Click on the image to see Cleo supply and return data for a newsagency. I have blurred identifying information. You can see that the newsagency sells three or four copies yet the allocations process at Bauer sees the business supplied many more copies than that, causing the title to be loss making for the business.
Earlier this week I saw several customers refuse to be served by a newsagency employee who is Asian. Even though the employee’s customer service skills and English are excellent, these bigoted customers declined to be served until a caucasian employee was free. It was disgusting behaviour that I am told is common from customers in this newsagency when ‘confronted’ with the Asian employee.
The employee accepted the behaviour as normal when it is anything but. Have others seen this?
Halloween is much bigger this year in major retailers like Coles and Big W compared to previous years. Indeed, one Big W I was in earlier this week had more than eighteen square metres of Halloween product at their main entrance. The products placed here included costumes, wigs, brooms, make-up and toys. Further in they had almost as much space again setup with candy packs.
Then, outside the shop and in the mall, is this Halloween m&m thing promoting the candy and a competition built around the Halloween theme.
Comparing our Halloween products to that available from the majors, our product quality is far superior and our prices are very competitive.
Sure it is frustrating that two biggest retailers in the country are chasing more revenue for what has been a very lucrative season for smart newsagents for the last eight or nine years, what I have seen makes me more determined to make a better consumer offer than theirs. For Halloween this means more fun and more scary. For example, Big W does not have a coffin on display nor do they try and connect with the zombie phenomenon.
We have placed the latest issue of InStyle magazine out so that the Napoleon Perdis make-up gifts with purchase are on show and easily seen with the magazine cover. This placement is much better than folding the gists back so they are hidden behind the magazine. While our placement takes up more space, I’m sure it will pay for itself. I am confident the gifts will drive sales and that there will be no push back on price.
I am planning a video to be published at this blog of positive conversations with newsagents about being newsagents. If you can get to hawthorn drop me an email and we can sort out a time. I am hoping for something that takes people behind the scenes about owning and operating a newsagency. It could be a good resource for people considering purchasing.
63% of the 68 newsagents responding to my survey on up-selling say they have time to up-sell to customers at the counter.
Many responding qualified their response with comments like – only when it’s not busy and when it does not affect other customers.
The second question about the success newsagents have with up-selling recorded 7.4% of respondents saying they are very successful and 29.4% indicating they are moderately successful. Seven respondents qualified the answer indicating that it’s challenging to be consistent. Click on the image for details.
My sense is that the majority of newsagents aspire to up-sell but few do it with consistent success. I also think that when asking about up-selling newsagents tend to think of it as pitching something across the counter more so than configuring the shop floor to drive up-selling to existing shopper traffic.
It is one thing for the channel and its suppliers to want more traffic in newsagencies for up-selling and another entirely for newsagents to achieve success with this.
I have been thinking about up-selling more since the ANF sees this as an opportunity flowing from their endorsement of the Hubbed bill payment platform to newsagents – as indicated in their recent letter to me.
The survey response does not provide comfort that newsagents want or are committed to resourcing their businesses to make the most of up-sell opportunities that may flow from additional traffic. The ANF needs to do more than just to want the traffic for newsagents.
One challenge is the nature of shopper traffic a typical newsagency counter sees:
Shopper preparedness to wait varies from high street to shopping centre and from city to country. Waiting matters as not all transactions can be done in seconds, particularly if someone has a question about a bill as could happen with Hubbed.
Up-selling in a newsagency is not as simple as would you like fries with that? No, we have no fries product just as we don’t have a small core product list like at a fast-food outlet.
Given the lack of consistency across newsagency team members, my preference is to use the store itself to drive up-selling, using the business to set consistency. At the counter, on the way to the counter and on the way from the counter. In structuring the shop for this the pitches are made to all shoppers and not only a certain type.
Newsagents who want more traffic need to have a plan for how they would make the most of the opportunity. Just wanting the traffic is not enough.
A customer on the weekend asked me to open the bag with Rolling Stone magazine so they could browse. Music magazine shoppers love to browse and bagging titles impedes this. I was at another newsagency later in the day and noticed their copies of Rolling Stone were not bagged. I can’t figure out why one store has bagged stock and another not.
