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

What we learnt from the adult colouring phenomenon last year

Adult colouring related products were massive in 2015. Indeed, the trend started in late 2014, spiked by mid-2015 and spiked again later in the year.

Commencing in the UK, it next hit Australia. The second spike came as a result of US suppliers and retailers joining the party, late.

Looking back on the phenomenon, there are useful learnings I’d like to explore.

  • Being an early adopter is important. Those who got into this space before the magazine publishers made the most money as it was high margin and high volume.
  • Focusing on margin for a short life space product matters. Connecting with suppliers who are early-adopters was key as you could sell above RRP because pf product scarcity.
  • Suppliers can wreck the party. While I didn’t mind some of the magazine publisher offerings, many were rubbish and not appreciated by customers.
  • Late to enter competitors must wreck the party for their benefit. Publishers bringing out titles today, for low margin, ruined adult colouring as did supermarkets entering the space with crappy product.
  • Understanding the whole opportunity helps you make the most. This is where overseas insights proved to be crucially in helping the most from early adoption.
  • Have an exit strategy. Knowing when to pull back so you were not left with too much stock was essential.
  • Traditional newsagency suppliers are likely to be late. And they were. Some ripped us off taking space and labour for product that came to market too late. They did not care about us.
  • Be ready for extensions. We are seeing this now. Adult colouring and general colouring: greeting cards, wallpaper, place mats, socks, party mats, t-shirts, door decals, jigsaw puzzles and light fittings. I have seen all these and more being pitched at gift and toy trade shows over the last two weeks. Many will come to Australia.

While adult colouring will be a hobby for some for years to come, sales today are not what they were last year. Given this, many of are such that plenty of retailers are getting out, as the return they are achieving is insufficient.

Some suppliers are not done. We already have calendars in this space. Watch out for greeting cards, jigsaws, specialty journals and wrapping paper. While some of the additions could be valuable because of goos profit, others with a lower than 50%  gross profit will be of dubious value.

For high interest trends we need to get in early, execute well, get out ahead of the curve and manage the amount of low margin product compared to fair margin product. We do this by being proactive. If an Australian supplier tells you about a trend you have not heard of before, it is likely you would be introducing the product after the trend has started fading overseas.

Footnote: I have seen plenty of adult colouring greeting cards, wrap and jigsaws at international trade shows over the last few weeks.

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Newsagency challenges

Sunday newsagency management advice: snacks with magazines

IMG_5666Leverage more margin dollars from magazine destination shoppers with thoughtful placement of snacks – candy, jerky, chips etc – with magazines.

This example is from a UK newsagent – smart clip strip placement to make the pitch. This is easy and newsagents have access to plenty of products today.

The products you choose to place need to target your shoppers. Jerky might one in one location while premium candy might be ideal elsewhere.

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Management tip

Sunday retail marketing advice: be personal in your communication

Personalise your communication and help people get to know you. In your emails to customers, include your name. When commenting on your business Facebook page, use your name. Let people know who you are as you are a competitive advantage for your business.

I mention this today as I saw an email last week from a newsagent to a customer where the newsagent did not include their name on the email – there was no idea who wrote the email. Impersonal and unprofessional.

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marketing

The newsagency channel needs to get better at handling a change of ownership

I have been helping a newsagent left in the dark by the people they purchased their newsagency from. They were taught the basics of operating the shop and given a one-page given a list of suppliers as a hand over document. This was their first business purchase and did not know what they did not know until it was too late.

When I sold a retail business in 2014, I provided a four page 1,200 word document with all details necessary for the new owners:

  • Supplier details including web address, contact name, number and email and purchase history for that supplier.
  • Admin access details for the business Facebook page.
  • Admin access to other social media for the business.
  • Account numbers for all service providers.
  • Contact details, TFN and other details for all employees.
  • Schedule information covering rubbish collection and other regularly scheduled services and activities.
  • Details of how to access full sales history for the business.
  • Notes on suppliers we did not deal with and why.

What was especially useful (I am told) was the information on suppliers. The list given to the newsagent I am helping has no contact details, no history of trading. This is problematic as the new owners wiped the computer system of all data except for basic stock information.

