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

Month: March 2014

7-Eleven shows how to do low-margin convenience / agency business

711With this poster spread around Melbourne, 7-Eleven makes a pitch that should have been owned by newsagents. Years ago, while the myki public transport ticketing system was barely a thought, 7-Eleven trumped newsagents and negotiated unprecedented access to offer top-ups.

While newsagents were offered similar access it was on a store by store basis. 7-Eleven established itself as the only network consistently offering myki product access. This is, in part, what allows them to run the strong ad campaign reflected by these posters.

Newsagents are losing the fight for relevance in convenience retail in part due to the commercial power and strong leadership of 7-Eleven and in part due to a lack of consistency of the newsagency offering. Whereas decades ago we were strong convenience retailers, today I’d say less than a third of newsagency retailers play i the convenience space.

Convenience newsagents need to connect with a convenience brand if they are to more successfully combat 7-Eleven. More than this, they need to follow the leadership of a brand and act consistently with any such group.

In the convenience space, a one size fits all approach is vital.

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Newsagent representation

Great Toy Fair in Melbourne

toyhobbyI had a good look around Toy Fair in Melbourne yesterday and spent considerably on new products and replenishing stock of products we already sell. Just about every aisle at the fair had opportunities for newsagents including licenced products connected with licences we sell today. This is the type of trade show newsagents should attend – you’d see traffic generating opportunities and basket building opportunities.

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Newsagency opportunities

One Direction fans not buying magazines

1dmagazineJust over a year ago we could not get enough One Direction magazines to sell. Today, there is almost no interest in magazines featuring the boy band. Despite good position support and co-location, The Directioner magazine is not achieving sufficient sales to pay rent for the pocket it occupies. Is the 1D phenomenon over? Maybe it’s a regional challenge.

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magazines

Statement from Matt Handbury in relation to Hubbed

Matt Handbury contacted me over the weekend and provided this statement in relation to Hubbed:

Hubbed: Setting the record straight

In response to speculation about the operational performance and governance arrangements at Hubbed, I feel it is in the best interests of the newsagent community
to provide some much needed clarity around these issues.

First, I can confirm that I have resigned as a director of Hubbed, and that my substantial investment as a shareholder is yet be repaid.

Given that legal proceedings are pending, I do not wish to comment further on this issue, other than to say I no longer have confidence in the management of the company. My involvement with the board and management of Hubbed has come to an end.

My experience with Hubbed has deepened my conviction that harnessing the power of e-commerce will provide significant and sustainable new revenue streams for newsagents. It can also greatly enhance newsagents’ services to customers and the publishers and e-retailers they serve. I am determined to bring this to reality and you will be hearing from me in the coming weeks.

All newsagents, both those already dealing with Hubbed and those considering how to embrace e-commerce in their business, can rest assured that their interests will be served and their expectations and ambitions more than met.

Matt Handbury
Executive Chairman
Murdoch Media Pty Ltd

I am publishing this statement with Matt’s permission.

The ANF and other newsagent associations have been provided this statement.

I originally published this post yesterday, March 16. I reset it this morning as the content is important and blog traffic on a Monday is 1,300+ visitors whereas on a Sunday it is usually between 650 and 800.

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Hubbed

Connecting the business to promotions leverages the investment

winacarreceiptMagazine publishers invest considerably in promotions, providing collateral for displays, valuable consumer prizes and financial incentives for newsagents. While we put up displays to engage, it’s the more subtle engagement that I like the most – like the coupon we have on the bottom of all receipts at the moment promoting the WIN A CAR campaign from Pacific Magazines. This coupon is included without us having to think about it. Our customers, when they get home and open their bag, will have a reminder about the promotion. This extends the reach of the Pacific promotion and it connects our business with this.

The more we structure our business processes to connect with and support supplier promotions the bigger the pay off for us. The investment is minimal.

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magazines

TV Week sales surge

tvwsurgeData from January 1 through March 13 2014 compared to the same period in 2013 indicates a 28% increase in sales of TV Week magazine for us. It’s an increase I wish I could explain as being a result of additional promotion or extra focus. The truth is that we have done nothing different. The title is where is’s been for more than a year – a good location with weeklies but nothing stand out. While I am thrilled with the sales growth I wish I had an explanation.

