Tracking unit sales is vital in comparing year on year performance in product categories where price fluctuate. In a retail newsagency business, for accurate year on year performance comparison, unit sales tracking is vital in newspapers, magazines and cards. Your newsagency software should be tracking unit sales for you.
If you allow representatives of supplier businesses to place orders for your business, ensure you have an agreed step in the process whereby orders are not to be placed unless you expressly approve other. Otherwise, you may receive stock you don;t want, stock supplied to serve your supplier more than your business.
I’d love a dollar for every story I have heard from newsagents about a supplier rep reportedly claiming something their company does not agree to. If a rep makes a claim or offers a promise, write it down and get them to sign and date it. It is amazing the promises, competitor claims and offers that cannot be put in writing … probably because they are not true.
Unless it is in writing, don’t believe it.
I know, this seems very basic, so basic in fact that it makes almost no sense to mention it. But mention it I must.
New stock received in your business cannot be purchased unless you take it out of the boxes, receive it into your retail management software, price it and place it on display for customers to see.
This is your job to do. Not a supplier. No, your job.
Do it and the new products you have received may sell. On the other hand, if you prefer, leave the product in the boxes and complain to the supplier that their product does not sell.
Every agreement you sign, every contract, every supplier offer – keep a copy, filed in a central place. Saying you can;t remember if you signed a contract is no excuse just as not being able to find an old contract is no excuse.
Be serious about your record keeping and this will help you stay out of trouble in the future.
I was talking to a newsagent last week who said they don’t have time to scan their sales so they use their out of date computer system as a cash register and process magazine returns through the Gotch website.
Data is vital in guiding the best business decisions you can make. By not tracking sales you open yourself to undetectable theft, poor decisions, a less attractive business when you decide to sell, slower customer throughput and being out of date with today’s marketplace.
Retailers need to own their data situation. It is 100% on them to respect data as much as you respect cash.
A newsagent colleague recently was stolen from by an employee. The cost to the business was $2,500. The person’s story at the interview was they had been out of the workforce for a year taking time off. However, given their age and health the story did not make sense. But it was not questioned. The reality is they were working in another newsagency for much of the year and were intimately sacked because of theft. They paid money back and left without prosecution. They found a new job in a newsagency an hour from the old job and the new boss eventually discovered their dishonesty.
If there is a gap in a resume, pursue it, ask questions. If you are not sure, don’t hire them.
There are people who like working in newsagencies because of the family aspect and the last of strict controls managing cash. This can provide a window long enough for them to steal, as they did in the latest case, thousands of dollars.
Employee theft costs between three and five times more than shopper theft yet small business retailers obsess about shopper they and tend to ignore employee theft – until it hurst them.
Theft is a cost of doing business in retail. Don’t let theft divert your attention from the bigger picture. Don’t let it get you putting up signs that turn customers off. Don’t let it get you hiding stock from customers.
I see too many retailers obsessing about theft to a point where their obsession costs the business more than the theft they are trying to avoid.
The Lottoland Australian website claims four million players. That number is extraordinary. It is audited by KPMG so I trust it.
What we don’t know is how many of the four million are regular players. That percentage would be interesting to know. Regardless, having 4 million players at any time over the course of their first year her is extraordinary.
As I have noted here previously when writing about Lottoland, they market well. here is part of an email I received from them yesterday – I am a registered customer having tested their product a while back.
This is a compelling offer compared to how Tatts promotes products products. Look at it. Buy six games and they give you another three free.
Because it’s all done online, they can push the offer out quickly, gauge engagement quickly and get people playing again who may have taken a break. Their whole approach is different as there is no store and I think that is what newsagents don;t get about this challenger, there is no store.
This is why the Lottoland TVCs target newsagents, because this is where they are weak. To play lottery games in a newsagency you have to go to the newsagency you have to be in the store with the parking lines, credit card fees and more points of friction. To play Lottoland you don’t have these points of friction.
