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

Month: July 2016

Being niche is important in toy and gift retail today

IMG_1129While the major retailers chase sales of the top selling lines in toy, gift and other categories, newsagents and other small independent retailers can do well by playing a niche game, serving what you could call the long tail in the categories. Sure majors serve the long tail but the size of their stores and usual lacking customer service makes serving shoppers interested in long tail products challenging.

The play money and play coins are an good example of what I am telling about here. They are vital to any toy department yet they are hard to find.  I know because I tested this recently at a Target, K-Mart and even an independent store. At the two majors I was pointed to a general area whereas at the independent store they did not have the products.

But this post is not really about play money and play coins. No, it is about being thoughtful in product choices and buying to provide a point of difference for your business through serving long tail niche needs. And once you have done this, using social media and other p;at forms to let people near your business know you have the products.

If your toy department and gift department looks the same as others then people will compare price as price will be the only difference. If your range is different and you are known for serving long tail niche needs then you build loyalty. But achieving that starts with your buying and buying beyond the main selling items.

The buying I am referring to here is best done under your control and not that of a supplier. Yours is the business with the unique local opportunity.

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Newsagency management

More on the Pokemon GO opportunity for newsagents

13612140_1741803999392275_7975590512027229433_nWe are now more than a week into life with Pokemon GO and each day has brought new opportunities from new traffic and from products of practical value to Pokemon GO players as well as licenced Pokemon products. With plenty of suppliers of Pokemon licenced products the opportunities are considerable.

US business magazine Inc this week published a terrific article on the business opportunity of Pokemon GO: Pokemon Go Is Driving Insane Amounts of Sales at Small Local Businesses. Here’s How It Works. This article provides practical advice retailers can engage with in any situation, advice newsagents can engage with.

We are engaged not only with products and a welcoming smile for Pokemon GO players, we are connecting with players and fans on social media. This is a terrific opportunity.

For more background on this, read my earlier post on Pokemon GO.

It would be easy to ignore this as a fad or as something for a younger generation. If you are a retailer, traffic is your lifeblood. Pokemon GO is doing more for getting people out on the streets than just about anything else right now. Understand it, embrace it and welcome those playing into your business.

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Newsagency management

Pen refresh boosts sales in the newsagency

IMG_1153The pen refresh in the newsagency has resulted in an immediate boost in sales.

Located next to the counter, the position drives impulse purchases. the new layout is more shopable and the branding more professional than what we had.

The results speak to the value of a regular refresh, especially of pens as a good pen department will deliver at least a third of all stationery revenue, making it the most efficient retail space in most stationery departments.

The stationery layout in the photo shows our standard approach to stationery – efficient use of space, layered to use the space well and in a way shoppers expect today if they are shopping at Officeworks or elsewhere for stationery.

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Stationery

SA distribution newsagents take a hit with Advertiser cover price rise

Screen Shot 2016-07-13 at 8.46.13 PMNewsagents in South Australia were sent a letter yesterday by News Corp. about a cover price rise for The Advertiser to take effect from July 23. The distribution newsagent commission is 22%. With the retail newsagent getting 12.5%, the distribution newsagent is left with 9.5% unless there is something I and others are missing.

This situation comes about because the distribution newsagent is on a fixed fee. Concern would not be significant if the fixed fee was fair, if it reflected the work, risk and capital cost of being a distribution newsagent in South Australia, if it allowed fora reasonable profit over and above all the costs.

In setting the fee, News Corp. has not considered these factors in my view.

For me, as an observer, the issue here is fair pay for the distribution newsagent. I don’t think $0.2601 per copy is fair is it does not reasonably cover labour, infrastructure and other costs of running a distribution business.

News Corp. will respond and say it has an annual fee review process. While this is true, it is reasonable to question if the fee the company sets is fair compensation for the time and infrastructure required to do the work it demands.