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magazines

Cake Decorating partwork issue helps promote Easter

cakedpromoThe Easter theme of the latest issue of the cake decorating partwork is an excellent opportunity to promote magazine as part of the Easter pitch. Indeed, this issue could be used to attract shoppers interested in cake decorating who then browse the broader Easter display you have on show. This is another way to leverage magazine sales into a deeper and more valuable basket.

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magazines

Sunday newsagency management tip: train your new employees

Employees can make or break a retail business, they have your livelihood in your hands yet how often do you let a new employee loose on the business with a fraction of the training they would receive before being allowed to drive a car? Too often, I bet.

Small business newsagents need a new employee induction process that includes minimum training necessary before they can undertake any work. There also needs to be an on-going training program that ensures new and even existing employees are properly trained to best serve your business and its customers.

I am not talking here about the formal courses in retail available through the public education system or privately, no I am talking about training you prepare about your business. Yes, you. Your business is an asset to be nurtured for you and your family and that can only be done by people who are trained in what you need and how you want things done. So, you need to develop training.

If you think your customer service is a unique selling proposition for your business then structured training of new employees is essential.

You should also look for training from your product suppliers. They may have training available in their products.  Card companies, for example, could train your staff on how to restock. Collectible plush companies could have training on their collections. You should speak with your POS software company. My software company has a 130 video curriculum for newsagent employees with each video running 8 to 10 minutes.

A consistent approach to training new employees will improve the consistency of the business and this will reflect in the performance of the business.

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Management tip

Sunday newsagency marketing tip: tell a story and drive sales

tellingastoryNow more than ever we need to tell a story on the shop floor of our retail newsagencies. We need to do more than expect products or a single display to work on their own. We’re competing for attention and the best way to get this is with displays of depth.

In retail today, we need to connect products and ranges from suppliers and bring them together to offer a more complete pitch to our customers. The better the story the more we sell.

This is what telling a story in retail is about – offering depth to a brand, a range or a buying opportunity or occasion.

Here’s a simple example of story-telling in retail. The photo shows placement of the Hallmark licenced AFL range of cards, wrap, team song buttons and other items, the Beanie Kids licenced AFL range for 2014 and, in the middle, the AFL record for the AFL season opener. This is a story – pitched to AFL fans and people who buy for AFL fans.

While the Hallmark stand or the Beanie Kids stand on their own has depth because of the products on offer, they each are not enough of a story in my view, not enough to attract the number of shoppers we need to achieve the sales and, in particular, basket depth necessary to give us the sales rewards we need.

The three displays together deliver better value purchases with more customers buying from each than if the stands were separated. This is a key commercial value in taking time to tell a story.

It can be hard work telling a story where you don’t have a unifying licence or brand to work with. It can take some misses before you find out the stories that work best in your business. Invest the time, tell stories and compete with big competitors who have a head office dictating the stories they tell.

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marketing

Promoting Better Homes and Gardens

bhgweekendClick on the photo for a closer look at how we are leveraging the Better Homes and Gardens brand over the weekend around the popularity of the TV show.

On the left you have a free-standing floor unit. This unit works exceptionally well for us. Newspaper customers pass it. On the right is our power-end nexus WIN A CAR promotion displaying six titles with BHG in the top left spot. On the right in the magazine fixturing you can see prime placement of Better Homes and Gardens in three pockets – next to our weeklies on one side and AWW on the other side.

Every week, between Friday and Sunday, we have the best opportunity to drive impulse purchases of BHG. This works best when we actively support the title beyond placement in the usual location.

If every newsagent did this we would wrest BHG sales from supermarkets. How are you supporting BHG this weekend?

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magazines

Promoting The Saturday Paper

satpaperposterWe have placed the poster for The Saturday Paper placed out the front of the newsagency facing into the mall, pitching the lead story in this issue of the newspaper to nearby shoppers. This is the only newspaper poster we are promoting at the front of the business – we don’t usually place newspaper posters here.

satpaperknoxThis photo shows the promotion of The Saturday Paper with other daily newspapers today. While I’d concede it’s a bit over the top, we wanted to ensure the new title was noticed by other newspaper shoppers. So far it’s not impeding sales of other titles.

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newsagency marketing

Tasty newspaper ad

tasty-newspaperI took the bait in the ad from Coles in the Herald Sun today and rubbed it. Sure enough, it smelled as the ad said it would: lemon and myrtle. Delicious.

