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newsagency of the future

Newsagency performance assessment for a regional small town newsagency

Here is another newsagency performance assessment I have undertaken.  This business is interesting in that they have taken some excellent steps that are paying off and now they want to achieve more.  Here is what I have written to them after looking at their data:

In reviewing the performance of the business I’ve looked at your sales and basket data for May through July this year compared to the same period a year ago. While I understand the business is quite seasonal, I am comparing like for like.

Some comments I make may come across as rude. That’s not my intention. The facts as I see them are the facts. This is where data is vital in guiding business planning and decisions. I see too many newsagencies being run on gut feel and emotion and not enough running based on data.

  1. Overall traffic. Down 3%. While this is within trend for newsagencies, you need to be considering what you can do to drive new traffic. This could include promotion outside the business, window displays, community engagement or a host of other ideas. The question you have to ask is: what am I doing to attract more shoppers to my business? I appreciate this is challenging in a small town but take your time and think about what you could do to atract people from, say, 20km away. Don’t restrict your view of your business to only those nearby.
  2. Cards. No change in sales. While this is okay in that sales have not dropped, they have not grown either. 23% of your cards are in unknown category. This needs to be fixed. Call the help desk and your card co to sort out why electronic invoice data is not being allocated. That said, there is some interesting data: 5.88% of card sales are sympathy! Cards overall account for 10% of your sales. It’s vital this is lifted to between 15% and 20%. This can be achieved with a card re-plan, marketing, a change in shopper engagement and maybe a rewards program for card shoppers. With your annual card sales at around $60,000 I suspect you could negotiate a more valuable card supplier relationship.
  3. Gifts. This is a terrific success story you’ve built. Sales of $5,235 – up 24% year on year. The only problem is that you are not categorising your gifts so it is hard to see what is selling and what is not selling. Your ration of gift sales to cards is well above average – this is good news.
  4. Magazines. Your magazine sales are strong. I notice that Home & Lifestyle has 10.73% of your sales. This is above average. If you’re looking for new gift lines consider items in these types of magazines as your customers are in that space. Also you have strong craft magazine sales – 9.79% of total magazine sales. This is another example of guidance for gift expansion. Your magazine data indicates around two thirds of your shoppers are women or they are at least shopping for women. Magazines account for 39.02% of your sales. This is too high. The business needs balancing to higher margin lines.
  5. Stationery. Sales are down 2% which is not bad compared to others. I’d love to be able to provide more insights but your data does not allow this. You have to sort out unknown category by arriving stock electronically and allocating this to categories within stationery. Otherwise you don’t know what you are selling for sure.

Given your location, in a country town with a population of 800, I can imagine that you see your opportunities for growth as being limited. maybe in the immediate area they are. I think it’s important to not be bound by borders as you see them. I also think its important you run your business as if your toughest competitor is right next door. Aim to be the best retailer in town.

Here are my thoughts on how I might approach your situation and desire for growth. Some are easy to implement immediate options while others involve research and planning. Some are mutually exclusive. Consider the list a list of options for your consideration:

  1. Decide who you are. What do you stand for, what is your unique selling proposition? Decide to be the best gift shop in the area, not just the town by the area. Plus the best card shop. Make it so people happily drive half an hour to get to your shop. Yes, this takes investment. Take your time. Develop a plan and make small steps toward this.
  2. Use your windows. From Google Street View I can see you’re in a good situation with excellent windows facing the street. Use the windows to make bold statements. One window could feature traditional newsagency lines and the other window could feature gifts. Retreat from tradition with magazine posters in front and give your windows over to bold create statements about your offer and about community connection. Develop a marketing plan. For example: in one window promote craft titles and maybe a local craft club and in the other window Spring Gifts (if you’re doing the display now).
  3. Entrance. from the front door through entice me into the business. Do this with fresh product placement from inside the door to the key destinations in your shop. Always look at your shop from the perspective of your shoppers. Break with tradition and break their expectations of what you sell.
  4. Look around you. Look at other shops in town that you can compete with. This is retail today, especially for a newsagency. there is nothing you sell that others cannot sell. So, look at nearby gift shops if there are any. They are your competitors. Take them on if you are game. But not directly – be smart. Look at gift suppliers who can help you expand to attract people currently shopping with these other gift shops. This is a long-term strategy. take your time.
  5. Services. Are there more services you could provide. For example, is there a good coffee shop nearby? If not, is this an opportunity?
  6. Tourists. Given the influx of tourism you experience consider what you can do to connect with them. For example, in your data I can’t see much in the way of sales of plush. If your tourists have kids or are likely to buy for kids then a plush presence in store during the tourist season could work well. Your location means you could possible achieve an above average margin too.
  7. Connect locally. In you don’t already: have a local events notice board in-store; promote a local community group; publish your own monthly newsletter; advertise on local radio as it should be pretty cheap.

