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

What happens to magazines newsagents don’t sell and why are newsagents treated differently to supermarkets?

Small business newsagents have no control over the range of magazines they receive. Nor do they have control over the volume of magazines they receive.

An average newsagency sells 55% of all magazines received. 45% of what is sent to the business fails to sell and is either returned for resale or dumped.

Unsold magazines are handled in two ways:

  1. Some newsagents are given permission to rip covers off unsold magazines with the covers returned to the magazine distributor for a credit with the rest of the magazine being disposed on however the newsagents choose.
  2. Other newsagents have to return all unsold magazines, at their cost.

There is also a mix between the above two points where a newsagent may return covers of some titles and full copies of other titles.

In supermarkets, my understanding is they do not return unsold product. They get to trash it locally.

The amount of paper water must be considerable. Yet no one appears to care about this.

That magazine titles continue to be sent to small business newsagents in a volume that is often far greater than would ever sell is a financial and operational overhead on newsagents.  It disadvantages us because of what we have to do to process returns. Since our competitors are not confronted with the same costs it gives them an advantage over us.

Shame on those in a position of power who have refused to act on this.

The big issue here is the waste of paper, labour and fuel on the 45% of magazines printed that do not sell.

What a waste to the environment and a waste of small business newsagent resources.

Despite lots of talk, little has changed in terms of the magazine supply model. Sales data provided by newsagents is not used to drive a more efficient and more fair supply model.

While the model for supermarkets evolves and serves those big businesses, small business newsagents are stuck with a model that is out of date and environmentally unfriendly.

What newsagents want is for supply to more closely match sales. It is a simple request. Those setting supply have the data. Yet too often they ignore it – probably for reasons that serve their ad model. Plus, supply is too often a manual process when it should be automated and 100% data driven.

I think our best chance of addressing the continues oversupply and cutting the 45% failure rate to 10% or less is to target Greens senators. We need to educate them about the wastage of paper, labour and fuel in the magazine returns process. We need their engagement politically to force the matter to be addressed.

If nothing is done, more newsagents will get out of magazines.

For the record, click here to see changes I proposed to the magazine supply model, changes that would benefit Australian publishers.

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Ethics

Opportunities for selling journals in newsagencies

IMG_0291In this pop culture obsessed world we are in good times for selling journals and other stationery items that are branded for the top-selling licences. It is amazing what a brand can do. Take this Star Wars journal – the base journal without the branding is a journal to be sold as stationery only whereas with the Star Wars branding it can be sold as a gift for a Star Wars fan of any age.

Licences offer us an excellent opportunity for growth in stationery item sales. There are several suppliers already playing in this space. My experience is quality matters to real fans of licences. Cheap China product does not cut it.

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Stationery

The role of local libraries in declining magazine sales for small business newsagents

Banner - websiteLocal libraries often claim to play an important community role. That role has expanded to hurting local small businesses that used to supply them. Revenue that would have remained in the community now hits the overseas bank account of Zinio.

A deal between Zinio and state run libraries, like the Zinio deal with Libraries of South Australia,  sees digital versions of more than 400 magazines available through local libraries across Australia.

Many local libraries used to purchase magazines from local newsagents. That revenue is now lost to the local community.

The Zinio move reaches beyond the four walls of the local library though. Whereas magazines newsagents would sell to a library remained in the library, some libraries offer Zinio platform access outside the library. People can use their library number from anywhere and access Zinio magazines. The reach of the Zinio / library relationship can go way beyond magazines newsagents might have sold to a library.

I understand the move to digital from print. There is no stopping it. Indeed, the pace of change will increase in my opinion.

I understand the need for a statewide deal that makes magazines available at a low cost. This is a result of cost-cutting at all levels of government.

The community needs to understand the consequences of Zinio access through the local library.

Newsagents are among the most hit-up businesses by local community groups for funding, prizes for raffles and the like. The capacity of the locally owned small business newsagency is diminished by moves like we have seen by libraries.

Newsagents can confront the Zinio / library challenge by educating people about it. Explain the loss of revenue and the need for this to be replaced somehow for the business to continue its level of giving. However, such an approach could come across as weak.

