Amazon, the online giant credited with driving many bookshops out of business, has opened a physical shop in the US. The move is not an endorsement of the old bookshop. From what I read it is a nextgen offer from the continually innovating Amazon.
Counter confectionery is ready for a shake up. With c-stores, petrol outlets, supermarkets and newsagents all offering the same brands, I think there is an opportunity for a point of difference. I have looked at many different offers recently in a range of retailers from different suppliers. This photo is one example. I like that almost all the products on offer are mints. Indeed, I suspect inside each tin is exactly the same mints. But the product is not the mints, it is the tin. The tin enables shoppers to purchase the mints as gifts – and that is what I like here – turning the counter based confectionery purchase into a gift purchase … and an impulse gift purchase at that.
When I have written here about disruption, this is what I mean. Changing the offer, changing the newsagency story, disrupting what you deliver as opposed to what people expect, getting people to thin about your business differently.
We can do this. we can change what the newsagency is, what our newsagency is and we can do it in a way that is appropriate to the needs of our customers.
The mints are one small example. The opportunities for challenging expectations exist right through our businesses.
The other reason to love these mints is that you will not see them supermarkets, c-stores and petrol outlets. we have to do more to pull our businesses away from these channels that have taken a percentage of newsagency shoppers over the years. We separate ourselves from them through the products we stock. I think starting this at the counter is a good move.
I pulled out of traditional candy at the counter of my newsagency two years ago. I’m happy with the result in the context of impulse purchases, margin and differentiation.
While a tin of mints will not define a newsagency business, it is another brick in the wall of change and change is essential in my view. We need to embrace every opportunity to change shopper perception and there is no better place to make such a move for change than at the sales counter.
Woolworths shoppers have been venting frustration with changes to the loyalty program. The comments on Twitter, Facebook and elsewhere remind of the personal connection people have with loyalty programs.
From what I understand I’d have to spend $100 a week for five weeks at Woolworths to get a free magazine whereas in my newsagency shoppers can get this value spending well under $100.
September quarter results reveal a mixed bag of results for newsagents. The gap in results between businesses is wider than ever and the performance of print media products more concerning than ever.
While some newsagents are generating ne traffic from new products to the traditional newsagency, not enough are doing this.
Change is essential. Too many newsagents and traditional newsagency suppliers are operating business as usual model. This is driving the downward trend I see at the core of the benchmark results for many newsagencies. The only way to arrest this is to drive change – in supplier relationships and in newsagencies.
Here are the headline numbers for the benchmark study:
Benchmark results by key departments:
Product mix shift. The shift in product mix continues. For example, the gift and related maximum single item price point I have seen this quarter is $1,000.
Traffic shift. Whereas the newsagency channel was built in print media products, they are less likely to be the destination purchase than today. I suspect this is a consequence of deregulation, of publishers facilitating access in supermarkets, c-stores and other locations.
In my own newsagency: My key category numbers off a good base, are: Books: up 1,000+% due to adult colouring. Diaries: up 196%. Cards up 25% with Everyday Counter up 38%. Cards account for 23.78% of sales; Gifts up 35% and account for 11% of sales; Magazines up 5% and weeklies down 5%; Stationery down 8%, Plush up 28% and accounting for 8.24% of sales. Traffic: no change; Average Sale Value: up 8%; Average Item Value: up 11%.
Here is data from another newsagency embracing growth strategies: Books: up 1,000+% due to adult colouring. Diaries: up 187%. Cards up 29% with Everyday Counter up 22%; Gifts up 47% and account for 13% of sales; Magazines up 7% and weeklies up 5%; Stationery up 7%, Plush up 24% and accounting for 8.6% of sales. Traffic: down 3%; Average Sale Value: up 9%; Average Item Value: up 11%.
CONTEXT
In the benchmark pool for this quarter, there are newsagencies with gift revenue of more than $50,000 and others with gift revenue under $500.00. To look at this in another way, there are newsagencies with gift revenue equal to or greater than card revenue and others with gift revenue equal to 5% or less than card revenue. I could share similar ratio analysis for plush, toys and selected other high margin categories.
NEWSAGENTS, IT IS YOUR FUTURE TO OWN
I urge newsagents to focus on traffic in gifts, plush, toys, homewares, fashion, ink and office furniture opportunities. You have to buy well and promote even better. More often than not your suppliers will not be traditional newsagency suppliers.
We have more control over our businesses than ever before. What we do with this is up to us. The trends affecting us are obvious. Our future is ours to own.
