Speaking at the QNF State Conference yesterday, I presented a comparison of the GP contribution by product categories in 2010 compared to 2005 – from a cross section of newsagencies in the benchmark pool I work with.
The two pie charts (click on the image for a larger version) show the shift in the products newsagents sell. Newspapers, magazines, lottery products and greeting cards are in fewer shopping baskets. Not necessarily because we sell less (we do in some categories but not all) but because newsagents have expanded the product range.
More newsagencies today offer gifts, books, calendars and ink than five years ago. This broader range is seeing a more efficient GP contribution. Indeed, deriving GP from more product categories brings welcome balance to our businesses. It also makes us more appealing to the older categories like newspaper and magazines.
This shift is not happening in all newsagencies however. There remain many who rely in newspapers, magazines, lotteries and cards for the majority of their revenue and in many of these newsagencies, these items are bought alone – i.e. without products from other categories. Such single category sales are inefficient and unhealthy for the future of the newsagency.
Balance is crucial to our collective and individual future. Balance in traffic, revenue and profit contribution.
Is used the slide to encourage newsagents to transform their businesses from relying on a few categories and pursuing more, higher margin, categories.
I am building a half day workshop on this theme, digging deep into sales benchmark and basket data to build the case for change and to show how some newsagents are building more profitable businesses by embracing change. What I covered yesterday at the QNF Conference was part of that bigger presentation.
Mark and I would suggest a smart sanity check would be to compare these % to the space occupied in the store. Whilst there will and should be allowances for ‘strategic’ allocations (e.g. to grow, or to reinforce your proposition) – it will propvide you with a simple game plan and DIRECTION towards you should be managing the categories. Agee?
Mark it is interesting that you write about the shift in what we are selling. I am just now running numbers for my newsagency. My results are close to what you have written – a broader range of products being sold meaning I am a little less reliant on major product categories.
I have cut back on magazines, a bit much I fear. Early return became a drug, good for cash but I fear bad for the long term appeal of my newsagency.
I would be interested to hear about other newsagents making these moves to broaden range.
New products for our store in the last 12 months are Ink, Calendars and Books which is what the Pie chart suggests to be added categories in newsagencies. At first we have dipped our toes into these categories but are already impressed with what we see. We were always hesitant because we did not know we could compete with established markets (or perceived established). An example of this would be calendars, we experienced a pretty encouraging first year even though we were competing with a casual lease posting from Angus & Robertson….we have just completed next years orders and have increased that by as much as 40%. Ink continues to build in numbers, as does our book sales. Sometimes you just have to trust somebody suggesting something new (even if you are cautious) and going for it. We are certainly not the biggest player in these categories but we continue to increase our sales and that can only be good for our bottom line. Keith, i too was tempted by the early return process (to save my cashflow) but if you broaden your offering across all departments i think you will find you will only have to cull smaller amounts of all non performing products not just magazines. As far as gifts are concerned our experience is you can sell just about anything your imagination allows you and at very good margins. Still the new boy on the block but am more than happy to share my experiences with all of these categories if it helps you Keith, just let me know.
Cheers
Al
I have to wonder though, if we are expanding into all these different fields where does our “point of difference” (a term I am still somewhat struggling with) or identity lie? What will a newsagent be in 10 – 15 years time? And (possibly fighting words but..) are we doing what we regularily accuse AP of doing and treading on someone elses territory?
The local convenience store or milk bar is all but dead and with the direction we seem to be heading I see Newsagents as taking their place – although possibly without the vegemite and rice. I don’t see that as necessarily a bad thing however I think we need to identify what direction we want to be heading and what we plan to identify ourselves as in the future.
As one speaker said at the QNF conference he came across on Gen Y lad who didn’t even know what a newsagency was.
So what will a newsagent be in the future?
B, The newsagent of 10 years hence will look very different/ How different is up to each of us.
We were created with a glue – news distribution – and that is rapidly diluting.
While some of the marketing groups will drive consistency, the newsagent shingle itself will not.
AP is different because it has 765 government owned stores. Their LPOs are fine (as long as they are small business owned) in my view, it’s the government owned stores I have an issue with.
When we first bought our newsagency in 1989, we sold books, calendars, gifts lines ,toys, social stationery as well as the core lines of Lotto, papers, mags etc.
Newsagents were muscled out of the first lot of these categories by large chain stores like Dymocks, big W, k mart under cutting prices and driving business away from us. These big boys have now moved on to other areas so I see us getting back into them as a return to what newsagencies should be.
B a newsagent to me is a more of a “feel” about a business rather then what we sell. We still have regular customers come in and browse around to see what NEW things we are offering as well as getting thier regular stuff.
We are the guys that are local so can help people find destinations, we are open longer then most so we are the go to destination for convenience items instead of say a servo that is operated by a drone. Becasue most of us are owner operators we know our stock and can help people find what they are after. We are the staff that greet customers as they enter the shop not just when they get to the counter.
All in all we are the best retailers around, just my opinion.
Very well said Luke!!!!!!
Mark,
How does the public differentiate between a Govt owned AP and a FGranchise AP?
I would think it’s a bit lijke your Sub Agency versus a Full Newsagency.
Personally, I have dropped the word “newsagency” and refer to our business as Browns of Burnside. When we are at the gift fair we used to get the “glazed look” when we said we were a newsagency so we have dropped the word and the service we get is now exponentially improved. Maybe we
need to drop that word Newsagent even if it means we have to re-invent ourselves as variety stores or some such thing. I personally think our newsagency shingle has had its day and is now the dinosaur that John Hartigan referred to long ago and I (and others) were so incensed about.
