Update from Network services on migration to Gotch
This afternoon, Network Services released update #5 on the transition of magazine titles to Gotch. Click here to access this update.
FYI this is the last update from Network.
Storytelling is magazine placement
The decisions we make in placing magazines on our retail shelves represent a kind of storytelling. Look at the current issues of The Australian Women’s Weekly and Mindfood next to each other.
Each features Helen Mirren on the cover, and for similar reasons related to age. Whereas an average retailer will put the titles in their usual spot, most likely separately. A smart retailer places them next to each other, telling more of a story and, hopefully, driving sales.
Updated newsagency performance benchmarks
Further to a discussion here, I decided to publish updated newsagency performance benchmark targets, to reflect the rapidly changing nature of our channel. These are some of the benchmarks I have provided to newsXpress members, but not all.
I say rapidly changing nature of our channel because that is what we are seeing. The traffic mix is changing as is the mix of what successful newsagents sell.
The benchmarks below are guidelines. They are subject to change as the suggested business model evolves.
It is important to have a goal, a target and that is what these benchmarks represent in my view:
- Gross profit: this is the goal gross profit for all product sales not taking into account any revenue or costs related to any agency business. The traditional newsagency average is 28% to 32% as shown through the Newsagency benchmark Studies. I think the goal today has to be at least 45%.
- Ratio of Gift revenue to Card revenue: 50% minimum. The goal ought to be 100% or more. If you do $100K a year in cards, target to do $100K in gifts, or more. NOTE: Gift is gift, not toy, collectible or other items. They have their own benchmarks.
- Revenue per employee – $250 an hour minimum.
- Revenue PSQM $4,500 – $8,500 depending on country versus city / high street to shopping centre and depending of the product mix. Higher GP lower revenue required.
- Overall revenue mix percentage targets: Cards: 25%; Gifts/toys/plush: 25%; Stat: 10%; magazines/newspapers: 20%; other: 15%.
- FLOORSPACE ALLOCATION: Cards: 25%; Gifts: 25%; Stat: 8%; magazines/newspapers: 15%; other products: 15%; office/back room / counter: 12%. It’s rare you make money from an office or store room.
- Mark-up goals: Stationery: 125%; Gifts 110%.
- Occupancy cost: between 9% and 11% of revenue where revenue is product revenue plus commission from agency lines. Location and situation are a big factor in this benchmark. For example, a large shopping centre business will have a higher cost than a high street situation. NOTE: It is easy to say the landlord is responsible for this ratio. As the retailer you are responsible for margin and revenue.
- Labour cost: between 9% and 11% of revenue where revenue is product revenue plus commission from agency lines. Labour cost should include fair market costs for all who work in the business.
These benchmark figures don’t all need to be considered together. You can pick one, measure, work on it, measure and adjust as the numbers indicate. The goal is to continually improve to pass the benchmark and work on the next.
I acknowledge these benchmarks are not close to what newsagent associations have recommended or would recommend. My focus is on the future whereas their focus tends to be on old-school products and services. Success in the future comes from diverging dramatically from the past including past benchmarks.
If you have any questions about any benchmark, please contact me. I’d be glad to help.
News Corp. change is another data challenge for newsagents to handle
Next month, News Corp. introduces changes in the handling of newspaper subscription payments by distribution newsagents. this is the next step in a project started years ago in South Australia.
On April 11 they are moving all subscriptions for News Corp product from a mixture of Pay at Publisher (Office Pay) and Pay at Newsagent (Carrier Collect) to Office Pay. This will affect around 300 newsagents as the News letter notes.
While affected newsagents will be able to handle data changes manually, it will save them time if their newsagency software companies make this easier and faster for them. That is what Tower Systems will do. Other software companies are welcome to note their planned processes here.
This is another reason to offer Touch Networks services as this is how accounts are paid. I am proud to have connected Touch and News years ago to facilitate this in-store payment method. Prior to then, the News payment model did not have an in-store payment option.
The new looking magazine department
I am often asked for photos of changes made to the layout of the newsagency based on what I write here or when I speak at meetings and seminars.
This photo, takes this past Saturday, shows part of the magazine department. It runs down this fixture to the back wall where we have 250+ full face pockets.
The display area to the left of the main magazine fixture changes regularly as does what is in front of the magazine fixture to the front of the store.
