Thanks in part of the prime location display featuring Pink created by the in-store team, we sold more copies of the latest issue of Women’s Health in two days than we usually sell in a month. If we can get the stock we should be able to achieve triple our usual sales.
Yesterday I completed another newsagency performance analysis, this time for a regional newsagency. It’s an interesting business with some terrific innovation (coffee, old style lollies) helping yet traditional products (stationery, magazines, newspapers) pulling them down.
The challenge is breaking free from a traditional and externally controlled past and creating your own future. It’s a common challenge newsagents face.
Here are my thoughts:
Thanks for giving me the opportunity to comment on your figures. I’ve done some research to ensure I have context and can see your local population is 2,500 and you’re almost 700k from the capital. I can see from Google street view that you’re in a high street situation with windows ion the street. The images suggest that heritage is important in the area.
I can see in your data comparing June through August 2013 with 2012 that business is tough.
- Overall revenue. Down 8%.
- Customer traffic. Down 7% or 2122 sales over the period. This is the biggest concern in the data. Traffic is the lifeblood of a broadly bases regional newsagency. What are you doing outside your business to bring new shoppers in?
- Cards. You sold 973 cards over the three months, an increase of 15%. While this is good, the changing nature of traffic generation for newsagencies means you need more from cards. When was the last time you refreshed your range? I can’t tell too much about what’s happening since most of your card sales are in unknown category – meaning the software has not been told how to allocate stock you bring in. This can be easily fixed.
- Cigarettes. Sales are down 13% and you’re doing around $2,500 a week in sales. Are you managing stock carefully? i,e, are you recording based on sales using the reorder report. It’s easy to do.
- Confectionery. Your 71% increase in revenue to well over $1,000 a week on the back of your old style lollies is working a treat. I also love your 339% increase in coffee sales to 1,160 units in the three months. These are two excellent moves you need to continue to drive harder. They are points of difference for you in your area – what are you doing to promote to passers-by on the street?
- Lotto. 27% increase in sales. Excellent result. Keep up with what you are doing – having fun and providing a good shopping experience (I can tell from your Facebook page).
- Magazines. Even though your sales are down 8%, your numbers are line ball with the average. What makes it hared to assess any further is that you don;t appear to be bringing in invoices electronically. This dumps all magazine sales into one category. It can be easily fixed so that there is more meaningful data for you to use. magazine sales data can guide plenty of other business decisions.
- Stationery. Sales are down 10%. Based on your sales your total stationery stock holding should be around $10,000. If you;re higher then either sales need to increase or your stock holding needs to decrease.
- Toys & Gifts. This is a break out success story with an 85% increase in revenue to over $500 a week. Note: I;d separate reporting of toys and gifts into separate departments. By not using meaningful categories I can’t comment too much more other than to note that based on your card sales I think you could grow gift sales by more than 100%. You can do this by using your =card category sales data to guide gift buying opportunities.
I’ve also looked at the full year on year comparison report you sent. I can see that revenue including lottery commission is around $680,000. Once I take into account your agency business (bus tickets, visa cards, postage etc), I estimate that your overall gross profit is between 27% and 30%. This is not enough.
Sometimes a business with less revenue but a considerably higher GP is more valuable.
If I were you I would sort out the data issues and get products into meaningful categories. I would then assess sales at the category level with a view to increasing gifts, toys, plush and stationery. At the same time I would also review my pricing policy and charge as much as I could for what I sell. You’re a remote business meaning you have a cost of doing business that should be reflected in your pricing. I would also make bold strong use of the shop window. Plus I would work to find a way to letterbox all homes within easy access to the shop to send flyers every two weeks promoting the business – especially coffee, confectionery and gifts.
It can be hard in a small town with a small business and limited financial resources. I have a graphic design person full time in my software company and would be happy to create flyers free for your use to help you market the business. The rest comes down to good product selection and hitting the footpath promoting the business.
In considering what to sell you do need to look at who is nearby you that you may hurt with expanding your range. I think you need to look at them thinking that it’s more important for you to survive than them.
I hope the comments help. I apologise for being blunt. Let me know what you think and send through any photos for specific display or other suggestions.
Many newsagents are in businesses that are being impacted by changing economic conditions as well as changing conditions around products being sold. It is important we chase change ahead of the wave. This business is doing that in several areas and while this work is delivering results, they need more.
We’re in an economy and retail channel that require is to be more vigilant than ever. We have to be the change agents in our newsagency businesses. No one else will do this for us as valuably as we can do it for ourselves.