For me, the best response is to be relevant in new product categories, outside of what has been traditional for newsagents. Focus your frustration at a Zinio / library tie-up in your area into changes in your business. Look away from this problem toward opportunities you can leverage for a brighter future.

No amount of complaining will make the issue go away so move on and look over the horizon.

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magazines

Leveraging the Frankie brand in the newsagency

IMG_0269If you have Frankie in your newsagency check where you have it placed in relation to the Frankie 2017 diary and Frankie 2017 calendar. The best placement is for them all to be placed with each other. This photo shows our current in-store placement.

We will move the items around over the weeks to keep it fresh and try and maximise multi-item purchases. It has been our experience over the years this is key to success.

While sales have dipped this year, Frankie continues to be a strong brand for us. The brand appeals to a valuable demographic to which we can pitch other items.

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magazines

It is time newsagents stopped returning unsold magazines

IMG_0218The service that collected our magazine returns has cut back and now picks up only once a month. They say they may stop altogether because they don’t make enough from providing the service.

Magazine returns are a high cost for us, for those newsagents who have to send back full copies.

The photo shows some of the current returns boxed up waiting for collection at the end of the month.

Since I had no control over supply it is unreasonable I have to carry the storage cost and freight cost of these returns. But I knew that going into the business so I shouldn’t complain – except that magazine publishers have brought on competitors who don’t have to do returns, who don’t have the stage and freight cost.

It is time those of us doing full copy returns tapped into the benefits of the many newsagents already exempt from full copy returns.

The business where I took the photo has no store room. It is in a Westfield mall with a high cost of space. The returns take up space that could otherwise be earning income. Opportunity cost is a factor.

Unless I have absolute control over magazine returns I should not have to send this failed to sell product back.

This system is horribly out of date. It places newsagents at a disadvantage to other retailers brought on to compete with us. Unless it changes soon I suspect more newsagents will stop seeing magazines.

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magazine distribution

Promoting Better Homes and Gardens with the free baking pan

IMG_0295We re promoting the Better Homes and Gardens December issue that is packaged with a free baking pan on this stand at the front of the shop – placed on the lease line facing into the mall.

Most people entering the shop will pass this stand.

We also have a double waterfall placed in the magazine department showing off the pan and the magazine.

Plus we have the placement in the photo below at the counter. All three placements are about maximising the opportunity in the first two weeks of on-sale.

IMG_0281

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magazines

Supporting the News Corp. newspaper promotion

IMG_0216We are supporting the News Corp. newspaper sales promotion of board games with this display with newspapers. It is a bold display well placed to pitch to the right shoppers. Yesterday saw terrific engagement.

In addition to this promotional space with papers we have a ton of games product to manage and fund – the timing of supply is another cost burden on newsagents for such a slim margin promotion.

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Newspapers

Sunday newsagency challenge: have a marketing budget, spend it

Most independently owned retail businesses do not have a marketing budget, an amount they spend promoting the business outside the business. My rule of thumb marketing budget advice for a retail business like a newsagency is at least 2% of revenue where revenue is product sales revenue plus commission from all agency lines.

A newsagency with, say, revenue of $500,000, the suggested marketing budget would be $10,000 spent over the year on out of business advertising and marketing. This amount should not include banner group fees or association fees. It would include print ads, flyers, local radio, local TV, facebook and other special media ads.

Setting a budget is important as it guides your weekly activity. The $10,000 plays out at $192.30 a week. There is plenty you can do with that. The key is to measure success from each spend, to ensure the business is benefiting.

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Management tip

Sunday newsagency marketing tip: photo selection can drive Facebook success

Screen Shot 2016-10-15 at 10.16.47 PMUsing a close-up photo of part of a magazine cover can get you a significantly better result from a Facebook than using the whole post. Take the current issue of Better Homes and Gardens. While it looks terrific, a close up of the pav was the hero so that is what I used for a post yesterday. And it worked a treat. Hundreds of shares in a few hours – extending the reach of the post beyond the like base of business I was promoting.

Here is my marketing tip: If promoting a magazine, look for the image that differentiates your pitch from what others will do to promote the same title. If you pitch the whole cover you are not offering a differentiation for your business.