It is a very different game, promoted in a different way.
The TVC is about attracting new shoppers while the email marketing is about driving engagement among their database of customers, four million customers.
Marketers say emails get a minimum response rate of 2%. That is 80,000. Imagine if 80,000 played the six Powerball games. The revenue soon adds up.
Now think about what it would take for the newsagent lottery outlet network to sell the 80,000 tickets. 80,000 transactions at around 30 seconds each plus stating in line and parking and more, the time cost of the purchase would be in the order of four thousand person hours – allowing three minutes per transaction walking and / or parking time plus shopping time. Compare that to something like 400 person hours for the seconds it would take each of the 80,000 to make the purchase online.
My point here is Lottoland is an extraordinary game changer. I don;t want it to be because I want newsagents to flourish. However, it is what it is, a game changer in my view.
Be informed. Play it, let your business planning be informed by that experience.
Another newsagent was hit by a ransomware attack last week. They paid $5,000 to get access to their computers again. Had they and their staff followed my suggested computer use policy they would have avoided the attach.
Mediaweek yesterday carried a link to a terrific report from Zenith forecasting that 75% of internet use in 2017 will be via mobile devices.
Mobile devices will account for 75% of global internet use next year, according to Zenith’s new Mobile Advertising Forecasts, published today. The mobile proportion of internet use has increased rapidly, from 40% in 2012 to 68% in 2016, and we forecast it to reach 79% by 2018.
If you have a website, it must be mobile friendly.
Your Facebook business page posts need to reflect that they will more likely be seen on mobile devices.
The growing level of internet access on mobile devices means we have to change how we communicate through our various online platforms.
I look at website platform access data for a range of websites and there is no doubt about the growth of mobile and the importance of being mobile friendly.
Being mobile friendly with newsagents starts with being able to be found by people using their mobile phones. Do a search for you business. If you cannot be found, fix that. How do you fix that? Talk to your =marketing group, ask them for their mobile marketing training.
I was talking with a newsagent last week about a product category that generates less than $30.00 a week in gross profit. The category is not paying for the space, labour or the inventory investment. Yet the owner wants to stick with it as a service. There is no evidence in basket data of the product serving a purpose. 60% of purchases are single item purchases.
Look at the numbers and be guided by the evidence and not your gut.
The days of the annual, end of financial year, stock take in retail are long over. That old-school approach is not needed by the tax office or your accountant. It does not serve your business needs.
My advice is newsagents do a custom stock take, targeting parts of the business by supplier, department, category or product tag.
Some parts of the business will benefit from this being done as regularly as fortnightly while other parts will benefit from monthly through to six monthly.
A regular custom stock take will absolutely help you reduce employee theft and customer theft as it will show you what is happening and that will change your behaviour.
The parts of the business where I’d custom stock more regularly are tobacco products and high moving sought-after items.
Local libraries often claim to play an important community role. That role has expanded to hurting local small businesses that used to supply them. Revenue that would have remained in the community now hits the overseas bank account of Zinio.
A deal between Zinio and state run libraries, like the Zinio deal with Libraries of South Australia, sees digital versions of more than 400 magazines available through local libraries across Australia.
Many local libraries used to purchase magazines from local newsagents. That revenue is now lost to the local community.
The Zinio move reaches beyond the four walls of the local library though. Whereas magazines newsagents would sell to a library remained in the library, some libraries offer Zinio platform access outside the library. People can use their library number from anywhere and access Zinio magazines. The reach of the Zinio / library relationship can go way beyond magazines newsagents might have sold to a library.
I understand the move to digital from print. There is no stopping it. Indeed, the pace of change will increase in my opinion.
I understand the need for a statewide deal that makes magazines available at a low cost. This is a result of cost-cutting at all levels of government.
The community needs to understand the consequences of Zinio access through the local library.
Newsagents are among the most hit-up businesses by local community groups for funding, prizes for raffles and the like. The capacity of the locally owned small business newsagency is diminished by moves like we have seen by libraries.
