Another day of newspaper headline coverup
What’s the point of the headline?
Are you ready for an ATO audit?
An audit by the ATO can challenge any business. Are you ready? I know of a newsagent who has spend more than $5,000 on accounting fees to deal with a super audit spanning three years. The audit became problematic because of high turnover of casual employees and poor record keeping.
The newsagent told me the ATO auditor mentioned that the ATO is targeting small businesses like newsagents. While I have no evidence to support this, there is no harm whatsoever in the reminder to be ready for an ATO audit with up to date and accurate accounting records including super records.
The opportunity of a new magazine
Spaces is a new title out today from the people behind the popular Frankie magazine. As we did with Smith Journal, we are launching Spaces with Frankie as well as if what will be the usual home for the title. We are also speaking about Spaces on social media to tap into interest being generated by the launch of the title. This is a title we can pitch a point of difference with.
Terrific June quarter for the newsagency
I’m thrilled with the June quarter results, especially for greeting cards – unit sales up by 20% and revenue up by 27%. Everyday counter, the core of the department say unit sales growth of 37% and revenue growth of 39%.
This is in a store with many competitors in the centre – major retailers with good card departments, specialty card and gift shops, supermarkets with cards as well as Typo, kikki.k and discount variety stores at the cheap end of the card space.
Cards account for 25.47% of our revenue – get them right and you know the rest of the business will benefit.
I think any newsagent can grow card sales in any situation. As I have written here several times recently, key to growth is promoting the category outside the business, to people who may not have considered purchasing cards from you.
I am starting to look at June benchmark study submissions and there are plenty of newsagents growing their businesses, plenty of results that challenge the stories of doom and gloom from some.
Gary commenting via this blog a few days ago saying: We have an industry in crisis. I am seeing data indicating for many there is no crisis.
Magazine publishers: careful what you wish for
For years there have been differences between how magazine publishers with products in newsagencies and supermarkets treat these retail channels. While newsagents have complained, they have done nothing serious about it. I think we are approaching a time when we will need to act.
The challenges now are about much more than better gifts with purchase for supermarket shoppers.
The supply model used today disadvantages newsagents as it encumbers our businesses with financial,. labour and space costs that our competitors do not have. But even that is not why I say we are approaching a tipping point.
Price is the issue. More and more I am seeing different pricing in supermarkets for titles we sell in newsagencies. News Life Media and Bauer Media are the main publishers engaged in this. They must be doing it to drive traffic to supermarkets and away from newsagents for their products. Why else would they make their products so much cheaper in our competitors?
- Why price Inside Out $2.00 less in Coles than the newsagency 50 metres away?
- Why bundle weekly Bauer titles in supermarkets at a discount to nearby newsagents?
- Why financially support supermarkets where you discount titles to preserve full price margin while not offering the same to newsagents?
The only reason can be to drive supermarket sales.
Think abut the long-term implications – either newsagencies close or they reduce their reliance on magazines. What that may not hurt many of the titles sold by Bauer and News Life Media, it will hurt them and it will hurt many other publishers.
Today, the Australian newsagency channel is still the largest single magazine retail channel in the country. But for how much longer? Those who appear hell-bent on directing shoppers away from us need to consider the bigger picture for all publishers as well as for small business newsagents and the vital and quintessentially Australian role they play in there communities.
Publishers: every action you take against us makes magazines less profitable for us and informs our own actions. Every time you facilitate supermarkets presenting your product as better value from them you harm our businesses. You’ll blame us when we are less interested in your products or quit as you have blamed us in the past, not thinking for a moment about the role you played in us deciding as we have done.
Every benefit you give supermarkets, every time you make them more appealing than newsagents is another decision against the future of the Australian newsagency channel. Shame on you as we have served you well. It is newsagents who have been key to your success and newsagents off of whom you make more money.
Starting the new financial year off right
I urge newsagents to start this new financial year off right.