Having the package of information available helped sell the business as it made the business seem easier to run for someone with no experience. It also gave me peace of mind knowing I have provided a good hand over.

Vendors have an ethical responsibility to hand their business over in a thorough and professional way. Those of us in the channel for the long term ought to push harder for this to be resolved.

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Newsagency management

Smart Valentine’s Day impulse offer

Here is the smartest Valentine’s Day pitch I have seen, an impulse pitch at the sales counter of a very funky gift shop in New York. The card selection is the key – non-traditional. This is the way to get people buying Valentine’s Cards who would not usually do so – with funky product placed ideally for impulse purchase.

IMG_6157

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Greeting Cards

The Independent newspaper to close

UK newspaper The Independent is to close. While I am not in the UK often, The Independent is one of the newspapers I like to read is its reporting is reporting rather than the silliness and sermons from News International titles and the nonsense in some other UK newspapers.

Without sales, a print newspaper cannot sustain its advertising rates. In Australia, I think News and Fairfax are staring at each other, waiting for someone to blink.

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Newspapers

GNS addresses Collins Financial Year diary challenge

GNS has issued a statement to newsagents about challenges around the supply of Collins financial year diaries. I share it here with the permission of the business and because on an ANF forum there has been comment on this issue that does not reflect the facts as they are known. Here is the GNS statement.

GNS have been promoting and supporting the Collins Debden range within the Newsagents channel for over 20 years.

Under new management, Collins Debden presented GNS with price increases for Financial Year Diaries for FY16/17 that were well above and beyond what we considered as justifiable, based on cost comparisons for the same products last year.

GNS held several discussions with Collins Debden in the interests of our shared customers, being Newsagents, to minimise the impact of the proposed increases. This did not eventuate and as a result GNS has decided not to range the Collins Debden Financial Year diaries for FY16/17. The price increase impact was both unsubstantiated and well over market influencers such as the devaluation of the A$.

GNS has sourced alternative product to offer our customers at competitive prices, high quality, healthy retail margins and sales offers to Newsagents that will minimise risk in this product category. GNS will be issuing these offers shortly.

GNS is an easy head to kick for newsagents. Plenty of head kicking is ill-informed in my view. The company is more transparent and accessible than ever. I have found that asking a question elicits a frank answer on any issue. This is better in my view than ignorant bashing as if it is a fun sport.

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Stationery

Who is to blame for long-term employee theft in a newsagency?

Screen Shot 2016-02-11 at 4.24.39 amA Current Affair ran a story about employee theft in a Queensland newsagency this week claiming the owner lost the Nextra Caloundra business as a result of theft of $36,000 over two years.

The reports indicating theft used in the ACA report are from the newsagency software from Tower Systems, the software company I own. When theft was suspected the COO of the company undertook a free theft check at the request of the owner of the newsagency and provided the evidence subsequently used by the police.

The ACA story frustrates me for a new reasons.

  • Long term employee theft is avoidable. The newsagent and the majority in Australia have access to evidence of possible employee fraud. Detecting it is easy yet most newsagents think it will not happen to them – not matter how many times they are told it could easily happen to them. Had this newsagent followed the advice provided to them by Tower through contistent communication on theft they could have detected it after the week it began.
  • Did $36,000 stole over two years really kill the business? I struggle to accept this as it is not a large sum of money. Further, for it to be the reason of the loss of the business the loss of the cash should have been discovered sooner. I’d more readily accept that the experience caused the owner to get out as the psychological impact of this type of theft is considerable.
  • The report says the employee did not receive a pay rise for most of the time they worked in the business. If this is true it is illegal. The ACA report did not adequately address this as in doing so left questions about the quality of the reporting.

In all my work with newsagents: individually helping businesses, through this blog, with Tower Systems and with newsXpress, theft is a common topic. Theft in a newsagency by an employee ought to surprise no newsagent I am in contact with. yet it does … because too many newsagents choose to ignore it. This is why I wonder: Who is to blame for long-term employee theft in a newsagency?

In this case from ACA, I think the newsagent is to blame for the extent of the theft. Their management approach allowed the theft to go on far longer than should have been the case.