We also adjust the layout of the magazines regularly.
The key point I want to make here: everything changes, nothing stays the same. I think this is essential in retail today. Shoppers are more fickle than ever. We need to keep our stores fresh and appealing. We need to push back on those few customers who complain about product location changes.
We to lay our businesses out to maximise the return we achieve.
Click on the image for a high res version.
I have focused on the magazine department in this image as it is the part of the business many newsagents continue to be reluctant to change. Some do, but not enough.
We are in a fight with supermarkets and other retailers. If we do not change our in-store offer we will lose the battle. Range and supply volume – they are topics for another day. This post is about the part of magazines over which we have control – how we lay them out in our businesses.
Using an easel to promote the Easter season in the newsagency
With more and more retailers using easels and noticeboards to signpost seasons, we are doing this for easter, with this placement of the Easter poster next to easter cards. Out of shot, to the left of the cards, is Easter gifts.
For a while now I have thought that hanging posters is not always ideal. Some seasons lend themselves to a different approach – such as what we are trying with Easter at the front of the newsagency this year.
Newsagents dealing well with the Network Services shut down
Help desk call traffic more than trebled for my newsagency software company today as newsagents updated data managed by their software reflecting the transfer of many magazine titles from Network to Gotch. All in all it was an orderly process. With 1,750+ newsagents using the software it could have gone any one of a number of ways.
While I expect help desk calls to remain high all week and into next week, today was the day of proving the process and testing the value of all of the preparation communication including that from Network.
Small business newsagents can be proud that they are handling significant change with calm professionalism.
Newsagent suppliers ought to take note. What is happening this week is newsagents demonstrating they can deal with challenges of a technical complexity. How newsagents have gone about this is another reason to support our channel ahead of supermarkets and other mass retailers.
Newsagent associations ought to take note. This is all being done without you.
Lunch Lady issue #2 coming
Issue #2 of Lunch Lady launches March 3. Issue #1 sold well thanks to terrific social media and word of mouth engagement. This is a niche title people love and they will get to their local newsagency for a copy. It is the type of niche title we can use to leverage our positioning as magazine specialists.
The image shows the cover of issue #2. Here is a note from Louise Bannister, publisher of Lunch Lady:
We are about to release Lunch Lady NUMBER TWO which is very exciting. Launch through newsagents is March 3rd.
We had great sales results from many newsagents who put issue one out on shelves.
We have worked really hard with our readers through social media to gauge where their local newsagents are and as a result have done a very tight allocations list for issue two.
Our social media accounts have increased significantly since the first issue from 5k to over 20k. We will be driving our readers
to newsagents through social media. Any support on getting the Lunch Lady message out there is much appreciated.A good description of what Lunch Lady is ::
Lunch Lady is a quarterly for people who used to read frankie magazine but are now grown up, have kids and are searching for a funny,
unique, creative NEW parenting magazine (which is packed with kid friendly recipes).SOME READER LETTERS::
“I stumbled upon the magazine in my local West End news agency. There it was. The colours catching my eye amongst the sea of tiered perfect binding.I guess I just really wanted to write to you to say, I feel like we are pals. Pals through pages, tasty ideas and grubby paws. I am enjoying the read so very much, you should be immensely proud of what you have created. I’m also now a walking marketing machine telling everyone and everything my affections for your publication.”“ Ladies, I just wanted to say well done! Read some blurb on your new mag on Instagram, went out and found it this morning. The look, the feel = excitement!! So came home and read it from cover to cover – lalalalalaloved it! Definitely the most interesting read on the shelf right now!”s
“Hi Lara, Lou and Kate,
I hope you’re all really well.
Congratulations on the launch of Lunch Lady – I LOVE IT! For years I have been thinking, when is there going to be a cool parenting magazine?? And now there is one. So thank you, from this young mum, who struggles to find anything online/in print that’s actually relevant to my parenting world. THANK YOU!”
Here is why I don’t have mainstream Easter chocolates in the newsagency
Coles is promoting Easter confectionery at 25% off in-store on in the media, trashing the margin opportunity for other retailers, especially small business retailers who can’t strong-arm suppliers to discount to allow 25% off retail to be profitable.
So rather than compete with Coles, Woolworths and other mass retailers and the price games they play, I pitch other products for seasons like Easter, products the majors tent to not pitch or, at least, not discount like this.
