How much does Melbourne Cup impact retail in other states this week?
Besides the cross the counter discussion, sales increase today compared to a dual Monday while tomorrow is dead from noon on.
How would small business newsagents handle this end of shift challenge?
I was recently asked by a friend who works for a national retailer about a situation they encountered. I outline the situation here here for your comment.
Five minutes after their shift ended one day recently and after the store had closed for the day, as as this person was exiting the business from the front door, they were confronted by a shopper who wanted access to the shop. They denied the shopper access, knowing that store managers were counting cash at the registers.
They left and thought nothing more of it.
A few days later, the store manager issued a formal warning to the employee saying that they provided poor customer service by not allowing the shopper to enter.
I was surprised by the approach being taken by the retailer. The employee was off the clock, knew the day’s takings was exposed and knew there was no one on the floor to monitor the shopper. I would not have issued a warning in this situation.
What would you do?
Lotto retail in New Zealand
I got to see some lotto outlets in Auckland yesterday. Here is what I am told is the minimum requirement for a lotto retailer (the terminal is out of shot to the left of the display unit):
Congratulate Kiwis
According to the ABS close to 3% of people living in Australia are from New Zealand. Today and this week is the time to congratulate them on their gutsy Rugby World Cup win.
Sunday newsagency challenge: talk about your competition
A newsagent I was speaking with last week was complaining about Officeworks and the stationery sales they felt they were losing to this national group. What are you doing about it? I asked. What can I do about it? I’m cheaper than them but they have more money to spend on marketing.
My challenge to this newsagent was – complaining about Officeworks achieves nothing. Prove your price advantage at every opportunity – on Facebook, in-store and through your team.
Make sure everyone has the Officeworks app and train your team members to openly discuss your price advantage over Officeworks.
The more you share the facts on pricing the further your message will spread. Officeworks does this, in the front of each store. They display pages of catalogues that usually feature equipment items and use a sticker to show their price next to a competitor offer.
Sunday newsagency management tip: stop buying
Many newsagency businesses I visit are over-stocked. The owners tend to buy with not enough regard to what is actually selling, driving an increased investment in inventory without a commensurate increase in revenue.
My advice is to put a road-block in place, a moratorium on buying or at least a slow-down in buying to ensure that you are buying you really need. Be disciplined on yourself, give someone authority to stop you buying stock.
Remember, buying stock is not a smart way to build friendships. It’s business. Every dollar you spend on stock only generates a return when you sell the stock.
Sunday newsagency marketing tip: ignore the Christmas crush
Letterboxes, local papers, radio stations and TV stations fill with advertising clutter this time of the year, much of it from advertisers with deeper pockets than small business newsagents.
This is why I recommend newsagents, especially city based newsagents, do not advertise through catalogues and in newspapers at Christmas time. I also suggest you do not discount at Christmas time.
Let your competitors drive shopper traffic. Leverage the extra traffic competitors who do advertise attract, lure people into your businesses, with stunning displays pitching appealing product. Ride on the back of the spend of others.
I am not a believer in the value of a Christmas catalogue filled with discounted gift items the shoppers these attract are less likely to be loyal through the year. Further, the catalogues from your business hit at peak catalogue season for your competitors – businesses that are regularly marketing whereas your business most likely is not.
Swim in the blue ocean that is not crowded with competitors. It is far more enjoyable.
Customers love product sampling in the newsagency
We are doing another product sampling this weekend, sharing pieces of our gluten free, nut free, egg free rocky road. In addition to impulse engagement, we have encouraged new traffic with Facebook promotion. This has worked because of the pitch around gluten free, nut free, egg free. The interest in any and all of these is strong. Shoppers looking for such product are appreciative of the recognition offered and the support through product purchasing.
I see this type of campaign focused on such niche products as part retail part community service. I am glad we are doing it. I see the in-store tasting as retail theatre, something that sets us apart from what shoppers usually expect in our type of business.
The more we provide experiences that are unexpected and good the better for us and our mission of changing shopper perception about who we are, what we stand for and why we matter to them.
I think the most valuable loyalty we can encourage in retail is loyalty at the special interest or fringe area. This is why we have been so invested in the and previous tasting campaigns.
