Imagine this out the front of the newsagency given the crazy stories in the media about crazy clowns
Mark Fletcher on October 24, 2016 10:03 PM
Mark Fletcher on October 24, 2016 5:17 AM
This photo is from a colleague newsagent. It shows just some of the magazine covers they have to return as part of the arcane unsold magazine returns process that applies to newsagents and not their key competitors. I am writing about this today because of the discussion from my recent post: What happens to magazines newsagents don’t sell and why are newsagents treated differently to supermarkets?
The stack of magazine covers have been ripped off magazines that failed to sell in the newsagency. This newsagent is permitted to return covers for some titles. For other titles they have to return the full product.
Some publishers see the sending of covers as a benefit for newsagents. Hell no! It is a cost our big competitors do not have.
Besides taking the title off the shelf and removing the cover, we have to post the covers to the distributor. This can often involve more than one envelope. Distributor processes being what they are, many newsagents send them in expensive Express Post envelopes.
- All of this for products that failed to sell.
- All of this for products over which the newsagents funding the work have no control re the supply volume.
These points are some of the reasons newsagents remain angry about the out of date magazine supply model. They are also points about which some magazine publishers are ignorant.
While publishers have benefited from deregulation, newsagents have received no benefit whatsoever. Indeed, the model we are forced to endure disadvantages us when compared with our big competitors.
Small Australian magazine publishers take note – this is why more newsagents are significantly cutting magazine space.
Returns ought to be eliminated immediately, unless publishers, distributors and newsagents agree to a model where newsagents are the exclusive retailer of magazines.
As newsagency businesses change, new traffic is found from new products categories and overall business GP % increases from selling higher margin products, it is only natural we look more carefully at the operating costs of low margin products over which we have little or no control. This is a consequence of deregulation – but it has been slow in coming for the channel.
Mark Fletcher on October 24, 2016 5:14 AM
This Christmas display is what greets shoppers as they enter the bed bath and Table shop in Hobart. It is terrific, in your face, easy to shop and timely.
I mention this today because there are newsagents who are yet to put out Christmas.
Bed Bath and Table is a terrific retailer. When it comes to major seasons, they are the best of the best – out at the right time, in the right place in-store and with the right mix of products.
That they have these Christmas items out now is enough of a reason to say to newsagents: get Christmas out, now.
Mark Fletcher on October 23, 2016 6:14 AM
I was talking with a newsagent last week about a product category that generates less than $30.00 a week in gross profit. The category is not paying for the space, labour or the inventory investment. Yet the owner wants to stick with it as a service. There is no evidence in basket data of the product serving a purpose. 60% of purchases are single item purchases.
Look at the numbers and be guided by the evidence and not your gut.
Mark Fletcher on October 23, 2016 6:10 AM
This Star Trek calendar is beautiful. Star Trek fans with a passion for the original TV series will love it for sure. The challenge is, many will not know newsagents have the Star Trek calendar. So, we are hitting social media to promote it. I expect this targeted marketing will bring new traffic to the newsagency business. It has in the past.
We will run a series of social medial posts using calendars to attract new traffic. There are some excellent calendars in the 2017 range and the time is right to call these out in a way that is sensitive to the niche interest each calendar represents.
This is my marketing tip today – use selected calendars to attract new shoppers.
Mark Fletcher on October 23, 2016 6:05 AM
The days of the annual, end of financial year, stock take in retail are long over. That old-school approach is not needed by the tax office or your accountant. It does not serve your business needs.
My advice is newsagents do a custom stock take, targeting parts of the business by supplier, department, category or product tag.
Some parts of the business will benefit from this being done as regularly as fortnightly while other parts will benefit from monthly through to six monthly.
A regular custom stock take will absolutely help you reduce employee theft and customer theft as it will show you what is happening and that will change your behaviour.
The parts of the business where I’d custom stock more regularly are tobacco products and high moving sought-after items.
Mark Fletcher on October 22, 2016 6:17 AM
newsXpress stores across Australia this weekend are running a nationally co-ordinated and promoted sale that is gaining terrific attention. This is the second such promotion in the last month that leverages the national footprint of 230 stores and an online and social media presence reaching deep into the community.
What is interesting is that technology has been the key to link the businesses together, to get them to act as on with a common purpose and single national message around a single national offer.
What is even better is that the promotion is for a product category that newsagents are not known for, a product category attracting more males than females and an age group appeal of between 18 and 34, a highly sought after group for the newsagency channel where at least 60% of shoppers are female and 70% of shoppers are 35+.
