A blog on issues affecting Australia's newsagents, media and small business generally. More ...

Newsagency management tip: worry less about competitors

I appreciate frustration newsagents and other small business retailers feel when they see products they have had success with make their way into a national chain or a nearby competitor.

In many cases this comes about because the supplier needs more volume than the independent retail channel can provide. Hence the move to mass or more independents.

Most key competitors of independents attract different destination traffic.

For you to make the most of what could be a growing product category, and or licence, you need to become the destination retailer in your area. This takes more than putting product on the shop floor. It involves being the expert, promoting outside the business, hosting events and giving people to place your store top of mind when they think of the product, category or license.

The easy approach is to complain about the actions of the supplier. The better approach is to deny the supplier this consideration by being better from the outset.

Competitors will always be there. Suppliers will always need to more more stock – usually because of manufacturer pressure.

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Management tip

Toys set to be strong in 2018 for newsagents

The toy category is set to be a strong category for newsagents in 2018 with more newsagents taking it on and with more suppliers prepared to sell to our channel than in the past.

Toys today are broader in their appeal than ever before, especially bad games, which experienced double digit growth in 2017.

While a few years ago it seemed that games were in trouble because of digital disruption, they have come into their own thanks to clever invention of new products and recasting of the appeal of some traditional products, such as Monopoly.

Taking on a local toy shop competitor is possible for newsagents. It takes knowledge, focus and commitment. This is especially true if you focus on niche, special interest, opportunities.

As a guide, toy revenue could easily be equal to 50% of your greeting card revenue. I have determined this base benchmark based on data I have seen from more than fifty newsagency businesses.

If you are not in toys, consider it. The right toy product can attract new traffic across several valuable demos.

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Newsagency management

Beware the doom and gloom reporting about Facebook

News outlets and some social media commentators / consultants have been saying the sky is falling following the announcement from Facebook last week of planned changes to their news feed algorithm.

As often the case, plenty has been said about what might be. I think we are better off waiting to see what actually happens, how the algorithm changes actually play out. Once we see those facts those of us who make active, daily, use of Facebook for our businesses can adjust accordingly.

Facebook is a business. It’s sole focus is share price. Share price is driven, in part, by revenue. Revenue is tied back to boosted posts and advertising. Advertisers will spend money if they can make money.

While we need to wait and see, I suspect facebook will ensure it has a healthy revenue model. That benefits those of use who use the platform commercially.

In the meantime, no, the sky is not falling.

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marketing

Terrific Atlanta gift fair offers insights for independent retailers

I am grateful for the opportunity to visit the Atlanta gift fair this year. It was my fourth year at the event and the most enjoyable so far. In addition to the trade show I was able to sit in on some terrific gift related product and strategy workshops.

There was plenty of new product to see and new initiatives to consider.

This is the major trade show for gift and homewares for the year. It is held in a three tower location with each tower similar in size two the one on the photo.

Many companies have year-long booths for sales people to use. Many of these booths show products as a shopper would see them in retail.

I use the show as an opportunity its to draw inspiration in terms of product range, in-store merchandise rising and retail management practices from way beyond the opportunities for inspiration we see in Australia.

As often the case, there was talk at the trade show about the mood of small business owners. The mood is considered to be optimistic. People were open to buy. This is an advance on the same rate show a year earlier.

I have come away with several new product opportunities as well as what I think will be some good in-store initiatives. Retail competition in the US is considerably greater than in Australia. This challenges small business retailers to do better. That is where I have found good learning opportunities by being at trade shows like this.

The importance of gift retailers  is growing in our channel. It is exciting as what constitutes gift continues to evolve.

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Gifts

Some small business newsagents rely too much on accountants for business decisions

While accountants can play a valuable role in business decisions, I see and hear of situations where the accountant has too much of a say.

In one situation recently an accountant told a newsagent they should put tobacco products into their business because all newsagents have cigarettes. This was in a business the accountant’s client had recently purchased, their first and the first newsagency for the accountant.

The previous newsagent had got out of tobacco five years earlier because of falling sales. But here was this accountant telling someone new to the channel and new to retail that they should get into tobacco. They did.

That was almost a year ago. It has not gone well.

The accountant thinks the retailer failed. The retailer thinks so too. This is despite evidence in the business data showing growth elsewhere in the business, where the retailer backed their own instincts.

