I took a look at Halloween at a couple of Coles stores yesterday, to understand their focus this year. Here is the main display:
Plenty of stock. I like the mix of products, the adjacencies especially. See:
Their prices aren’t good though:
What I like about the Coles pitch is that it is bold. Their commitment is helping to educate shoppers about Halloween and that helps us. The key for newsagents is to differentiate.
Yes, I have written about this before. It is important and needs repeating. If you decide to quit stock, quit it fast. I suggest seven days, no longer. Dead stock is a stink in the business. It does not serve the future of the business. Quit fast. Find the price that works so this happens.
I have participated in marketing events in several newsagencies this year where feature products have not, until the event, been available in the business. A purpose of the event was to test if there was sufficient. In each instance, there was. In fact, in some cases, several thousand dollars in revenue for the new products on the day of the event.
Hosting an event for products you don’t usually sell is another way to extend the reach of your business, to attract shoppers who do not usually shop with you. It can be a valuable marketing activity.
I also love this idea for the excitement it provides when the retailer sees products they don’t usually stock selling in their business.
This is a great way to build optimism.
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.
I love the cover of the current issue of Donna Hay magazine. Kudos to all involved.
The sticker offering 30% off the cover price of The Weekly Times if you subscribe has no place in a retail-only newsagency if the business plans to sell newspapers in the shop into the future. I don’t like to see these offers in any retail-only newsagency.
Picking up on comments on my post about where I think some newsagencies will be by 2020, I note I regularly promote core lines like greeting cards on Facebook and other social media platforms. Here is a Facebook post from this week. It is simple and ensures the cards are the hero. I selected cards likely to appeal to a demographic – outside what is traditional for a newsagency.
If your card sales are flat or declining you have to act and promote cards outside your business and your promotion has to target a demographic that is not common in your business. All this is your obligation and not the obligation of your supplier.
I think this poster supplied by tatts to lottery outlets including newsagents endorses the depiction of lottery outlets as being run by older out of touch white guys. If they wanted to push back on the Lottoland depiction they would have gone for a different looking poster to this.
I continue to wonder if Tatts is concerned about Lottoland. I see no evidence in their marketing suggesting they are.
I noticed this out of date newspaper fixture in a convenience store in Sydney earlier this week. I mentioned to the guy behind the counter about the out of date promotion information from April this year. Not my problem he said. The newspaper company has to change it. This is a competition of the newsagency channel. I really wonder why publishers like convenience stores. They care less about their product.
Derry City council passed a motion calling on newsagents to stop selling The Sun. As The Guardian reports, the council also voted to support the group Total Eclipse of the S*n, which wants every shop to boycott the newspaper.
This campaign is about the grossly inaccurate reporting by The Sun on the tragedy at Hillsborough.
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.
I am running free e-commerce workshops starting next week that may interest newsagents. Offered to all retailers through my POS software company, newsagents wanting to know more about website options and how to connect to POS software could find the sessions useful. Here are the details of the events:
Join Tower Systems for a one of our free seminars in Australia and New Zealand (in Auckland, Wellington and Christchurch) where we will show our latest Australian developed POS software for specialty independent small business retail.
This will be a truly interactive learning opportunity for small business retailers, an opportunity to see under the hood of website development, to discover is this is something any retailer could do for their business.
We will show you how to setup up a Shopify store that can be live in hours. Plus, there will be a Q&A opportunity so you can explore your specific needs. Book now by clicking on the city location you prefer.
We will share our experiences in the small business POS and e-commerce areas and outline what we learned when creating sites for our own retail businesses. This seminar could save you thousands in web developer fees.
If you have questions, please email mark@towersystems.com.au or call 0418 321 338. If you are in New Zealand, please call toll free on 0800 444 367.
We have Halloween up and running in the newsagency with the front third of the shop established as the scary (in a good way) zone.
This year our focus is on style with three major displays (only one display is in the photo) targeting a specific aesthetic.
We have left the lower price point disposable Halloween items to the Reject Shop and Coles supermarket located a few doors from us. Our buying goal has been to focus on products different to what they will stock.