CTC stores selling ‘hempers’ of ‘licenced’ product
A CTC store I visited this week sells hempers (SIC) of licenced products. I’d love the Australian licence holders to ensure they are genuine licences for if they are, the licence owners may want to see how their licences are represented. A couple of the licenced characters looked off to me, like a cheap copy, but that could be my eyesight.
Licences are expensive to obtain, making licenced products sold in-store more expensive than similar unlicensed product. This is why suspicions can be raised when you see cheaper than expected licenced product.
Lovers of a licence deserve to be provided an authorised licenced product and not a knock-off. Any retailer of genuine licenced product would be interested in cheap off looking product.
CTC is on my radar as they are cigarette shops using kid-targeted plush and other items to attract shoppers. I am surprised landlords who claim to be focused on family shoppers welcome them to their centres.
Point of difference helps drive adult colouring in the newsagency
Adult colouring titles not readily available elsewhere drive interest in the category. We use unique product to promote and thereby attract those already deep into the activity as they know a unique title when they see one. The approach is similar to dealing with collectors – focus on their specialisation and they shop with you more often.
Halloween pitch for magazines
Here is a pitch from US digital subscription platform Magzter overnight promoting magazines during Halloween season.
A homewares pitch for Halloween
Here is how Bed Bath & Table is pitching customer at Halloween time. Many US retailers use this season to pitch deals.
I urge magazine publishers to make newsagencies magazine specialists once more – ditch supermarkets
I response to the article in mUmBRELLA last week reporting comments about newsagents by two publishers, I offered to write in support of newsagents and with a suggestion on how to grow magazine sales and support small business newsagents.
mUmBRELLA published my contribution yesterday. In this article I call on magazine publishers to supply newsagents and not supermarkets, thereby refreshing us as magazine specialists, giving us commercial reason to re-engage with the channel and allowing us reason to support the category as professionals and not as competitors to better funded and better supported but less engaged competitors.
I am serious in this suggestion as I am confident that if magazine publishers were to supply newsagents and not supply supermarkets, newsagents would partner with them to arrest the sales decline.
Newsagent responds to magazine publisher complaints and advice
It is frustrating reading that magazine publishers bagged newsagents at an industry forum without newsagents having a reasonable right of reply. But maybe that is how publishers like it, maybe they don’t want to mix with newsagents. We do, after all, only sell 50% of magazines sold in Australia.
Nicole Sheffield, the CEO of NewsLifeMedia says we need to exert more control on the titles we receive. Ash Hunter, CEO of Hunterfive Group, says newsagents entering the channel are of a poor standard.
While these opinions could be factors in challenges for magazines, they are only opinions. Sheffield, Hunter and other publishers ought to look at the facts. They took what was a specialist channel and took from it around 50% of magazine revenue and gifted it to supermarkets and convenience stores.
This new competitive landscape facilitated by the publishers left newsagents with less profitable titles. Newsagents and now, finally, responding by reducing retail space and labour they invest in the magazine channel. This is causing newsagents to not display all the magazine inventory sent as they no longer have the space for it.
Indeed, there is a fundamental disconnect between the retail space available in newsagencies and the inventory sent. Talk to Gotch and Network and they will agree – they do not know the retail space allocated to magazines and that they do not know is not a factor in what they send. Nuts!
If Australia wants a profitable magazine publishing channel it needs a profitable route to market. Newsagents are the best opportunity. Plenty of them want to be the magazine specialist, a destination for the magazine shopper. But the numbers do not work. The numbers could work if publishers ignored supermarkets and helped direct more magazine traffic to newsagencies.
My proposal is simple – make newsagents the magazine specialists by only supplying them.
This single move, of choosing to place titles exclusively in the newsagency channel, would encourage newsagent support. I am not talking here about one or two titles. No, I am talking about hundreds of titles, popular titles, titles in the top 200 even. Place these exclusively in the newsagency channel and you change the game, you get the attention of newsagents, you push back against the supermarkets and you respect your product.
While I am confident that a bold move such as I outline here would benefit publishers and newsagents it would need careful negotiating, involving many titles and requiring thoughtful newsagent engagement. And, yes, there would need to be a discussion on margin. Rent and labour in retail are considerable expenses and titles not paying their way serve no purpose in any retail business. However, margin can be considered in various forms. For example, there could be a base stocking fee or some other levy to support the category.