Please take this benchmark report as a call to action.
We have to be disruptors if we’re going to grow.
This is James Murdoch as quoted in a report in today’s Australian Financial Review. The quote equally applies to newsagents. We have to be disruptors ourselves. Some of us are, but not enough.
Being a disruptor means breaking free from expectations associated with your shingle. It means new suppliers, new products and new traffic. It means changing how you run your business and how you think about your business.
It means identifying less with the traditionalists who share your shingle.
Being a disruptor means you becoming your own competitor.
Being a disruptor means you stop complaining about others taking business from you and you taking business from others.
Taxi drivers are waging a campaign for compensation over the introduction of the competitive Uber service. Ross Greenwood has has a bit to say about this on Macquarie radio. Taxi drivers have step and association and a website to make their case.
If the federal government provides any form of compensation for the introduction of Uber, newsagents ought to urgently make representations for the situation of taxi drivers today is the same as newsagents faced in 1999 with the federal government facilitated removal of our monopoly.
Prior to 1999, newsagents had a ACCC authorised government facilitated monopoly for the distribution of newspapers and magazines. Many purchased their businesses with the knowledge of the monopoly. banks funded the purchases with the knowledge. Immediately the monopoly was removed newsagencies were worth less, goodwill dropped.
Newsagents received no compensation. Some newsagents at the time claimed this wad due to poor representation as it was not long after the federal government paid pharmacists to close to reduce oversupply.
My question today is – what do newsagents think about the claim by taxi drivers they deserve compensation for the watering-down of the protection they have had?
I love Mad magazine for the nostalgia and for the humor. Every issue I read gives me a laugh. The covers are appropriately seasonal or topical, providing good opportunities to promote with related product – like this issue with Halloween product. I wish it sold better though – kids today don’t know what they are missing!
I received an advance copy of Lunch Lady magazine, a new title from the team that created Frankie. Lunch Lady launches in newsagencies and some specialty retailers later this month. It is a niche title, appealing to those who love good food,preparing good food, good writing and who want something beyond a magazine.
While family is a focus throughout the magazine, Lunch Lady would be equally appreciated by those without a family.
Like Frankie was, Lunch Lady is difficult to categorise. It is certainly a title to use to show-off your specialisation. It would make an excellent gift or a ,over appreciation to food titles in a kitchen.
Being a quarterly will be a challenge for some. My approach will be to push hard in the first weeks of the on-sale so the long on-sale is not an issue. I have often to take ten copies as I expect it to perform well.
Here is more information from Gotch.
I was fortunate to participate in a flight to Longreach, Queensland, on Saturday, raising funds for the Western Queensland Drought Appeal. A key message from speeches made on the day was regional and rural Australia needs visitors. In Longreach especially, tourism is vital given the impact of the four year drought.
I have thought about this a lot since Saturday along with stories I hear from many newsagents in regional and rural Australia about the tough local conditions caused by drought, high unemployment and other factors.
In every situation I can think of, growth in tourism could help.
To urgently encourage tourism to regional and rural Australia I’d like the federal government to offer travel subsidies for families to travel away from the cities, to regions where their tourist dollars will do good for local economies.
The subsidies could be for family flights to regional Australia, accommodation in country towns in bed and breakfast, farm stay or local motel accommodation. I’d love to see local restaurants and find experiences subsidised along with local tourist attractions.
I’d love to see subsidies for city versus country kids sporting tournaments that would bring families from cities to country towns.
I would not want to see subsidies any foreign owned company or any business above a certain size or with a head office in a city – except for airlines to get people to their destination.
This needs to be a regional / rural Australia first initiative, targeting getting people to travel the country, spending locally and boosting the local economies that are struggling.
What this has to do with newsagents is that there is a newsagency in every town. They could be part of managing the program locally. When helps local towns helps local newsagents. Helping newsagents helps a quintessentially Australian business.
I tried to purchase a ticket in tonight’s $25 million OzLotto jackpot this afternoon in Melbourne only to find the five newsagencies I tried closed.
Jackpots are vital to driving purchases by first tine and infrequent lottery ticket customers. Being closed when a jackpot is on sale is poor form. You choose to be a lottery agent and in doing so accept the obligations associated with this.
To those who say I should not write about this here because it could bring the issue to the attention of tatts I say – they would know from terminal activity.
To the newsagents in Melbourne who have been open all day – well done.