These are just some thoughts. The real goal of the list is to get you thinking. I’d be happy to discuss these options with you – 0418 321 338.

I spent my teen years in a country town with a population of 2,500 and worked in the local newsagents after school for a couple of years. While that was decades ago, I do have a reference point for country towns.

I am grateful to the newsagents who share their data for comment. I don’t publish all reports here, not even a fraction. Those I do publish I hope speak to others who may be in a similar situation.

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Newsagency challenges

Sunday newsagency marketing tip: watch the heads of your shoppers as they enter and shop your shop

I love watching customers in a newsagency, from when they enter the shop to where they go and, more important where they look. I watch their heads to see what they notice, where they turn. I learn plenty from being a voyeur.

In one newsagency I was working with recently shoppers tended to enter and look down at the flat stack of magazines. This was a surprise to the owners since they focused their attention on the top pockets of their magazine fixture. Magazine sales were consistently below the industry average.  Changing their focus to building from the flat up drove an immediate sales lift – all because we followed where the customers were looking. While this is not the only reason for below average magazine sales, it was a factor, one to address.

Watching where your customers look and taking note of what draws their attention can be instructive. Major retailers can do with the technology tools. We in small business need to live with personal observation. And that’s my marketing tip today – watch your customers, learn what they notice. Do more of that.

How’s this a marketing tip? Tune your business more to what interests your existing customers and you will sell more.

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Management tip

Jumbo Interactive growth from online lottery sales

Following form my post yesterday about Tatts Group, check out the Motley Fool article about Jumbo Interactive, the operators of the successful Oz Lotteries website. Their success is another indicator of migration of the lottery customer to online and another reason for newsagents to consider the extent of capital they invest in lottery products

Lottery products are agency products and while there is potential for sales growth thanks to jackpots, I don’t see much everyday growth for high street stores since more lottery customers will migrate online – especially when the online experience becomes even easier. As an agency line, retail success is dependent more on the supplier than retailer lines where we have more levers with which to play to make our own success.

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Lotteries

New video: how newsagents can grow magazine sales

Further to my post yesterday about our growth in magazine sales here is a brief video I shot late yesterday where I explore the sales results, explain how we achieved this and call on all newsagents to embrace the category.

I am concerned that newsagents are giving up on magazines. This would be a mistake. With good management and hard work newsagents in almost any situation ought to e able to grow magazine sales – despite the best efforts of some distributors and publishers to make our channel less competitive.

Footnote: this is the first video I’ve shot with a new lapel mic. The sound quality is much better.

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magazine distribution

Participating in GNS Market Fair seminars

I’m participating in workshops being run on each day of the GNS Market Fairs. I’ll be sharing the latest newsagency sales benchmark insights and covering how newsagents can grow their businesses – providing some specific tips they can action right away.  The seminar schedule for each day of the fair is:

10:00am Retail Leasing – Retail tenancy legislation, what is it and how does it protect newsagents? Michael Cuda – ANF

11:00am How to make your Newsagency worth more using Point of Sale software Mark Fletcher – Tower Systems

12:00pm GNS Alex Stewart – GNS CEO

1:00pm Creative Publishing – Kids Licensed Products learn about the Australian mum and her life and how to unlock the sales potential in your store.

2:00pm Nexus – How to use this marketing tool and why you should use it. Jane McIllhatton – Pacific Magazines

3:00pm Connect – a new set of products & services exclusive for Newsagencies David McLean – HUBBED CEO & Matt Handbury – HUBBED Chairman

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Newsagency benchmark

Another tough magazine sales audit for publishers

The latest magazine sales audit results released overnight covering January through June 2013 compared to 2012 show a decline in sales around what I have reported here in the newsagency sales benchmark study.