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marketing

Sunday newsagency management tip: it is okay to say no

One reason suppliers maintain reps on the road is the results they can achieve by being in front of retailers. Some people find it harder to say no to someone in person than by email or on the phone. Too often I see retail businesses, not just newsagencies, overloaded with stock that does not deliver the return necessary.

If a rep claims a product is working particularly well, ask for proof. It is your money. Satisfy yourself the claims are true and that you can expect such results for yourself.

It is okay to say no, even to a rep who has become a friend.

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Management tip

Are supermarkets breaching the rules of the latest News Corp. promotion?

Screen Shot 2016-10-15 at 12.00.07 PMI have reports from some newsagents that their local supermarket is selling games from the Hasbro collection ahead of the start date of the promotion in the area. Some others, where the promotion has already commenced, have reported supermarkets not asking for the coupon News Corp. require.

The purpose of this post is to give newsagents somewhere to comment about what they see in their area.

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Newspapers

Smiggle Advent calendar

IMG_0144Smiggle stores have a terrific Advent calendar and there are two key points to make about this:

1 – wow! Brilliant idea and execution by Smiggle including the Golden Ticket promotion. The calendar is excellent value at $45 – I have seen all the products included. Parents will love that it is not chocolate.

2. Get Advent calendars out now. Majors have them out already.

Here is a look at the products in the Smiggle Advent calendar. They have one at the counter for people to see and they happily hold it for you to take a photo. Nice.

IMG_0146

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Competition

A crappy distribution newsagent

It is frustrating hearing from a retail only newsagent who is not supplied promotional material and giveaways. This happend recently when a capital city daily had a free for all who purchased the paper yet the distribution agent, who also has a retail outlet, refused to supply the freebie to their competitor retail only sub agent. They had plenty of stock. The only problem was their inability to fulfil their obligation as a distribution agent. This is the attitude of a business person scared for their future.

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Ethics

Officeworks out early with boxed Christmas cards, are you?

Officeworks outlets across Australia have boxed Christmas cards, Christmas gift bags, gift tags and more out on display in-store with this ready-to-display unit. The unit is delivered to them loaded with stock, retail ready.

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On the unit there are two major colour themes. Here is the second:

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The products have a low cost feel yet the prices are not all that low. To me, this is typical Officeworks – source from China and price with a generous margin yet still pitch to connect with their we’ll never be beaten on price pitch.

I think Newsagents need to respond to what Officeworks is doing. We need to not cede ground to them. we do this by being engaged, now. Even if you don’t have an Officeworks located nearby you should be engaged. Here is the advice I provided newsXpress members when I first saw the Officeworks boxed Christmas card pitch:

  1. Boxed Christmas cards should be out now, located near the front of the business, disrupting traffic.
  2. Block cards in your displays by colour.
  3. Consider displaying boxed cards on a trestle table. I have found this works well.
  4. regardless of how you display, weekly, take stock down and rebuild so the display looks fresh and combats store blind staff and customers.
  5. Promote the charities your boxed cards support.
  6. Talk about your boxed Christmas card on your business Facebook page and note the charities.
  7. Run a weekend sale asap with a deal for boxed Christmas card shoppers. I’d suggest a 4 for 3 offer. Pay for three and get four boxes. Two days only.
  8. Announce new card designs you add.  For this to work you may want to hold back some designs to release through the season. Shoppers like new.
  9. Place gift cards, gift bags, wrap, take, pens and ribbons next to or with boxed cards.
  10. Ensure your staff are trained on the cards and the charities the cards support – the charity connection is very important.
  11. Promote boxed Christmas cards in an ad on all shopper receipts.
  12. Move the location of your boxed card placement every week. There will be some who notice them several weeks in and think they have only just arrived in-store.
  13. Host a boxed card writing party. Invite a local bottle shop to provide wine for a complimentary wine tasting or invite a local bakery to provide cakes for tastings to go with the card writing day.
  14. Co-locate. Try and place boxed cards in two locations in-store.

The best way to respond to what Officeworks is doing is to engage with boxed cards as if you are serious about them.

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Competition

The importance of games in the newsagency

Shari recently commented on my post: Toy insights help newsagents grow sales, sharing insights so valuable that I wanted to post them here to ensure a wider audience. In Shari’s own words:

I’m an occasional reader here; I discovered this blog while looking for some info on Frankie magazine several months back and ended up becoming fascinated by the insight into news agencies. (As an American living in Australia, it took me awhile to realise that my local newsagents weren’t the Oz equivalents of overpriced/dodgy convenience stores.)

