We are promoting the latest issue of Super Food Ideas at the power end betweek our two main magazine aisles to try and drive sales over the weekend. This is a title which does not often get display space in a newsagency yet it perform as well. In our food section, it is title number five or six for us. Each time we support it with a promotion it lifts.
Based on the emails and calls I have received over the last couple of days, I have struck a nerve in asking here what an Australian newsagency will look like in 2020. Newsagents are keen to discuss this. I am keen to discuss it. Some newsagency suppliers too.
For the record, I feel bullish about the future. I see excellent opportunities. These spring from what will happen with some of our core products and the realisation by more newsagents that our future is up to us.
Some newsagents are already having fun exploring new product and service opportunities and building businesses with healthier margins than the traditional newsagency. This is a minority group though.
For many newsagents there is a time of unlearning to go through. This includes an assessment of each department of the business and assessing its contribution to profitability in the context of return on investment, return on floor space and return per labour unit.
Newsagents who do this work soon see opportunities and embrace the liberation which often follows.
Profit is the key to decisions about the future – short, medium and long term. For many, this is a new paradigm for newsagents.
Profit based decisions are where some traditional newsagency suppliers will struggle. They will soon realise, though, that to engage with new generation newsagents the profit model of the past will not cut it.
There is a considerable risk in selling or buying a newsagency using a regular real estate agent. They often do not understand the specialist requirements for managing the change of ownership of a newsagency. I have seen serious mistakes made which have cost one of the parties a sizeable sum.
Buying a newsagency is a complex transaction which can be easily mishandled. It requires good industry knowledge, supplier connections and an attention to detail.
While I am not about to recommend one broker over another, I do recommend that newsagents selling and prospective newsagents buying do so from an experienced specialist newsagency broker.
we will stop printing the New York Times sometime in the future, date TBD.
Editors Weblog has this quote from New York Times Chairman and Publisher Arthur Sulzberger. He was speaking at a conference in London earlier this week. He was asked to respond to a suggestion that the NYT may stop printing in 2015.
The question is being posed not only in relation to the NYT with all newspapers as we watch circulation flatline and publishers invest considerable sums in pay walls for online content and developing applications for devices like the Apple iPad.
While the focus is on the impact of devices on the print model, one must also consider the impact of environmental issues, the cost of newsprint, the cost of ink and the increasing cost of landing a newspaper on a subscriber’s front lawn.
Newsagents are voting with their feet about the future of the newspaper home delivery model with many quitting this year. The home delivery ‘crisis’ as a publisher labelled in talking with me last year is far from over.
But back to Sulzberger. He interests me because he was one of the first publishers to note that broadband would significantly impact newspapers – covered in BusinessWeek in 2005. Rupert Murdoch soon picked up on this and then overtook Sulzberger as the publisher spruiking a digital future.
Exercise, Yoga and Pilates balls we have as part of the latest book sale have been selling extremely well. Since most are purchased on impulse they are a very nice addition to any shopping basket.
In a business management sense, these balls and the other products in the Father’s Day book are one of several strategies vital to lifting the gross profit of the business beyond average for a newsagency.
With so much of what a newsagency sells delivering a gross profit of 25% or less, products which sell well and deliver a gross profit of more than 50% are most welcome.
While I could make as much or more with cheap product from China, I like remainder books because they appeal to our core customer base, they make good gifts and they are promoted externally in an appealing catalogue. I alos like that they are easy to display – just stack them on a table and they sell.
We are promoting the latest issue of Weight Watchers magazine with an in-location display as well as a couple of pockets located with our weekly magazines. The pockets in with the weeklies achieve half of our sales for this title. This suggests to me that it is purchased on impulse. We shift it around based on space availability in with the weeklies.
We received way more copies of Lovatts Holiday Crossword Collection than is warranted by recent sales. Going against my usual approach, I decided to early return some of the stock yesterday when it arrived. Early returning is frustrating though because we still have to pay for freight.