If sought after product is only available in one channel then the two main parties to such a relationship, the publisher and newsagents, ought to benefit. We would have a shared commercial objective, far more so than exists today.
My call to Sheffield, Hunter and other magazine publishers with opinions about magazines in newsagencies is simple – engage with us, invite us to your conferences, work with us on a =n alternative model as the current model is not working for anyone. Oh, and don’t engage with the newsagent associations as they are out of touch on this and most other issues as history has shown.
Footnote: I’d love Nicole Sheffield to explain the News Corp. position on pricing Inside Out $2.00 a copy less in Coles than in newsagencies.
Promoting Healthy Food magazine
We are using a nifty piece of acrylic to pitch Australian Healthy Food in front of other food titles. Being a small title it needs this type of support to be noticed. This issue features the Healthy Food Awards. See this terrific report on this issue in Mediaweek.
Art Therapy partwork going okay
Issue #6 of Art Therapy is in and it is kicking along okay. We have a good number of putaway customers who are staying with us and extra product to display in-store. While the adult colouring segment has been truly overloaded, interest in this title remains and while it does we will stock it.
Could drones be used to deliver newspapers?
With more retailers, like Walmart, seeking approval to test delivery of products by drones, is it only a matter of time before publishers or others seek to trial delivery of the daily newspaper by drones? While there are regulatory challenges, drone delivery of newspapers could be more cost-effective in built-up areas where drones would be challenging.
The Economist recently published an excellent article, Welcome to The Drone Age. The article opens with a stat that is extraordinary:
THE scale and scope of the revolution in the use of small, civilian drones has caught many by surprise. In 2010 America’s Federal Aviation Authority (FAA) estimated that there would, by 2020, be perhaps 15,000 such drones in the country. More than that number are now sold there every month.
Swiss Post is trialling drones for small parcel delivery. So, why not newspapers?
Understanding the reach of Halloween in Australia
While Halloween is still a relatively small season in Australia for some retailers, for others it is worth thousands. In my own case, it is bigger in terms of gifts and party items than Valentines Day.
Halloween is changing too. whereas in the past this season was about costumes, now it includes homewares, baked goods and plenty of premium products for premium shoppers.
Huffington Post has reported Halloween engagement in Australia is growing. I urge you to read the article.
The photo is an ad promoting Final Draft, excellent scriptwriting software for writers that I use. This is an example of a business to professional promotion around the Halloween season – showing the reach beyond dress-ups and candy.
Thinking about the Final Draft ad, newsagents could run Spooky stationery offers, Scary card deals (maybe for birthdays 50+) or Frightening party deals – for those having Halloween parties.
Halloween is an excellent opportunity for us. Now is the time to start thinking about 2016.
Is Halloween expensive at Woolworths?
Checking the price of Halloween items earlier this week, I found Woolworths expensive compared to newsagent prices I have seen. While Woolworths is making considerable noise about Halloween, I don’t see this being matched by value for shoppers.
Two regional newspapers merge
West Australian Newspapers has advised two of its mastheads are to merge:
In week commencing 2nd November 2015, the Northern Guardian and Mid West Times will be consolidated into one publication with circulation coverage into the Mid West and Gascoyne areas.
This new combined edition will be known as Midwest Times Northern Guardian and will become a Wednesday publication with the first combined edition being Wednesday 4th November 2015.
The final single edition for the Northern Guardian will be the edition of Wednesday 28th October 2015.
Comparing Woolworths to the newsagency
This photo shows the placement of Total Girl magazine, which comes with a free Beanie Boo, in my newsagency at the weekend. We are using a large Beanie Boo to attract attention to the magazine. The display is placed two metres into the store and can be seen by people in the mall. In fact, the large Beanie Boo is a magnet for attracting shoppers.
This photo shows the placement of the same issue of Total Girl magazine, which also comes with a free Beanie Boo, in a Woolworths supermarket I visited two days ago. There is no call out whatsoever, nothing special reflecting the publisher’s investment.
I am proud of how the team at my newsagency engaged with this opportunity compared to Woolworths. This is the type of thoughtful engagement by small business newsagents compared to disengaged team members at supermarkets.
Newsagents offer publishers a different experience, one that is specialist, supportive of magazines in a way you never see in a supermarket – unless the publishers ays extra for extra support.