Newsagents can confront the Zinio / library challenge by educating people about it. Explain the loss of revenue and the need for this to be replaced somehow for the business to continue its level of giving. However, such an approach could come across as weak.
For me, the best response is to be relevant in new product categories, outside of what has been traditional for newsagents. Focus your frustration at a Zinio / library tie-up in your area into changes in your business. Look away from this problem toward opportunities you can leverage for a brighter future.
No amount of complaining will make the issue go away so move on and look over the horizon.
Most independently owned retail businesses do not have a marketing budget, an amount they spend promoting the business outside the business. My rule of thumb marketing budget advice for a retail business like a newsagency is at least 2% of revenue where revenue is product sales revenue plus commission from all agency lines.
A newsagency with, say, revenue of $500,000, the suggested marketing budget would be $10,000 spent over the year on out of business advertising and marketing. This amount should not include banner group fees or association fees. It would include print ads, flyers, local radio, local TV, facebook and other special media ads.
Setting a budget is important as it guides your weekly activity. The $10,000 plays out at $192.30 a week. There is plenty you can do with that. The key is to measure success from each spend, to ensure the business is benefiting.
One reason suppliers maintain reps on the road is the results they can achieve by being in front of retailers. Some people find it harder to say no to someone in person than by email or on the phone. Too often I see retail businesses, not just newsagencies, overloaded with stock that does not deliver the return necessary.
If a rep claims a product is working particularly well, ask for proof. It is your money. Satisfy yourself the claims are true and that you can expect such results for yourself.
It is okay to say no, even to a rep who has become a friend.
I was in a newsagency recently where they labelled newspapers for customer pick-up. It was a thrill to see this part of the newsagency software being used. It is professional, enables tracking of collection and provides confidence in your business.
This is my tip today: if you hand write customer names on newspapers, stop and use your software for a more professional approach.
For my Newsagency of the Future workshops, in 2010 I developed a forecast model of where a typical newsagency would be by 2020.
The forecast was based on a blended business.
Here is the forecast exactly as published in 2010. Note the lotteries figure is commissions only. What matters in looking at the forecast is not so much the numbers but the differences across the model year on year.
What I predicted for core traffic categories has happened, unfortunately.
Recently, I looked at the period from 2016 to 2020 again, taking on board new trends.
Here is the forecast to 2020 as I see it today for a traditional newsagency. By traditional newsagency I mean a business focussed on newspapers, magazines, lotteries, stationery, tobacco and cards with minimal gifts or higher margin product.
You can see I am more downbeat in this model than I was back in 2010. Things are far worse for this type of old-school newsagency into the future than for the transforming newsagency.
This old-school newsagency is confronted by:
While there are some old-school newsagencies doing well because of their local situation, it is not a model with an upside. This is why it needs to transform, to be appeal to more people, to shift overall GP performance, look relevant in today’s retail landscape.
It is not too late to switch from the old-school approach. However, doing this needs commitment to change. It also needs some capital but not too much if the transformation is managed well.
Change starts with wanting it. My goal in sharing these forecasts today is to demonstrate what a business could look like if it does not embrace change, to get people in old-school newsagencies to think about the future of their businesses and realise that what happens next is up to them.
There are many stories of success in our channel, success based on embracing change. I’d love this blog post to encourage more of these.
In posts here I have offered plenty of advice on newsagency business transformation for newsagencies in any situation and of any size. The key message is – there is on magic bullet, no one single thing to do to transform your business. The best success I see comes from many small steps.
A supplier to the newsagency channel recently reviewed the top selling items in a product category and discovered that the top product across all retail channels was not the top product newsagents chose to stock. In other words, newsagents were buying poorly and sales were impacted as a result.
My tip today: act on advice as to what to stock. If you are not sure, ask for evidence supporting the advice.