Make a decision this morning that this year will be better than the last and that through your actions you deliberately pursue the business you want.
I urge you to make a decision to not be driven by reactions to what has been traditional for newsagents, make a decision to chase what is right for you and your future.
Not sure where to start? Here are some suggestions to get you thinking:
- Set a sales budget by department. Take the 2014/15 figures and decide what you want to achieve by department in 2015/16.
- Set a GP% target for the year. It is vital newsagents break free from the channel average GOP of 28% to 32% of revenue as this is no future. I urge newsagents to reach for 40% and then 45% and then 50%.
- Set your top 10 overarching business goals for the year. This could be reduce debt; a transaction count target, basket value target, less hours worked; increased profit.
- List things you want to stop doing in 2015/16. Think of this as a clean up for the business, de cluttering. Moving the business away from the traditional newsagency and into a future over which you have more control.
- List what you need to achieve your goals, the resources.
- Now, and most important of all, list from the above lists your next five steps in order of priority.
- Start.
The alternative to this approach to starting a new financial year is to do nothing special, to operate in a mode of business as usual. Do that and you will have a usual result. For too many newsagents that result is flat or declining traffic, revenue and profitability. That is no future. It need not be your future.
If you plan to sell your newsagency at some point the best outcome will be achieved if you grow the business. Growing the business relies on steps such as those I have listed and other steps that will come to mind as you work through what I have suggested.
Now more than ever, embracing change in the newsagency is important. The start of a new financial year is an ideal time to commit to a plan of major change.
We can all grow our businesses and enjoy them more.
Make FY2015/16 your year!
Anyone wo wants help planning for next year let me know – 0418 321 338. I’d be glad to help.
Optimism sells at the newsagency counter
This range of optimistic cards is working a treat at the newsagency counter. They are from Affirmations in NSW. Customers comment about the positive messages. I can tell these products make people happier at the newsagency counter. The images and words slow people. They also provide us with an opportunity to pitch a point of difference.
This is an example of how a thoughtful placement at the counter can be helpful beyond sales achieved.
You know it’s working when a customer picks up the product and smiles a genuine and heartwarming smile.
I like to have products at the counter that are not what people expect at a newsagency counter as this is another way to disassociate fro the traditional newsagency.
Product selection is a key activity through which to redefine your business to those who shop with you.
I think too often newsagents stock items and police them where they do because of they think is expected of a traditional newsagency business. Traditional activity will deliver traditional results.
Facebook promotion of cards drives newsagency traffic
This post I put on Facebook two weeks ago to promote cards in the newsagency continues to attract new shoppers for us. People seeing the post have commented to us about the message of a handwritten message in a card lasting longer than a text message. While this sentiment is what they mention, I think it is the choice of cards for the post that drives attention – they are different and on point for the text in the Facebook post.
I encourage all newsagents to try this. It’s easy. For a few dollars you could attract new shoppers. Here are some tips based on my experiences:
- Choose cards that are different and that stand out visually.
- Order the cards with the most important visually places on the left.
- Write in a relevant way about the cards.
- Include details on your location in the post.
- Boost your post – I suggest spending $2.00 for a day. Target your location.
News Corp. needs to treat all retail newsagents the same
The bundle offer pitched by News Corp. is good in that is offers newsagents something fresh to pitch. Unfortunately, News is not pitching it consistently in the channel as it does not have direct relationships with all retail newsagents through which to track engagement and manage the accounting side.
As I expect to see more retail offers News needs to sort out its engagement with retail only newsagents who do not have a direct account. Fix this and more will engage I am sure.
How the tables turn – newsagents become the threat to niche retailers
I have been part of a discussion elsewhere over the last few days where a number of independent niche retailers are criticising newsagents for moving onto their turf.
Passions have run high in the discussion as the niche retailers and their fans have pilloried newsagents and claimed we don’t have the same care for their customers. There was anger as the niche retailers did not realise that some newsagents have been on their turn for over a year.
