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

Month: July 2013

April – June 2013 Newsagency sales benchmark study results

Overall newsagency sales decline. 57% of participating newsagencies reported a decline in revenue. This is an improvement on the previous quarter. Of those reporting a decline, the average was 4% – also an improvement. Of those reporting growth, the average was 3%.

Traffic. Customer traffic was down for 54% of newsagents recording an average decline of 3% in the number of transactions.

Basket depth. 52% of newsagents reported a decrease in basket size (items in the basket) with an average decrease was 1.4%.

Basket value. 42% of newsagents reported an increase in basket value – with an average of 3.1%. While newsagents are selling fewer items, they are selling more expensive items.

Product mix. Traditional newsagency lines – newspapers and magazines – suffered the most, again.

Discounting. The decline in discounting identified in the last two quarters has continued with only 18% of newsagents undertaking discounting of any significance.

The gap between the performance of the traditional newsagency and one chasing change growing. The traditional newsagency is the type of business reporting the most significant decline whereas the newsagency pursuing new lines is the type of business reporting growth.

This newsagency sales benchmark study is based on an analysis of sales basket data from more than 150 newsagencies – city and country, shopping centre and high street, banner groups (various) and independent.

Benchmark results by key departments:

1. Magazines. 71% of newsagents reported an average decline (in units) of magazine sales of 9.1%.

Women’s Weeklies is the category reporting decline in more stores with 83% of all newsagencies in negative. The average unit sales decline for the category was 9.6%. Women’s Weeklies accounting for, on average, 25% of all magazines sold in a newsagency. What are newsagents doing about this? Not enough from where I sit.

I expect weekly sales to be even more challenged in the second half of the year as a consequence of the change in magazine distribution days. I think this will drive more people to get their magazines from supermarkets. I don’t want this to happen but I worry it will because newsagents will not fight to win retail let alone win magazine shoppers.

Magazine categories doing okay are: special interest, sport & leisure, craft & hobbies, home & living and partworks.

The number of newsagencies reporting declines above 25% is most concerning.

2. Newspapers. 81% of newsagents reported an average decline of 5.3% in newspaper sales. Regional newspapers did not suffer as much.

3. Greeting cards. 55% of newsagents reported average growth of 3.2%. Of those reporting a decline, the average was 3.8% with some as high as 18%.

4. Stationery. 62% of newsagents reported an average decline of 2.3%. This continues a trend in newsagencies in relation to stationery. What are you doing about it?!

5. Ink. 49% of stores participating in the study separate ink sales data allowing further analysis. 41% of these stores reported ink sales growth of 3%.

6. Gifts. 61% of the newsagents in the study have a separate gift department. Of these, 53% reported average year on year growth of 4%. This shows a slowing of gift sales growth. The way to arrest this is better buying and better in-store engagement. Standalone gift shops are vulnerable and we can take more business from them.

7. Plush. 7% of newsagencies report on plush sales in a separate department. I recommend this. A reasonable sales benchmark for plush is revenue equal to 25% of card revenue. In stores reporting on plush, sales are up on average 26%.

8. Tobacco. 62% of stores with tobacco products reported a decline.

9. Confectionery. 59% of store reported an average decline of 8%. This category is in trouble in our channel.

10. Toys. 838% of stores with the department reporting growth of just 3%.

Newsagencies continue to be good businesses to own. They respond to attention. There is good evidence of this in individual store data I have seen. The average newsagency with a retail model 10, 20 and 30 years old is the type of business in trouble. It’s unlikely to be doing anything to insulate against the changes we see impacting traditional lines.

Newsagents need to understand that growth comes from management and shop floor attention to products more so than agency lines.  If the benchmark data I see evidence of local store engagement driving better outcomes. This is why I say newsagents need to decide if they are going to be agents or retailers.

The best type of newsagency to own continues to be the one where you have the most control over what you sell.

We create our own luck, now more than ever.