While Asians in Australia love funky stationery shops like Kikki.K, Typo and Smiggle, in Guangzhou the only stationery I saw being sold was at this almost warehouse-like shop. Setup for space efficiency and volume sales. It’s located on the street in a busy business residential area. I walked past a couple of times and it was open day and night. Population size and labour costs drive this.
I was talking with a newsagent yesterday who is in the middle of a challenging finance review with their bank. The bank had a bunch of reasons to reduce the funding line to the business and the newsagent had not countered with anything. They are a distribution business and advised the bank abut the News Limited announcement. having now done their their relationship manager feels they can make a case in favour of the business.
Every newsagent should advise their bank about the News announcement at the appropriate time.
I’ve been in Guangzhou, China for the last few days on business and looking at retail. I was fascinated by the way they sell instant scratch tickets – on the street in this stall. I passed several. You sit, make your purchases, scratch and collect. There’s a community spirit around it. The games are run to raise funds for community charities. I love how the scratchie shoppers were engaged and not making a quick in and out purchase.
Footnote: business being what it is I connect with my newsagencies and other businesses while on the road so I don’t come back to a backlog.
Newsagents planning to attend their first Gift Fair in Sydney in a few days need to plan in advance. Read the access rules at the fair website and be prepared. If you turn up without the required identification documents you will not be allowed in. I mention this as a newsagent was turned away in Melbourne recently because they only had one form of ID.
I participated as a judge for the Maggies this year, the second year in a row. The Maggies recognise magazine covers of excellence. The judges choose the shortlist from submissions and the public can then vote on the winners. I cast my votes yesterday after careful consoderation of the finalist magazine covers in a range of categories. I like the criteria provided to the judges for selecting covers that:
I am grateful to represent retailers including newsagents as a judge.
Comments on a recent thread explored gifts for sympathy cards and it got me thinking about what we sell today that could work in this situation. This terrific range of soaps from Victorian business B Gentle would work as sympathy gifts – when you want to give something beyond a card. We sourced this range to appeal to our older customers and those who buy for older people. The range sells very well. It’s something to suggest as a sympathy gift.
When working with a newsagency business to explore gifts they could sell, I look at card and magazine sales as guide. These two categories can tell us plenty about a newsagency.
Several newsagents commented on Hello Kitty when the new partwork was launched recently. From what I can see in Australia and overseas Hello Kitty is alive and well. The mega-brand is being enjoyed by a new generation. But the older generation has not forgotten it by the looks of the window display I saw last week in Vans store.
As I mentioned here, we’re enjoying good success selling Hello Kitty gift lines along side the Hello Kitty partwork.
Brands are vitally important in retail and even more so in newsagencies as we transition our businesses from being general stores into more specialist focus retail outlets.
I heard from my newsagencies yesterday about the bagged discount pack of Woman’s Day and AWW. It frustrates me that I have no control on receiving these bagged discount packs. They take time and space & are loss-making for us. It is unreasonable that I’m forced into this situation. Every newsagent ought to be able to cancel these bagged discount packs if we wish.
We’re promoting the latest issue of Women’s Health magazine with this aisle-end display at the entrance to our magazine department. This issue should sell especially well thanks to Pink being on the cover – she has been on a sell-out tour of Australia for months. Her face on the cover alone should drive sales. Hence the prime placement for us.
I was asked to look at the performance data for what I’d call a traditional newsagency recently. As the following brief report shows, this is an older-style newsagency dominated by lottery sales. The sales mix is very concerning as too higher a percentage of income is coming from one source.
I have looked at your Monthly Sales Comparison Report for April through July 2013 compared to the same period in 2012.
I can see from the data that the business is struggling. Your main traffic generator is lotteries, accounting for 61.76% of your traffic. As lottery sales migrate online your situation puts you at risk as you’re not generating traffic for any other significant product line.
You need to act urgently to repurpose the business. The easy route would be to play in the convenience / agency space. The problem with this is that it’s nothing special and nothing you control as your own. With Australia Post nearby and offering high tech solutions in parcels, bill payment and other areas, I can’t see how you can compete with their mature and nationally marketed offer.
Once I strip out lotteries, dry cleaning classified ads and instant scratch ticket sales, you’re at $5,550 in sales. If I take out low margin and falling (at 16% YOY) tobacco sales you’re well below $5,000 a week.
I think you would be better off creating a pint of difference around other opportunities. For example, your data shows several opportunities I’d be interested in if I were you:
- Magazines. Motoring titles account for 13.28% of sales and sport at 6.9%. So, your shop has a reasonable male shopper skew. What gifts do you offer for males? I can’t tell because your gift sales data does not provide this detail. Women’s Weeklies magazines account for 23.8% of total magazine sales. Are you catering to women in your gift offer?
