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

Month: March 2016

How much time do you spend training staff in your newsagency?

This is a boring topic that many will tend to not read. Please resist that thought. Employee training is important. Employee training can help you save time, reduce theft, increase sales and retail good employees.

Through my newsagency software company I see data on engagement by retailers and their employees on a comprehensive free online software use training curriculum. The curriculum includes more than 130 videos structured into topics based on work role, live online training workshops and other activities.

Ranking seven different retail channels, newsagency businesses rank the lowest for using the free tools. Garden centres rank the highest, making the most comprehensive use of the free training resources.

I am not talking here about a large time investment. Some training videos run only five minutes.

Through engagement data I can see some businesses put a new employee through between an hour and three hours of training, earning the employee a certificate and ensuring a level of competency. This matters if training is not done and mistakes are made that cost the business money.

Regardless of the software you use, my sense is that an employee working 30+ hours a week in a newsagency ought to undertake at least twenty hours of professional development a year to improve their skills and their value to the business.

I’d note my suggested 20 hours is lower than the 2% the federal government suggested years ago for employee training annually.

Hour much time do you invest in formal employee training or professional development each year?

10 likes
Newsagency challenges

Celebrate Life Easter message

IMG_2762The newsXpress Easter collateral this year follows last year’s subtle and loved approach.  The colour change and the message of Celebrate Life guides appeal for the collateral for a season that can be hard to pitch. This photo is from my shop yesterday.

Customer comments are terrific.

3 likes
newsagency marketing

News Corp. newsagent remuneration review for Victoria

News Corp. today announced the results of its remuneration review for distribution newsagents.

  1. An increase in the home delivery fee newsagents are permitted to charge home delivery
    customers they bill for each News publication

    1. Metro agents: increasing from $0.205 per copy to $0.2081 per copy incl GST
    2. Country agents: increasing from $0.2563 per copy to $0.2601 per copy incl GST
  2. An increase in the amount they can charge home delivery customers as a
    postage/administration fee

    1. Increasing from $2.00 to $2.30 incl GST
    2. This can only be charged on each customer invoice if the customer elects to receive their monthly invoice as a hardcopy rather than electronic

It is appalling that a supplier can dictate the fees a small business can charge for such a labour intensive service.

Newsagents, the service providers, ought to be able to charge what they like. But, the system is the system and those in the system entered it knowing the terms.

The fee increase is disrespectful and socially irresponsible.

Victorian distribution agents looking to save money ought to consider quitting VANA, the local newsagent association as VANA is clearly not able to help them on the single most important matter, fair and equitable remuneration. Further, it has never been able to help them. Save the fees and reinvest in your business and you will be better off.

14 likes
Newspaper distribution

A fresh looking magazine offer from WH Smith

I had a good look at the magazine department at WH Smith in the Sydney International Terminal yesterday. It is impressive, far superior to what you see in WH Smith stores in the UK. Whereas in the UK they use old unwelcoming fixtures and support them with mediocre lighting, in Sydney I saw fresh fixtures you hardly notice supported by good lighting.

Here are photos. The first is of the back wall. This is what drew me in. 210 magazines. Full face display. Deep pockets negating the need for a waterfall to hold stock.

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Here is business and current affairs.

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Here is home and travel.

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And here is an overall view for context.

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While I would not allocate this much space in a more competitive situation than an airport terminal, I do like what WH Smith has done here. I hope the photos provide inspiration to newsagents considering shoplifts.

Note, not one of the fixtures is purpose built. All can be clipped in and clipped out. This is vital for any fixture in a newsagency business today.

8 likes
magazines

Credit Suisse update on Tatts

Credit Suisse has this morning issues an update on Tatts Group that newsagents may find interesting.

Tatts was unsuccessful in retaining its A$540mn pokies licence refund after the High Court upheld the Victorian Government appeal. Tatts must also pay 20 months of accrued interest and legal costs which we estimate to be A$50mn.

I wonder if media coverage of the Tatts High Court loss will be as strong as when they won. I recall some media outlets were savage toward politicians. Will they now apologise for this? I doubt it as it would not serve their political purposes.

1 likes
Lotteries

The curse of sale or return in the newsagency channel

The next time a supplier representative offers you a product on a sale or return basis, ask for more information. Ask your buy price if you take it firm sale. Ask whether other retailers with the same product are offered sale or return.

I am not talking here about product such as newspapers, magazines you’re your main card range. No, my interest is more with gifts and related items, new card spinners and toy related items.

I label sale or return as a curse because too often I see it stop retailers being retailers, managing a product on the shop floor for maximum performance – because if the background is the knowledge they can return the product if it does not work.

I think a sale or return offer makes retailers lazy. I think suppliers offer it because it is an easy to get a product into a retail business and once there it is more likely to stay.

Compare how you treat sale or return product with firm sale product. I sell plenty of retailers treating the two differently. Firm sale product is worked hard, pushed to sell through, to achieve the necessary return on inventory, space and labour for the business. This makes sense since it is your money at risk.

With sale or return, it is easy to consider that you have no risk. Without risk, where is the pressure. While some retailers will work sale or return product hard, plenty will not and this is why I say it is a curse.

Sale or return is not a benefit. I see it most often as a lazy tactic used by some suppliers because their product is not good enough to support a firm sale approach.

To newsagents I say: take the challenge of being completely responsible for your buying decisions. Chase better deals from firm sale. Work the product hard. Drive a faster return. Look at products differently as a result.

