hopefully several answers, you then have an opportunity to think about the next question and consider whether you act on any of these opportunities yourself.
I can think of plenty of general upside opportunities for newsagents and several for my own businesses. Each newsagent is in their own unique situation, facing unique challenges and certain to have unique upside opportunities.
What is the upside for your newsagency?
PS. I have called this a marketing tip because I am hoping that by thinking about your business through a different prism you discover opportunities which you can leverage for success in the short to medium term. One way to respond to an upside opportunity is to do it, make the change, innovate … in pursuit of the upside.
We have started co-locating some magazines to the front of the newsagency, near Father’s Day cards and gifts to pitch them as gifts for Father’s Day. We plan a more complete and broader range display closer to the day. These few titles are just a start. In such a value conscious marketplace, magazines make for a good gift.
In previous years we have created impulse purchase stands around the Father’s Day opportunity. They have worked well. I think they will work even better this year as magazines present an excellent gift giving opportunity for newsagents.
I received a letter this week from the Classification Branch of the Attorney-General’s Department outlining the regulations relating to selling classified material, adult material. The letter goes on to talk about P & O Distributors, saying that they have distributed unclassified material to retailers. It documents a risk of prosecution and a fine of up to $28,688 or imprisonment for 2 years for breaching the law. Click on the image to read a copy of the letter.
While I have never dealt with P & O Distributors I certainly recall seeing product packaged like the example included with this letter from the Government in some fuel over the years.I think this is the more likely venue for unclassified material than newsagencies.
The letter points newsagents to the classification website for more information. It also came with a list of titles from P & O Distributors and a copy of a cover of one of their titles.
At first I thought this may have been some form of scam but upon checking I found it to be genuine.
Each copy of New Idea sold next week raises ten cents for the Daffodil Day campaign being run by the Cancer Council. This is an important campaign, raising much needed funds. The folks at New Idea have produced an A3 poster and an 5 flyer for newsagents to use in promoting this. I am promoting the fund raising campaign now, in advance of Monday’s on-sale. I’d encourage other newsagents to download, print and use this collateral now.