While you could see this post as marketing for newsXpress, my objective in writing about this is to share an example of how a group of newsagents can work together on a national campaign with a single national purpose. As all the stores in the group share common suppliers, common pricing and websites that connect them, making such a pitch is easier.
The campaign is different to the old-school mid year sale, Christmas sale and back to school sale our channel has been known for. Personally, I think those sales serve little purpose today because they are in crowded marketplaces with big business competitors who attract far more attention.
To me, the best sales are when others are not running sales and where you can structure the sale to maximise the GP opportunity as well as the margin dollars result. That has been the focus of the latest two campaigns.
The latest campaign kicked off with a tease on Facebook, on several different Facebook pages, on Wednesday this week. That tease post reached 50,000 people in a few hours. In-store, the result was people calling asking about sale items. Over Thursday and Friday I heard from retailers saying they have seen new customers as a result of the promotion.
While magazines, newspapers, stationery and cards remain important categories, it is new categories through which we can attract new shoppers – as long as we work together in such a way as to leverage the national footprint.
Mark Fletcher on October 22, 2016 6:13 AM
I cropped the cover of Diabetic Living to create this image for use on social media. It is more interesting than the whole cover and meets Facebook % of text guidelines for a boosted post whereas the whole cover fails the test. The other reason for the crop is differentiating content. I am bored by business Facebook posts that use the whole cover of a – there is no differentiation.
Mark Fletcher on October 21, 2016 6:52 AM
Australian consumer law regarding sales is clear. You cannot advertise an item at a SALE price if you have not previously sold it at the higher price. The discount must be genuine and the test for this is the price history for the item.
There are some in our channel who flout this law in terms of their pricing of ink – they run promotions pitching as a discount their everyday price. If reported to the ACCC they could be in trouble.
Using your newsagency software it is easy to get this right, to have an everyday price and then offer a discount across a set date and time range. That is what sales are all about after all.
The greater risk in this area is when a retailer does was / is pricing. However, advertising a item as having a discounted price when the price is your everyday price opens the business to challenge. All it would take is one shopper complaint to the ACCC or the local fair trading office.
Mark Fletcher on October 21, 2016 6:12 AM
At a coffee shop in Hobart earlier this week I heard a tourist say to a companion the paper here is $3.50, they’d never get away with that back home. They were pointing at The Mercury on a stand. I can see how they would think that.
We see this in retail, shoppers misunderstanding a sign or price. It is on us in retail to create better signs just as it is on the folks at The Mercury to be clear that the paper is $1.40.
Mark Fletcher on October 21, 2016 6:03 AM
Our sales of the latest issue if Better Homes and Gardens for the first week of the on-sale are three times sales for the whole on-sale of the same issue last year. I am hearing terrific reports from other newsagencies with the baking pan gift. This is great news for the stores and title. Success comes from strong displays promoting the gift.
This photo of a terrific display is from newsXpress Glenorchy, where I visited this week.
Mark Fletcher on October 21, 2016 6:00 AM
With Kylie on the cover, the latest issue of Hello magazine should be in prime position with the cover on full display – especially in her home town of Melbourne. This is the type of cover that could drive impulse purchases.
Mark Fletcher on October 20, 2016 6:03 AM
Westfield, bless their heart, has removed the ability for us to discard old spinners in the rubbish / recycling area of the large shopping centre in another cost cutting move taking away serves previously available to tenants. Rant over.
At the weekend we found ourselves with a spinner we no longer needed and so placed it at the front of the shop with a Free to a good home sign. Sure enough, our trash became another person’s treasure in quick time
It is easy to get side-tracked by obstacles that change what we can or can’t do in our businesses. There can be a comfort drawn from being angry about something we think is not your fault or outside our control to address.
More often than not in these situations of anger and frustration there are solutions if we look at the situation confronting us differently.
I have been talking with many different small business retailers over the last few weeks at workshops about social media and e-commerce and at these sessions I have talked with small business owners who only see barriers. They see them as that, a barrier. The alternative is to see the opportunity, the road over, under, around or through. Yes, I appreciate that may sound easier said than down. However, every barrier has an alternative.
I am guilty of this. The Westfield policy change re spinners being dumped happened months ago. It frustrated are and still frustrates me. However, trying this alternative has eliminated it as an issue – unless I prefer to be drawn to remaining frustrated at Westfield. But there is no sense in that, no business value from that.
If only I had thought of a lateral solution when Westfield changed their policy.
I was talking with a small business retailer yesterday about a challenge in their business that had them stopped in their tracks. Every suggestion would not work for one reason or another. many suggestions were put. Every one of the rejected. It was like they did not want the issue to be addressed, like they preferred to have the challenge remain in front of them. It was like the challenge put them in a place of comfort.