Given the quantity supplied and the three month on-sale period, we need to be supplied with a target sell through of at least 75%. Anything less supplied to a shopping centre newsagency and the title is probably loss making.
Maybe the folks at Lovatts need to look at their scale out model.
As I have written here recently, I am researching, considering and wondering about the newsagency of the future … five and ten years hence.
While some say you cannot plan that far ahead, my view is that we have to look out as far as possible and consider what our future could look like. Sure we may get it wrong. I would rather get it wrong trying that not trying at all.
Considering our future is even more important for newsagents because of the change in supplier engagement in recent years compared to the first 130 years of our existence.
All of this was on my mind as I sat at the desk in my hotel room in Sydney tonight working through sales benchmark data, looking for trends. I looked up and out the window and saw two beautiful rainbows dropping down over Sydney harbour. One landed on the forecourt of the Opera House.
Without wanting to sound too ‘weird’ the glorious sight reminded me that we have to get out and look for gold at the end of our rainbows. Today, our rainbows are excellent traffic, ideal geographic location and being top of mind in key categories – cards, magazines, newspapers and lotteries. We will be blessed with good traffic for some time to come. In the future, our rainbows could be new product areas, new services or a completely new style of retail. As I said, we have to get out there and looking, no matter how far into the future it may take us.
Data I am currently reviewing for capital city shopping centre based newsagencies indicates that afternoon customers are more likely to spend more in a sale than morning customers. Indeed, the later in the day the more they are likely to spend.
In several instances, I have seen late afternoon sales worth, on average, 50% more than early morning sales.
This data will vary newsagency by newsagency. Get it for your store and it could be gold. Most point of sale systems can produce it in seconds. They can cut time based sales in a range of useful ways.
Thinking about this further and recalling customer behaviour in that last hour or so, it is clear that at this time of the day we are the convenience store for our customers. They tend to take less time choosing their purchase and that works in our favour.
Digging deeper into the dataset from a small sample group, I can see that afternoon shoppers are twice as likely to, for example, purchase multiple greeting cards in a sale. If you knew that for your newsagency would it change how you manage the business. I bet it would!
I started looking at this data again recently to help a newsagent out in balancing the roster. It turned out that they had their people working at the wrong times for maximum benefit – based on the customer behaviour shown in their sales by time data.
We received an increase in supply of Total Fanzine even though our sales data indicate we should receive less rather than more. My other concern is that the new issue is out and the old issue is not due for return for a few weeks. Magazines which target the teen market are challenges from the sales data I get to see so pumping out more does not work for newsagents who have to fund the stock for the publisher while it is on our shelves. We are trying to cut supply of this title.
We are promoting the latest issue of That’s Life with a full waterfall in its regular location as well as this high traffic placement with our main newspaper stand this week. The free copy of part one of their Real Food Fast part series publication makes it a good value purchase. We are trying to encourage putaways like we do with all partworks. sales from the frist day indicate good interest in the offer.
Oops! This copy of the latest issue of Woman magazine which arrived yesterday experienced a production problem. We had a laugh and sent it off to be returned. Production issues like this happen from time to time. The only time it is a challenge is when you only get one copy ansd it is for a putaway customer.
Several newsagency suppliers are actively researching what our channel will look like in five and ten years time. They have engaged professional researchers to look outside and inside the channel for information to guide their view.
It concerns me that newsagents appear to be unconcerned about the same question.
Maybe 2020 is too far away to consider. Maybe they are swamped in the day to day to worry about the future.
Given that an average shop fit investment lasts five years we need to consider this. Good news or bad, being more aware of what might be will better inform the shorter term decisions we need to make in our businesses.
NDD is working through the process of winding down the business including the settling of newsagent accounts. They are being transparent with newsagents on timing and fulfilling commitments they have given in terms of payment of credits.