How interesting – maybe he was trying to warn us and was not a bad guy after all.
Graeme,
The public does not easily differentiate. That is not my point.
That’s mine as well. If the public/consumer doesn’t then we have no worries whether it is APost or Franchise/APost.
In other words if they are not passsng on an advantage there is no difference.
The point raised here is that GNS supplies APost with stationery and you bag APost as unfair competition-you then support GNS Mark it’s face up to reality time. GNS need to supply APost – Sub Agents and whoever they can as wholesalers to survive and newsagents need to compete with whatever opposition they have to survive.
You can’t take the moral high ground and then support the opposite point of argument which is supply of product to be used against us. It’s still supplyings guns to the injuns nomatter what you may call it.
Graeme, take your beef with Mark where it belongs.
This thread is about looking at the shift in products that newsagents sell today.
I’m sorry, but myself and others are getting somewhat annoyed at your constant comments regarding everything but the main subject/thread. Make comments by all means – but don’t change the subject.
peronally i love the little arguments they have , maybe i am just missing the conflict from when ANON was around . by the way where has he gone
I`m with Luke on this one, lets stick to the topic at hand instead of bagging Mark at every opportunity. Shaun S i too like the little arguments but only when they are on topic otherwise all they do is put the whole thread out of line. I want to hear comments about the changing shopping basket not about who is supplying AP. There must not be enough traffic on Graeme`s blog because he seems to be here all the time causing trouble……getting a little boring Graeme with all due respect.
Talking about the basket and what it contains tells me that I must be missing out on ink product. I have been bitten before with product left on the shelf and have tended to drop it and leave it for officeworks etc but I know some agents do very well with it. How much do you have to purchase and what are the top sellers and from whom do you
buy? I was impressed with the “piechart” from the QNF conference and thought I should follow it up.
June,
The type of Ink you stock will depend to a degree on your customers and their profile. I now make in ink the same as 50% of my total stationery sales. It will take a while for the customers to find you and it will cost you some errors in stock. Engage with your customers and find out what they want and go from there. Keep the prices keen and the loyalty of your customers will keep them coming back. If you need more I am happy to chat on the phone.
Allan,
So is bagging the Apost all the time when it’s up to the consumer. If we spent half the time looking after the consumer that we spend on stupid call to arms telling newsagents to write to their local MP about the monopoly that “they/we” already own and condone.
Then to say when we finad out that GNS supplies Franchise AP’s that they’re alright it’s the Govt owned one’s that are not.
Give it a break Alan stop brown nosing and start being objective It’s your industry as well you know.
Luke,
My comments were in direct reply to those made in this blog. Perhaps Mark wants a bklog of yes Sir 3 bags full. I wouldn’t think so but you do and so does Alan however I get many that don’t so how about a bit of genuine comment like don’t bag your apposition and then suppoprt them by supplying them with product.
What is wrong with that comment? and it was made on this blog Where is the off the subject in that?
You should check youyr bias for it is showing.
Allan,
You are misinformed I don’t have a blog This is Mark’s blog I am getting the message – thanks.
Greame i read this blog first and foremost to see if i can get ideas to use in my business like the changing basket story. I dont need to know your opinion on wether Mark is being hypocritical in his views on AP. You are correct on one point that it is MY industry as well and thats why i like to contribute (hopefully for the better and not the detriment)Your “Brown nose” comment only adds to your bullish and sometimes pigheaded self rightouse views that you continually put out there for all to see. Why dont you take a leaf from your own book and finally come clean on YOUR OWN AGENDA???
No agenda just truth
Boys… please behave.
That is an interesting point Mark. But if we will no longer call ourselves newsagents because as a newsagent we have lost our identity what will we call ourselves?
This is very concerning…. perhaps we will have a good ten years left with specialty magazines to allow us to cling to the title of newsagents?
B We will call ourselves something relevent to our customers.
General Stores
Why not just call ourselves retailers, why do we need to be limited into one group? There is a lot of things we do not sell at the moment ie tech stuff, toys etc but if we could see a hole in the market we would go after it, I cannot understand in the current retail world why we would just stick with what we have always sold and nothing else.
No one else does, coles and woolworths have branched out into grog and now hardware, Gerry Harvey is now into online photo processing.
Do not limit our horizons as an industry just because of a name and because a few will not move outside thier comfort zones.
Graeme, yes I work for Mark Fletcher. He pays me to work with Retailers to make better use of the Tower Systems software – not to brown nose him on his website.
I have been and still am a newsagent. Mark Fletcher doesn’t own my newsagency nor does he own my views as a ‘retailer’.
As for discussions – there should always be different point of views. My comment, if you read it again, is relating to your comments about Australia Post and the irrelevance to this thread – trying to divert the attention away from the main subject. There is a different thread, which you can make all your comments there relating to Australia Post.
@Luke LA, why isn’t there a online forum for newsagencys/retailers? Besides this blog, which is mostly discussions/topics basically started by Mark, there isn’t really much of gathering place for retailers.
You could swap ideas, info or possibly even have “Display of the Month” polls. (lol)
I’m sure e-mails, calls and faxes work fine for most, but i just think it would be much more convenient for a forum.
Aaron,
what newsagents have here is more than in some other channels.
That said, watch this space for an alternative discussion place opportunity.
That sounds good.
I quite like following the discussions here, although most are (almost) irrelevant to me, on a personal level anyway.
It would be great idea if the Associations would provide such a forum. I would be the first one to volunteer my technical skill to create such a forum.
I have many questions that I would like to ask but don’t know where is the right place to ask. It is very frustrating especially for someone like me who wants to enter the industry.
I was going to set up one myself but I do not want to clash with Mark’s site.