Overall magazine sales are down around 8%.  Car magazine sales are down on average well into double digits, girl magazines, Dolly and Girlfriend and both down more than 12%.

The Australian Woman’s Weekly has achieved what I’d call a good result, down 1.4%. In this market I expect Bauer would be happy.

Better Homes and Gardens has also achieved a good result with no change. Pacific would be happy with that.

As I wrote earlier today, frankie is the shining light with growth of more than 10%. This is interesting since frankie plays close to the Dolly and Girlfriend space.

In the weekly space, the results are not great but not a disaster considering the overall market situation: Woman’s Day down 4.2%, New Idea down 4.4%, Take 5 down 8.9%, That’s Life down 12.2%, Famous down 14.4%, NW down 6.9%,OK! Down 7% and Who down 8.9%.

I would like to see data comparing titles performance in the various retail channels and even comparing individual businesses in the newsagency channel. I’d like to see if there is migration of the magazine shopper from one channel to another. I’d also like to see how shoppers respond to the different tactics newsagents use in the category.

I have used the magazine club card loyalty program since mid 2004 and for years this helped achieve a better than average result. In February this year I switched, cold turkey, to a unique discount voucher program that front-ended loyalty. My basket data shows that this program has generated considerable incremental magazine sales for us, sales I am certain we would not have achieved.

So, I’d like to see more thorough store level analysis so the channel can understand the success of the various tactical programs being used by newsagents. I’d be happy to share my data, for the good of the channel, to see how what I do stacks up.

From where I sit the evidence is pretty strong that shoppers are over the old points based approach. They prefer a dollar value discount as a reward for above average behavior.

It would be a mistake for newsagents to see the audit numbers and feel encouraged to retreat further from the category.

I am certain we can increase magazine sales by churning shoppers from one retailer or retail channel to us. While it’s hard work, sales are there for the taking.

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magazine distribution

Where the money goes in a typical newsagency

In helping a mid-size unbranded newsagency business recently I put together an educational flyer outlining where each dollar goes that they receive from customers. I created this to show that each dollar does not belong to the newsagent, that the wad of cash counted at the end of a shift is not their money.

This business had recently experienced an employee theft situation which had cost tens of thousands of dollars. The person committing the crime told the police that the newsagent could afford it they make loads. While I’ve heard this ignorant excuse many times when investigating theft in newsagencies, the newsagent affected was shocked.

The goal of the educational flyer is to show employees where the money in this business goes and to illustrate the point that the owner ends up with less than three cents in the dollar out of which they take payment for their time and service their loans.

I firmly believe that the more information we share about our businesses the greater the opportunity for our employees to make better business decisions with and for us.

Anyone questioning the percentages in the flyer can be shown invoices from the landlord or supplier invoices. Being prepared to prove the percentages claimed is important. To those who would say it’s none of their business I’d say it is their business. If you get them thinking more about the business, more connected with the numbers of the business they are more likely to support the business.

Jack Stack many years ago lead a turnaround of a reengineering business in the United States. His story is told in his book The Great Game of Business. It outlines the principles of open book management. The core principle driving their turnaround success was sharing business data and educating all who wanted so they could understand the data. What Jack led has become a movement – The Great Game of Business.  The principles apply to businesses of all sizes including newsagencies. I’m fortunate to have met Jack a couple of times including for several days last year at a small conference for small business owners.

I mention this to show that the idea of sharing business information with employees is not new and that it is backed by research as to how it can positively impact a business. My flyer idea is a small start in this direction. It goes nowhere near as far as Jack Stack would suggest but it shares way more than many newsagents do today. It’s a start, a necessary start in taking your employees by the hand and showing what happens to each dollar they put in your cash drawers.

I’d be happy to share the original file with anyone who would like to customise it to their situation.  Please email me at: mark@towersystems.com.au. It is vitally important that the percentages you present are yours.

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Newsagency management

Discussion on why the Washington Post should cease the print edition relevant to newsagents

Check out the report at Gigaom by Matthew Ingram on why the soon to be owner of the washington Post should cease the print product.

If I’m reading it correctly his central thesis is that print newspapers, emphasis on news, will die so why not act now and reduce the pain and force ourselves to pursue the alternative more vigorously.

This same thesis applies to newsagencies. We continue to offer products and services today that are in decline. We invest capital in supporting products and services that are migrating to non retail store platforms (lotteries for example).