The challenge, however, is that newsagents can find themselves waiting for a refund from NDD while facing bills for stock previously supplied by NDD which is now supplied by another distributor. I have seen cases recently where the cash flow cost of a title has doubled as a result.
It is disappointing that newsagents, the weakest partner in the magazine supply chain, are the ones carrying financial cost of this.
No one party is to blame but the publishers and distributors involved could have seen this challenge and assisted newsagents accordingly.
We are relocating our newsagency early next week for around six months while our current location is required for major construction at Forest Hill Chase.
We have been promoting the relocation to our customers through a newsletter – pictured left. This shows our new location on a map and provides some background to the move. We are running a massive sale as we are temporarily going from a 330 sq m store to a 97 sq m store.
The new store will not carry all departments we cover today, there isn’t the room. We have thoroughly reviewed our data and decided to focus on: magazines (but range down by 33%), cards (no change), Tatts, Stationery (down by 75%), ink (no change), books (no change), gifts (no change), social stationery (down by 50%).
We anticipate that the first week or two will be challenging as we make compromises to fit into the considerably smaller store.
Given that the alternatives were no store for six months or a small outpost, fitting into a 97 sq m shop is a welcome challenge.
On the back of the Cosmo display (see my previous post) we have this display for House & Garden.
We decided on using the back of the stand as this places the display near to the stock for the title and to pitch the magazine to customers as they leave the women’s magazine aisle.
House & Garden is just outside the top ten magazines and saw a sales decline of 9.39% year on year in the latest audit. I would love to know the newsagency channel year on year numbers as I think they are worse than this. It’s a good but maybe a bit tired magazine in a very crowded space.
We are doing the best we can – with displays like that in the photo and tactical placement on the flat next to stable mate title Real Living.
We are promoting the latest issue of Cosmopolitan magazine at the entrance to our women’s magazine aisle.
While sales are down 9.02% year on year in the latest audit, Cosmopolitan is still in the top ten selling magazines in the country and is therefore, in my view, a low hanging fruit opportunity for impulse purchases.
The cover of the latest issue looks stunning, it cuts through the sea of colour in a newsagency.
I was talking a major landlord recently about the future of newsagencies and was asked what our channel would look like in 2020. I gave a vague answer and moved on to more near term issues around occupancy cost, marketing fund contributions and tenancy mix. Their question has been on my mind ever since.
What will our channel look like in 2020?
To find a possible answer to this billion dollar question I have been looking at the benchmark data I have been gathering for years as well as other trend data for key product categories we carry.
While the view I ultimately form in answer to this question may ultimately be wrong, it is important to at least consider. Every newsagent preparing a business plan must have a similar question on their mind and if not, why not?
We have spent far too long worrying about what our suppliers will do for our future. No more. 2020 is up to us and I have to say that the more I work on what my model will look like by then the more questions I have.
If you are buying a newsagency or have an existing newsagency you want to run better then the newsXpress one day conference is an excellent opportunity to connect with proactive newsagents and helpful suppliers. In an outcome-focused agenda you will find practical ideas you can implement right away…
09.15am – Suppliers on site with great Back to School and exclusive deals – we recommend all stores arrive early and use this time to engage with the suppliers and take advantage of the HOT OFFERS
10:00am – Open and Introduction by Graham Randall
10:05am – Mark Fletcher – How to avoid calling the police to your store
10:10am – Mark Fletcher – An OCD Diagnosis is not all bad news
10:45am – Ron Thorpe – Taking Ownership of the Greeting Card Category & making more money
11:15am – Morning tea – SUPPLIER INTERACTION OPPORTUNITY
11:30am – Graham Randall – Buying and Selling a newsagency – The facts, the myths and the figures
12:00pm – My Stories – selected newsXpress members share their stories on what makes their store profitable
12:30pm – Ben Kay – Stalking Goliath – techniques for competing with the big end of town
13:00pm – Lunch & Networking – SUPPLIER INTERACTION OPPORTUNITY
14:00pm – Jason Skodt – How to make money from the phone card category – Tips and practical advice on making this category more profitable
14:30pm – Business Building Open Forum
15:00pm – newsXpress Members only meeting – 60 minutes
16:00pm – Close of day
Click here for a one page brochure and registration form. Click here to book online. Participation costs just $50 and includes lunch and breaks.
