A blog on issues affecting Australia's newsagents, media and small business generally. More ...

Month: May 2013

Swamped with applicants for junior newsagency role

I placed an ad on Seek for a full-time junior for one of my newsagencies. I was not happy with resumes being handed over the counter so decided to pay for a proper da.

Within twenty-four hours I had to take the ad down as I’d received more than 200 applications.  Now I’ve used Seek for this type of role previously – but I have never received this number of applicants in the first day.

Beyond the extraordinary response, I am enjoying looking at the diversity of applicants. Most do not come from a newsagency background and I think this is important for our future in the business for which we are hiring.

We are looking for candidates with initiative, fresh eyes, excitement and a love of small business / independent retail.  While it’s a challenge to find these qualities in a junior, I have resumes from some who show terrific promise.

10 likes
Hiring employees

UK mums target newsagents in porn campaign

Check out a video targeting how adult-themed titles are displayed in retail, including newsagencies.  The video was produced for National Children’s Day in the UK.

This is a contentious issue for retailers. We don;t control the regulations nor do we produce the product. Too often we don;t control whether we carry the product.

3 likes
Ethics

Directioner the One Direction experiencing flat sales

We’ve sold 8 copies of Directioner, the One Direction magazine. I have checked with some other stores and its equally flat there.  We pushed the title for ten days with placement on the lease line, facing the mall. We’re now pulling back as we need the space for products that will deliver better GP for the space commitment.

0 likes
magazines

Promoting Harpers Bazaar because we want to

We are giving Harpers Bazaar time in the spotlight this week with prime positioning display – because we want to and not because of the pushy Bauer representatives who visit and try and tell us what to do. This is a special issue, one we are happy to support with tactical displays to drive sales.

I am over suppliers sending reps to my stores to rudely demand space for their product. If they want to pay extra for the space then okay but since they don’t – stop these rude visits.

2 likes
magazines

Update on the News Limited move on pricing in some parts of SA

News Limited approached me earlier this week following my post about their imposition of a new freight charge in some parts of South Australia. They provided a press release / statement on their position. I did not publish it here as it did not add to the situation and I didn’t want to put their case. The ANF in SA has published the News statement, unfortunately.

My view is that what News is doing is wrong. They are passing on freight costs selectively.  Also, they are not communicating clearly and do not appear to be communicating with customers – but that may come with time.  The ANF should be as clear on its position.

News should apply freight to all non suburban deliveries – user pays right?! Their selective approach is problematic for them. They could also have produced advice for newsagents to place with the products. Finally, they could have a cover price for the affected areas – to show it’s a News charge and not a newsagent charge.

There are times when publishers treat newsagents as agents and other times when they treat newsagents as retailers. They can’t have it both ways.

18 likes
Newspaper distribution

Balancing the business is vital for small business retail newsagents

On Sunday I published a post about the importance of calculating what you need to earn per square metre of retail floor space.  I want to revisit that topic here in this post.  But first a story…

I know a newsagent who is growing sales of magazines, gambling products and cigarettes.  They have a good business in a location that has become a convenience for new traffic.

The growth in convenience traffic has come at a cost as sales of higher margin items have fallen.

Here is their challenge: revenue is up and GP is down. The business is worse off for being busier in some categories.

This is why we need to all know what we need to make per square metre of our stores … so we can chase the GP necessary for us to pay the rent and other fixed costs we have in running our business.  We need to work hard at balancing our business.

By balancing I mean managing the growth of low margin items versus the growth of high margin items. Yes, it’s tricky as one can drive sales of the other – but maybe not as much as we think.  Our data can tell us just how much in our particular business.

A spike in a low margin product category – and by low margin I mean anything at 25% or less – could hurt the business overall.  However, growing higher margin product sales is much harder work. It has to be because of the size of the rewards available.

Now more than ever, newsagents need to balance their business – balance their sales based on GP – for the future health of the business.

No supplier will do this for you. It’s up to you.  I’d be happy to engage with any newsagent wanting to work on this.

11 likes
Newsagency challenges

Finding space for nourish, another magazine launch

nourish is another magazine launch we have to make space for. This one is challenging since it looks like a guys magazine aimed at the fitness section but it could also fit in general health as well as food.

We have it with men’s health and fitness titles. I’d love to know where others have it.

Notice the card sticking out of the magazine – the nourish publisher is taking space from titles behind it in a move sure to upset the affected publishers.

1 likes
magazine distribution

Promoting issue #2 of Collective

We are promoting issue 2 of Collective, now called renegade Collective after a stoush with the News Limited owned messenger news group, with our women’s magazine. We have it placed here because this feels right given the cover – even though this is a far more broadly focused magazine than the cover indicated.