This is one example. There are plenty in our channel, where accountants have provided advice that is either out of date, not relevant to a transforming newsagency today or plain wrong. And there are plenty of examples where accountants have provided excellent advice to newsagents.

Some decisions are not about the numbers alone. With the extent of change we are confronting, taking a risk beyond what the numbers show will be key to success in a year or two.

It is important to remember it is your money on the line. As the business owner, you have to back yourself. Relying too much on an accountant who is not in the business, who may not have relevant knowledge about your channel, may hold you back. It could head you in an inappropriate direction.

My advice is to by all means listen too your accountant. However, have the data and knowledge to make decisions yourself, and in a timely manner, based on your own evidence. The pace and scope of change today demand this from us in business.

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Management tip

Inside the pencil factory

Pencils are a core product for Australian newsagencies. While they have travelled a significant distance from where began, they remain vital today as new generations buy them in good numbers.

With this in mind, I encourage you to take a moment to read a wonderful article, Inside One of America’s Last Pencil Factories.

In an era of infinite screens, the humble pencil feels revolutionarily direct: It does exactly what it does, when it does it, right in front of you. Pencils eschew digital jujitsu. They are pure analog, absolute presence. They help to rescue us from oblivion.

This article is a beautiful piece of writing about a wonderful factory where they make an item important to us for decades.

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Stationery

Suppliers promoting retailers on social media need to lift their game

The publisher of Breathe magazine promoted newsagents on social media, and Woolworths.

The post from yesterday says participating newsagents. You have to go to their website to find them.

However, on their website it is all about them selling direct to the shopper.

It is only when you scroll down to the bottom of the home page that you see the store finder link. Once you click that you enter a suburb and it them displays a map of stockists.

Once you get to the map it is terrific. They need to make this easier to find. It could be in front of people landing on their home page, without needing to scroll or even click on a link. That is what they should do if theirs is a over the counter purchase first strategy.

If the publisher strategy is that retail serves to facilitate the publisher / reader relationship then they should continue doing what they are doing.

I like to see suppliers promote stockists and do appreciate that newsagents get a mention from the folks at Breathe. However, I (selfishly, of course) want them to do it with a retailer first approach. In fact, a newsagents first approach. That approach would drive our engagement is it demonstrates respect for the us.

Re this pitch for Breathe: Woolworths is at an advantage and that is unfortunate.

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Competition

TV campaign for newsXpress

newsXpress yesterday kicked off a national TV campaign promoting jigsaws. 93% of purchases with jigsaws have only one jigsaw in the basket. The goal o the TV campaign, in-store promotion and social media engagement is to drive basket depth – in addition to making newsXpress stores destination stores for jigsaws.

Last year, jigsaw sales increased by more than 10% in Australia, off a strong base. Jigsaw shoppers are loyal.

The more newsagency businesses are promoted outside what have been traditional traditional traffic attracting offers for the channel the better.

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marketing

In 2018, make every day your payday

For several years, I have written that newsagents need to make every day their payday.

This is an important message as it focuses on the goal of driving business value. Too often, I see retailers working about, being focussed on, the wrong things, things that do not directly affect business value.

As 2018 gets under way, I am pitching this again, with revisions.

Make every day your payday.

There was a time when small business retailers could rely on selling their business for a handsome increase on the price they paid thereby providing a good pay day, when businesses sold for a good multiple of net earnings.

No more. Today, the best way to extract value from our businesses is to make every day your pay day, to not rely on your pay day being the day you sell the business. In fact, the typical newsagency today will sell for somewhere between 1.l5 and 2 times actual net profit as shown in the business P&L.

The P&L matters as this is what you need to be guided by in all business decisions and actions.

The challenge is how do you do this?

Retailers need to look at their businesses differently. This starts with the mindset of every day being your pay day. Each decision needs to be considered in this context, in the context of the P&L impact.

Focusing on profit today will give you a better result today and make your business more valuable tomorrow.

