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

Moving crossword magazines in the newsagency

IMG_9133We relocated crossword magazines in the newsagency last week from the end of our fill-face magazine area to this placement between two sections of male-oriented titles, a section seen by almost everyone entering our main magazine aisle. The move will have the crossword section seen by more people and this should further list sales from the good numbers we already have.

Crossword title sales account for 6.5% of all of our magazine sales.

Changes like this in the magazine department are crucial to maintaining a fresh offer. I don’t care about the odd customer complaint about moving sections.

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crosswords

A walk through the newsagency

Here is a 3 minute video I shot at one of my newsagencies on Saturday. Note this was the last day of our unicorn season as this week and next are all about Mother’s Day.

newsXpress Knox City 23/4/16 from mark fletcher on Vimeo.

The shop itself is 135 square metres. It is in a centre with around 250 other retailers. Plenty of competition. we don;t have lotteries, confectionery or tobacco products by choice.

The pitch across the front of the business and into the first third changes every couple of weeks. This constant movement is vital for us for traffic and shopper visit efficiency.

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Newsagency management

Sunday newsagency management and marketing tip: being average is not a future

Last week while in Caboolture, Queensland, on business I stopped in at Revolution Espresso Lounge for a coffee. I was guided there by the excellent Beahunter app, an app where coffee lovers rate and write abut coffee shops. With a rating of 9.2 I knew the coffee would be good as Beanhunter members are serious about their coffee.

On entering the business I was immediately taken to another place. This was not your usual coffee shop. It was retro in style, completely and done well. This told me a lot about the business, what it stood for.

Inside the business there are many indicators of deliberate management and marketing decisions – the decor (floor, ceiling, wall art, seats, tables) , floor layout, music, lighting, notices on the board and the service style.

This business is anchored, true to its pitch, true to its unique selling proposition. The coffee itself was serious, full of flavour, with an excellent body, perfect. This, too, was true to the mission of the business.

This is my combined marketing and management tips today – being true to your mission, true to what you stand for, true to what makes your business unique. What they are doing at Revolution Espresso Lounge in Caboolture Queensland is different, worth the drive and worth talking about to friends – and isn’t that what we want from our businesses, to have created something customers talk about, in a good way, to their friends.

Let’s take a look inside the business. In the door and sitting down, in a comfy retro lounge chair, opposite the counter, this is what you see. See what I mean about anchoring the business in what they stand for? Look at the notices on the board, the cool retro trolley on the side of the counter.

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At the counter, in front of the espresso magazine, is a table setup with a Scrabble game. This is another cue as to what the business stands for, another way to remember the business and another way to engage with the business. These are all important factors in making this coffee shop different to the many other coffee shops around. And it has to be different as it stands alone, away from the main shops of Caboolture. You have to seek it out.

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Here is the Beanhunter page for the business that led me there. The reviews accessible from this page are excellent. Of course, as Beanhunter fan and looking out for my fellow caffeine friends I have added my review and a photo.

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There is no future in being average because average is missed and forgotten. Average is going nowhere. People don’t talk about average businesses with passion. Next time you are near Caboolture in Queensland, check out Revolution Espresso Lounge for yourself and I think you will see what I mean.

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Management tip

Why does Tatts ‘fine’ a small business newsagent for using counter space for other products while allowing On The Run to get away with it?

This post is about what appears, in my opinion, to be a double standard of Tatts in its dealing with small business newsagents compared to the giant On The Run convenience group in South Australia.

This post is also about business ethics, social responsibility, support for small business and, fairness.

Whereas On The Run stores can have non Tatts products next to, in front of and around the Tatts counter space, newsagents are not allowed.

Here is a photo of an On The Run counter. It is setup is such a way that it appears to be permanently operating this way.

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Now, look at a newsagency counter in South Australia. This location is at the front of the shop, to the side of the main lottery serving counter. If the newsagent puts any other product on the empty square top you can see in the photo they are fined. Well, actually, they are not fined. The site auditor marks them down and Tatts requires another visit to make sure they are compliant. This supplementary audit costs something like $230. I see the $230 charge as a fine.

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This, to me, looks like double standards from Tatts. The newsagent is being held back, their competitiveness is being hindered while On The Run is provided a competitive advantage.

I would like to see the double standards tested on behalf of small business newsagents in South Australia and, indeed, nationally. If this behaviour is allowed to continue unchecked what will happen when more of these corporate convenience and similar businesses come on stream? How will newsagents be able to compete with Tatts stopping newsagents achieving the best possible return from Tatts traffic?

I would have thought Tatts would want to be in successful retail outlets. One way to ensure success is to allow and encourage retailers to be retailers.