To an outsider, the newsagents now competing with the niche retailers are evil.
All through the several day discussion I felt on the wrong side as it is usually newsagents who are critical of others, like supermarkets, encroaching on their traditional turn. It felt odd.
Now, after the discussion has calmed down, it is interesting to look back with some perspective, to consider if there are learnings.
Reading the text of the discussion I am surprised at the lack of facts used to attack the newsagents encroaching on the niche retailers. Emotion is high in the comments, well ahead of facts. I think the niche retailers could have made a stronger case had they got their facts right as there are other factors at play besides newsagents taking on the products. For example, the active role of a key supplier.
I wonder if newsagents and the complaints we make about supermarkets could benefit from a focus on facts ahead of emotion. I certainly think it is true when we engage in the issue of shop local or the issue of lotteries in supermarkets.
The facts in any argument support the why. If we simply say shop local we are not making a case. The same as if we say we will close if supermarkets get lotteries we are not making the case. If we say shop local and here practical reasons that affect you, we cover the why and make a stronger case. Or if we say don’t give supermarkets lotteries and here is why we make a stronger case.
We support too many arguments with an emotion and not facts. Maybe if we stick to the facts and bring our case back to the why for our customers we could have a better chance in making our case. But if we look at magazine oversupply we all know that no amount of facts are fixing that for us.
The experience of engaging with the niche retailers who feel threatened by newsagents has me looking at making the case from the other side. It is interesting and fascinating all at once. I think we can make a better case on a range of competitor issues.
Another magazine sent unnecessarily
Here is another example from another newsagent documenting the consistent oversupply of Inside magazine by Network Services. There is no sense to this other than Network keeping their trucks full. Right here is why newsagents early return.
How many new magazine titles from Bauer this month?
One newsagent told me yesterday they had received 27 new titles from Bauer Media’s Network Services this month and two reintroduced titles. 27 new titles is nuts. Performance data from the business does not support this expansion.
The result is cash, time, space and paper wasted as well as competitive disadvantage for the newsagent and, I suspect, plenty more like them in the channel.
At some point there will be newsagents who shut down their Bauer account believing it could be the only way to stop gross oversupply by the company.
Fair Work Ombudsman acts on Kennys Cardiology
Inside retail reported on action by the Fair Work Ombudsman against the operators of Kennys Cardiology.
The Fair Work Ombudsman has taken the rare step of seeking an injunction restraining a retail operator from underpaying her employees.
The move, in the Federal Circuit Court, comes after the agency received further complaints from young, vulnerable workers.
This report is a timely reminder to all retail business owners to ensure you are paying what is required. This also applies to newsagents employing family members.
Yes, newsagents can sell gifts priced over $20
I can’t sell gifts over $20. This is a common comment I hear from newsagents when I talk about the need for us to explore new product category opportunities at price points of $100, $200 and more.
In Cairns a week ago a newsagent made the comment at the Newsagency of the Future session. I accept this is their experience and the experience for many newsagents.
I think any newsagent can sell gifts and other items priced at $20 and more, much more. It is not easy and it does not happen overnight, but it can be done if you follow a process.
It starts with having products people expect to pay more for. This means buying from suppliers you have not dealt with in the past. It also means displaying and promoting them differently. It means making your business look and feel more like the type of business where the more expensive items are sold.
If you place gifts priced at $20, $200 and more in a traditional newsagency alongside cheaper items they will not sell. If your visual merchandising of more expensive items is old school newsagency VM, the expensive items will not sell. If you do not promote the new lines outside your business to people who do not usually shop with you the more expensive items will not sell.
Success with more expensive items starts with you approaching the opportunity with a fresh mindset, unlike anything from your history in your business. It starts with you understanding your target shopper: what they like, how they buy, what matters to them and how far they will travel to buy.
While it would be easy to list here for you more expensive items you could carry in your business to get you thinking, my experience is greater success is achieved by those who sort out this for themselves based on their situation, available capital and preparedness to embrace change in their business.