I wish we had politicians in this country with the requisite guts to dilute the market power of Coles and Woolworths. The pressure they put on suppliers and primary producers is not socially responsible.
Another example of the appeal of retro magazines
A cool pub venue in Melbourne has old magazine covers on wallpaper plastered all over the wall including the very cool image of an old New Idea cover.
I mention this today as it connects with my post a couple of days ago about Mojo ’60s. There are plenty of opportunities in the retro space in products we can sell including circulation product. At the gift fair in Sydney last week many suppliers were promoting retro product. I need this retro wallpaper as a backdrop.
Sunday newsagency challenge: promote cards outside your shop
When was the last time you marketed your cards outside your newsagency? You have competitors actively marketing to attract your card shoppers to their businesses. Compete with them or plan for declining card sales.
Sunday newsagency management tip: make every day your pay day
For years I have written here and spoken at newsagency conferences about the need for newsagents to make every day your pay day. Click here for an updated, more focussed, version of the advice. This is on my mind as several more newsagencies close that did not need to close.
Sunday newsagency marketing tip: merchandise products to sell
Here is a before and after photo of a display unit of cool erasers we have in the newsagency. The photo on the left shows how the product arrived in-store and was initially displayed. The product on the right shows how the same display box looks with a simple change. You can now see what this product is. That simple change alone ought to boost sales.
We need to obsess about these things otherwise we condemn ourselves to average sales. Retail is detail. Engage in the detail and you are chasing a better result.
When I talked about this with a newsagent a few weeks ago they told me they didn’t have time for this. They were dismissing as if concerning themselves with this level of detail was beneath them. Any newsagent who wants to maximise their return will care about the detail I am writing about here.
Loving retro in the newsagency
Retro products are easy to sell right now so I love it when a magazine offers a retro cover like the last ever issue of Cleo and this copy of Mojo I noticed in the newsagency today. the cover gives us an opportunity to promote the magazine outside the usual magazine department placement with other product from this year in the gift department. There are many gift suppliers playing to the interest in retro, we are spoilt for choice. Being able to leverage this with magazines is a bonus for the gifts and for the magazines.
Newsagency software user meetings
My newsagency software company announced capital city user meetings a couple of weeks ago. Included in the free sessions will be retail management advice. These are not sales events – rather the goal is to help small business retailers leverage their IT investment for even better outcomes. The start time is 8am so as to not interrupt too much of the day.
I will be at all sessions and would welcome an opportunity to catch up with anyone on any topic.
FYI here are the details:
Launceston User Meeting
Date: 07/03/2016 Time: 8:00am
Venue: Quality Hotel Colonial Launceston
Address: 31 Elizabeth St Launceston TAS 7250
Breakfast: Coffee, Tea and Egg & Bacon Muffins on arrival
Parking: Limited Free onsite parking
Hobart User Meeting
Date: 08/03/2016 Time: 8:00am
Venue: Hotel Grand Chancellor
Address: 1 Davey St Hobart Hobart TAS 7000
Breakfast: Tea, Coffee and Swiss cheese and ham croissants on arrival
Parking: Onsite Parking available charges may apply, let the parking assistant know you are attending a meeting. Marketplace Car Park is open 24 hours and there is metered parking within close proximity to the hotel.