We are particularly focussed on adult Halloween parties as this is a differentiating and lucrative market.
If you are not in Halloween 2016 it may be a bit late. We ordered most of our stock more than six months ago.
Halloween is an important season for us and many newsagency businesses. We put it up after Father’s Day and ahead of the major Christmas rush. it is a way of easing into Christmas. Plus it is fun (and scary).
Newsagent owned Group Newsagency Suppliers stationery wholesale business announced the appointment of a new CEO today:
Paul Yardley has been appointed CEO of the GNS group of companies. Paul’s most recent role was CEO of WH Smith Australia, one of the country’s leading news, book and convenience retailers. His time in that role saw –
- Increased earnings and market share
- Acquisition and integration of Supanews and other businesses
- Implementation of key retail systems including inventory controls
Previously, he worked in retail consulting roles and has developed wide experience in business transformation. Starting his career in merchant banking, he saw the light and moved into retailing as Managing Director with video game retailer GAME Australia. He has a wealth of senior executive experience and is well versed in corporate transformation. Paul and his family live in Sydney.
Paul commences with GNS on October 17th and is looking forward to working with the newsagent and stationery businesses to forge a company well positioned for the future.
– Martin Hartcher Chairman GNS
The story goes that a parent bought a Pokemon card game pack from a shop because that shop’s price was half all the others. The kid went to play with mates but could not because the cards were not authentic. The kid was humiliated. They went home and ripped into the parent. The parent went to the shop and was told they are half price, what do you expect.
If someone tries to sell you Pokemon cards at half price or a massive discount to what is usual, they are probably a knock-off. Selling knock-off product of any brand can seriously harm your business.
Only purchase licenced products from a business that you know has the licence.
Every month data is released reporting on the year on year performance of toy related categories such as games, puzzles, plush, art, craft, dolls, sport, indoor, outdoor and the like. This data and the accompanying analysis is used by buyers in major retailers and connected small business toy category retailers to adjust focus to leverage the trends in the data.
The monthly report is tremendously valuable is seeing the whole of category isights across all retailers. The analysis reveals trends you may not see in your store or a group of stores you work with.
Suppliers will usually not share the isights unless they are relevant to them. This is why whole of category insights are valuable, because of the source of the data and that it is outcome focussed and not supplier driven.
As we transform our businesses, which is a never ending task, external professional data to fuel strategic and tactical decisions is vital. Sure, you can get insights from your own business. However, to see broader possibilities, seeing what is happening inside competitor businesses could take you to a whole new level.
Newsagents in a marketing group should have access to this information as it is just this sort of independent analysis groups would / should use to guide the advice they provide their members. In the toy category there is an excellent independent report, best practice in fact.
As a channel we have moved beyond relying on advice from suppliers and others that is nothing more than opinion. Our decisions need a strong foundation and the best foundation will be in reliable data backing professional analysis.
Toys is an important category in the transforming newsagency. It can account for an amount equal to around 25% of annual card sales as a starting benchmark.
The toy category is another of those in which newsagents used to dominate. It was let slip away. Now it is time to bring it back. However, in toy more so that almost any other category, brand matters. This is not a place for cheap China imports if you want to become a destination retailer.
At the counter is the best place for calendar refills. They are an easy basket-builder. If you don’t have them there, make room right away. Here is our placement – tactical, not pretty.
652,000 reached with the original tweet:
I don’t get why any small business retailer would run a loyalty program based on points when the supermarkets have ruined the value of points programs with change after change and a value proposition that is dreadful.
News Corp. published an article about this in August. Consider the Woolworths supermarket pitch:
$1 spend will earn one Woolworths Point, with no minimum spend.
$2000 spend on anything in the supermarket, BWS and Caltex will earn 2000 Woolworths Points, which can be redeemed for $10 off your next shop.
Now, take a look at the Coles supermarket pitch:
$1 spend will earn one FlyBuys Point, with no minimum spend.
$2000 spend on anything in the Coles supermarket, Target or Kmart will earn 2000 FlyBuys Points, which can be redeemed for a $10 gift voucher in Coles or Shell petrol, effectively $10 cash off your next shop.