We, each of us, need to own our own situation. This is why the newsagent in the story ought to say they are to blame for how long this went on and the cost to the business. Taking such a stand would be more helpful to small business retailers seeing the story.

One of the worst cases of employee theft I saw was in a newsagency where an employee stole more than $250,000 in case over almost three years. The theft went on almost a year longer than it should as the newsagent said my advice they were being stolen from could not be right as it could only be one person and they would never steal from the business. Almost a year later they realised they were stupid to make such an assumption and ignore the evidence they were provided.

Yes, this stuff frustrates me because all the advice, all the training, all the warnings are too often ignored … and then when it happens, the their is the only person responsible.

newsXpress offers its member newsagents training and resources for confronting employee theft. I hope this is something all the newsagency marketing groups do. One of the theft mitigation resources from newsXpress is documented advice accompanying a store Theft Policy document.

As a courtesy to all newsagents, click here to download a copy of the latest version of the newsXpress theft advice that was first published years ago. This advice is part of a set of more than 100 business management advice documents provided to newsXpress members as part of their management assistance and training. I mention this to reflect that the approach to employee theft is part of a whole of business approach.

A few months ago I tried to take a different approach to warn about theft. In the studio at Tower Systems I and the video production team created this video. I share it here in the hope it makes a point:

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Newsagency challenges

Inadequate Wendy Harmer program on ABC 702 on newsagents

The ABC fact checker ought to listen to the ABC 702 program discussion earlier this week on newsagents. The first problem is the claim there were 7,000 newsagents 10 years ago. This was never the case. 10 years ago, the number was around 4,500. Today, that number is 3,000.

It would have been good for more thorough research to have been done on this prior to the discussion.

The discussion abut the challenges was equally frustrating. While the decline in print is a factor, so is the expanded reach by supermarkets, the ever increasing lease costs, online and the blurring of what specialty retail is. Today, chemists sell what many newsagents sold. To balance, many of us newsagents sell what other retail channels sold.

They talked about magazines toward the end of the discussion saying, shock horror, that between 40% and 50% of magazines sent to us are unsold. Seriously? The number is higher for most titles. There was no real comment on this when it ought to be a headline.

There appeared to be little interest in talking about positive stories and what many of us are doing to build strong businesses. There appeared to be a preference to talk it down.

The only upside was the discussion was that abut branding and the failure of the shingle newsagent to be relevant.

I know plenty of newsagents achieving double digit growth.

On the comments about the problems coming when supermarkets get lotteries, this need not be the case. Newsagents should run their businesses as if they do not have lotteries as that will focus the owners on gross profit. there is no upside in lotteries. There ought to be no surprise when supermarkets do get lotteries.

Smart newsagents have a good future in their businesses if they embrace change. Here is a video I shot recently for newsXpress. I post it here as it speaks to growth opportunities available to every newsagent. It is a good news story about one very specific business – based on their most recent benchmark results.

While our newsagent associations run awards and promote those they say are the best of the best, there are newsagents out there who do not ever the awards and, instead, reap the most important rewards for themselves by being smart and embracing change.

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Newsagency challenges

Cutting up the Valentine’s Day poster for impact in the newsagency

IMG_4919 (1)I love the handiwork of Chris at one of my businesses. He cut hearts out of the corner of two of the A1 valentine’s day posters, bringing them alive in a way beyond the poster artwork. The result is porters that come alive. You could almost say they tell a story.

The hearts are tumbling into the products we are selling – the cards, plush, chocolates and gifts.

While two posters hanging above the Valentine’s Day display would be good, especially these posters with the simple Loving You message, Chris’ creative efforts have resulted in something far more effective, far more noticeable.

This is a good example of taking merchandising material provided to the business and making it better – as well as making it unique to that business. For a season like Valentine’s Day that involves many retailers, being different is important. It gets you noticed above all the noise and remembered.

I have seen people see the posters while walking past the shop and post them out to someone they are walking with. That is a bankable result as far as I am concerned. These front of store displays are all about getting people noticing you as they walk through the mall as people shopping with you who would not usually shop with you are where revenue increases come from.

The other aspect of what Chris has done that I love is the symmetry of the display. This enhances the impact.