We are planning a staff review for the magazine to help draw attention to the diversity of the title beyond what it looks like.

2 likes
magazines

Small business lost in Canberra this week

Small business was lost in the budget and the budget reply in Canberra this week.  For me, the best example is the hundreds of millions in benefits delivered to the free to air TV networks to enable them to fund structural change while small business newsagents continued to be ignored as we move through a more significant structural change of our own.

What did I expect? Not much … but this does not block my disappointment.

Politicians care only about where their money comes from and those with the loudest voices. One day maybe they will understand that investing in small business can deliver excellent rewards.

10 likes
Ethics

Lottery sales in South Australia to unlock fuel discount

In a move that I expect will divert purchases from newsagencies, a South Australian fuel retailer has announced plans for substantial fuel discounts for lottery purchases and other product category purchases.

With this happening in SA, I wonder how long before we see it in the 7-Eleven owned Mobil fuel outlets.

When Tattersalls did the deal with 7-Eleven they said Tatts products would be at the counter add-on. Over time that has changed with lottery tickets featuring in advertising to drive traffic.

Now we have this announcement in SA yesterday.  I don’t want to call it prematurely but I do suspect that this move is a game changer. It will certainly get newsagents looking at the lottery category more carefully. How can they compete with this.

And to those outside SA, On the Run is more community connected and more local than the supermarkets. I’m told there will be more trust in this being a genuine offer that is the case with Woolworths and Coles fuel discounting.

In the Newsagency of the Future series I’m in the middle of I challenge newsagents to contemplate business without lotteries.  It’s a value question, one that must be considered. Now, in the face of yesterday’s announcement, it is more timely than ever.

If you have lotteries in your newsagency and had a fuel outlet nearby offering a discount off fuel with a lottery ticket how would you react? You can’t do nothing for to do that would invite migration.

On the Run has declared war on lottery product sales with this move. Newsagents need a plan for confronting this challenge.

8 likes
Lotteries

Cool retro lava lamp display

Check out the display promoting retro lava lamps created by the team at one of my newsagencies. This is very cool and very clever. They sourced some retro carpet from the Reject Shop and created a sign and a backing that connected visually with the theme.

All of the elements – carpet, backing sheet, sign and product – combine to tell a story and draw shopper attention. It looks much better than simply putting the products on the shelves.

This display is located at the corner of the counter, near our gift department. It shows us off as being different and connects shoppers with the retro fun of the lava lamps.

3 likes
retail

Promoting under the magazine

We’re giving up a bit of space below Men’s Health to promote the Win a Car competition from pacific magazines with this placement of the header below the magazine.

While it takes a pocket below, it’s the type of change that could be noticed as it’s not usual and clearly promotes the detail of the competition.

We don’t do this often. In this case, the collateral works a treat – hence our use of it below Men’s Health. I’d encourage other newsagents to try this if they can create the space.

2 likes
magazines

New generation shopper loyalty program breaks free from me-too VIP / loyalty cards

For some time I have thought that points based VIP / loyalty cards offer retailers little differentiation. Besides them being in use in many retail businesses, I have felt there is a real doubt among shoppers as to their genuine value.  They are decades old after all.

FlyBys and Everyday Rewards are the market leaders in Australia and they educate shoppers that they need to spend thousands to get even a small reward. No matter how much small business retailers might say their program is different, if it’s points based it will be considered to be the same as these programs and offer similar value.

Shoppers are fatigued by loyalty programs. Some doubt their value. Others are sick of carrying cards. Others don’t like the promotions sent.

Retailers launching a VIP card today rarely offer anything new. Too often they reward shoppers for average behaviour.

It was with this background that I got involved in a very different approach to shopper loyalty. I wanted something that got shoppers behaving above average so that my business performed above average.  I am fortunate to have a software company through which I could play with my ideas.

Around a year ago through my software company I started work on creating a front-end approach to shopper loyalty, an approach that did not use points or require shoppers to carry cards.

In February this year I started a secret trial in one of my newsagencies and soon thereafter expanded this to a second newsagency. now, three months later I have an excellent set of data showing shopper behaviour. The data show how the new approach to loyalty, called Discount Vouchers, changes shopper engagement on the shop floor – driving basket depth and margin dollars banked from shoppers.

More important, Discount Vouchers give me a point of difference to the decades-old VIP and loyalty card programs. This point of difference is driving word-of-mouth and generating its won traffic.

I have personally had shoppers tell me how their behaviour has changed because of the Discount Vouchers. In one case, two months in, we won a customer who will spend $1,200 a year solely as a result of this program.

I wanted to trial it in secret as I was not sure how such a radical approach to shopper loyalty would work in a newsagency.  Now, three months on, and comparing my own experience to the experiences from trials in three non-newsagency retail businesses, the results are the same. Shoppers love it.