- Stationery. You’re doing $250 a week in stationery sales. If you have more than $3,000 invested in stationery stock then you;re grossly under-performing in this space.
Your business, in the data, looks like an old style newsagency, one that was built i the day of regulation and tradition. It’s time for you to break free and be a retailer exerting control over the business. You have to stand for something other than lotteries and magazines, something extra to generate net new traffic for you. the question is what is that? What can you offer that will bring shoppers to your business?
I can see you dabbling in gifts at $150 a week in sales. What’s working, what are the expansion opportunities.
You will do far better attracting shoppers for gifts and other items at 50% and more GP than if you focus on agent type business that earns you far less and relies on others to generate traffic for you.
The biggest challenge is whether you want to take control of the business, to break free from being a shopkeeper and becoming a retailer with a business plan. It’s hard work. I’ve seen it succeed in the most unlikely situations. The key is to engage aggressively targeting your goals and not what others say your goals should be.
Your data suggests that you need to act with urgency.
While I’d rather write a more positive report, this could become positive if the owner recasts the business to generate traffic for themselves, from their own initiatives and in pursuit of better margin. I understand how hard this is and that such a change takes cash and time. However the challenges of today’s newsagency are not unexpected.
For decades our channel was protected and we could get away with being average and with others generating traffic for us. Today’s reality is that our further in each of our businesses is 100% up to us.
While we offer an in-house gift card as well as a Visa gift card, it’s the retail branded gift card range from Blackhawk that works best for us. Shopper feedback is that they feel like they are giving more of a gift by giving a retail store branded gift card whereas the Visa card might as well be cash. Shopper feedback has encouraged us to look at the range of branded gift cards we sell. We’re talking with Blackhawk about expanding the range.
In our shopping centre there are three other outlets selling the Blackhawk gift cards. Since we sell more greeting cards it makes sense for us to get more of the gift card business.
Any newsagent can sell Blackhawk cards. There is no stock cost so the financial risk is minimal. The free merchandising makes selling easy.
I am often asked by newsagents for advice on laying out magazine departments. The best advice I can give is to change, change and change some more. It all starts with a magazine relay as I outlined in a long article on the topic ages ago. That said, one thing we consistently do is to use key titles in a section blocked so as to draw attention to the section – as shown in the photo for our home and living section. Laying these four titles out in this way with double pocket allocation makes them the hero titles of the section. I’ve never been in a newsagency where such space can’t be found for this type of beacon branding.
The titles we place in this way change through the month depending on what’s just out and whether the title is well known to our shoppers.
This photo shows a pen wall in a newsagency I was in recently. The pen offer in this high-street newsagency is less than ideal: much of the stock is old, the fixtures are vey old and the overall offer unappealing. There is no story being told, no pride being shown.
Get pens right and they account for around 33% of all stationery sales and they deliver year on year growth of between 5% and 10%.
Getting pens right means having a good range of current stock fixtured in clean and fresh units well signed and in a location noticed by most who shop in the newsagency.
It’s not hard work to get pens right but it does mean exerting control: controlling what is ordered, how it is displayed and how it is sold. Suppliers make it easy by providing reps who will order for newsagents. This can be a bad move.
My Sunday newsagency management tip today: look at your pen offer and take control. Expect sales to increase.
The front window of a retail newsagency is one of the most important marketing investments for the business.
A good window display will attract shoppers into the business and drive sales of the items prompted.
W good window display will surprise shoppers and challenge their expectation of what the business sells.
A window I saw last week stunningly used colour blocking to show off the range of products they sell. While colour is a key theme of this business, the window itself is inspirational for newsagents since we could try this given the colour of products we sell.
Colour blocking in a window display could see magazines, cards, gets, stationery and toys in the one display – getting shoppers to see items they did not know we sold.
Here’s another window from the same shop in my example. Fewer colours – vertically blocked. These are ideas we can play with – not all the time but enough to get new traffic for our businesses.
A window display like this for a newsagency would see us challenge customer perception about us and what we sell.
A window like this is easy to create.
Allocate limited time to create the display and be sure to measure the results.
These Jelly Rings sell better at the counter if one in the display unit is turned on. One flashing attracts attention and attention = sales.
From Independence Studios, the Jelly Rings are part of a range of counter and candy-lane products we embrace. While not for everyone, they work for us as we are surrounded by retailers with discounted candy.