We ought to more carefully think about our capital investment and consider the long-term returns we are likely to get should these migrating products and categories migrate as many expect.

As Ingram says about the Post, making a decision for yourself could be a better business move than to find yourself reacting – and playing catch up.

Our channel has spent too long being told what to do and too many expect to be led to their future. The future for each of us in our businesses – newsagents and newsagency spillers – is 100% up to us.

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Media disruption

Newsagent survey: what do you think about sales reps?

I’ve put together a quest survey for newsagents about in-store sales reps – how you engage with them and their value. You can participate in the survey by clicking this link.

I have put together this survey because of a change by some suppliers in their sales rep strategy. I’ll publish the full results here for newsagents and suppliers to see sometime next week.

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Newsagency management

Pixi Photo in administration

The Pixi Photo group was put into administration yesterday. They operated photography and printing services in major retailers across the country. The administrator said that the use of digital devices for sharing photos had hurt revenue.

Connect this story with the downturn in ink sales reported by ink retailers and the decline in copy paper sales and you get a sense of the shift to digital content being shared in that form more rather than hard copy.

Often here I write about the disruption to print media from digital platforms. We are seeing an equal level of disruption to other print related activities such as printed photos and printed documents.

Newsagents need to take these trends into account in their business planning.

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Media disruption

Just read: Killing Fairfax

Killing Fairfax is an excellent read, I couldn’t put it down over the last couple of days. Beyond telling the story of how successive leaders of the once giant media company missed online opportunities, the book takes us deep into Australian media family rivalries thanks to excellent on the record sources.

Newsagents wondering about the future of newspapers ought to read this book. It’s pages are drenched with insights newsagents could benefit from as they plan their future.

Beyond the question of the future of print, this is an excellent business book and most instructive for businesses facing the challenges of disruption to the model they were founded.

Kudos to author Pamela Williams. I highly recommend Killing Fairfax.

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Media disruption

Sunday newsagency management tip: planning for 2020

A few months ago I shot a video for newsXpress members about planning for 2020. It looks specifically at challenges categories and growth categories in the context of my Newsagency of the Future series.  I am sharing the video here as today’s newsagency management tip to encourage newsagents to work on their future. No one else will do this for you.

Of course, there is much more to say about the categories in decline and the growth opportunities. That’s a discussion more to be had on a more confidential basis and considering the situation of each business. This video is intended to open a discussion and to do this with an insight into the thinking of what might happen between now and 2020.

My work in this area predates the News Limited T2020 project by several years.

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Management tip

Newsagency performance assessment – for a newsagency in transition

Here is another newsagency business performance assessment I have completed. This regional high-street business (population 3,200) is in the middle of significant owner driven change, building a higher average GP and basked size.  Here’s what I sent the owners…

I have reviewed your business sales and other data for the year to June 30, 2013 and compared it with data for the year prior. I have selected the year on year comparison, as opposed to my usual three month comparison, as it provides a better analysis of the changes you have made to the business.

In your business data I can see that you don’t scan all stationery items with 4,405 items being sold using department keys in one six month period. While this could be cardboard or loose paper, it’s important you check. In my own newsagencies we do not use department keys at all and the result is more useful business data.

Your newsagency is what I’d call traditional in product mix. yes, You are introducing some new products – but you need to do more to keep ahead of the waves of change hitting your business and all newsagencies. Bring on change through your actions and not as a reaction to what is hitting you.