From a retail management perspective I control voucher value and the items on which the value is calculated.  I also control what can be purchased using the voucher. I can also change these business levers at any time without a need to retrospectively change past vouchers.

There is no paperwork for shoppers and no paperwork for sales staff. This program is easier that VIP and loyalty cards, it saves time.

When shoppers redeem a voucher we gather details to go in the running for a monthly prize draw – harvesting contact details for future marketing.

Having run a VIP / loyalty card program and other loyalty programs, I am confident that in Discount Vouchers I have a point of difference appropriate to today’s shopper and able to give me a competitive advantage in a world of shopper fatigue with VIP / loyalty cards.

18 likes
Newsagency benchmark

Too soon for Art of Crochet repeat

The re release of the Art of Crochet part series is too soon.  Judging by our initial allocation they must have a ton of stock left in the warehouse.

Our sales history for this title indicates that we will be lucky to sell 30% of what they have sent us so the distributor has just cost us a ton in freight to send the unnecessary stock back.

It is scale outs like this that make newsagents less competitive than supermarkets when it comes to magazines. It’s a pity the competition regulator refuses to engage on this.

2 likes
magazine distribution

Tapping into the Iron Man franchise

Iron Man is huge around the world following the release of the latest movie, Iron Man 3. The movie is breaking box office records and reinforcing interest in the brand. We are tapping into this with placement of the Iron Man related titles in prime position between entertainment and kids magazine titles.

0 likes
magazines

News Limited hits some South Australian newsagents with a freight charge

News Limited is hitting some newsagents in regional South Australia with an 80 cent freight charge on The Advertiser, the local SA newspaper, Monday to Friday and $1 per newspaper for weekend titles.

This is an extraordinary charge, one newsagents will have no choice but to pass on to consumers.

It will make newsagents look bad applying a price over and above the cover price printed on the product. It’s a move that us upsetting some newsagents as they think about how regular customers and holiday markers will react.

I am not sure how News has decided the areas to be hit with this 66% levy given that some rural and regional areas of South Australia are hot being charged while others are. Some in the areas being charged feel discriminated against and I am inclined to agree with them.

Beyond the charge itself, the approach by News adds to the workload of newsagents – creating something that they could seek additional compensation (from customers) for.

16 likes
Newsagency challenges

Reading what we sell

After reading Political Animal by David Marr, sent out by Network Services, I thought I’d like more time to read more of what we sell.  This is an interesting book. It plays out in an unexpected way and that’s why I’d like to read more of what we sell – to challenge assumptions. While it’s impractical it’s also important – knowing more on what we sell.

3 likes
Brand retailing

Big business: the power of one large account to force suppliers to change

Check out a quote from Richard Goyder, CEO of Wesfarmers, from a couple of weeks ago in The Australian Financial Review:

Any business in this country has to be looking at how efficient it is. Our business is not to prop up inefficient suppliers but supply great products to our customers in the best way we can.

This is very true. The problem for newsagents is that we have contracts in place with Gotch and Network that see us propping up inefficient suppliers. We are treated differently to our competitors by these companies, with less efficiency, and this costs us tremendously.

There was a crisis meeting of all newsagent associations almost a year and a half ago about this and to my knowledge nothing has happened.

I predict that once the issue of newspaper home delivery efficiency and value is resolved, more newsagents will turn their eye to the value of magazines. I have already heard of several newsagents actively considering closing their magazine distributor accounts because of inefficiencies they cannot overcome due to the poor business practices of Gotch and Network.

Magazine publishers should get engaged in the issue of supply efficiency – otherwise they will find newsagents not wanting to carry the category.

Richard Goyder is lucky, his one account is so big that suppliers must take notice.

20 likes
magazine distribution

Stunning look for Real Living

I love the monochrome look for the latest issue of Real Living magazine. Indeed, the look has encouraged us to put this issue in the spotlight. In addition to excellent full cover placement as shown in the photo, our plan today is to promote the title outside its usual space – with an appropriately monochromatic display.

Looking down the aisle of magazines, this issue of Real Living stands out. Kudos to those behind this look.

2 likes
magazines

Promoting Slow Cooker 3

We are cautiously promoting the AWW Slow Cooker 3 cookbook. I say cautiously because Slow Cooker 2 was a dud for us – on the back of Slow Cooker 1 being an amazing success selling between 200 and 300 copies.

Others flocked to the slow cooker space once they saw the success AWW had with their first slow cooker title and this segment saturation, in my view, diluted interest in Slow Cooker 2.

We are promoting Slow Cooker 3 in three locations this launch week including the location in the photo – with our range of AWW cookbook titles.