I’m shooting a video of the presentation I gave at each of the GNS Market Fairs over the last two months, to make the content accessible from the GNS website and from here. GNS is loading videos of all the presentations. The video content will be an advance on what I covered at GNS thanks to questions and feedback. It will be skewed more to independent newsagents as that’s who tended to take part in the sessions.
VANA yesterday advised Victorian newsagents that they should not sign the Hubbed contract at this time. here is their announcement in full:
VANA’s position on Hubbed
By VANA News | September 13, 2013 | Nparcel Leave a commentThere has been much talk within the industry lately about the ANF’s endorsed company ‘Hubbed”. VANA also understands that the Hubbed team are visiting Victorian Newsagents to introduce the platform to them. As expected, VANA is receiving enquires from members as to our position and recommendation.
The VANA Board was given a presentation by Hubbed CEO David Mclean at our May Board meeting, and has also had many conversations with ANF CEO, Alf Maccioni in relation to the platform.
VANA received a copy of a Hubbed contract and VANA’s solicitors have given us a list of issues and concerns involving this. On Thursday 29th August, VANA met with the ANF to enquire about these issues and on Friday 30th, a list of issues was submitted to Hubbed CEO, David McLean. These questions have been answered and after further discussions, Hubbed has released another version of their contract.
VANA’s advice to Newsagents today is to not sign a Hubbed contract until the final version of the contract is available for all to see, understand and evaluate. Newsagents MUST seek their own professional advice on this contract if they wish to participate as the platform does commit newsagents to a contract term and at a monetary cost, amongst many other things.
VANA also has concerns over the ANF 5% shareholding in Hubbed and the ANF’s ability to have an influence in making sure newsagents are protected.
This issue will be discussed further at our next Board meeting. VANA will continue to update members if any more information comes to hand. If you have any questions in relation to this announcement, please contact The VANA team.
I have expressed some of these concerns here on August 20 and here on August 26. It is good to see newsagent associations doing what associations should do when a new business opportunity enters their marketplace. This is what members expect.
If the Hubbed offer is as good as Hubbed and the ANF say it is they will welcome the scrutiny.
We introduced the Melissa and Doug educational classic toy range to one of my newsagencies last week and while the display oin the lease line facing into the mall looked good, I felt it could look better. Here are before and after photos. Click on them for bigger size.
Here is the display as it looked yesterday when I saw it for the first time. The product was well laid out and there was good use of the Melissa and Doug logo. Seeing it though I felt it lacked what I’d call ownership of the space for the brand.
Here is the display after we had made one change, the introduction of a black cloth backdrop covering the beanie Kids fixture behind the melissa and Doug product. This simple change makes a huge difference. Now the Melissa and Doug products own the space.
Visual merchandising is all about making the product the hero, making it stand out to shoppers in your store and walking past your store. While the only test that matters is if the product sells, it will sell if it is displayed in to sell.
Since I am not in the newsagency full time it is easy to walk in and notice things people who are there all the time may miss. I appreciate their patience and cheerfulness in letting me do this and then leave while they change things.
The first display was not bad at all but I knew it could be better. Hence the small change.
sales of melissa and Doug product are excellent. We’ve reordered.
Another magazine move we have made this week is to shift our magazines that are purchased by our older shoppers together and placed them opposite our weeklies at the entrance to the magazine aisle.
We are adding more titles here as these customers are valuable for magazines, cards and gifts. We want to better serve their needs.
This posts and others recently documenting magazine placement adjustments and our overall magazine relay strategy demonstrate our commitment to magazines. We are committed because growth is achievable. Magazine customers are vital because they shop by habit.
We’ve sold out of marie claire as have many other newsagents and there is no spare stock to be found. While it’s a good problem it have it’s proving to be frustrating to regular customers who have not purchased their copy yet. We’re using it as an opportunity to remind them of our magazine putaway service.
I love this disco robot product for the fun it brings to the shop floor and for the easy sales it’s generating. I also love the appeal to a younger shopper and those who buy for younger shoppers.
Robotic products are huge in the US. In fact toy retailers there say the robot category will be the break-out this Christmas across several age groups. We are yet to see the US robot range hit Australia.
Playing a video of the robot in action is proving to be key in driving sales.
Here’s a photo sent to my by a newsagent this morning after they have removed the subscription ads from the front page of the Herald Sun newspapers they were delivered for sale in-store today. Fair enough I say. While I understand why newspaper publishers want to promote newspaper home deliveries, let them do it inside the newspaper and not with an ad stuck over the day’s front page news.