13 likes
Newsagency challenges

Storytelling is magazine placement

IMG_7233The decisions we make in placing magazines on our retail shelves represent a kind of storytelling. Look at the current issues of The Australian Women’s Weekly and Mindfood next to each other.

Each features Helen Mirren on the cover, and for similar reasons related to age. Whereas an average retailer will put the titles in their usual spot, most likely separately. A smart retailer places them next to each other, telling more of a story and, hopefully, driving sales.

4 likes
magazines

Updated newsagency performance benchmarks

Further to a discussion here, I decided to publish updated newsagency performance benchmark targets, to reflect the rapidly changing nature of our channel. These are some of the benchmarks I have provided to newsXpress members, but not all.

I say rapidly changing nature of our channel because that is what we are seeing. The traffic mix is changing as is the mix of what successful newsagents sell.

The benchmarks below are guidelines. They are subject to change as the suggested business model evolves.

It is important to have a goal, a target and that is what these benchmarks represent in my view:

  1. Gross profit: this is the goal gross profit for all product sales not taking into account any revenue or costs related to any agency business. The traditional newsagency average is 28% to 32% as shown through the Newsagency benchmark Studies. I think the goal today has to be at least 45%.
  2. Ratio of Gift revenue to Card revenue: 50% minimum. The goal ought to be 100% or more. If you do $100K a year in cards, target to do $100K in gifts, or more. NOTE: Gift is gift, not toy, collectible or other items. They have their own benchmarks.
  3. Revenue per employee – $250 an hour minimum.
  4. Revenue PSQM $4,500 – $8,500 depending on country versus city / high street to shopping centre and depending of the product mix. Higher GP lower revenue required.
  5. Overall revenue mix percentage targets: Cards: 25%; Gifts/toys/plush: 25%; Stat: 10%; magazines/newspapers: 20%; other: 15%.
  6. FLOORSPACE ALLOCATION: Cards: 25%; Gifts: 25%; Stat: 8%; magazines/newspapers: 15%; other products: 15%; office/back room / counter: 12%. It’s rare you make money from an office or store room.
  7. Mark-up goals: Stationery: 125%; Gifts 110%.
  8. Occupancy cost: between 9% and 11% of revenue where revenue is product revenue plus commission from agency lines. Location and situation are a big factor in this benchmark. For example, a large shopping centre business will have a higher cost than a high street situation. NOTE: It is easy to say the landlord is responsible for this ratio. As the retailer you are responsible for margin and revenue.
  9. Labour cost: between 9% and 11% of revenue where revenue is product revenue plus commission from agency lines. Labour cost should include fair market costs for all who work in the business.

These benchmark figures don’t all need to be considered together. You can pick one, measure, work on it, measure and adjust as the numbers indicate. The goal is to continually improve to pass the benchmark and work on the next.

I acknowledge these benchmarks are not close to what newsagent associations have recommended or would recommend. My focus is on the future whereas their focus tends to be on old-school products and services. Success in the future comes from diverging dramatically from the past including past benchmarks.

If you have any questions about any benchmark, please contact me. I’d be glad to help.

20 likes
Gifts

News Corp. change is another data challenge for newsagents to handle

IMG_0929Next month, News Corp. introduces changes in the handling of newspaper subscription payments by distribution newsagents. this is the next step in a project started years ago in South Australia.

On April 11 they are moving all subscriptions for News Corp product from a mixture of Pay at Publisher (Office Pay) and Pay at Newsagent (Carrier Collect) to Office Pay. This will affect around 300 newsagents as the News letter notes.

While affected newsagents will be able to handle data changes manually, it will save them time if their newsagency software companies make this easier and faster for them. That is what Tower Systems will do. Other software companies are welcome to note their planned processes here.

This is another reason to offer Touch Networks services as this is how accounts are paid. I am proud to have connected Touch and News years ago to facilitate this in-store payment method. Prior to then, the News payment model did not have an in-store payment option.

11 likes
newsagent software

The new looking magazine department

I am often asked for photos of changes made to the layout of the newsagency based on what I write here or when I speak at meetings and seminars.

This photo, takes this past Saturday, shows part of the magazine department. It runs down this fixture to the back wall where we have 250+ full face pockets.

The display area to the left of the main magazine fixture changes regularly as does what is in front of the magazine fixture to the front of the store.

We also adjust the layout of the magazines regularly.

The key point I want to make here: everything changes, nothing stays the same. I think this is essential in retail today. Shoppers are more fickle than ever. We need to keep our stores fresh and appealing. We need to push back on those few customers who complain about product location changes.

We to lay our businesses out to maximise the return we achieve.

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Click on the image for a high res version.

I have focused on the magazine department in this image as it is the part of the business many newsagents continue to be reluctant to change. Some do, but not enough.

We are in a fight with supermarkets and other retailers. If we do not change our in-store offer we will lose the battle. Range and supply volume – they are topics for another day. This post is about the part of magazines over which we have control – how we lay them out in our businesses.

12 likes
magazines

Using an easel to promote the Easter season in the newsagency

IMG_7150With more and more retailers using easels and noticeboards to signpost seasons, we are doing this for easter, with this placement of the Easter poster next to easter cards. Out of shot, to the left of the cards, is Easter gifts.

For a while now I have thought that hanging posters is not always ideal. Some seasons lend themselves to a different approach – such as what we are trying with Easter at the front of the newsagency this year.

7 likes
newsagency marketing
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