This sign in the window of a Priceline on George Street Sydney is interesting in that a national chain would only do something like this if it worked. It looks like an opportunity for newsagents in areas where cruise ships dock or tour groups visit to try if not being done already. You can leverage the opportunity with discount vouchers or similar as the traditional loyalty offer would not work with these types of shoppers.
An out of date sign indicates an out of date business in my view. Take this sign I saw hanging over the front door of a newsagency on Friday:
Valentine’s Day 2016 was more than seven months ago. This sing is out of date. It’s presence above the door does not put the business in a good light.
Take a look around your shop, remove eve out of date sign. Make your team aware of the importance of current signs to reflect the focus of the business.
Saving money is something all small business owners want to achieve, when it suits them, to make the business more profitable.
When it suits them is the key phrase. I don’t want to sound bratty but I often see situations where the retailer, maybe a newsagent, maybe not, chooses to ignore a money saving opportunity because it does not suit them.
The thing is, money saving opportunities need to be embraced without the qualification of it suiting. I get that some money saving opportunities have personal implications. However, if saving money matters, these personal implications will be parked.
Here are ten money saving ideas for any retail business:
If you are in a business where every cent counts, look carefully at this and go further, make your own. The best opportunity to cut costs is when the business is open. Once you have gone under or walked away it is too late.
Management decisions in retail need to be data driven. 100%. Take away the emotion, friendships and other non data related factors. Savings should follow.
Shirt retailer Charles Tyrwhitt was fined $10,800 by the ACCC for advertising was / is pricing when the shirts were never sold for the was price. The Age has the story.
This is an important story as the obligations on retailers when it comes to price claims is clear. The ACCC website offers excellent guidelines on this specific topic:
Two-price comparison advertising
Businesses often make comparisons between product prices being charged and:
- the company’s previous pricing (including ‘was/now’ or ‘strike through’ pricing or by specifying a particular dollar amount or percentage saving)
- the ‘cost’ or wholesale price
- the competitor’s price
- the recommended retail price (RRP).
Businesses that use such statements must ensure that consumers are not misled about the savings that may be achieved.
Statements such as ‘Was $150/Now $100’ or ‘$150 Now $100’ are likely to be misleading if products have not been sold at the specified ‘before’ or ‘strike through’ prices in a reasonable period immediately before the sale commences.
Such statements are also likely to be misleading if only a limited proportion of a product’s sales were at the higher price in the period immediately before the sale commences. The volume or proportion of sales that may result in such statements being misleading will depend on the circumstances of each case.
The length of the period will depend on factors such as:
- the type of product or market involved
- the usual frequency of price changes.
If a business has a policy or practice of discounting goods when not on sale and uses two-price advertising in relation to sale periods, there is a significant risk that the use of two-price advertising will involve conduct that is misleading. The business would be representing to consumers that they will make a particular saving if they purchase the item during the sale period, when this is not necessarily the case.
Similar considerations apply to the specification of dollar amount or percentage savings such as 60% off.
I mention this today as I know of businesses that use was / is and discount pricing when the price promoted is the only price the goods have ever been sold for. As the story in The Age shows, you don’t want to be caught misbehaving as the financial penalty is considerable.
In our channel there are risks in the ink space particular.
If your year-on-year sales are not down in your business, this advice is not for you.
If your year-on-year sales are down, something has to change if you want to turn the situation around, please read on.
If you keep doing what you have been doing, the sales results in your business will be what they have been.
It would be a mistake to think that external factors are the sole reason your sales are down.
So, change is necessary – change in what you sell, how you merchandise and how you promote.
It is only from change that the sales decline could be arrested and reversed.
Look for u-turn or right turn opportunities, changes you can implement to divert you from your current path.
This is the only step you can take to reverse the situation: turning away from what you have been doing as you know how that will end … the destination is in your own numbers.
FOOTNOTE: For what it is worth, I think this advice is among the most important I have ever published on this blog and, mist likely, among the least that will be followed.