Melbourne User Meeting
Date: 09/03/2016 Time: 8:00am – 11:00am
Venue: Hawthorn Art Centre, Mayor’s Room
Address: 360 Burwood Rd Hawthorn VIC 3122
Breakfast: Tea, Coffee and mini tomato and cheese croissants on arrival
Parking: Free onsite parking – enter via Kent Street
Brisbane User Meeting
Date: 10/03/2016 Time: 8:00am – 11:00am
Venue: Quality Inn Airport Heritage
Address: 620 Kingsford Smith Drive Hamilton QLD
Breakfast: Tea, Coffee, selection of biscuits, slices, cakes and muffins on arrival
Parking: Limited free onsite parking and free street parking
Adelaide User Meeting
Date: 11/03/2016 Time: 8:00am – 11:00am
Venue: Rydges South Park
Address: 1 South Terrace Adelaide SA 5000
Breakfast: Tea, Coffee, egg and bacon muffin as well as fresh fruit served on arrival
Parking: Limited Free onsite parking as well as 2 to 3 hour free street parking
Sydney User Meeting
Date: 15/03/2016 Time: 8:00am – 11:00am
Venue: Novotel Sydney Olympic Park
Address: Olympic boulevard Sydney Olympic Park NSW 212
Breakfast: Tea, Coffee and ham and cheese croissants on arrival
Parking: Hotel car park fees apply: All day rate $25.00, or $13.00 for 1 hour, every additional hour charged at $5.00. Additional parking is available in P3, accessible from Sarah Durack Ave or P8 accessible from Herb Elliot Ave at a rate of $5.00 per hour
Canberra User Meeting
Date: 16/03/2016 Time: 8:00am – 11:00am
Venue: Mercure Canberra
Address: Cnr Ainsille & Limestone Ave Braddon ACT 2612
Breakfast: Tea, Coffee and a chefs selection of breakfast items on arrival
Parking: Free onsite parking at the front and back of hotel
Perth User Meeting
Date: 17/03/2016 Time: 8:00am – 11:00am
Venue: Assured Ascot Quays Apartment Hotel, Marina Room
Address: 150 Great Eastern Highway Ascot WA 6104
Breakfast: Tea, Coffee, whole fruits and warm muffins served on arrival
Parking: Free onsite parking available
Gold Coast User Meeting
Date: 30/03/2016
Time: 8:00am – 11:00am
Venue: Mantra Twin Towns
Address: Wharf Street Tweed Heads NSW
Breakfast: Coffee, Tea, Mini ham and cheese croissants and mini Danish on arrival
Parking: Free Parking available across the road from the conference centre at Mantra Twin Towns, there is a walk away connecting the hotel to the conference centre as well as a lift
Tubs working for roll-wrap in the newsagency
We are chasing growth in sales of roll-wrap by using tubs placed below the flat wrap in one of my stores. While the photo makes the product look untidy, the in-store impression is there is plenty from which to choose. This is what we have gone for with the change.
I think the more we own product layout and placement in our businesses the better for our businesses.
We also have roll wrap at the counter plenty of time and elsewhere as we seek to surprise shoppers with the opportunity. I think plenty of roll wrap purchases are on impulse. Key to this is placement.
We should not rely on suppliers for initiatives as they are not retailers, they are not in our shops seeing what we see and talking with our customers. No, the best people to know what is best for your business is you and your team in the business.
Newsagents: are you ready for the Network / Gotch transition
Newsagents need to ensure their newsagency software is ready for the transition. If you are not across what is necessary, please talk with your software company. This is not something to ignore.
Suppliers ought to carry more responsibility for out of stocks
Suppliers ought not accept an order from a retailer unless they are able to fulfil the order. This is not too much to ask, especially in this era of being always on, always connected.
It is frustrating placing an order to only have part of it arrive months later and not be able to tell a full story in-store.
Some suppliers are worse than others. The best way to deal with them is to complain once, louder the second time and cut them off the third time.
Suppliers need to have the systems and processes in place to stop this from happening, to stop taking orders when at the head office they know from forward orders or warehouse management that the orders cannot be filled. Anything less is not good enough.
I see this problems with big and small suppliers. It happens too often. Indeed, it peaks following major trade shows where some suppliers manually gather orders and take a week to key them in and see what their actual commitment is.
Once supplier told me they could not fulfil as my order and the order from a few others pushed them to another container and they did not want to risk it. What a way to run a business!
In the case of an out of stock where the supplier accepts unsullied goods as a backorder and has a need to send out a catch-up order, the supplier ought to carry the freight cost of this and not push the retailer to get to a minimum spend.
I like this newspaper poster
In Esperance Western Australia earlier this week I found a newspaper I like, one that uses news of the day to promote the newspaper. Kudos to the folks at The Esperance Express.
Gotch magazine allocations discussion
I am publishing this post to give newsagents a place where they can comment about any allocations concerns flowing from the take over of magazine distribution by Gordon and Gotch by Network. Please be detailed in your comment … i.e. what you used to get versus what you get now.
Reclaiming magazine space in the newsagency
I was in a newsagency this week where a magazine relay resulted in this four square metres of retail space was reclaimed from magazines delivering 25% GP for gifts delivering 50%+ GP. No titles were cut. Rather, a more efficient allocation of space was achieved through smarter space management. This is smart newsagency management – respecting a core low margin category in a way that lowers the overhead cost of the category on the business.