The only performance measures Tatts should have are year on year performance on a same store basis and store performance compared to other outlets in the region. These performance measures should apply equally to all retailers.

Not allowing a newsagent to use the space in the photo above is unfair and an abuse of power by what, in my opinion, is a large and overbearing supplier. In fact, it is the type of behavior new ACCC rules from the federal government could assist in resolving.

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Ethics

Prince

My first Prince concert was at the Sydney Opera House two months ago. The concert was extraordinary, I am grateful for the experience. Prince’s music has been the soundtrack for many decades and, I am sure, for many newsagents. As happens when someone so famous passes, customers talk. I bet there are many commenting today across newsagency counters about the passing of this influential, extraordinarily talented giant.

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Social responsibility

How Australia Post is changing

IMG_9116This sponsored tweet from Australia Post speaks to the extent of change in the retail side of the challenged business.

Now more than ever in the history of specialty retail we are living in borderless times.

Change is vital to the future of every retail business.

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Australia Post

Why I think newsagents should turn off early return facilities in their newsagency software

A newsagent I am working with is confronting an above average decline in magazine sales. Working through their data I can see they have been driving some of the sales decline by early returning magazines based on settings in their newsagency software, settings that were too severe and that did not take into account any marketing, free gifts or other activities that could see a spike in sales of some titles.

In more that ten cases recently they have early returned issues of different magazines only to try and reorder because of unexpected demand.

This newsagency they early returned copies of the 100th anniversary issue of Marie Claire, an issue that sold out. This is nuts!

While I understand concerns about the costs of magazine oversupply, going too hard the other way can hurt the business.

Following settings set in newsagency software, some newsagents will early return without considering anything about a specific issue – the free gifts, a new TV campaign, some other social media or a very hot cover that drives sales.

My advice is to not early return the day of on-sale except in genuinely exceptional circumstances and where you have thought about this carefully. Rather, put the product out, give it a crack and take a look at sales toward the end of the month.

This is what a magazine specialist would do.

I urge all newsagents to review your approach in your newsagency software to early returns. If you think your approach is right after the review – good. All I encourage is you think about it and ensure you are not magazine magazines to drive a decline in sales through ill-considered early return settings in your software.

The more newsagents early return and lose certain sales the more likely publishers will pus for their products to be placed in a more diverse, non newsagency, mix of retail businesses.

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magazine distribution

Supply of Stationery News today

Gotch as provided this notice for newsagents re supply of Stationery News today. Gotch responded quickly on my notifying them of the problem on behalf of my stores and newsxpress stores early this morning. What they have sent to newsagents is a good quick response from the company:

Dear Retailer,

This is to inform you that you will have received the annual April 2016 subscription issue of Stationary News today.

There has been an allocations error with your account where you have been supplied 2 copies instead of 1.

If you wish to take up the subscription please return 1 copy via the usual method for credit.

If you do not wish to take up the subscription offer please return both copies via the usual method for credit.

GGA Title Code: 25232
GGA Issue Number : 1760
Title Name: Stationary News
Issue Description: April 2016

We apologies for any inconvenience.

Thank you.

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magazine distribution

Why I supported the MPA campaign in the newsagency

IMG_8981I have been asked several times why supported the MPA magazine promoting in my newsagency when I make more money from other products.

While there is no doubt newsagency businesses are (or should be) in transition. However, magazines remain a vitally important traffic driver.

The MPA promotion was exclusive to our channel, the flow display unit small and easily moved and the range of titles promoted fitted with other categories we sell. Further, there was no downside for me, no crazy engagement required at the counter.

Plain and simple, this campaign was a good fit for the business. It made sense to me to support it.

The alternative is to refuse this and other channel exclusive magazine engagement opportunities. That leads to only one place – the elimination of magazines altogether. If that is your goal, talk to a gift shop owner or or the owner of any other single or limited category of products. They will tell you they would love our everyday traffic drivers including magazines as it provides a traffic base from which to build a more valuable business.

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magazines

The Ty Frizzy if a perfect gift with magazine purchase from Pacific Magazines

IMG_9048The Ty Frizzy free with the latest issue of Total Girl magazine is perfect for the target shopper but evermore perfect for us as we sell Frizzys along with plenty of other Ty products. Indeed, Ty is an extraordinarily successful brand for us, making this promotion one we welcome and support.

This is not an issue to stick in the usual place. Leverage the amazing value gift for maximum sales. That is what we are doing and it is working a treat.

Kudos to Pacific Magazines for such an engaged promotion.