It is fundamentally unfair that News Corp. sets the fee it pays newsagents as it is conflicted in setting the fee. The fee ought to be set by an independent party. The alternative is newsagents set their own fee. However, the problem with that is there will always be bottom feeders who undercut.

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Newspapers

April – June 2016 vs. 2015 newsagency sales benchmark results

This study is based on data from 161 newsagencies in city and country, high street and shopping centre situations, newsagencies in different groups and trading alone.

Overall, Q2 2016 delivered better results than Q1. There is good news in these benchmark results, especially for newsagents who are working their business as retailers.

  • Customer traffic. 57% of newsagents report average decline of 1.4%.
  • Overall sales. 59% reported an average revenue decline of 2.2%.
  • Basket depth. 64% report a 1.9% decrease in basket size.
  • Basket dollar value. 61% report a decrease in basket value of 1.1%.
  • Discounting. 35% of respondents use a structured loyalty offer such as points or some other discount.

Benchmark results by key departments:

  1. Magazines.  78% of report an average decline in unit sales of 7%. The average decline in weeklies was 8.4%. 20% report an increase in unit sales.
  2. Newspapers.  77% report average decline in over the counter unit sales of 6.1%.
  3. Greeting cards.  56% of report average revenue increase of 2.9%.
  4. Lotteries. 68% of those with lotteries report average decline of 5.5% in transactions.
  5. Stationery.  77% of newsagents report a decline, with an average of 1.7%.
  6. Ink.  23% of stores report ink separately. Of these, 51% reported increase of 2%.
  7. Gifts. Of the 78% with gifts, 61% report average growth of 5.1%. Note: for the purposes of this analysis I roll gift related departments such as plush, collectibles, homewares and gifts into one.
  8. Tobacco. Of the 45% with tobacco, 73% report an average decline of 17%.
  9. Confectionery. 66% of stores reported an average decline of 3%.
  10. Toys. Of the 25% with toys, 70% report growth of 4.5%.

Here are some insights from analysis of the data:

  • High street and regional newsagencies were among the best performers.
  • The traditional newsagencies: papers / magazines / lotteries / cards / stationery and little or no gifts fared the worst.
  • Newsagencies with a strong gift department performed better with cards.
  • Newsagencies selling higher value gifts did better than those at the low (under $20) end.
  • Newsagencies in a group usually, but not always, perform better than those not.
  • In the successful group, the ratio of gift to card revenue continues to grow.
  • The most significant growth year on year is in the businesses where significant shop floor change has been undertaken. i.e. increasing gifts, shifting to higher price point products, introducing homewares and / or introducing toys – but not the usual low end toys we see in newsagencies.

I say the results this quarter are better than last because there is evidence of the value of embracing change. While there is no doubt that print media continues to challenge as does tobacco and lotteries, newsagents acting as retailers can achieve gains as the results show.

HOW TO USE THESE RESULTS
Look at your own situation. Compare your year on year results with those detailed here. If you are doing worse, act. If you are doing better, celebrate briefly and then get back to it.

There is no time to lose. We are in a period of extraordinary change and challenge on many fronts and the best way to confront change and challenge is to lean in and bring it on.

The business owners of any newsagency are the single most important influence on their results.

WHY I DO THIS STUDY
My interest in the study is as a newsagent and as a supplier to the channel through Tower Systems and through newsagency marketing group newsXpress. I want the channel to grow for selfish reasons and because it has been my life since 1981. I am invested.

BENCHMARK GOALS
I am often asked for benchmark goals newsagents ought to aim for. Here are some benchmarks I have developed in my work with newsXpress and through Tower Systems:

  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 sits at 28% to 32%. For a newsagency focused on the future, the goal 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.
  3. Revenue per employee – $250 an hour minimum not including agency revenue.
  4. Revenue PSQM $4,500 – $8,500 depending on country vs. city / high street to shopping centre and depending of 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/toys/plush: 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%; plush: 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.
  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. (See above).

If you want help transforming your newsagency business reach out for help to people you trust. The earlier you reach out the better.