Magazine publishers should look at this as newsagents have to make moves like this given the margin dollars being achieved from magazines continue to fall in a marketplace where rent and labour costs are increasing. Are you listening?
Here is why I prefer some suppliers over others
It has been interesting comparing suppliers at the Sydney Gift Fair, those who were their at least. Here is what I like in a supplier. If you are a supplier and don’t do this, I’ll mark you down in my view:
- Order confirmation – written or by email immediately on placing the order. This nonsense of excuses for not confirming means it’s not an order, not really – so don’t expect me to pay a fee if I don’t proceed.
- Electronic invoices. Not doing this puts you in the dark ages.
- Being in stock. Placing an order for a merchandising story and only having half in stock is not a solution.
- Ideal timing. Timing that suits my floorspace allocation is always a plus and helps me maintain shop floor space commitment to a supplier.
- Seasonal relevance. Suppliers that help me embrace major and minor seasons get more attention.
- Easy claims for damage. Goods can get broken during shipping. Making me wait until I have five or six to return or until a rep comes to get the credit demonstrates a lack of respect.
- Fast credits. Holding off giving me credits for unsold stock when you promise sale or return turns me off you.
I could add to this list. This is my top seven. It has been on my mind this week because of experiences I had at the Sydney Gift Fair. I got to enjoy some suppliers more than others.
What I am looking for in supplier relationships that provide benefits beyond good products. I want professionalism and operational efficiency.
We have too many suppliers with old-school ways that hold retailers back.
Update from Network Services re transition to Gotch
Click here for the latest update from Network Services on the transition from titles to Gordon and Gotch. network advises the list of Transition issues has been reduced from 150 to 92. The updated list is hosted on both NetOnline and Gotch Connect. Links to the portals are included in the communication.
The communication through the process is consistent and thorough.
When a newsagent supplier says: I’ve got a perfect product for you
I’ve got the perfect product for you, it’s perfect for newsagencies.
Rarely is this statement following by a pitch for a product that is perfect for my newsagency.
I am so over suppliers assuming they know what we should sell. I am over suppliers pigeonholing newsagents and their businesses in a way that denies smart newsagents the opportunity to genuinely change their businesses.
Many suppliers do not know today’s engaged and growing newsagency. Many don;t want to know as they have built their businesses around serving businesses rooted in the 1970s and 1980s. It is 2016 folks. Average sale value is way up, GPO is way up. What we can sell has changed forever and this is because many of us are buying from suppliers who to not look at our businesses as selling what newsagent can sell.
I am not angry at suppliers, just frustrated that they have not seen the change in many newsagencies, that they themselves are rooted in the past.
I’d prefer suppliers to start a conversation by saying tell me about your business and what you sell.
I met a supplier yesterday in Sydney who was like this. Their average wholesale price point is $100.00. Their products are unique, not newsagency like. This was a big plus for me as I am keen to continue to push the definition of my business through the products I range. This is one of the reasons why I do not want suppliers to see me as a newsagent as that locks me in a box that does not work for me or for my customers.
So, if you are a supplier reading this, consider a new opening approach:
- Tell me about your business today – who you sell to and what you are looking for.
- Tell me about the changes you are planning.
- Tell me more about your customers.
The answers to these questions should guide a more productive discussion and relationship for both businesses.
Stop putting newsagents in boxes as that box marked newsagent or newsagency is crumbling fast. It has no future – the old school newsagency that is. The future, for the record, is bright and exciting.
More newsagent suppliers engaging with EDI
I have spoken to several newsagent / gift shop suppliers at the Sydney Gift Fair about turning on electronic invoices. Through my software company we are helping the suppliers get it right so all retailers can access the files regardless of the software they use. This is exciting as electronic invoices makes suppliers more appealing to small business retailers. Time is money as they say.
I have encouraged the suppliers close to turning this on to use electronic invoices as a marketing pitch in their campaigns through 2016.
This is a good benefit of a trade show like the Gift Fair – the ability to get to suppliers to connect with them on a business to business level and make the pitch – and to have suppliers speak to each other about the benefits of this type of engagement.
As the channel grows and the supplier base diversifies, it is important for all of us to encourage newer suppliers to transact with us in efficient ways we have become used to.