  1. OVERALL SALES. Total sales fell by 5% in 2012/13 compared to 2011/12. That’s on average 163 sales each week. This decline requires a response from you as business owners – what are you doing inside and outside the business to bring in new traffic?
  2. OVERALL REVENUE. This is down 3% year on year, meaning you are earning more from each transaction than in a year earlier.
  3. AVERAGE ITEMS PER SALE. You have 1.734 items per sale. This is a good number, nicely above average for a newsagency in Australia.
  4. AVERAGE SALE VALUE. Your average sale value of $9.49 is terrific – up 7% on a year earlier. This is what is softening the impact of a small decline in sale transactions.
  5. CALENDARS. I can see this is your first year with a separate calendar department. $1,362 in sales at 60% gross profit is a good starting point. Your magazine data could guide you in calendar purchasing. I have found magazine sales data to be the best guide in this area.
  6. CARDS. Your sales are up 4% year on year. The data shows the shift from one card company to another and in this a shift in price point focus. While the 4% increase is good, I’d stay on top of the card relationship by requesting a review to tweak what you have … chasing more growth this year. Your card data can better inform your gift, toy and plush buying. for example, I think you could increase plush sales by 500% on the basis of your card sales.
  7. GIFTS. While you had gifts the year earlier, your sales result in 2011/12 of $1,312.61 is nothing compared to $15,402.26 this year. As well as increasing revenue from gifts by 537% you have increases your average GP. Based on your card sales I am certain you could grow gifts further this year. I suggest you target $25,000 as your sales target for gifts this year. I am certain you can achieve this. I’d suggest you move toys to their own department for more accurate reporting. Looking at Toys I can see this accounted for most of your 2011/12 gift revenue – making the result in 2012/13 even more stunning. Well done.
  8. INSTANT SCRATCH TICKETS. With ticket sales down 6% and revenue down 10% you have to look at how you promote these. Are you and your team engaged? Are tickets being offered across the counter? The data indicates the decline is in the lower denomination tickets.
  9. MAGAZINES. Unit sales down 5% and revenue down 7%. These figures are not bad compared to the newsagency channel average. Whatever you are doing – keep doing it but do more to ensure that you keep the decline in check.
    – Women’s Weeklies are only down 3% – an excellent result considering what I see elsewhere. Since they account for 26.72% of your sales the good performance is important to you.
    – Your commitment to special interest titles sees them accounting for 12.39% of your magazine sales at around $500 a week. This is important since special interest titles are usually only sold in newsagencies.
    – Well done on the 13% year on year growth in teen magazines and 15% in buying and selling.
    – I can see from your magazine data that your shoppers are more likely to be women: craft 7.55%, Home & Lifestyle 8.19%, women’s Interests 4.89%, Women’s Weeklies 26.72%, Food 2.59% and Crosswords 4.34%. Are all your women-focused titles in the one area? Is this easily shopped? Could you improve their shopping experience?
  10. NEWSPAPERS. Unit sales are down 7% just below the newsagency channel average. The concern is that this reflects a decline in traffic, a decline you need to replace. The other question re the 37,919 newspaper sales in the year is – what’s next to your top selling newspapers? You ought to have products you want purchased on impulse next to them. For example: better Homes & Gardens Thursday through Sunday, Women’s Weekly the first few days it comes out etc.
  11. STATIONERY. You dropped $14,500.85 in revenue over they year, a decline of 7%. This is higher than the channel average. What’s interesting in your data is the growth for account books – 25% year on year, Binders – 15%, crepe paper – 25%, Notebooks – 21%. A deeper analysis is challenged because you’re slack in managing your data – you have $11,509 in sales sitting in unknown category. This can be easily fixed to give you accurate data. In terms of stationery overall, connect with your GNS rep and ask for an assessment based on their top selling stationery items in the area. It could be that you have some opportunities here.
  12. LOTTO SALES. Well done on the 12% increase in sales, this is better than average. What are you doing to encourage and guide your lotto customers into purchasing other items? You had 38,172 transactions in 2012/13 – plenty of opportunity for promoting other parts of your business.

As I noted above, what you have is a reasonably traditional newsagency but I can see transition underway in some areas. I think you need to pick up the pace on this transition, chasing new traffic by expanding your product offering.

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Business planning

The breakfast opportunity for newsagents

If I had a newsagency in a high street situation I think I’d be looking at breakfast on the go opportunities for attracting more shoppers. While I know some who have gone with coffee, I am not aware of any newsagent taking a strong stand with a breakfast offer.

In the breakfast on the go mix I’d include yoghurts, meal drinks like Up & Go, pre-packed fresh bakery items – hot and cold if possible and practical, fruit, breakfast bars and hot drinks.

Depending on location, I could go further as some newsagents already have by creating a cafe. My thoughts this morning are about tapping into the breakfast on the go opportunity specifically and noting that newsagents in the right location could move into this without dedicating too much space.

If you’re not sure about the scope of the opportunity for you look at convenience stores, supermarkets and petrol outlets nearby. They will most likely have this covered and they are grabbing your magazine customers – and maybe customers looking for other items you sell.