Elle magazine is the subject of a rumour published by Crikey today:
Elle: it might well be a fizzer. Word on the street and within newsagent circles is that the rebirth of the Australian Elle magazine may be a fizzer. Piles of the Bauer-produced product can be seen from the doorway and more than one newsagent has reported that the other fashion magazines are still selling at the same levels as pre-Elle.
So I say, how are your Elle sales? In one store I’ve sold 3 out of 20, in another 3 sold out of 14 and in another 6 out of 11. For a launch receiving considerable advertising support these numbers are lower than I’d expect.
In news that will frustrate newsagents who care about magazines, Network Services continues to shed customer-facing staff, reducing the support services for newsagents chasing resolution of magazine over and undersupply issues.
Network is also reportedly about to change their internal magazine allocations system from one that involved considerable human review of allocations to one that uses only 10% of human review time. The risk of supply errors as a result of less human oversight is significantly enhanced by this move.
I’m told these changes are in direct response to the Bauer driven cost cutting of the magazine publishing and distribution organisation.
Network continues to frustrate newsagents by offering a website that does not provide us with reasonable control over magazine supply. For example, it is impossible for newsagents to make a change and be certain of the result – all they can do is ask and hope that someone sometime in Network will approve.
As we have seen in recent weeks, oversupply is on the increase of Bauer titles and other titles distributed by Network Services. This increase in oversupply disadvantages newsagents, it makes us less competitive.
One person put it to me that the Bauer people have little experience at dealing directly with a retail channel like newsagents, that their experience is more with major retailers, like supermarkets.
It appears from the outside looking in that there are fewer people supporting the newsagency channel within Bauer today compared to when it was ACP magazines and part of Nine Entertainment.
The Sunday Age had an excellent article by John Elder yesterday about teen and adult males who like My Little Pony: Friendship is Magic – they’re called Bronies. Besides providing an excellent insight into a fascinating phenomenon, the article also opens an opportunity for newsagents to understand that plush products can be sold to more than what we consider to be the traditional customer.
An informal survey at herdcensus.com places the U.S. Brony population at somewhere between 7 and 12.4 million. Using this as a base we can estimate the possible size of the community in Australia.
Whereas in the past we would have created a My Little Pony plush and toy display focussing on your girls, we now need to be open to a more inclusive display. We also need to consider that the factors which make My Little Pony popular with some males could also drive popularity of other plush lines.
I know from my own experience that plush items are purchased by a broad cross-section of people, certainly broader than what newsagents not selling plush tell me they would expect. For example, I have a guy in his thirties who comes in regularly for new Ty branded plush. He’s collecting because he loves the brand.
The Brony phenomenon is something for us to understand and embrace as newsagents are well-placed to serve this community.
There is more reading available on the Brony phenomenon here, here and even here at The Wall Street Journal.
The announcement Friday by Fairfax that they will close the weekly print edition of BRW in a couple of months is not unexpected. The title has struggled for sales for a long time, often not paying for the retail space it occupies in-store. It is part of a segment of magazine titles that is significantly challenged with equivalent content available online.
With the slim size of The Australian Financial Review I do wonder how much longer it will be published in print form. take the friday edition, for example. If you remove Domain you’re left with a pretty slim publication. Greg Hywood, CEO of Fairfax, is on the record saying print publications will be closed or frequency cut when they no longer pay their way.
The folks behind the Australian Moto GP on Phillip Island next weekend have been using Twitter and Facebook to promote newsagents as the go to retailers for the program. Their 6,387 Twitter followers and 23,670 Facebook page followers have been told to shop with us. I love it when publishers reach out to people who they know will buy their products and promote us.
Some newsagents like agency products because they attract traffic and traffic presents up-selling opportunities. I have created a two-question survey about up-selling and would appreciate your input.
Next time there is a market near your newsagency, book a market stall and promote some of what you sell in your shop at a stall at the market. Even a car boot market would work. But be sure to brand the stall to promote your shop.
