Newsagency opportunities

February was interesting in our newsagencies. Many departments were up: Newspapers (9%), calendars (144%), diaries 171%), Art (8%) and gifts (77%). Magazines were down. Stationery was flat. At Forest Hill our magazine unit sales fell 14% while at Frankston the fall was 20%.

The fall in magazine sales correlates to the drop in customer count. The good news is that we are making more from each customer.

While our numbers are not what we would like, we are happy because of the growth in key good margin departments. We are operating business as usual, trying new ideas, offering deals on stock we want to quit and presenting our shops as cheerful easy-to-shop destinations.

We are pursuing new customers by distributing Hot Ink! Flyers to homes around our locations. As is always the case, we are seeing a good kick in ink sales.

Since we are in shopping centres, we are somewhat reliant on our landlord to lure new customers to the centre. I’d like to see landlords think right outside the box on this. The usual mix of kids activities, displays and feel good promotions are not having the same cut-through as they once had.

There are a couple of current stories about the Woolworths group from which newsagents can learn.

The first story is about the introduction of Optometrist services in Big W. The arrival of Optometrist services in several Big W stores is being advertised heavily on Melbourne radio. It is a compelling pitch around professional service and low prices on glasses and contact lenses – a change from the traditional big W pitch.

The second story is in yesterday’s Australian Financial Review (p51) and relates to the company’s moves in the electronics area. They are rebranding 300 electronics outlets to the Dick Smith brand. The article by Sue Mitchell reports that refurbished Dick Smith stores are reporting 11.7% sales growth. It says the Woolworths is investing in its electronics offer in pursuit of JB HiFi.

Here is this giant of a company expanding its product / service offer in one channel and significantly refurbishing its offer in another channel. They are doing what good retailers do, what we newsagents should be doing.

We are smaller and therefore more nimble yet we, most of us at least, continue to ignore or resist change.

Our new shopfits are, more often than not, old and inflexible. Our ranges don’t seem to change. Our business practices are from decades ago and we leave control over much of what we do to key suppliers.

We have opportunities for significant change without the need for major capital investment yet many newsagents appear to be happy being the newsagent which has always been. These newsagents will see their businesses shrink.

Smart newsagents are attending events like the Reed Gift Fair in Sydney this week and other non newsagency channel trade shows. They are reducing space for traditional categories and creating space for new categories targeted at their demographic. Changes like this need to be local, we cannot move thee channel as a whole into new categories. That opportunity was lost, as it should have been, with deregulation.

But back to Woolworths, my newsXpress Forest Hill business is opposite a new Dick Smith store. It is an appealing retail offer, motivating to drive change in our business. The range of product is good, thee price points keen and the customer service friendly and knowledgeable – all points that we in small business accuse national retailers of neglecting.

Every time I walk past this Dick Smith store, I wonder what a Woolworths designed newsagency would look like.

There are many issues and disputes which newsagents encounter where the supplier is prosecutor, judge and jury. While some newsagents capably stand up for themselves, many do not. There are forums in some states available to small business, including newsagents, yet they are rarely used due to ignorance and lack of knowledge about the operation off the newsagency channel.

Associations have an opportunity here to create an ombudsman role. This could be funded from member fees as well as a supplier levy.

The newsagency channel ombudsman could hear disputes and adjudicate in line with a charter of operation agreed by newsagents and suppliers.

Such an office could provide a neutral ground place where account, supply and other disputes could be heard and mediated quickly – before things get out of hand.
What I have in mind is something more comprehensive than advice.  I see it as more structured than the ad-hoc defence run by some of the more proactive associations and marketing groups today. There could be rules and case management to ensure that the process is fair on all parties. Most of all, this would be an opportunity to diffuse issues before they get out of control.

I’d like to think that suppliers would welcome an ombudsman role as it might help issues get resolved in a more valuable way and before they take action.

It is this level of practical help where associations can make a difference.

I’ve been fortunate to meet face to face with plenty of newsagents in Melbourne, Sydney, Brisbane, Canberra, Adelaide and Perth this week at the newsagent management workshops I have been running. Some common issues are on the minds of newsagents.  Curiously, not one question or comment about associations or unity – this issue is off the radar.  Here are some of the topics people did discuss:

Optimism. Plenty of newsagents are optimistic about the future and reflecting this in their investment in their businesses in shop fits and funding new product categories.  These opticistic newsagents come from businesses of all sizes and situations.

Change. Newsagents are talking about change more so than ever before.  Some are driving change in their businesses others are trying to work ot what change will occur.  My view is that we need to control change and that we do this in our space allocation, our attitude and our engagement with our teams.

Magazines. Oversupply, long shelf life and poor business practices make magazines frustrating for newsagents. Unless magazine distributors make progress on these issues, more newsagents will reduce space and even close accounts.

Newspapers. Newsagents say that with publishers wanting to get into more and more non-newsagent outlets they are less likely to see newspapers as a core product in their newsagencies.

Service. Customer service is the most popular point of difference being pursued by newsagents.  For some it is lip-service while for others it completely defines their business and every decision they make.

There were plenty more areas covered. In all, the week has been an excellent rolling conversation for which I am grateful to the newsagents who gave of their time to participate.