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magazines

Newsagents: beware the lease negotiator

I said no thanks to a landlord proposal for a newsagency in a shopping centre a few years ago as my assessment at the time was the offer was not viable. The landlord would not move enough to make the opportunity viable.

A newsagent subsequently took on the tenancy, with a lease negotiated on their behalf by someone claimed to be a good negotiator. Sure enough, the business went broke, costing the newsagent hundreds of thousands of dollars.

The lease ‘deal’ was no deal at all. While their negotiator got paid for their service and the landlord got their rent, the business operator paid the price.

In hindsight, given what was negotiated, the lease negotiator appeared to be more concerned about getting the shop than the long-term viability of the business they were negotiating for.

Be wary of anyone saying they have negotiated a lease deal for you. Do your own research, check the viability for yourself. Landlords run with strict financial models. While they have some room, the amount of room they have is usually considerably less than some promoters of lease negotiating skills suggest.

The family taking on the business I rejected have lost plenty. sadly, the story is the same for some others taking on leases negotiated by the same ‘expert’.

If you are paying a lease negotiator, have a written agreement with them laying out your requirements and tying their fees to proven viability of what they negotiate. Ensure the lease costs proposed fit with your business plan and that the permitted use clause is appropriate to the future plans for the business.

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Newsagency management

Homespun magazine in gift shops

IMG_9007A few doors away from a newsagency and supermarket with Homespun magazine is this gift shop also offering the title.

As newsagencies reallocate magazine space to higher margin product I expect to see more special interest magazines in a more diverse mix of retail businesses as publishers chase impulse purchases closer to people interested in their niche topics.

What is interesting about this shop is their use of a Homespun poster on the door, as if it will attract shoppers to the business. Maybe the poster will work better here with product in the windows either side appealing to the Homespun reader.

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magazines

Changing the way we merchandise roll-wrap in the newsagency

We are having success pitching roll-wrap outside the card and wrap department in the newsagency, and outside of the card company packaging.

While the Hallmark branded box looks professional and facilitates easy shop floor placement, we wanted something different, something that made the product the hero rather than the corporate brand.

My experience is people buy wrap for the design more so than the brand of the product. So, making the product the hero was a goal for planned changes in how we pitch roll-wrap on the shop floor of the newsagency.

Here is a before picture next to an after picture:

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We have four of these stands, all placed outside the card and wrap department, each in a different location and each with carefully selected roll-wrap. We have no more than two designs in each stand. The stands are checked daily to ensure they pitch the product in the best possible light.

This work is part of a broader project changing our approach to cards and wrap, reaching out of the destination location to capture more revenue from people visiting the business to purchase items outside of the card department. The goal is to make the experience in-store more appealing and more memorable than in a traditional newsagency and certainly than shoppers see in a supermarket.

The wire stands we are using are from K-Mart and cost $6.00 each. This is a small and easy investment in a different and more visually appealing approach.

Small steps like this are important in growing sales and increasing the average spend of a shopper visit. Gone are the days of one or two big steps that can be taken to grow revenue. Instead, we are in this world of many small steps and this approach to roll-wrap is one.

If you engage with it, I hope it works for you as it is for me.

Traditionally, newsagents would ask card companies to supply all fixtures and setup the type of display I have written about here. I think this is a mistake. Own your approach. This gives you control and control is paramount. Historically, too many suppliers have had too much control over our floorspace, to our detriment.

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Management tip

News Corp. responds on unauthorised sales of coins

News Corp. in Victoria sent this letter to Victorian newsagents yesterday:

2016 Official ANZAC Coin Collection – ANZAC to Afghanistan

Dear Newsagents/Distributors,

We would like to thank distributors & newsagents for the great job that they have done with the launch of the ANZAC Coin promotion. Early feedback indicates that it should be another great success in both the increase in paper sales, as well as sales of the coins.

Disappointingly, we have also received feedback that there are full sets of the coins being offered for sale on eBay and Gumtree. The online ads feature photos of the full sets alongside images of posters distributed for promotional use in newsagent stores.

A requirement for retailers and newsagents to participate in this promotion, is that the coins can only be sold with a token from the paper and cannot be sold separately or in advance. This is critical in achieving the primary objective of the promotion, to increase newspaper sales.

Where we have identified the parties involved in the unauthorised sale of the coins online, we have taken appropriate action. It should be clearly understood that any contracted party involved in the unauthorised sale of the ANZAC Coins risks action being taken under the terms of our contract.

We acknowledge that this issue relates to a minority of outlets and thank you for your support in this matter.

Kind Regards,

 

Circulation Team News Victoria

While I would have liked this communication to be in the market sooner, that they have sent it is good and appreciated.