Today I was catching up on posts and this one struck close to home. My husband and I are modern board gamers. If you’re familiar with board gaming, you might know that we’re in what everyone is calling a golden age for the hobby. With every passing day it seems that more and more people are finding out that not only has the world moved on from Monopoly/Cluedo/Life/etc., but board games aren’t just for kids. Many of today’s board games are suitable for couples, families (with willing participants at all ages), co-workers, and so on – even solo players. (Much of this might be laid at the feet of Wil Wheaton’s excellent Tabletop series on YouTube.)

In recent months the amazing growth of the hobby and its penetration into the mainstream has been exemplified by US retailer Target’s changes to their toy section. Not long ago, Target’s board game selection was about the same as what the Target stores here in Australia carry: the usual classics, a lot of kiddie games, a few party games, and a bunch of flash-in-the-pan games based on current TV shows and movies. But now, not only does Target in the US carry modern “gateway” games (Pandemic, Ticket to Ride, Carcassonne…) and a few ‘heavier” games, but they’ve licensed exclusive editions of the most popular games. Meanwhile, uber-bookstore chain Barnes & Noble’s game section has, in many stores, started to rival a dedicated game store.

Why am I mentioning this? Well, Australia’s mass-market retailers still have cruddy game selections. Not every town has a game shop, and many game stores either don’t appeal to the general public (the nerd factor) or else people don’t wander into a game store in the first place because they have no idea that board games have changed so much. (I hear “I never knew board games had become so cool!” over and over when teaching games.)

As a fan of the blog, I wanted to pass on this info. Some news agents might do well to investigate the modern board gaming phenomenon for themselves and consider stocking and showcasing a few gateway games. After introducing a modern board game to someone, I usually have to direct them to an online retailer for their own copy, which is a shame when they’re excited and want their own copy or something similar ASAP.

Anyway, just passing on thoughts. There’s a hole right now in the marketplace where “regular” people in Australia aren’t discovering modern games naturally nor finding anything other than the same-old at Toy World, Target, Big W, etc. when they try to seek something out. (Meanwhile, chains like Games World can be overwhelming and seem like a sea of serious fare.) An attractive display with a few titles, some signage about date night or family game night or office lunchroom, and who knows? Obviously this gap isn’t going to last, but there’s definitely an opportunity to differentiate.

Thanks for the enjoyable and informative posts. I always buy my Frankies from a news agency now!

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Newsagency management

Advice for small business newsagents on how to win more diary business

Newsagents used to be the biggest retailer of diaries in Australia. That has not been the case for some years.

You only have to go into an Officeworks to see an extraordinary pitch for diaries. Calendar Club, too, are in this space. Plus we have Typo, Kikki.k, discount variety stores, K-Mart, Target and supermarkets. Then there is online – from websites in Australia and overseas.

Looking online, I found diaries for a raft of special interest niches available at less than Australian recommended retail and with free delivery from overseas websites.

It is a tough challenge for newsagents to win back the diary business. But we have to try. The channel has to try. The alternative we we mark this down as another loss for us. We should not stand for that.

Here are some management and marketing tips for newsagents to win back diary business:

  • Display differently. Create something beautiful, eye-catching. Colour block.
  • Feature diaries, showing off features in a creating way to grab attention.
  • Use social media. Run a series of posts showing information about diaries, show off your knowledge. Pitch yourself as the local expert.
  • Pitch range. Show your range in a way that pitches you as having the biggest local range.
  • Use a secondary location. Near weekly magazines or newspapers. Get your regular shoppers considering diaries thanks to tactical placement in-store.
  • Offer multi-buys. Consider packaging multiple diaries in a pack to make price comparison difficult. For example, a small pocket diary with a desk diary.
  • Host a diary party. Some people are very committed to their diaries. If you can find them this could be a fun event. Put on some drinks and food to make it special. Can you think of any other business nearby hosting such an event? Probably not. And this is the reason for you to do it.
  • Run a short term sale. For, say two days. 25% off. Run it now and call it an early bird sale. This is particularly useful if you have shoppers who may, later in the season, purchase elsewhere.
  • Feature new diaries in store now. As you get new product, shout out about it to show your range has expanded.
  • Train your staff. Make everyone a diary expert.
  • Find the oldest diary. Ask your customers for the oldest diary they have and get ti in-store for a promotion.

