Gifts

These Cat Magnets have sold our at the counter in less than two weeks at our newsXpress Forest Hill.  They are a good margin impulse purchase item.  While we would not usually order more of a counter offer, we have in this instance because of their popularity.  Sourced by our manager through Gibson Imports, they are a good example of pitching an impulse offer to your average shopper.  We only have them at one store – where we knew they would work.

The basket in the photo shows that a beautiful display is not always necessary to drive good sales.

Newsagents in Victoria looking for new revenue opportunities ought to get to the Gift Fair which starts tomorrow morning and runs for four days.  You’ll see plenty of suppliers and products worthy of consideration.  More than 300 suppliers are exhibiting.

I know of newsagents who went to their first gift fair and within months completely refreshed their business.

Organisers have sold well this Christmas.  Birthday card organisers, gardening organisers, recipe organisers.  We brought in the K TWO range late in the Christmas season and sold most of the stock in just over a week.  We thought the higher price point might be a barrier in our newsagencies (we have the same range in our gift shops where price is less of an issue).  Price was not an issue in our newsagencies.  The experience is a reminder that we can sell a broader range of product and higher price point product than we expect in newsagencies.

We played with plenty of new products this Christmas.  Most worked, some did not.  It’s all part of the experience not only of newsagencies but retail in general – we must keep evolving our businesses.  The best change is that which we drive for ourselves.

A common question I get from visitors to this blog is where can newsagents find these new products.  Go to the gift fairs.  Join the GHA – $200 a year connects you with a whole new world of suppliers.   It is only by trying new items that you can see how far you can push the boundaries of products sold in your newsagency.

The success with the K TWO organisers shows that we can carry higher priced social stationery type items, especially for gift giving seasons.  They worked in diverse locations such as Frankston and Forest Hill as well as in the heart of Melbourne.

We were fortunate to pick up some Hallmark Christmas Ornaments last week.  These are usually sold at Target stores.  The reaction from customers has been amazing.  What has been most interesting is the strong word of mouth.  Within a day of us putting up our display we had customers coming on asking for the ornaments – having been told about the range by a friend.  Most sales involve at least two ornaments and several other items.

The trial this year encourages us to build a strong collectible ornament story for Christmas 2010.

I like ornaments as a category because they are habit based.  They fit with calendars, diaries and many other items we sell in our newsagencies.

Sydney area newsagents looking to get into gifts ought to consider attending the Reed Gift Fair in Sydney this weekend.  While not as big as the fair earlier this year, it will present a broad range of products which could work in newsagencies.

The Melbourne Gift Fairs come to an end today.  While there has not been as much in the way of new product that we wanted to see, some excellent deals have been on offer.  Plenty of suppliers were prepared to negotiate on terms, making taking on new ranges more appealing from a cash-flow perspective.  Suppliers who are sensitive to the cash-flow challenges of retail today are more interesting to newsagents keen to expand their floor stock – especially in the lead up to Christmas.

One frustration is a few suppliers who refused to  permit their products to be places in newsagencies.  While this is their right, it demonstrates an ignorance of what a newsagency can look like today.

Gift fairs always present excellent margin and range opportunities – crucial opportunities in building a healthier newsagency, crucial opportunities in pursuing change.

Newsagents in Victoria should take time out of their businesses and visit the GHA and Reed Gift Fairs in Melbourne starting today and running through to Wednesday.  You will see product allied to what is sold in newsagencies today as well as many completely new lines and categories.  I was talking with the GHA (Gift and Homewares Association) yesterday and they confirmed that the number of newsagents attending these fairs increases each year.

Gifts are a fast-growing category for newsagents.  I have seen newsagencies go from $10,000 in sales from gifts in 07/08 to $40,000 in 08/09.  The margin, depending on your buying and pricing policy, is usually around 50%.  The key to success is careful buying and knowing your customer – oh, and that you may not be your customer.

It is also important to have a price management policy – knowing how long you want to hold an item and how you transition the item through price points to move the stock.

I know a bit about the fairs because my software company, Tower Systems, exhibits.  This year, like last, we are at the Showgrounds location.  We find it worthwhile because of the number of newsagents attending and because of our growing gift shop customer base.

Newsagents are generally risk averse compared to other business owners. I realised yesterday that I take more risks in my non newsagency businesses than in my newsagency, risks which don’t feel risky but are not taken in a newsagency.

I have been thinking about risk taking in newsagencies recently because it is what we need to do to reinvent our businesses. In my own case I have been thinking specifically about the gift department and how safe we play in selecting products. We have had tremendous success with gifts, almost trebling last year’s sales thanks to our choices.

Take the Chubby Geisha money boxes in the photo. We would not stock them as we’d consider that they are too far removed from what we think our gift offer should be. What is odd is that gifts are new to us in this location so we don’t really know how far outside the traditional we can play. We have allowed our own blinkers to restrict what we can achieve.

In my gift shops we are far more adventurous, allowing our customers to tell us what works and what does not work. We experiment more – probably because gifts are central to the business whereas in a newsagency they are often a small department.

Realising how conservative we have been, we are committed to experimenting more and pursuing the boundaries of what we can achieve in terms of product category, style and price point. The only boundaries will be margin and overall feel – we do not want to look like a $2 shop.

We will take more risks, try the Geisha moneyboxes and try other items we have said no to. We’ll have fun funding the new level.

While there are many newsagents taking risks, more of us need to – and share the results.

We have gone out early with some Father’s Day gifts, items which show a point of difference and which work as gifts for other occasions.  We were able to source these globes at an excellent price so it was a logical decision to place them in our window with other items from our expanded gift range.

Maintaining a gift department beyond seasons is new for us at Forest Hill and so far, it is working a treat with excellent growth and great margin.

All of our gift buying is based on what we know about our customers from card captions, magazines and calendars purchased.

Tower Systems, my newsagency software company is exhibiting at at the GHA Home and Giving Fair in Sydney and the Reed Gift Fair in Brisbane.  The photo is of our stand GHA Home and Giving Fair at Homebush.  Both of these fairs will be of interest to newssagents because of the cards, gifts and associated lines on display.  Upwards of 10% of attendees are newsagents – which is great is it demonstrates that newsagents are playing outside their traditional categories.  I find attending gift fairs to be terrific because you are constantly challenged as to what you could sell in a newsagency.