Now, if you run a points program, think about your offer. I know newsagents who accuse a point per dollar spent and the points are worth 2.5 cents each. In this scenario, $2,000 in purchases results in a value to the shopper of $50.00 – considerably more than the $10.00 you get from the same value purchase at Coles or Woolworths.
The comparison is reasonable because the currency is the same – the currency is points. Regardless of the value of the points.
I don’t understand why any retailer would offer a loyalty program that can be easily compared with a big business competitor, especially where the competitor actively runs a loyalty program that is anything but.
In small business especially, the loyalty program you run needs to be an easily understood point of difference. It needs to be something people will switch to your shop for.
If you run a points program, ask your customers if they understand it. Next, run your management reports to assess whether you are actually making money from the program. you know what it costs each year, are you achieving incremental business to justify the investment?
Many years ago we all jumped into points based loyalty because it was the big new thing and because we wanted to be like big businesses because that’s what we thought was right back then. However, that sea quickly became competitive and bloody. In fact, now it is so cluttered and confusing that copying big business is not a smart move at all.
Be smart about your loyalty offer. Ensure it is easily understood, differentiating and offering understood and appreciated value.
Newsagents will probably find the article about Bauer Media in today’s Australian interesting.
The surcharge free movement in Australia is growing momentum. So much so that newsagents charging a surcharge for the use of a credit or debit card will face even more pressure than before.
While I don’t charge a surcharge in my newsagencies, I know of plenty who do. Given the 6% commission on lottery products or 2% commission on transport ticket sales, a surcharge is necessary for many transactions that would otherwise be loss-making.
There is no future for a retail business that sells goods or services where it does not even cover operating costs.
However, Surcharge Free is a thing, a movement … apparently funded by American Express, surprise surprise – and they are using consumer advocate and former Choice spokesperson Christopher Zinn as their public face.
Check out this video:
This video from House explains the retail business value better.
From a newsagency business perspective, the House story does not connect as they control their prices and therefore their margin. Agency focussed newsagencies do not have this luxury. Newspapers, magazines, transport tickets, lottery products, phone top-up … they are all sold at a fixed price with a fixed, small, margin. It is these products that are problematic when it comes to credit and debit card surcharges.
Here is a video from tailor Germanicos:
Again, a product where the retailer controls their margin.
All these videos are from American Express. The surcharge free website is full of data, presented well, that encourage retailers to confront the challenge of surcharge free:
And if that is not enough, there is this:
My own view is that a surcharge in retail is a point of friction. It is an invitation to a shopper to shop elsewhere. It has them wondering where they could shop next time – yes, to save a few cents. They do not care about your margin situation.
So, what do you do?
One option is to pull back on low-margin agency business. I think that is the smart move. It is happening naturally with transport tickets, lottery products, mobile phone recharge and phone cards – with suppliers of these pushing online purchases aggressively. But I know this is easier said than done with many newsagency businesses relying on agency business for more than 50% of foot traffic and revenue.
The other option is to grow non agency business, higher margin business, to fund the credit and debit card fees.
The other option is to charge a surcharge. However, I think that will only end badly for the business given the forces being rallied against surcharges.
I do think shoppers see it this way: no surcharge = better customer service.
My advice to small business retail newsagents is to think through carefully what is best for the long term health and value of your business asset, do not apply a surcharge without thoughtful consideration.
I see plenty of newsagencies where products are held for customers at the counter for purchase later, that day, that week or even that month. While this is a nice customer service touch, it can cost you sales – especially if the item is highly sought after and the customer may not collect it.
Take a look at your processes and be more firm on how you handle this.
My advice to newsagents is that you do not use a consultant to run your social media campaigns. rite your own Facebook and other social media posts. No excuses. I am yet to see a social media consultant who speaks with a voice that best represents a local retail business like a newsagency. Save the money and spend it more productively in the business.
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.
With the AFL Grand Final is full swing it is fascinating the different shoppers you see this afternoon in major shopping centre situations. This morning was a surge as people who would have shopped in the afternoon got it out of the way. This afternoon there are plenty of grandparents and kids as well as families. It is terrific seeing the change in mix of shoppers.