Every newsagent needs to be working on attracting shoppers for more than magazines, lottery tickets, newspapers and greeting cards. Breakfast on the go could work for some.

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Management tip

Spirit humour cards help drive in-store traffic

There are two types of traffic generation I obsess about in my newsagencies: getting customer inside and getting them further inside.

Often in a newsagency customers only shop the front part of the business.  We need to work hard to lure traffic further inside our newsagencies. We can do this by giving shoppers a reason to shop the shop.

One product we use to lure shoppers deeper into the business is the humor spinner from card company Spirit. I find this works a treat.  The stands attracts two types of people – those looking for a funny card and those who pass time reading funny cards. The stand is a perfect browsing opportunity.

We move the Spirit humor stand around the store every few weeks. Right now it’s located in front of our magazine department where it is attracting more shoppers to our magazine department. I’d encourage other newsagents with the stand to try this placement. You’ll see upside in Spirit card sales as well as upside in magazine sales.

The other day I noticed a shopper browsing the cards and then moving to browse magazines. While I can’t be certain, it looked to me like they only got to our magazines thanks to the card unit. They bought a magazine.

It’s important we do this, place products such that they bring shoppers deeper into our shops.  Indeed it is this above average behavior as retailers that will help deliver for us above average business results.

Newsagents who run their businesses in an average way will achieve average results. Yes this is a glib comment. It’s also true.

I urge newsagents reading this to look at their product placement to assess whether they are, through this, luring shoppers deeper into their shops. Excellent spinners, like this one from Spirit, can help us achieve better results from existing foot traffic.

FOOTNOTE: Reflecting my obsession, I’ve asked staff to ensure the spinner is turned to a specific facing of cards as I see this as working best to get people engaged. Crazy, yeah – but chasing sales.

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Greeting Cards

Another newsagency business performance assessment

Here is another newsagency performance assessment I have recently completed. This is an interesting business facing traffic disruption in a high tourism location – challenges faced by many newsagents.

My comments are direct and to the point. My intention is not to offend but to get your better engaged with the management of your newsagency business.

Good data feeds good business decisions. I can see in your Monthly Sales Comparison Report data that you do not scan everything you sell. For example, in the three months I have data for, you sold 546 stationery items without scanning them and 4,248 newspapers without identifying the titles (by scanning them or using a hotkey). It’s important you scan everything.

Now, onto my analysis of sales by each part of the business comparing three months this year to the same period a year ago.

  1. OVERALL SALES. Number of sales is down 11%. This is worse than the average I am seeing for newsagency businesses.
  2. REVENUE. This is down by 15%. It is concerning that the fall here is bigger than the fall in the number of sale transactions. The best way to assess this is by looking at GST collected.
  3. CARDS. Sales are down 3% off a low base. I am not too concerned here. however, I note that you;re doing only $500 a week in cards. Is this an opportunity. While I appreciate you see mainly tourist customers, could you change your card offer to better connect with tourists?
  4. CIGARETTES. The decline of 18% is considerable. You’re now doing $2,200 a week in sales. You need to check your stock holding as if it is greater than $5,000 you are probably losing money. The other option is to look at your price. Are you making the highest margin you can based on your convenient location.
  5. GIFTS. Sales are up by 599% off a tiny base. $75 a week in gift sales is hardly earth shattering. Based on your card sales you should be doing at least $200 a week in gifts however I suspect you could do far better than this. The gift category is important since it lifts the overall gross profit of your business.
  6. INSTANT SCRATCH TICKETS. Your sales are down by 22% and this is worse than the average decline for Queensland. This needs urgent attention.
  7. LOTTO SALES. Your lotto sales are up 4% and while this is good news, the increase is lower than the average I am seeing for Queensland. Yu need to do better. how are you promoting. If you are only doing what is asked of you it is not enough. Come up with your own ideas for promoting lotto products. A good campaign can draw shoppers from the street.
  8. MAGAZINES. Some good news here. Unit sales declined 8% and sales declined 9% – both lower than your overall store average. That said, your weekly sales total of $1,550 is low. In fact, it could put your accounts at risk. I’d urge you to take a hard look at your magazine department: undertake a full relay, make your magazine layout compelling and enjoyable. Entice shoppers with your placement.Your data shows the convenience nature of the business with women’s weeklies accounting for 19.74% of all sales Your 3% growth here is good. Continue to focus on this category as the hero.
    – Women’s Interests magazines account for 12.96% of sales but they are down by 15% year on year. This is where a relay should help.
    – Sport magazines account for 15.85% of your magazine sales. Excellent news. However, your sales are down by 23%.
    – I am surprised at the small contribution of some categories and would encourage you to work on growing their sales: food, crosswords, motoring and computers & gaming.
  9. NEWSPAPERS. The decline in unit sales of 22% must be of concern to you. That’s a decline of 535 newspapers a week. You have to be asking yourself what are you doing to replace this lost traffic? Now is the time for this question to be asked and an action plan put in place.
  10. STATIONERY. Revenue is down 22% and stationery sales are down to $700 a week. I’d be looking very carefully at your range and wondering if you have the right mix for your convenience / tourism shoppers.