If your experience is like others I have spoken to you’ll have some regular customers buying items from the stall and saying you should sell these in your shop. Rather than being frustrated by such a comment, take it as advice that you need to find a way to cut through with product displays and placement.
Another option is to book a local hall and create your own market situation. In the run up to Christmas you could create a pop-up shop and run this for,say, a week – offering great Christmas gifts at bargain prices. Just taking some of what you currently sell and adding to this with extra stock you would most likely find that you can maintain an excellent margin.
While there is a bit of work organising a second temporary location, done well the reward should be worth it.
Shopping centre based newsagents have plenty of opportunities for outposts. While they can be excellent, my marketing tip this week is to break free from being out the front or close to your shop. The goal is to find genuinely new shoppers.
Footnote: one newsagent doing this a few years back found another stall holder selling products stolen from the newsagency. So, you never know what you’ll find when you get outside your shop and look around.
I have been working with a couple of newsagents recently to help them each get to an accurate P&L and Balance Sheet so they can sell their business. I’ve had the help of a qualified accountant who has experience doing the accounts for several newsagency businesses. In each case, the accountants used by the newsagents charged too much to produce financials that are inaccurate and cannot be used in the sale of the business. In one case their accountant wanted to charge thousands to fix the botched job.
It’s important to choose an accountant who understands the nature of your newsagency business. Recommendation from a newsagent you trust would be a good guide in my view. Choosing an accountant because they are local could lead to your business being poorly served as has happened to these two businesses I have been working with.
A lady bought flowers for her church from a nearby newsagency and had to return to the shop when she discovered the receipt showed she’d bought lottery tickets and not flowers. She needed a correct receipt for reimbursement.
On checking, the newsagent could not find the sale of flowers in the computer system for that amount. What was even more surprising was that they could not find a sale of lottery tickets at the time on the Point of Sale software receipt for the same amount.
Unable to reconcile the data, the newsagent called in the employee on the counter at they time asking why they could not find the lottery sale on the lottery terminal or the flower sale on the POS system. The employee advised that the lottery sale did not exist.
This employee, it turns out, would ask customers if they wanted a receipt before processing the sale and if the answer was no and the sale value was high, $20 or more, they would ring the sale up as lottery products. The employee kept a tally o their iPhone. Then, later in the day, they would buy lottery tickets to the value they had accrued in the POS software. The register would balance and they theft was not caught because the newsagent was not reconciling stock on hand.
The lady from the church had said no to a receipt. On realising she needed one to claim the cost of the flowers she returned to the shop and asked for one. This is how she ended up with a receipt for a lottery purchase equal to the value of the flowers she bought.
The employee admitted theft and was sacked. The police were called. The newsagent stopped looking for evidence after going through several months of data and getting to a theft value of $70,000.
Had this newsagent been controlling their stock and checking discrepancies they would have found the theft sooner and saved tens of thousands of dollars.
This story illustrates the potential cost of poor stock management.
A newsagency I spoke with recently discovered an employee theft problem including cartons of cigarettes among other things. They were not stock-taking cigarettes as they thought it was too hard to get it right. It turns out the challenge was the employee who was stealing and hurting the quality of their data.
The newsagent chose to blame their system and or process and gave up when if=n fact the discrepancies should have been taken as an alarm that they were being stolen from.
There is no excuse to stock-taking cigarettes. If you’re not doing it you’re missing the opportunity for early detection of theft and you are missing the opportunity for more accurate ordering of stock.
What frustrates me is that I encounter there every month or so – a newsagent uncovering long-term theft that includes cigarettes and that they are not using stock control for cigarettes. These newsagents have themselves to blame.
Boot camps are all the rage right now – parks and beaches are busy with groups of people engaged in boot camp training. Best Body Boot Camp, a new mag book just released, taps into that interest. We are promoting the title with fitness magazines as well as near our weeklies to ensure its seen by people who could buy on impulse.
I’ve heard this morning of reported problems with barcodes on Tatts terminal produced lottery tickets. There is no problem. Any newsagent experiencing an issue should call their newsagency software company to get them to properly program their barcode scanner. The 02 variable weight and variable measure barcode being used by Tatts is an international standard as defined by GS1.