Here are some suggestions for making every day your pay day:

  1. Run with the leanest roster possible. Just about every retail business I review has capacity to lower labour costs. In a typical newsagency, one hour saved today is worth between $75.00 and $100.00 in revenue.
  2. Ensure you can sell when the business is closed. Yes, this means sell online.
  3. Promote the business outside your usual foot traffic area … increase your customer base.
  4. Promote your business outside the brand people know you as. or example, online pitch under a brand other than your newsagency brand.
  5. Have your best people working the floor, helping customers spend more.
  6. Have stunning displays that attract people from outside the shop.
  7. Have compelling displays in-store that encourage people to browse beyond their destination purchase.
  8. Always have impulse offers at high traffic locations.
  9. Charge more every time you can. Loyalty programs such as discount vouchers, bundling into hampers, multi buys such as 2 for 3 and other opportunities enable you to do this by blocking price comparison.
  10. Buy as best you can.
  11. Grab settlement discounts every time you are able.
  12. Measure product category performance by gross profit. Quit the categories that are not paying for themselves.
  13. Promote outside your store using online and social media opportunities.
  14. Leverage adjacency information. Chase a deeper basket – people purchasing more each visit.

Be responsible for the profitability of your business. Don’t blame your suppliers, your landlord, your employees or some other external factor … it all comes down to you – the decisions you make and the actions you take.

If you relentlessly pursue profit with a clear focus you are likely to see profit grow. That’s better than waiting to make money when you sell because that’s less likely to happen in this market.

Doing all this relies on your measuring the performance of your business. The Tower software helps with this. It is easy.

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Newsagency benchmark

You are not your customer

The next time you decide to not stock something because you do not like it, stock it and give it a good location and good support.

You are not your customer.

Think about the magazines you sell, the diverse number of titles. What percentage of the magazines you stock would you read if you had time? I would be surprised is the percentage was higher than 25%. That would mean 75% of the titles are not to your taste.

You don’t have to like what you sell. You don’t have to like it to be able to pitch it. All you need to do is to understand what you sell. Understand who the customer could be, how they would choose what they buy and how to best represent the product.

The more people who shop with you buying what you would not buy for yourself the better for you and the business.

Don’t think about your shop as an extension of your home, filled with what you want ton see.

You are not your customer.

Hang on to this mantra. Buy with it in mind. Take it as a challenge to see how far you can stray from your comfort of what you like. Let this straying show you what is possible in your business.

The desk nameplate in the photo is an example of an item several newsagents I know stocked under protest. They were shocked that it and others from the sarcastic range sold out in a matter of days, leading them to reorder these products they do not like.

Chase opportunities outside what you like and outside of what people expect for your business or your type of business. This is key to attracting new shoppers.

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Gifts

Advice: retail visual merchandising for blokes

This advice could also be called VM merchandising for people who think they can’t do it. Everyone can do Visual Merchandising! Experience is not necessary.

Visual merchandising is about display products in a way that attracts people to them, to look, touch and feel. It is about displaying products so you sell more.

Sales determine success, and only sales. A pretty display that does not drive sales is a waste of time and space.

A display that wins a supplier prize that does not increase sales is a waste of time and space, despite the supplier award.

Here is my advice on VM for blokes.

  1. Start with a clean space, a flat surface, in a good location.
  2. The best display looks like a pyramid.
  3. Your hero product is at the top of the pyramid.
  4. A seasonal poster hangs above the display or is placed next to it to signpost the display.
  5. Flowing from the hero product down to the base of the display are other products. But not so many that you can’t see what you want people to see.
  6. The display is balanced, even.
  7. A display of gifts always includes cards.
  8. Use coloured paper to highlight certain products. But don’t go for a rainbow.
  9. From a colour perspective, a good display has no more than two core colours as the focus.
  10. Don’t put signs in the display itself unless absolutely necessary.
  11. A display can look untidy and that is okay in some circumstances. For example, a box of Beanie Boos exploding from a box .
  12. Mistakes are okay.
  13. Oh, and don’t treat this as an engineering challenge. Keep it simple and fun! :

Remember, the alternative is no display at all.

A note to others who may be around when someone is doing their first display – we all did our first display once … be gentle.

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Newsagency management

Bauer shutters Reader Rewards program

Bauer Media has announced the end of the Reader Rewards loyalty program. Here is the announcement from the company:

As part of Bauer Media’s ongoing commitment to continuously provide effective and sustainable support to the newsagency channel we regularly review the range and efficacy of resources we offer.

After reviewing customer feedback as well as the low newsagent participation, Bauer Media has made the strategic decision to close the Reader Rewards loyalty app. The available funds and resources will be diverted into Bauer’s keystone trade development program, Connections with Bauer.

Please note the following closure timeline and details.

·         Reader Rewards will continue operating until Monday 22nd January 2018.

·         From the 22nd January customers will no longer accrue any additional stamps.