Your location and product sales mix makes me ask the question: Is it time for you to cease identifying as a newsagency and start trading with a different business identity more attuned to people walking past your business? Give people more reason to walk in and browse your shop than the old newsagency approach that may not be connecting with shoppers in your unique situation.

Your data shows a fundamental shift away from traditional newsagency products and if this is not responded to by the business then a predictable end for the business will be reached. This does not have to be the case. Your data also shows opportunities in terms of the types of customers and what they are buying. Use this data to kick start your business plans.

If it were up to me I’d rebrand as something fresh – after I had reconfigured the business to sell products to the unique people who walk past your shop front every day. I’d look carefully at the successful retail businesses nearby. I’d also look at how I could make shopping with me easier and more enjoyable.

I hope these comments help.

In a follow-up discussion with one of the owners of the business I’ve got an excellent answer for the department sales of stationery – cardboard and paper without barcodes.

5 likes
Newsagency benchmark

Newsagency business performance assessment

I am regularly asked to assess the performance of newsagency businesses and comment on what I see in their data.  What follows below is the feedback I provided to one new newsagent earlier this week. I share it here with their permission:

The comments I make below are not intended to offend you however it is possible they will. They are direct, to the point as I have found there is value in calling it as I see it. The comments reflect what I see is the state of your business as represented in the Monthly Sales Comparison Report for April through June 2013 compared to 2012.

Your business data is the best assessment of business performance as it does not lie as long as you use the system to track all sales.

I have broken the assessment down by various parts of the business.

  1. TRAFFIC. Number of sales is down by 13%. This is very significant, considerably above average for a newsagency. It makes me wonder how you are marketing the business externally – advertising, promotion, offers.
  2. SALES. Revenue is down by 11%. Also very high and concerning.
  3. CARDS. You are not arriving stock properly – see unknown category. You should talk with support about getting this sorted out. This could be because you may have changed card companies. The sales decline is on par with the rest of the business.
  4. CIGARETTES. The decline here is less than for the average for the business. This is good news. However, be careful since there is no upside in tobacco product sales.
  5. CONFECTIONERY. 22% decline. Worse than the business average. You need to take action here. Look at your product range, your display and your pricing. Something is not working for you. Also look at the value of your sock. If you have more than $1,000 in stock you;re losing money. Act with urgency here.
  6. GIFTS. You are managing the data poorly. What does assorted gifts mean. Assorted gifts account for 67.72% of your sales. Categories are supposed to guide you meaningful information. I like to see: male, female, teens, kids, babies. Or: home, traditional, retro, funky. Categories should help guide your decisions. Assorted is meaningless. So, get your data right – the help desk can help you with this. In terms of sales, the 7% decline is just below the business average so that is good news.
  7. LOTTO. 12% up is good news. My question is what are you doing to leverage lotto customer traffic? Are you helping your lotto customer spend on other products you offer? your data suggests not.
  8. MAGAZINES. Unit sales down 21% and revenue down 18%. Both are bad numbers compared to the rest of your business and the average for the newsagency channel. This situation needs urgent action. When did you last do a full magazine relay? If not in the last six months get to it urgently. Take a fresh approach with magazine location and display. One you get the layout right I’d look at some form of magazine related promotion to reward people who are especially loyal to you.
    – Your data shows that Motoring titles are your top performing, accounting for 17.10% of your magazine sales. Wow! This is your hero category for the men’s section. Sport at 9.40% is also doing well.
    – Your women’s titles are troubled. Women’s Weeklies are down 22% in unit sales and Women’s Interests down 25%. Has something happened in your newsagency to turn women off? I ask this question seriously. These declines need arresting first followed by rebuilding.
    – You are under-performing newsagency channel averages when it comes to Food (2.06% of sales), Crosswords (2.03%), Music (1.84%) and Teenager (0.62%). It would be easy to blame this on your shoppers. Your challenge as a retailer is to look at where you have them placed and how you promote them.
  9. NEWSPAPERS. Unit sales are down 14% and revenue down 9%. The unit sales decline is the real worry as it’s worse than the overall average for the business.
  10. SCRATCH TICKETS. A 27% decline in sales is dreadful. The traditional decline I am seeing in Queensland is around 15% so your business is performing worse that the statewide trend. The question is what are you doing about this. A shopkeeper will shrug their shoulders. A retailer will work on an action plan and then implement the action plan.
  11. STATIONERY. This is a good news department. Your sales are down 10%, slightly less than the average for the business. While not good, at least it is close to the average for your business. In this department again you have Assorted as a category. This is useless. It accounts for 41.60% of sales and we can’t further assess this. Pens, Pencils and Markers is the next big category at 11.07% of sales. They declined only 5% and this is excellent news. What are you doing there as it is working better than for other products? You should talk to your GNS rep and ask them to conduct a review of your stationery. They could guide you to relay stationery to tell a better retail story.