Newsagents have reported being approached to participate in My News Plus. This is being promoted by a business called Commerx1. The website is www.commerx1.com.au. Ross Whitehead claims to be a principal of Commerx1 on his Linked In page, although the domain name was registered by a Ross Smart.
Read how they describe their business:
MyNewsPlus.com.au MNP is an on-line department store designed specifically for Newsagents. MyNewsPlus will be licensed and operated on behalf of more than 2,000 newsagents Australia wide. The business will be managed by MyNewsPlus Pty Limited, founded specifically to develop and manage the on-line sales and delivery infrastructure for MyNewsPlus.
Commerx1 has been tasked with the design, development and implementation of the MyNewsPlus technology and logistics infrastructre. Commerx1 is a consulting company which specialises in the development of e-commerce software and fullfillment solutions.
I would be interested to know how they will be licenced and by whom.
Newsagents considering getting involved in My News Plus ought to research Ross Whitehead. Click here to see what Queensland Fair Trading had to say about him. Then click here to read a story from ZDNet from 2004.
Once you read the two reports above and look at the My News Plus website you can see a pattern. While newsagents need to form their own view, when asked for my opinion I have said that I would stay away from My News Plus.
While I am pleased that ACP reduced our supply for their latest Weeknights Fast & Fabulous cookbook, we still received around twice what we could reasonably expect to sell – even in today’s marketplace of strong interest in food titles.
For a company which demands on time settlement of accounts by newsagents and often pursues this with ignorant aggression, it is disappointing that the supply model remains unfair to newsagents.
This title has a three month on-sale so why not provide me with 33% of my expected sales and use the Sales Based Replenishment model to provide additional stock when sales show that this is necessary. That would be fair in terms of demands on retail space and newsagent cash.
Better still, why not give newsagents absolute control over supply? This makes sense given that we are responsible for paying for the stock. This is where the model is half pregnant and grossly unfair toward newsagents.
By supplying the stock up front as ACP has done for this title and its other long shelf life titles makes newsagents ACP’s banker in many respects. Sure we will ultimately be credited for unsold stock but in the meantime ACP has our cash and given their debt situation I am sure it comes in handy.
I would expect that somewhere within ACP the cash flowing from newsagents for this and similar long shelf life titles is reflected in their financial modelling.
Supplying more stock than we could reasonably expect to sell is effectively a request for us to provide a loan. This is more true for ACP than other publishers since they own the distribution company and, I expect, have faster access to the cash newsagents pay for these long shelf life titles.
I like the look of Weeknights Fast & Fabulous but I do worry that it will struggle in the more competitive food space of today. MasterChef is a monster of a title. Delicious is improving. Better Basics is hot! Donna Hay continues to cut through with stunning covers. The bar is higher today than a year ago. Food titles need to clear that higher bar if they are to at the very least achieve the sales they achieved previously.
Just as the iPod led the way in how we consume music and cleared the way for a range of competitive devices, the iPad is now being joined by more tablet computers. The Samsung Galaxy Tab is the latest. While Adam Turner at the SMH is not a fan – read his review here – having another device in this space will extend the migration of news and information consumption from print to digital.
We have the $20 million superdraw this Saturday and a jackpot the following Saturday since last Saturday’s division did not go off. This gives us two weeks of bonus Saturday lottery traffic.
This Saturday’s draw is now $24 million giving is one week of bonus traffic and not two as appeared to be the case earlier in the day.
Superdraw sales are already very good. The unusual nature of the following Saturday’s jackpot gives us an opportunity for some additional retail fun.