It is hard work to think through, around or over a problem. You have to choose to think this way, to think beyond the problem. It is important your happy place is with the challenge or problem gone. Otherwise you get into an unhealthy mental health funk that can be personally harmful and harmful for the business and everyone served by the business.
What happens to magazines newsagents don’t sell and why are newsagents treated differently to supermarkets?
Mark Fletcher on October 19, 2016 5:53 AM
Small business newsagents have no control over the range of magazines they receive. Nor do they have control over the volume of magazines they receive.
An average newsagency sells 55% of all magazines received. 45% of what is sent to the business fails to sell and is either returned for resale or dumped.
Unsold magazines are handled in two ways:
- Some newsagents are given permission to rip covers off unsold magazines with the covers returned to the magazine distributor for a credit with the rest of the magazine being disposed on however the newsagents choose.
- Other newsagents have to return all unsold magazines, at their cost.
There is also a mix between the above two points where a newsagent may return covers of some titles and full copies of other titles.
In supermarkets, my understanding is they do not return unsold product. They get to trash it locally.
The amount of paper water must be considerable. Yet no one appears to care about this.
That magazine titles continue to be sent to small business newsagents in a volume that is often far greater than would ever sell is a financial and operational overhead on newsagents. It disadvantages us because of what we have to do to process returns. Since our competitors are not confronted with the same costs it gives them an advantage over us.
Shame on those in a position of power who have refused to act on this.
The big issue here is the waste of paper, labour and fuel on the 45% of magazines printed that do not sell.
What a waste to the environment and a waste of small business newsagent resources.
Despite lots of talk, little has changed in terms of the magazine supply model. Sales data provided by newsagents is not used to drive a more efficient and more fair supply model.
While the model for supermarkets evolves and serves those big businesses, small business newsagents are stuck with a model that is out of date and environmentally unfriendly.
What newsagents want is for supply to more closely match sales. It is a simple request. Those setting supply have the data. Yet too often they ignore it – probably for reasons that serve their ad model. Plus, supply is too often a manual process when it should be automated and 100% data driven.
I think our best chance of addressing the continues oversupply and cutting the 45% failure rate to 10% or less is to target Greens senators. We need to educate them about the wastage of paper, labour and fuel in the magazine returns process. We need their engagement politically to force the matter to be addressed.
If nothing is done, more newsagents will get out of magazines.
For the record, click here to see changes I proposed to the magazine supply model, changes that would benefit Australian publishers.
Mark Fletcher on October 18, 2016 5:59 PM
In this pop culture obsessed world we are in good times for selling journals and other stationery items that are branded for the top-selling licences. It is amazing what a brand can do. Take this Star Wars journal – the base journal without the branding is a journal to be sold as stationery only whereas with the Star Wars branding it can be sold as a gift for a Star Wars fan of any age.
Licences offer us an excellent opportunity for growth in stationery item sales. There are several suppliers already playing in this space. My experience is quality matters to real fans of licences. Cheap China product does not cut it.
Mark Fletcher on October 18, 2016 8:02 AM
Click here to see the email sent to newsagents seeking business performance data for the September benchmark study.
Mark Fletcher on October 18, 2016 5:55 AM
Local libraries often claim to play an important community role. That role has expanded to hurting local small businesses that used to supply them. Revenue that would have remained in the community now hits the overseas bank account of Zinio.
A deal between Zinio and state run libraries, like the Zinio deal with Libraries of South Australia, sees digital versions of more than 400 magazines available through local libraries across Australia.
Many local libraries used to purchase magazines from local newsagents. That revenue is now lost to the local community.
The Zinio move reaches beyond the four walls of the local library though. Whereas magazines newsagents would sell to a library remained in the library, some libraries offer Zinio platform access outside the library. People can use their library number from anywhere and access Zinio magazines. The reach of the Zinio / library relationship can go way beyond magazines newsagents might have sold to a library.
I understand the move to digital from print. There is no stopping it. Indeed, the pace of change will increase in my opinion.
I understand the need for a statewide deal that makes magazines available at a low cost. This is a result of cost-cutting at all levels of government.
The community needs to understand the consequences of Zinio access through the local library.
Newsagents are among the most hit-up businesses by local community groups for funding, prizes for raffles and the like. The capacity of the locally owned small business newsagency is diminished by moves like we have seen by libraries.
Newsagents can confront the Zinio / library challenge by educating people about it. Explain the loss of revenue and the need for this to be replaced somehow for the business to continue its level of giving. However, such an approach could come across as weak.