The best way to not have an average Valentine’s Day season in your retail newsagency is to not be average in your approach. No supplier will help you not be average as they have many retailers they serve. Being not average has to come from within your business.

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marketing

If you sell Darrell Lea in your newsagency

IMG_5485Darrell Lea has a national TV commercial running to boost brand awareness, specially for liquorice products. The TVC promotes the packaging shoppers will see in-store.

If you stock Darrell Lea, now is the time to refresh your pitch, to leverage the TV ad spend by the company. While the TVC ought to raise awareness, this will not help you unless you act. How valuable the TVC is for your business is 100% up to you – based on what you do.

The ad does not pitch any retail channel, which is good in my view.

So, how can you leverage the Darrell Lea TV commercial for your business? Here are my suggestions … and I say this as a retailer who does to stock Darrell Lea, who has no relationship with the company:

  1. Make sure your product display is fresh with best-practice colour blocking and located in a high traffic location in-store.
  2. Make sure your display is branded Darrell Lea.
  3. Have a secondary pitch at the counter.
  4. Offer taste testing. be sure to follow health requirements.
  5. Promote on Facebook over a series of posts. Talk about the favours. Talk about Aussie made. Be passionate.
  6. Promote flavours by email to your customers.
  7. Host a tasting event to re-launch all the favours to your customers.
  8. Offer a buyers reward for loyalty. for example, if they buy four packs they could get one for free. How many times do you sell four packs at once? rarely probably.

While supermarkets, petrol outlets and others have Darrell Lea product, they are likely to be lazy retailers, doing little to actively engage with the product and the latest television commercial. This is your opportunity to separate your business from theirs.

If you do engage using any or all of the ideas I have suggested you can pitch your business differently, you can position your business as the Darrell lea expert.

if you do engage, let the company know. make sure they understand the value of having you as a retail partner.

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confectionary

Leveraging licences for Valentine’s Day card sales in the newsagency

IMG_5535 (1)I love this Darth Vader Valentine’s Day card as it helps is make a considerably broader appeal for the season. Too many Valentine’s Day cards from all companies are sugary sweet. This one stands out not only for the Darth Vader image but for how it has been produced. It looks terrific in the card fixture but even better when stand-alone at the counter or on social media. I especially like that the card is 100% image – i.e. no words. I also like that the rose reached out from the card and can be removed as a memento.

So, this card is our feature card for the 2016 Valentine’s Day season as we seek to appeal beyond the traditional Valentine’s Day shopper.

With many other Star Wars and Darth Vader products in-store right now, the card is an excellent opportunity for non-traditional Valentine’s Day gifts as well.

We have to look at major seasons in a non-traditional way, to make the most possible from the opportunities. This is how we attract more than the usual newsagency shopper, it is how we grow our newsagency businesses.

Too often we either put product out or let suppliers put product out for a major season without thinking about special interest or niche interest opportunities we have with products. That is what I love about this card, the niche appeal. It presents us with an excellent opportunity our major card competitors – supermarkets, department stores and discount variety stores – will not embrace. This card is an opportunity for us to demonstrate the value we bring through our specialisation.

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Greeting Cards

Promoting the new Dr Who partwork

20160208_102647We are promoting the new Dr Who partwork with an aisle end display, near our other Dr Who and pop culture product. With plenty of licenced products available it is easy for newsagents to leverage this opportunity way beyond magazine margin.

We are also engaging on social media to attract people who may not think of us as where to purchase this and other Dr Who products.

This is a partwork to embrace in my view.

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partworks

Remembering David Bowie in the newsagency

We have given prime position to the music magazines remembering David Bowie. We have also been using social media to let people around know that we have these magazines as his passing is an opportunity for a real fan to collect a special edition of a memorial feature for future reference.

IMG_5512 (1)

The purpose of the social media engagement is to reinforce the relevance of our small local business when it comes to stories like this. I see it as if we are in a battle for relevance with other magazine outlets. Embracing opportunities around major news events provides us with an opportunity to show our point of difference. In this instance, it is in range of titles we carry. Coles only has one of the titles we have. Our social media engagement reminds people of our range.

For reference, I targeted the post broadly around the area and spent $5 on a 24 hour boost. I did this to pitch to more than people who already know about us.

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magazines
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