The core reason newsagents need to address this is: there is no upside in low price point low margin retail unless you significantly increase volume and that is a whole other challenge. Selling more expensive better margin products can deliver a better bottom line result.
Can you sell items priced at more than $20? For sure, any newsagent can.
This question sits at the heart of how you see the future of your business and whether you have the capacity trade through the opportunity of change in the disruption impacting the newsagency channel today.
Bauer increases Homes+ supply for no reason
Here is evidence of more overloading by Bauer. Not one issue of Homes+ has come close to selling out since October 2014 yet they increase supply by 20%. This from the company that says it supports newsagents and wants to help us make more money from magazines.
Their actions do not match their words.
Using Lorde to attract new shoppers
Lorde on the cover of the latest issue of Vogue Australia is an excellent opportunity to promote this title and your newsagency on social media. A boosted post with a photo of the cover and mentioning Lorde in the text will get your business in front of more people. This cover is an excellent opportunity for you finding new traffic.
In store – place this title next to Frankie, Yen, Peppermint, Russh and others like these.
Promoting AWW in the newsagency
Here is one of three placements we have for the first week on on-sale of the new Australian Women’s Weekly issue. I mention this to publicly demonstrate our support for the title, to balance my criticism of Bauer for loading with more stock despite a history of average sell through.
Promoting the 3D globe partwork
While initial supply is only small, we are promoting the launch issue of the 3D globe building partwork – My 3D Globe – as it will sell in school holidays and because we already serve a large number of jigsaw customers.
Sunday newsagency marketing tip: invite customer reviews
Leverage the opinions of your customers to shine a light on products you sell. Ask for their reviews of items and place the reviews on your Customer Reviews noticeboard.
Your customers could review magazines, cards, gifts – almost anything you sell.
In addition to putting the reviews on a noticeboard, post them on Facebook and other social media platforms – reach outside your business and show how you listen to your customers and make them an integral part of your business.
Don’t rush into this idea. Take your time. Think about it in the context of your customers. Plan. Get your team on board. Come up with a way for people to participate easily. Make sure you have the right place to display the reviews.
I suggest you focus on one product category to start, to focus attention in a way that works commercially for the business. Once that has run for a while, take a break and then review something else.
Sunday newsagency management top: your end of financial year to do list
Here is a list of things you need to do this week with the new Financial Year kicking in on July 1:
- Take a backup at the close of business on June 30. While not all software systems will require this, it is better to be safe. Store the backup off-site. Ensure it is labelled.
- If you use stock control and manage stock well through the year, run a stock on hand report and save this as a PDF for your accountant. The ATO will not require a stock take.
- Review your stock performance report and set out a plan to quit dead stock (for me that is stock not sold in six months at the eldest).
- Ensure your payroll records are up to date.
- Issue group certificates.
- Make final superannuation payments.
- Submit your BAS.
This is also a good time of the year for a whole of business review leading to the refinement of your strategic plan for up to two years out.
Make the most of this Who cover
The James Packer / Mariah Carey romance story in the latest issue of Who magazine is an opportunity to sell the title to people who may not usually consider it for purchase. Check that you have the full cover on show in a location to encourage pulse purchase. We have it is an acrylic in front of the weeklies – so it stands out.
Promoting the Tour de France program in the newsagency
Here is how we have been promoting the Official Guide to the Tour de France 2015 in the newsagency. This placement with newspapers is in addition to placement with sports magazines. It’s selling well – responding to impulse purchase opportunities.
Bagged Woman’s Day fails to sell
Okay so we tried this bagged Woman’s Day with the out of date Australian Women’s Weekly as we’d sold out of Woman’s Day and no one bought it just as no one buys these bagged magazines yet the continue to come. So frustrating. A waste of time, space and money. What’s worse is Bauer will send this out again next time they do the discount bundle.