With non lottery product sales of $300K for the quarter and an average of 3,600 sales transacted each week you have a sound business base. What happens from here is up to you. If this were me I’d be urgently overhauling my approach to key traffic driver categories in the business:Lotto, magazines, stationery and cards. I’d engage with suppliers for help. I’d also develop a series of plans for change in the business to give customers a fresh experience. Once I had that where I wanted it I’d promote the business externally. I can’t stress enough the importance of external promotion of the business.

The best business growth is that achieved over time through a series of small steps: a small bump in traffic, a small bump in the average spend and a small bump in the margin you achieve on the items you price for yourself.

I appreciate you’ve not even been in the business for a year. Since it’s your money invested, the future of the business comes down to you. Get your data right, set your focus on a plan and get cracking on that plan.

Let me know if I can help in any way.

19 likes
Newsagency benchmark

ABC radio interview about the future of the newsagency

Click here for a link to the 612 ABC Brisbane website and and the interview I did with them yesterday.  It was wide ranging and went to the heart some of the challenges and opportunities before us. They also tweeted key points from the interview. I’m told there was plenty of talkback on the topics covered.

ABC TV in Brisbane had scheduled an interview yesterday on the same topic but they decided to not run with the story at the moment.

18 likes
Newsagency challenges

Plush, gifts and cards growth reflect newsagency reinvention focus

I’ve been looking at sales for the first two weeks of June and comparing them to the same period a year earlier.  What is usually a quiet time of the year is good for us: cards up 16%; diaries up 22%; magazines up 1%; gifts up 500% (off an average base); plush up 12% (off a very high base).

Average sale value is up 10% and overall revenue up 6% off of flat traffic.

What we can see in the data is that our focus on cards, gifts and plush as traffic drivers is working.  This has been our focus for some time – generating traffic from products we decide on for our business.

Plush, cards and gifts account for 39.5% of our sales – up from 26.4% for the same period a year earlier. This is the number I was most interested in as it reflects on the reinvention of the business. Such reinvention is vital for all newsagents, reinvention around conscious decisions we take on our businesses and the products we target for generating traffic.

7 likes
Newsagency challenges

Terrific newsagent of the year awards night in Hobart last night

It was a thrill to be part of the ANF newsagent of the year awards dinner in Hobart last night. My newsagency software company was a sponsor so I got to say a few words before presenting the Tasmanian Retail Newsagent of the Year award.

My message was simple – we need to move from being agents making cents from a sale and embrace being retailers where we bring customers in based on our decisions and to purchase items at 50%, 60% and more GP. This means owning our own success and not expecting others to own it for us. It means being retailers being responsible for and pursuing our own success.

In a room with plenty of suppliers I made the point that our success depends more on us and less on our suppliers.

Let’s focus more on action and less on complaining.

7 likes
Newsagency management
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