This benchmark study is not a piece of fiction. It’s from a broad cross-section of newsagency businesses. It reflects what is happening in newsagencies. For what it’s worth I think we need to:

  1. Fix magazines so we own the category again.  Too many newsagents are doing the bare minimum and their sales are suffering. The declines I am seeing need not be as bad.
  2. Take stationery more seriously by mounting a challenge against the majors.  I think too many newsagents have become lazy while others have taken this business from us.
  3. Refresh greeting cards to grow beyond our 30% (or thereabouts) of all card sales.  Card companies live engaged newsagents.
  4. Run our gift department as if it was the only revenue you have got. You are competing with gift shops with little or nothing else. They are usually tough competitors. Unless you match them they will win.
  5. Use plush to attract shoppers who will buy other items.  I own newsagencies that will top $80,000 in plush sales this year. I know what I’m talking abut.

Too many newsagents are waiting to be told what to do. It’s your business, your money at stake. Engage as if your future depends on it!

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Newsagency benchmark

Gift pack helps drive InStyle sales

Even though it’s been a challenge to display the latest InStyle magazine is selling well thanks to the free hair products bagged with it. We have placed this issue with the gift in our feature magazine display stand on the lease line at the front of the store as well as the usual location with women’s magazines.

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magazines

News Limited swings punches at Fairfax

The Media pages of The Australian yesterday led with Fairfax shortens print timetable, a report claiming that Fairfax insiders leaked that the timetable of retreat from print had been shortened. Fairfax management yesterday denied the report.

This report is the type of punch that News Limited swings at their biggest competitor, Fairfax. The frequency of punches has increased recently. That the news report is freely available and not locked behind a subscriber log in says that News wants this story to reach as many eyeballs as possible. Other reports from The Australian yesterday remain hidden behind a subscription login.

It would suit News if Fairfax did make a move on the print days for its capital city dailies so its understandable that then company uses its newspapers to further its own agenda. It’s something News has done for years.

The challenge for Fairfax is that the scope of the turnaround being attempted is enormous and the diversity of the company quite narrow, requiring the benefits of the turnaround to come from diminished operations.  The company under Greg Hywood has aggressively cut costs and paid down debt, all good moves from a financial strength perspective. The unknown is where the company will end up and from a newspaper perspective, where print will end up.

The real issue for the future of the print editions is to create products people want to purchase in the printed form.  Print sales will determine when the print editions are cut as Hywood has said.  If I was in control of the print product I’d take a fresh, left field, look at the content. I’d be looking for ways to make the print product more locally relevant. It’s rare I reach for a newspaper for news. I do, however, reach for a newspaper for perspective and longer form reporting. The challenge is that as I think about that it’s obvious that such content does not need to be and probably cannot be daily.

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Media disruption

Pixi Photo in administration

The Pixi Photo group was put into administration yesterday. They operated photography and printing services in major retailers across the country. The administrator said that the use of digital devices for sharing photos had hurt revenue.

Connect this story with the downturn in ink sales reported by ink retailers and the decline in copy paper sales and you get a sense of the shift to digital content being shared in that form more rather than hard copy.

Often here I write about the disruption to print media from digital platforms. We are seeing an equal level of disruption to other print related activities such as printed photos and printed documents.

Newsagents need to take these trends into account in their business planning.

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Media disruption

Preparing for the new Smurf movie

I was in Hong Kong on the weekend and saw Smurf products displayed in several stores including the shop in this photo.

What impressed me was the range of products on display from a variety of suppliers. The display presented good ideas for preparing for the launch of the new Smurf movie in Australia later this year.

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Newsagency management

Newsagents could have sold more copies of Locomotives of the World partwork

The supply of the Locomotives of the World partwork is another example of how the distribution model does not achieve the sales it could. I know of newsagents who could have sold more stock had the allocation more accurately reflected local interest in trains. I know of others who will return their supply because of no interest.

had newsagents been able to control their supply of the first issues of the Locomotives of the World partwork I have no doubt the publisher would have achieved a better outcome.

Magazine distributors prove time and again that they are not expert at what they do.

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magazine distribution

Just read: Killing Fairfax

Killing Fairfax is an excellent read, I couldn’t put it down over the last couple of days. Beyond telling the story of how successive leaders of the once giant media company missed online opportunities, the book takes us deep into Australian media family rivalries thanks to excellent on the record sources.

Newsagents wondering about the future of newspapers ought to read this book. It’s pages are drenched with insights newsagents could benefit from as they plan their future.

Beyond the question of the future of print, this is an excellent business book and most instructive for businesses facing the challenges of disruption to the model they were founded.

Kudos to author Pamela Williams. I highly recommend Killing Fairfax.