Everyone trading under a brand is connected and responsible for customer perception associated with the brand. For a typical newsagency, the key brands are: Tatts, the major newspaper, a marketing group (if you are in one) and all newsagents.
Maybe NANA and the ANF should lobby newsagents with the same vigour and cash with which they lobbied the NSW politicians.
Here is the flyer to which I referred here yesterday from Bauer Media provided to newsagents asking them to promote a Myer department store sales catalogue in their newsagencies, a catalogue that promotes items newsagents sell. Bauer is not paying newsagents the traditional margin of $1.4875 for handing out this ‘publication’.
Beanie Boos costing $10.99 at the WH Smith after customs at Sydney airport sell for $9.99 in most newsagencies. Priced fairly, the ex GST price ought to be $9.00.
Would an independent newsagent do this or is price gouging something we only see from large retailers?
There have been reports about WH Smith and other retailers overcharging in selected UK locations.
Last week newsagents were asked by News Corp. to hand out Woolworths bags, this week some have been asked to hand out a Myer Christmas catalogue. The Myer catalogue promotion is through the Bauer Connections program. I am surprised as this sounds like a dumb move and they know the channel well enough to know it is a dumb move no matter how it is pitched.
Did those who pushed this onto newsagents check the contents of the catalogue? Did they think about whether newsagents would want to promote a competitor? Did they put themselves in the shoes of newsagents? Did they ask any newsagents?
Myer is pitching cards, wrap and gifts in this catalogue – all items newsagents sell. Why would we promote this competitor? Of course we should not as Myer would not promote us. We have to fight for every dollar we win against them in a range of categories.
One newsagent I heard from received the catalogues and no explanation. If true, this is a botched campaign.
I suspect many Myer catalogues will end up in recycle bins.
I was recently asked by a friend who works for a national retailer about a situation they encountered. I outline the situation here here for your comment.
Five minutes after their shift ended one day recently and after the store had closed for the day, as as this person was exiting the business from the front door, they were confronted by a shopper who wanted access to the shop. They denied the shopper access, knowing that store managers were counting cash at the registers.
They left and thought nothing more of it.
A few days later, the store manager issued a formal warning to the employee saying that they provided poor customer service by not allowing the shopper to enter.
I was surprised by the approach being taken by the retailer. The employee was off the clock, knew the day’s takings was exposed and knew there was no one on the floor to monitor the shopper. I would not have issued a warning in this situation.
What would you do?
According to the ABS close to 3% of people living in Australia are from New Zealand. Today and this week is the time to congratulate them on their gutsy Rugby World Cup win.
A newsagent I was speaking with last week was complaining about Officeworks and the stationery sales they felt they were losing to this national group. What are you doing about it? I asked. What can I do about it? I’m cheaper than them but they have more money to spend on marketing.
My challenge to this newsagent was – complaining about Officeworks achieves nothing. Prove your price advantage at every opportunity – on Facebook, in-store and through your team.
Make sure everyone has the Officeworks app and train your team members to openly discuss your price advantage over Officeworks.
The more you share the facts on pricing the further your message will spread. Officeworks does this, in the front of each store. They display pages of catalogues that usually feature equipment items and use a sticker to show their price next to a competitor offer.
Many newsagency businesses I visit are over-stocked. The owners tend to buy with not enough regard to what is actually selling, driving an increased investment in inventory without a commensurate increase in revenue.
My advice is to put a road-block in place, a moratorium on buying or at least a slow-down in buying to ensure that you are buying you really need. Be disciplined on yourself, give someone authority to stop you buying stock.
Remember, buying stock is not a smart way to build friendships. It’s business. Every dollar you spend on stock only generates a return when you sell the stock.
Letterboxes, local papers, radio stations and TV stations fill with advertising clutter this time of the year, much of it from advertisers with deeper pockets than small business newsagents.
This is why I recommend newsagents, especially city based newsagents, do not advertise through catalogues and in newspapers at Christmas time. I also suggest you do not discount at Christmas time.
Let your competitors drive shopper traffic. Leverage the extra traffic competitors who do advertise attract, lure people into your businesses, with stunning displays pitching appealing product. Ride on the back of the spend of others.
I am not a believer in the value of a Christmas catalogue filled with discounted gift items the shoppers these attract are less likely to be loyal through the year. Further, the catalogues from your business hit at peak catalogue season for your competitors – businesses that are regularly marketing whereas your business most likely is not.
Swim in the blue ocean that is not crowded with competitors. It is far more enjoyable.