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Ethics

What is the cost of offering tobacco products in the newsagency and is it worth it?

Sales of tobacco products are down more than 7% year on year on a same store basis in the first quarter of 2016. The latest decline on the back of declines for most through 2015 and 2014 mean it could be useful to consider getting out of the sale of tobacco products.

In considering whether to stay in tobacco or to quit, newsagents need to consider:

  1. The cost of the retail space and the value of alternative uses for the space. Tobacco units, by necessity, are at the counter. They are bland, promoting nothing other than warning signs. This is premium space that could be used for alternative products people would purchase on impulse at the counter. Calculating the cost of the retail space could be more about opportunity cost than the actual cost of the space.
  2. The labour cost of managing the tobacco category. With average hourly labour costing $23.00 and more plus on-costs and at least an hour a week needed to properly manage even a small tobacco department, you need to sell close to $200 a week just to cover the labour cost.
  3. The cost of theft by employees and or customers. The average cost of theft of tobacco products is between 3% and 5% of revenue a year. While many retailers will say they do not have a theft problem, only those with tight inventory management and tracking procedures will know this for sure.
  4. The return on inventory investment. If, for example, you have $1,000 invested in tobacco products, what is the return this investment generates for the business through a year and is there a better return opportunity for you from the same level of investment?
  5. The message it pitches about your business. If you are transitioning your newsagency from the old-style traditional newsagency of magazines / newspapers / tobacco / cards / stationery / lotteries to something new, fresh and relevant to your area, which I hope you are, does tobacco fit with this or is it too old school? Think about the tobacco message and its relevance to you.
  6. Community health. How does selling tobacco products fit with what you stand for?

A newsagency I am helping at the moment sells $800 in tobacco products a week. The labour cost is an hour, or $26.45 a week (including on-costs), the retail space costs $44.50 a week or $120.00 a week if you consider the counter position to be prime space and theft tracks back at a weekly average cost of $30 a week. Assuming they can stop the theft, this leaves, at the most generous estimate, a cost base of $70.95 for tobacco in the business.

On their current margin, they are above the break even point of $475.00 a week in sales. However, once I factor in regular discounting they do to drive sales and apply the cost of theft back in, I would say this business ought to get out of tobacco now.

Their sales trend is down, in line with the national average so it is only a matter of time. My advice to them is to get out of tobacco ahead of the curve, to own the terms of their departure from the category.

If I factor in opportunity cost of tobacco, the decision has an urgency. This is a good retailer, they would use the space well and make far more money with products with 50% GPO and more in the tobacco space. Feather, they would use the space to drive a difference for the business. See, as things stand for them right now, the business is different compared to your average old-school newsagency, except for tobacco. This is a big factor in crafting my advice.

If your tobacco sales are under $2,000 a week, do the analysis. Let your data be your guide. If they are under $1,000 a week, it is almost certain you ought to get out, urgently.

Every day you hang on to any product category that is not paying its way or that is not relevant to the narrative of your business is a day lost for the future of the business.

We have to manage our newsagency businesses by the numbers. This is better for the business than emotional decisions and gut feel when it comes to considering your position on matters such as what to do with tobacco.

Footnote: I have no personal experience in this space having got out of tobacco products in 1999.

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Management tip

Women’s and men’s fitness magazines together in the newsagency

IMG_8982In many newsagencies I visit I find women’s fitness magazines placed near fashion and pregnancy titles, away from men’s fitness titles. While I understand the rationale of this placement, I think there is value in women’s and men’s fitness titles being placed together as the same shopper could purchase from either or both segments in a visit.

The photo shows the placement we are trialling in the newsagency at the moment. We will run with this and then flip with women’s titles above men for a couple of weeks … and then measure the results.

I think constant change like this is important in the magazine department to keep the offer fresh and to try and get titles in front of shoppers they might otherwise miss in the shopping visit.

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magazines

Sunday newsagency challenge: rank your competitors

Make a list of the competitors of your business with #1 being the biggest / toughest / most important competitor. next, get everyone in your business to make their list. lay all the lists out in front of you and see if they show you anything you had not realised about your business.

I did this recently with a newsagency and the result was enlightening for the owner. Most of their team ranked competitors the owner did not even have on their list. This is resulting in changes to the business.

Sometimes, seeing our businesses through the eyes of others has us make changes we did not know were necessary.

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Management tip

Sunday newsagency management tip: be professional in your front of store pitch

IMG_7598Take a look at the front of your retail business, looking at it as if you are customer approaching the shop or walking past.