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Media disruption

Vogue discounts digital edition 50%

Vogue Australia has announced a 50% discount digital subscription offer until Aug. 1. They pitch the offer as a thank you.

At Vogue, we’re constantly overwhelmed by your ongoing support. To say thank you, we’ve teamed up with Zinio for a very special offer.

But wouldn’t the people they want to thank already have a subscription?

8 likes
magazines

Terrific Hugh Jackman magazine display

I love this Hugh Jackman display created by a team member at one of my newsagencies. It’s in the men’s magazine area toward the rear of the store.

I love the display because of its intensity. It captures the drama of his most famous character. It forces you to stop and notice … and hopefully pick up one or more of the magazines being promoted. That’s what displays like this are all about – getting shoppers engaged with what we sell.

This display is a good example of promoting multiple titles. While publishers want us to promote their title separately, often we get more value as retailers by promoting more than one with a unifying theme.

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magazines

Sunday newsagency management tip: planning for 2020

A few months ago I shot a video for newsXpress members about planning for 2020. It looks specifically at challenges categories and growth categories in the context of my Newsagency of the Future series.  I am sharing the video here as today’s newsagency management tip to encourage newsagents to work on their future. No one else will do this for you.

Of course, there is much more to say about the categories in decline and the growth opportunities. That’s a discussion more to be had on a more confidential basis and considering the situation of each business. This video is intended to open a discussion and to do this with an insight into the thinking of what might happen between now and 2020.

My work in this area predates the News Limited T2020 project by several years.

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Management tip

Sunday newsagency marketing tip: show off your knowledge with an in-store training event

Newsagents regularly tell me that they have better product knowledge than their competitors. This is usually mentioned in relation to stationery, ink, cards and magazines.

My tip today is in the form of a question: if you think your product knowledge is better that your competitors how are you leveraging that leadership? Being more knowledgeable is only useful if you use it.

One way to leverage knowledge is to host a training event. get support from a key supplier, offer some prizes basic catering and promise to deliver valuable knowledge on products you sell. In the stationery area, for example, you could share insights into how to save money or knowledge about choosing the best pen. The topic of the training is not the key here – that you offer training to leverage your knowledge is the key.

This is an excellent way to promote your business, by showing off something unique to your business, your product knowledge.

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marketing

Onesies show up the innovative newsagents

Onesies have featured on Facebook and Pinterest this week with office pyjama days raising money for charity and last night on TV with them being worn on the Living Room show on Network Ten.

Newsagents who have had onesies in stock leading up to and during Winter need to be congratulated – you;’re the early adopters. Newsagents reading this and thinking whether they should get into this popular and good-margin fad need to spend more time thinking about what you could sell by being an early adopter.

Whereas in the past what was sold under the shingle of Newsagency was defined and rarely varied from, today’s retail landscape and the challenges newsagents face mean that what we can sell is only limited by our imagination. Onesies are a perfect example of this. I know of newsagents who did several thousand dollars in sales before Winter got going. Well done to them!

The onesies phenomenon is an excellent example of the diversity of ‘gifts’ we can sell.

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Gifts

The ATO continues to do nothing to address appalling treatment of newsagents

The questions from customers about the tax packs keep coming and we keep answering them and the ATO does nothing but talk. While many newsagents have written to their members of parliament and the issue has received considerable media attention, nothing has been done. Newsagents continue to provide a valuable public service for free.

As I wrote two weeks ago, this move by the ATO is, in my view, a breach of their charter. That they continue to ignore newsagents at the coal-face is evidence of how out of touch the ATO is with the real world. Shame on them.

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Ethics

Moderate interest in the royal baby magazines

We saw a sales bump for the royal baby special editions of magazines in my newsagencies. No mad rush, just a bump. hence my labelling interest moderate.

As the photo shows, in one of my stores we promoted several of the magazines with newspapers – as well as their usual location.

In another of my newsagencies we promoted the magazines on the lease line, facing into the mall, to generate traffic. We got a bit of that but they sold equally well from the usual location for the weeklies.

If I had to call it after a day I’d say Who is benefiting the most. Certainly that is what I am seeing in my businesses.

There seems to have been a blip with OK! supply. We did not get the full allocation making co-location challenging.