My hope is these ideas get you thinking of ideas for yourself.

Diary sales growth is here for the taking for small business newsagents. If you do what you usually do your results will be in line with your past trajectory. If you are happy with this, don’t change. If you want to do better then you need to do better.

Good luck and let’s all work to win more diary revenue for newsagents this season.

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Diaries

How small business newsagents can push back on Lottoland misrepresentation

With Tatts not doing anything to counter the false and misleading portrayal of newsagents by Lottoland in their TV commercials, it falls to newsagents to act.

Newsagents selling lottery products need to actively engage and pitch that they are not the grumpy old white guy they see in the TVC. They need to embrace every opportunity to promote local personal service. They need to find ways to add value.

Lottoland and Tatts want lottery customers to migrate from in0-store purchases to online. Lottoland is a pure online play. I say Tatts wants people to migrate because of the extent of their investment in online and because of their failure to confront the Lottoland attack on the Tatts retail network.

While I no longer sell lotteries, I sold my newsagency with Tatts in 2011, I have some ideas on how newsagents can counter the Lottoland pitch. I have developed this list specifically to address the representation of newsagents by Lottoland:

  1. Ensure your lottery customers receive excellent customer service every time. Excellent customer service is:
  2. Always smile.
  3. Never sit behind the counter.
  4. Never charge a credit or debit card surcharge.
  5. Always have the youngest person working at the lottery counter.
  6. Provide free breath mints at the counter for staff.
  7. Provide hand sanitiser for staff and customers to access at the counter.
  8. If anyone behind the counter wears reading glasses, take them off when talking with customers – do not leave them on and look over them.
  9. Blokes should not wear cardigans or jumpers such as what we see in the Lottoland ad.
  10. Be cheerful when paying out a prize on tickets purchased elsewhere.
  11. Be cheerful when people say the same thing over and over. The alternative is having no one in your shop at all.
  12. If you sell candy of any sort, every so often offer a free tasting. Look for more ways to add value to the shopper visit.
  13. In winter offer free soup at lunchtime.
  14. In summer offer access to cups and filtered water.
  15. If you are on the high street, have a bowl of water for dogs.
  16. Celebrate all wins in-store on your noticeboard as well as on your business Facebook page.
  17. Run a second chance draw and actively encourage every customer to engage with this. Be generous with the prize.
  18. As an alternative for a second chance draw, host a BBQ event in the shop for the prize draw. Di this once a year, quarterly or six monthly with the prize commensurate with the frequency and business size. For example, in a shop with $250,000 in lottery commission, second chance draw prizes should value at least $10,000 a year. In fact, if it were my business, I’d be more likely to go with $24,000, $2,000 a month. Yes, you have to be that bold I think.
  19. Establish a community noticeboard and welcome free notices. Somewhere on the board have a subtle sign: Your support of this business helps us support your community.
  20. Share links to news reports about data security breaches by hackers with comments like: shopping in-store is safer or Our shop is a hacker free zone. Print the stories and place them on your community noticeboard.
  21. List every local community group you support on the noticeboard with a certificate.
  22. Thank community groups you support with a note on Facebook like: We are grateful for the opportunity to support the work of xxx community group.
  23. Ensure your staff understand what Lottoland is and isn’t and are able to explain why purchasing lottery products from your business is better for them and the community.
  24. From out the front of your shop make sure it looks appealing to passers-by.
  25. As people step into the shop make sure the pitch is fresh and enjoyable. Get rid of anything that looks or feels like an old-style newsagency.

All newsagents selling lottery products need to urgently ensure their businesses look nothing like the Lottoland depiction. You have to distance yourselves from the Lottoland depiction.

This work is urgent. No one will do it for you. Tatts appears asleep at the wheel on Lottoland. Or, as I suspect, they like the idea of educating people to move online.

Take a careful look at our business today in the contact of the list I have published here. Then, act!

Hopefully, more ideas will flow from this post in comments from others.

23 likes
Lotteries
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