For me, the best response is to be relevant in new product categories, outside of what has been traditional for newsagents. Focus your frustration at a Zinio / library tie-up in your area into changes in your business. Look away from this problem toward opportunities you can leverage for a brighter future.
No amount of complaining will make the issue go away so move on and look over the horizon.
Mark Fletcher on October 17, 2016 8:28 PM
If you have Frankie in your newsagency check where you have it placed in relation to the Frankie 2017 diary and Frankie 2017 calendar. The best placement is for them all to be placed with each other. This photo shows our current in-store placement.
We will move the items around over the weeks to keep it fresh and try and maximise multi-item purchases. It has been our experience over the years this is key to success.
While sales have dipped this year, Frankie continues to be a strong brand for us. The brand appeals to a valuable demographic to which we can pitch other items.
Mark Fletcher on October 17, 2016 6:12 AM
Magazine returns are a high cost for us, for those newsagents who have to send back full copies.
The photo shows some of the current returns boxed up waiting for collection at the end of the month.
Since I had no control over supply it is unreasonable I have to carry the storage cost and freight cost of these returns. But I knew that going into the business so I shouldn’t complain – except that magazine publishers have brought on competitors who don’t have to do returns, who don’t have the stage and freight cost.
It is time those of us doing full copy returns tapped into the benefits of the many newsagents already exempt from full copy returns.
The business where I took the photo has no store room. It is in a Westfield mall with a high cost of space. The returns take up space that could otherwise be earning income. Opportunity cost is a factor.
Unless I have absolute control over magazine returns I should not have to send this failed to sell product back.
This system is horribly out of date. It places newsagents at a disadvantage to other retailers brought on to compete with us. Unless it changes soon I suspect more newsagents will stop seeing magazines.
Mark Fletcher on October 17, 2016 6:09 AM
Most people entering the shop will pass this stand.
We also have a double waterfall placed in the magazine department showing off the pan and the magazine.
Plus we have the placement in the photo below at the counter. All three placements are about maximising the opportunity in the first two weeks of on-sale.
Mark Fletcher on October 17, 2016 6:07 AM
We are supporting the News Corp. newspaper sales promotion of board games with this display with newspapers. It is a bold display well placed to pitch to the right shoppers. Yesterday saw terrific engagement.
In addition to this promotional space with papers we have a ton of games product to manage and fund – the timing of supply is another cost burden on newsagents for such a slim margin promotion.
Mark Fletcher on October 16, 2016 6:19 AM
Most independently owned retail businesses do not have a marketing budget, an amount they spend promoting the business outside the business. My rule of thumb marketing budget advice for a retail business like a newsagency is at least 2% of revenue where revenue is product sales revenue plus commission from all agency lines.
A newsagency with, say, revenue of $500,000, the suggested marketing budget would be $10,000 spent over the year on out of business advertising and marketing. This amount should not include banner group fees or association fees. It would include print ads, flyers, local radio, local TV, facebook and other special media ads.
Setting a budget is important as it guides your weekly activity. The $10,000 plays out at $192.30 a week. There is plenty you can do with that. The key is to measure success from each spend, to ensure the business is benefiting.
Mark Fletcher on October 16, 2016 6:13 AM
Using a close-up photo of part of a magazine cover can get you a significantly better result from a Facebook than using the whole post. Take the current issue of Better Homes and Gardens. While it looks terrific, a close up of the pav was the hero so that is what I used for a post yesterday. And it worked a treat. Hundreds of shares in a few hours – extending the reach of the post beyond the like base of business I was promoting.
Here is my marketing tip: If promoting a magazine, look for the image that differentiates your pitch from what others will do to promote the same title. If you pitch the whole cover you are not offering a differentiation for your business.
Mark Fletcher on October 16, 2016 6:09 AM
One reason suppliers maintain reps on the road is the results they can achieve by being in front of retailers. Some people find it harder to say no to someone in person than by email or on the phone. Too often I see retail businesses, not just newsagencies, overloaded with stock that does not deliver the return necessary.
If a rep claims a product is working particularly well, ask for proof. It is your money. Satisfy yourself the claims are true and that you can expect such results for yourself.
It is okay to say no, even to a rep who has become a friend.
Mark Fletcher on October 15, 2016 11:57 AM
I have reports from some newsagents that their local supermarket is selling games from the Hasbro collection ahead of the start date of the promotion in the area. Some others, where the promotion has already commenced, have reported supermarkets not asking for the coupon News Corp. require.
The purpose of this post is to give newsagents somewhere to comment about what they see in their area.