The more publishers support newsagents the more support they can expect from newsagents. The heart of the relationship is commercial, after all – or, at least it should be.
Why is News Corp requiring newsagents to promote Woolworths, a big competitor?
In a galling extension of the News Corp support of supermarkets over small business newsagents, News in NSW has emailed requiring they engage in a Woolworths marketing campaign:
On Thursday 29 October, 2015 The Daily Telegraph will give readers the chance to collect a Free Woolworths Tote bag. The Tote bag is free with purchase of The Daily Telegraph Thursday 29 October.
Most Woolworths stores have also be allocated stock of bags. Where you currently deliver The Daily Telegraph to a Woolworths store you will be required to deliver the Woolworths Tote bags to these stores with The Daily Telegraph on Thursday 29 October.
Newsagents will be paid a distribution fee of $0.20 (inc GST) per bag. This fee is payable for both Newsagent and Woolworths stock.
20 cents is not enough for this. The compensation needs to be more than 50 cents. That aside, requiring small business newsagents to support Woolworths is an offensive impost on newsagents in my view. Here is part of what one newsagent emailed me today:
I have emailed my News Ltd rep and have let him know that there is no way I am promoting Woolworths actively in my shop.
If News was true to what it publishers it would support small business newsagents more.
Can newsagents refuse to engage in the campaign? News would say no to this. While I do not have a News contract in front of me, I expect a case could be made about the fairness of supporting a major competitor. It is a question those representing newsagents should have been on the front foot on days ago.
Is the Dymocks discount strategy an indicator of an Adult colouring slowdown and, if so, what should newsagents do?
Dymocks is pitching two adult colouring titles for $30. As the poster in the photo notes – shoppers can choose from 20 different adult colouring titles.
This discount pitch by Dymocks is unfortunate as to tells shoppers to expect to pay less for these titles than usual full price. It could also be a marker of a downturn in sales of adult colouring titles. Why else would Dymocks make such an offer? Unless it is a spoiler move on their part?
Regardless of the reason for the Dymocks promotion, newsagents need be aware of the move and watch other retailers as their actions will impact on sales in newsagencies.
In the magazine space, magazine publishers and distributors need to be aware as well. It is bad enough being loaded with products from which we make a paltry 25% gross profit (from which to pay rent, labour and other costs) when we have plenty of stock in the same segment from which we make 50% … but now, while magazine supplies are increasing, a major competitor who does not stock magazines, is discounting the better margin product.
I hope people in our supplier business are thinking about these things. Based on current supply, over which newsagents have little or no control, there is little evidence of thinking of newsagents.
Many small traffic generators are more important than one big one
The newsagency channel grew up with major traffic generators: tobacco, lotteries, magazines, newspapers and cards. For decades, the traffic from these was fantastic. Indeed, it made our businesses bankable.
Over the last fifteen years, the traffic from these key traffic drives has faded. The challenge for newsagents is what are you replacing it with.
Too often, newsagents look for a major traffic driver to replace a fading traffic driver. I think this is a mistake.
There is no golden bullet, no one thing you can do to replace a former major traffic driver in your newsagency.
This is not a bad thing. In fact, I think your business will be more healthier relying on traffic generated my many acrivities and products rather than a few. This reliance across a broad base protects you from stormy weather.
So, what can you replace falling traffic with? Look at your data. I usually find good guidance in business data. For example, in the data for one newsagency recently I noticed a considerable spike in craft magazine sales yet the business had no gifts to serve this shopper. Six months on, sales of gifts to the craft interested shopper are strong.
If you dig deep into your data and look at it from several views you will most likely find new traffic opportunities. But look for several as the more traffic generators you can find the better for the business.
We are in an era of many small steps. While this is harder work from a management perspective, the result is a stronger traffic foundation for the business.
If you are in a marketing group, ask for a copy of their new traffic strategy as this should provide excellent opportunities.
Useful Gotch magazine email helps newsagents who want to grow magazine sales
I like the regular email from Gordon and Gotch highlighting magazines on issue this week as it highlights titles I may have missed. Take Frieze, this looks like a cool title I would like to stock. In the email is enough information to assess the title and decide whether to stock it.
I appreciate some do not want to expand their range. My view is we ought to do this, especially in this area of niche / special interest titles.
Another AFR cover-up
Ad revenue is far more important to Fairfax than the front page newspaper story.