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magazines

21st Century Australia party uses newsagents to distribute election propaganda in the form of a ‘magazine’

Yesterday some newsagents received 21st Century Australia from magazine distributor Gordon & Gotch. Retail price is $9.95 and the on sale period is around three months.

21st Century Australia is not a magazine. It’s election propaganda from a political party: 21st Century Australia. Go to their website and see for yourself.

Indeed, go to their website and download the whole magazine for free. Seriously.

The leader of the 21st Century Australia Party is Jamie McIntyre. He calls himself an educator, author and mentor.  Reading through the website he comes across to me as someone peddling a familiar rags to riches story. There is little in the way of substance. From what I can see, his businesses don’t appear to create real value or engagement for those connected with them.  Maybe my suspicions are on alert because he has Max Markson as his publicist.

If he uses people the way newsagents are being used for this ‘magazine’ no wonder he’s done okay for himself.

Check out the report by Mark Hawthorne in The Age about an allegation that Jamie McIntyre is faking Twitter follower numbers. Also check out The Sydney Morning Herald report from 2011 and issues with ASIC. While you’re researching him you might want to check out this.

This ‘magazine’, 21st Century Australia, should never have been sent to newsagents. It’s not a magazine. Someone in Gotch should have stopped it getting on the trucks. If not for the election propaganda nature of the content then for the design. It’s dreadful.

Our glorious magazine distribution model is such that we have to pay to send this junk back. Gotch has declared it a full copy return. So even if newsagents early return this title they have to pay freight as well as the labour handling costs.

This is another example of what’s wrong with the newsagent magazine distribution model. We get sent this junk and have to pay ourselves to handle it. None of our magazine competitors get this junk. It makes us less competitive. It’s this stuff that is driving more newsagents to shrink engagement with magazines and some to exit the category altogether.

The magazine distributors say the sale or return model protects newsagents. This is nonsense. Labour, freight and storage costs for junk like this ‘magazine’ are a cost of business newsagents face that our major competitor magazine retailers do not face.

Gordon & Gotch has ethical social responsibilities to newsagents, responsibilities they have failed to fulfil with the distribution of 21st Century Australia.

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Ethics

Travel agents hit back at US Woman’s Day magazine

The response to 9 Things Travel Agents Won’t Tell You in the US Woman’s Day magazine has been ferocious in social media. Twitter and Facebook are alight with travel agents striking back at the magazine, seeking to hurt it commercially for an article they claim will commercially hurt them.

Not only do publishers have to create a sustainable model in a mobile and digitally enabled world, they need to be able to handle the fast assembling of a crowd baying for blood of what they publish.

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Media disruption

Good gift but no help with magazine sales

The free bamboo kitchen utensil with the latest issue of Cook Vegetarian is good value in my view but it’s done nothing for sales. We’ve had the full cover on show at eye level – showing off the gift. We’ve seen no uplift. We’re in gift with a magazine season right now with plenty of titles bagged with gifts from umbrellas to cosmetics to beanies. While I get that the gifts usually help drive sales, flooding the market all at once does make shoppers a bit gift-shy, it takes away the specialness of the gifts.

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magazines

Come on magazine publishers where’s your support for newsagents?

Both Bauer and Pacific have been using social media to promote their special issues out early with coverage of the royal baby. Their engagement was a perfect opportunity to remind shoppers to pick up the magazine at their local newsagency. I’ve not seen them do this.  Why should they promote us? … because they say we are important and because we will do more to support these issues than supermarkets, petrol outlets and convenience stores. They only do extra when they are paid extra to do it.

Newsagents sell more magazines than all other retail channels combined.

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magazines

Updating the royal baby poster

With the announcement of a name for the royal baby we updated the poster. We were tempted to go with boy george in the headline but baby worked better.

Early indications are that interest will be strong. My feeling, however, is that interest will fade faster than it would have for this content five or ten years ago. That’s the nature of the market today for short shelf-life news.

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magazines

Promoting Friday’s royal baby special issues

We have an A3 poster out promoting the special issues of magazines out tomorrow with royal baby coverage.

We’re currently the only magazine outlet in the shopping centre promoting this. The supermarkets won’t. To me it’s a good way to promote a point of difference – by giving shoppers a heads up and doing it with a professional looking poster.

This promotion is about our newsagency more than about individual mastheads.

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magazines