·         Customers will have until Wednesday 28th February to redeem any remaining free magazines they have earned.

·         Customers will be notified of the closure via email encouraging them to redeem any remaining stamps they have accrued.

This decision has been carefully made in response to channel feedback and an increased demand for alternative business building resources, such as social media support.  Bauer Media’s ongoing priority is to continue to deliver a host of optimised tools through the Connections with Bauer program in-line with new and exciting developments in the retail landscape.

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magazines

Are the banks closing accounts of newsagencies with Western Union?

The Australian published a report Friday claiming that banks have ended services to 100 customers (newsagents) offering Western Union services.

The rift between the small business ombudsman and Australia’s largest lenders has widened further, with Kate Carnell set to pursue the big four banks over their decision to end banking services with more than 100 customers ­offering remittance services through Western Union.

As the threat of being ensnared in a legal stoush with anti-money-laundering regulator Austrac continues to loom large, following the explosive suit against Commonwealth Bank late last year, lenders may be too aggressively ending business banking relationships with newsagents who offer Western Union services.

The report in The Australian is the first I had heard of such action being taken. I have searched online and cannot find any other reports.

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Newsagency management

Newsagency management tip: handling charity donation requests

I have written before about the need for policy and process around community group and charity donations. I like the approach of a cafe I visited recently. Every person approaching on behalf of a charity was given a card.

While the cafe is part of a small chain, their approach of bringing structure to handling the request is good. A single local business could easily do the same. Groups expecting you to support them need to show support for your business.

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Management tip

Pitching Valentine’s Day at the entrance of the newsagency

This photo shows our opening pitch for Valentine’s Day in the newsagency. This is at the main entrance to the business.

I call it the opening pitch as the placement will move twice through the season. We are supplementing this in-store placement with a series of social media posts starting later this week. Social media is playing a big role in our marketing spend this year. We have a budget, which is measured against sales outcomes.

While we will get good traffic for Valentine’s Day card purchases, those who actively promote outside their businesses set themselves up for great success.

2018 is already showing itself to be a year for making our own success.

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Greeting Cards

Good jackpot start to the lottery year

While the OzLotto $40M jackpot went off a couple of days ago, last night Powerball jackbooted with next’s weeks top prize worth $55M. This is a nice start to the year for lottery retailers for we know the best sales growth comes from natural jackpots.

While I don’t have lottery products in the newsagencies I have today, I did for many years at Forest Hill. Our most successful marketing for jackpots was by papering the newspaper stand. This was back ten and more years ago, when newspapers were a valued destination category.

If I had lotteries today, I’d look at by top destination lines outside of lotteries and pitch the jackpot there.

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Lotteries

Pitching Pilot Frixion pens

With tv commercials promotion Frixion pens on high rotation on free to air TV right now, promoting them at the counter or some other high traffic area of the business as well as on social media would help you maximise the opportunity. My only wish is that Pilot offered a file of the video so that newsagents could use to promote the pens more easily.

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Stationery

Good early Valentine’s Day card sales

Several have reported excellent early Valentine’s Day sales. Each went out a day or two after Christmas, replacing Christmas singles. While most Valentine’s sales are in the last week, early display captures those who plan ahead and reminds others you are in this space.

Valentine’s Day is an excellent season for pitching the broader gift range in the business. It for this reason that I suggest newsagents not purchase gifts that are too Valentine’s focussed. Rather, they can buy items that will sell all through the year as well as for this season.

The season is also an opportunity to pitch the business as a card destination. It is important for Valentine’s day cards to be close to other cards, to encourage purchases outside the Valentine’s purchase.

I was in  the US last week and saw plenty of Valentine’s displays. The photo shows the range in a Walgreens store in the midwest, in Winconsin in December 27. The major retailers, like Walgreens, run like clockwork with stores required to take down and put up seasons on a national calendar.

Note their use of the shelf at the top of the card fixture, pitching bags. This is excellent use of the space and drives gift bag purchases.

Newsagency businesses remain a key destination for Valentine;’s Day card purchases. We can leverage this by in-store and out of store promotion, especially out of store.

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Greeting Cards

Tatts ads running when retailers are closed

A newsagent contacted me this morning about Tatts running ads promoting the OzLotto jackpot after 6pm, when stores are closed. They say this happens often. I agreed to post about it here for others to comment.

From a Tatts prospective this is the right move. For shareholder value, growing online is important.

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Lotteries
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