Knowing about the smellable ad is something useful knowing for talking with customers through the course of the day.

You can’t do this with an ad on phone yet.

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Newspapers

Melbourne Toy Fair a must-attend trade show

toyfairThe Toy Hobby & Nursery Fair in Melbourne that starts tomorrow (Sunday) has become a must-attend fair for newsagents keen to grow toy, plush and gift sales. Like the gift fairs, the Toy Hobby & Nursery Fair Fair appears to attract more newsagents than newsagency specific trade shows recent years.

I like Toy Fair because I’ll see product that can stretch the range of products I sell and therefore the appeal of my shop. I also like it to spot trends and understand from suppliers how these can play out for me.

The best way to grow our businesses is through the products we sell and how we merchandise and promote them. The Toy Fair is important for expanding our offering and better competing outside lower margin newsagency product categories.

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Newsagency opportunities

Encouraging a newsagent to break free from the past

Here are some notes I put together for a newsagency business I assessed as part of the October / December 2013 vs. 2012 newsagency sales benchmark study I did last month. These notes are for a smaller town newsagency currently offering a very traditional mix of products. Here’s some of what I found:

Your newsagency appears to be a traditional newsagency business with a focus on lotteries (57% of sales), magazines & papers (30% of sales) and a bit of cards and stationery.

This mix of products does not give you a bright future in that for the vast majority of your business you are relying on others to drive traffic. If lotteries, newspapers and magazines decline or those customers defect to other retailers you will be in a difficult situation.

A way to address this is to focus more on products and services over which you have control and through which you can advocate a point of difference.

What your point of difference? What do you think it is? It’s essential you have one – beyond being a newsagency. In your data I cannot see a point of differenced reflected. While your sales decline of 3% is less than the average for declining newsagencies, it is not a good story.

Based on your care sales I suspect you could increase gift sales by 300% or more. Plus I think you could sell more in toys and plush – I’d suspect at least $1,500 in each in the October – December quarter.

Tough as it is in a town your size (pop. circa 3,000) I’d look carefully at the businesses nearby, if you have anyone selling gifts, what are they selling? I ask because I know newsagencies in towns this size that have lifted gift sales to match card sales. If you could do that you’d see your GP for the year increase by between $10,000 and $15,000. This, in turn, would make your business more valuable.

I think mission critical to your business right now is getting known for something other than magazines, newspapers and lotteries. You need another valuable point of difference. Something that could attract people from nearby towns to your business to shop.

If I were you these are the issues I’d be considering to make the business more successful and more valuable.

We have to break free from the past and from the agent mentality. Our future is as retailers.

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Newsagency benchmark

Getting attention in the shop window

windowconnectionCheck out the sign I noticed in the window of a shop in The Strand Arcade in Sydney.

There were four signs like this in the window. Each with text unrelated to the products being sold but related in that the statements were complex, interesting like the menswear products being sold.

What struck me was the use of space in the window by the retailer to not overtly try and promote products but rather to attract and interest a type of customer. Very smart. I noticed.

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retail

The Saturday Paper promoting newsagents

satpaperThe publisher of The Saturday Paper has used Twitter to promote tomorrow’s edition and newsagents as the go to retailers for this to their 7,979 Twitter followers.

The tweet has been re-tweeted nine times, significantly extending the promotion of The Saturday Paper and our channel.

This is terrific support specifically for our channel.

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Newspapers

When a newsagent steals from a partner

This is almost the worst kind of theft you can see in a newsagency, theft by one partner from the business. I saw it recently with the result of forever ruined friendships and a business that will struggle to make it in-tact.

Newsagents can better manage their theft exposure by treating data as if it was cash. Unfortunately, too often, once theft is discovered the victims rarely consider they may have played a role in the theft by not managing appropriately.

I am writing about this today because I’ve recently seen a situation that should have been caught far sooner.

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theft

All quiet for St Patrick’s Day

stpatsIn Auckland a couple of years ago for St Patrick’s Day the city was jam-packed for close to 24 hours. In New York a year before leading up to the day there was green everywhere. In Melbourne this year, St Patrick’s Day is set to be quiet if what I’s seeing is accurate. I noticed the delicious sounding menu in the photo in Richmond and saw some Irish artwork but that’s it. No non-food small business in Melbourne and some inner suburbs I could see.