What do you see? What is the key message pitched to attract people to the business and to step in through the front door?

If this your best pitch? Are you being competitive? If your voice clear?

Getting the front of your shop is one of the most important marketing investments you can make in your business.

The photo is from the front of a newsagency I visited recently. While I am sure the owners think the message they are pitching is relevant and professional, it is not. This business could look more appealing with a clearer message, a differentiating message.

The terms SALE and BARGAIN BOOKS mean little today. They are non specific. There is no urgent call to action, no indication of value.

The product mix, type of display and signage do nothing tomato this business stand out. A small investment in time and product display could have the samara similar products displayed more effectively and with grater commercial success.

My management (and marketing) tip today: get the front of your store right. Make it look appealing, with a clear message that differentiates your business.  Oh, and change it weekly.

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Management tip

Sunday newsagency marketing tip: magazine placement as in-store marketing

IMG_8983We made a crazy change to magazine placement in the newsagency on Friday last week –  placing entertainment / film magazines between car magazines and motorcycle magazines.

The photo shows the result of the move. Click on it for a bigger version.

I call this a crazy move as it is against what is usual or reasonable or expected for magazine placement in a newsagency.

I made the move to interrupt / disrupt as I know this increases the opportunity for products to be noticed. My goal is that all magazines in the display are noticed more as a result of the changed. An increase in noticing a product is the first step to increasing sales.

With magazine sales falling, anything goes in terms of placement. Now is not the time to do what is usual as that will only facilitate usual, declining, results.

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magazines

President of Condé Nast on why their magazines defy the trend

The Guardian has an article quoting, Nicholas Coleridge, President of Condé Nast speaking about why their magazines are not down. He clearly loves print:

“There is something extraordinarily alluring about a glossy magazine, the physical quality, particularly a very thick one.

“It is a pleasure that cannot easily be matched, the care taken by art departments, impossible in a faster moving medium, and the sense of a club feel… you feel yourself attractively badged and comfortable.”

The article is worth reading as he goes on to talk about changing magazines and how that has to be done gradually.

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magazines

How boring is your Mother’s Day display?

What does your Mother’s Day display look like. Are you promoting photo frames, mugs, journals, bookmarks, retro magnets and coasters, tea-towels, pens, chocolates and money banks?

I have looked at several Mother’s Day displays this week in gift shops, newsagencies and even in a department store and, frankly, none was inspiring.

Where is the fun? Where is the retail innovation? Where can I see a Mother’s Day display that is different to last year and the year before that? Why is this season so boring in so many businesses?

Check out what I saw at a UK card shop when I was there in the lead up to Mother’s Day two months ago.

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This is fun. It got my attention. While not appropriate to every store, it is right for the store in which I saw it.

I think we have to challenge ourselves to be this different. We have to challenge ourselves to do something this year that is a right turn from what we did last year … if it is not too late. If it is too late, start planning now for Father’s Day. Plan to be different, to use the traffic generating season to break customer expectations, to get them looking at your business differently.

Changing customer perception is vital for our businesses right now. We have to get people seeing our businesses differently and one of the best ways we can do this is through major seasonal displays.

Sure, many customers have an expectation around Mother’s Day that we need to serve. We can do this while playing outside this expectation and shocking / challenging along the way.

So, what is Mother’s Day like in your newsagency? Are you using the season to change customer perception of your business?

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Management tip

News Corp. and Tatts in joint promotion

I have heard from newsagents in the last hour and a half about a joint promotion announced by Tatts today. The responses I have received from newsagents so far include: groan, really?, ugh, what will they think of next? and, groan (again):

There is some very exciting ‘news just in’ for Set for Life, not only did we have another 1st Prize winner in the draw last night – but there is also a fantastic promotion running this May.

For the entire week 15 – 21 May any customer that purchases a Set for Life entry will receive a complimentary News Corp newspaper!

This promotion is all about increasing the awareness and trial of the new game Set for Life with new customers, whilst also increasing circulation of the News Corp titles for the entire week. The great news for you is that you will receive full commission for the papers given away as part of this promotion (it will be as if you sold the newspaper even though it was given away for free!) as well as full commission for the Set for Life products that you sell.

This is a great opportunity for you to invite your newspaper customers to trial the new game Set for Life, and talk to every customer about the game.  It’s also a wonderful time to encourage customers to play using their own numbers, with Entry Coupons being distributed via every copy of the The Sunday Mail on Sunday 15 May.

Be sure to keep an eye out for more information on how this promotion will work in-store and how you can support the offer.  Make sure you also share the exciting news with your customers about the latest winner and keep an eye out for the winners story!

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Lotteries
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