1 likes
magazines

More evidence of structural change in retail

The Australian Financial Review today has a report about how David Jones is dealing with structural change in retail. I urge newsagents to read the article.

The key takeaway for me is the acknowledgement by David Jones’ CEO Paul Zahra of the structural change confronted by retailers. The scope of the structural change is considerable, it goes to the very foundation of retail – what people buy, when they buy and how they buy. It challenges what we invest in our businesses and our plans for our future.

I cover this in the Newsagency of the Future workshop series.

6 likes
retail

One Direction lollypops demonstrate abuse of the newsagent magazine distribution model

We are early returning the two boxes on One Direction lollypops and patches we received with our magazines last week. We should never have been sent these in the first place.

Besides the lollypop / patch packs not being magazines, I have no interest in selling One Direction product for 25% GP.

The other issue is that we have nowhere to place them except at the counter and I use that space for products for much higher gross profit.

I have access to a broad range of more relevant One Direction product from which I can achieve 50% gross profit and more. I’ll take the magazines but nothing else.  I don’t need a magazine distribution company getting into this space – their interests are not aligned with mine.

That newsagents have been sent this and have to fund its return is another example of the disadvantage we face over other retailers selling magazines. The costs of being in the magazine space are far greater for us that for petrol, convenience and supermarket outlets. This disadvantage could hinder competition if newsagents get out of magazine altogether because of our continued inability to manage magazine (and other product supply to our businesses by magazine distributors.

Having to pay to send this product back disgusts me.

27 likes
confectionary

Multiple locations for for My Kitchen Rules cookbook

Our strategy of displaying the My Kitchen Rules cookbook in multiple locations worked for us. At three separate locations – the front of the shop, mid point and toward the back – we have this product on show, ready for purchase as part of our Mother’s Day strategy. We saw an uplift in sales. It was the free standing unit near Mother’s day gifts that worked well for us. We will pull back to two locations now that the season is over.

2 likes
magazines

Sunday newsagency marketing tip: use a celebrity to drive a traffic spike

Ricky Martin caused havoc when he visited the centre where I have one of my newsagencies yesterday. One entrance to our newsagency was blocked by people lined up to see him. The other entrance was hard to navigate because of the thousands wanting to see him on the stage just across from us.

The marketing people for shopping centres hire celebrities to spike traffic. This only works for the retailers if their sales are up. We can’t tell in this store since it’s our first Mother’s Day. The feeling, however, is that the Ricky Martin crowd hampered our sales by blocking traffic and making our part of the centre less appealing for shoppers who may have purchased Mother’s Day cards and gifts. But we don’t know for sure.

Despite the experience yesterday, I am all for newsagents using celebrities to drive a traffic spike. The keys are to choose a celebrity relevant to what you are promoting / selling and to live within your budget.

For as little as $1,000 you could get a celebrity in-store to boost a promotion. While anyone with a national profile will cost considerably more, a local radio personality, a local TV personality or a local reality show contestant could be accessed for this type of money. Promoted appropriately and for a decent amount of time you could get a good return on your investment.

If you want to get together with some nearby retailers, you could get someone with a higher profile for around $5,000. Well known comedians and current chart singers would appear for this amount – especially if they have something of their own to promote too.

We can’t rely on the name or type of our business to attract shoppers. We need to get outside our four walls and actively promote our shop, we need to grab only people in our catchment area and drag them in for a reason beyond what they remember about our business.  And, when they get there, we need to excite them and get them happily spending money with is.

10 likes
marketing

Sunday newsagency management tip: calculate what you need to earn per square meter

It’s important to know how much each square metre of retail space costs you so that you have a gross profit target when assessing the performance of stock. What I propose is not conventional. However, I have found it to provide a more genuinely useful assessment for newsagents.

Here are the steps I suggest:

  1. Calculate your retail space. Work out how many square metres of customer accessible retail space you have. Do not include the back room or space behind the counter.
  2. Calculate your costs. Tote up all the fixed or semi fixed costs fo your business: rent, outgoings, labour, power, marketing, insurance etc. Do not include any inventory costs.
  3. Divide your costs by your space. This gives you an annual cost a cost per square metre of retail space. It’s the gross profit you need per square meter to cover your costs.
  4. Divide the cost by 52 for the cost per week or your trading days per year to get a daily cost. WARNING: the daily cost per square metre is not for the feint hearted.

Once you have the number, get your daily or weekly sales data for a department and work out where you stand. Find out what departments are working and what are not. next, find out what categories within each department is working or not.

While this sounds time consuming, you could just focus on one part of the business that interests you the most.

The result is data that helps you manage your business by numbers. The result will be empowering for you.

Good newsagency software can do this for you – return on floor space and return on shelf space.

 

6 likes
Management tip
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