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newsagency marketing

Distribution newsagents miss out on News Corp cover price increase

Distribution newsagents are voicing frustration that the price increases for News Corp. newspaper titles are not resulting in an increase in the fees they are paid.

While News Corp will say they addressed this in their restructuring of fees last year, any reasonable assessment will challenge this. Last year’s fee increases did not catch up with the cost increases newsagents have absorbed in recent years.

Ater the increase in 2013, distribution newsagents were still worse off in real terms than a year earlier.

As long term SA newsagent John Fitzpatrick noted yesterday:

The retail price of the Saturday paper has jumped from $2.00 to $2.50 the extra commission to Distribution Newsagents on copies supplied to retail outlets = ZERO, Subagents receive an additional 0.0625 per copy BUT nothing for the Distribution Newsagent!

Granted, we will receive the .0625 cents on Home Delivered copies – BUT NOT all copies – Cafe’s, Hotel’s, NIE Packages, TAB and many more will be at a reduced rate.

There are never ending costs in Subagent delivery, especially in SA where current weekend publishing times have been very late.

It seems News doesn’t value the work involved in Subagent Distribution.

News will need to work urgently on the current model if it wishes to retain all existing distribution newsagents. And right there is the question many newsagents are asking.

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Newspaper distribution

Here’s how to do in-store video advertising

screens1The Newslink stores at transit locations have an excellent in-store screen-based advertising and promotion platform. Their screens promote offers that are pitched consistently from the shop floor and across the sales counter. They only advertise what Newslink sells. The offers I have seen are compelling – designed to attract shoppers.

The screens they use are big. They themselves are placed in consistent locations in-store – at the front.

I’m aware several parties are pitching advertising screens to newsagents and to newsagency suppliers. None of the offers I have seen come close to the Newslink approach. The screens themselves will not drive discipline in newsagencies.

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Newsagency challenges

News Life Media drives supermarket traffic

newsmagswoolThe Australian today has an ad promoting a bunch of News Life Media magazine titles and an easter-themed gift with purchase that is exclusive to Woolworths.

While I understand the need for publishers to promote different retail channels, I can’t recall News Life Media supporting newsagents with advertising like this for promotions nor can I recall them offering a seasonal gift like this across a range of titles.

It’s this type of promotion that diverts traffic from one retail channel to another. It also reinforces a consumer view re the value proposition of newsagents versus supermarkets. News is promoting Woolworths as a better value retailer for the titles.

News should realise that when it comes to seasonal related promotions there is no better retail channel than newsagents. We own seasons.

Smart newsagents presented with this promotional opportunity would have placed the titles with an Easter themed display. They would have done this without charging extra for the additional space and effort. They would have done it with other Easter product. Smart newsagents would have been more engaged than Woolworths. Yet we have been overlooked.

Shame on you News Life Media.

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magazines

The evolving bookshop, the evolving newsagency

i2I spent some time at the Dymocks flagship store in Sydney earlier in the week and was surprised at how far it had evolved from a traditional bookshop offering. While they still sell books, they have a strong representation of gifts, cards, social stationery, gadgets and toys / games. The photo shows part of their toy / game area which is in the front part of the store. I’d say it’s located here because it’s an important part of their offer.

The borders between retail niches have become blurred in recent years and this will be even more so as more niches encounter challenges from online.

Smart retailers today don’t define their businesses by the traditional past of the channel. They focus on what they can sell regardless of whether it neatly fits the business they offer. This is why we see newsagents doing so well today with gifts, plush, jewellery, toys, homewares and fashion.

Being a retailer and not an agent means we have to continually evolve our businesses, to make the most of the opportunities we see where we can generate and nurture our own traffic from decisions we make – even if the products are outside of what we have traditionally offered.

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Book retailing

Impressive new wine magazine

alquimeOne of the pleasures of writing this blog is the people I get to meet along the way. Last week, I met with the three guys who launched ALQUIMIE, an impressive wine related magazine.

ALQUIMIE is unlike any wine magazine I have seen. I’d liken it to wine magazines what frankie is to young women’s magazines – smart, accessible, beautiful, passionate.

Issue #2 will not be out for close to another month but I wanted to put it on your radar – if your customers are into good wine related writing. It’s distributed through IPS.

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magazines
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