Here are my contact details: Mobile – 0418 321 338; email – mark@towersystems.com.au. I will help as much as I am able.

Tower Systems serves in excess of 1,750+ newsagents with newsagency software. newsXpress has 220 newsagency businesses as members.

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Newsagency benchmark

What is Pokemon GO and why does it matter to your newsagency?

IMG_1117Pokémon GO launched Wednesday last week in Australia. It is a game played on your phone or tablet that integrates with the real-world in a ground-breaking way. Pokémon GO uses your phone’s GPS and camera to turn the real world into a hunting ground for Pokemon characters. It also transforms local landmarks (yes, here in Australia) and businesses into locations players can physically visit to stock up on free accessories and items.

Click here for a bit of historyClick here for a story in the SMH on the Australian perspective.

There is a business connection with this phenomenon. Forbes published an interesting article from a business perspective.

newsXpress, the newsagency marketing group of which I am a director, has confidentially shared comprehensive information with newsXpress members on what Pokémon GO is how to embrace Pokémon GO and leverage the opportunity for their businesses. newsXpress also shared details with its members on five suppliers with products for the Pokémon GO fan plus specific revenue strategies. Note – these are suppliers who do not usually supply newsagents.

newsXpress has detailed other products ideal for Pokémon GO players. Plus, it has shared traffic driving strategies that can be used to attract Pokémon GO players and through this drive engagement with the business.

The early adoption and embrace of Pokémon GO is another example of the newsXpress difference. newsXpress is the first newsagency marketing group to embrace Pokémon GO.
 
This is what we have to do in our channel: be early adopters of trends. For some, this means stocking products while for others it means connecting on social media while for others it is about full immersion and playing the game.

This initiative on Pokémon GO is a good example of what newsagency marketing groups need to do for newsagents – to be out there researching new ideas, developing commercial strategies, training newsagents and encouraging their employees to entrance the opportunities of change.

Yes, I have Pokémon GO on my phone and I’m giving it a crack.

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marketing

Take care when mailing a USB stick

FullSizeRender 23At my software company yesterday we received this envelope with a USB stick containing business data. The sender is lucky the stick was in the torn and damaged envelope. While the best way to access the data is via the net, in some situations this is not possible and mailing is essential. If you ever need to post a USB stick, take care to protect it and package it in an appropriately strong and secure mail unit.

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Newsagency management

A magazine for the times

200x200With marijuana now legally available in the US and petty of other place it was only a matter of time before we saw this magazine on newsagency shelves. High Times is certainly a special interest title. It is an opportunity to pitch to niche shopper and reflect our specialisation.

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magazines

GNS responds to discussion on stationery

GNS CEO Alex Stewart provided the following in response to comments by others to a post here about stationery. I am posting the response in full. I’d note that my post was about a whole of store approach, hence my focus on Typo in the post.  Here in the GNS response in its entirety. It has been written in relation to comments by a newsagent:

We have reviewed your comments and would like to provide a response where we see it corresponds to specific comments made. For that reason we have included extracts of your post in red to establish a reference point. We are addressing this as GNS only. Where Ancol is referenced we can only speak for GNS in context.

Whilst GNS and Ancol may introduce a range of “fashion” stationery it’s usually confined to notebooks and other associated lines.

There is no whole of stationery range concept.

We have introduced Skweek and Urban ranges and have been selling in hundreds of Newsagencies for almost 1 year now. It does cover a wide range of products within the fashion category, including Notebooks. It was introduced to allow Newsagents who would like to provide customers with a lower cost alternative to existing brands, with a sustainable margin position for Newsagents (see  link to Facebook page and the many great examples of SKWEEK at Newsagencies https://www.facebook.com/skweekaustralia/ )

Skweek newsXpress Kyneton

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newsXpress Sunbury Square

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The range includes pencils cases, calculators, exercise books, scissors, lunch bags, gift sets, stickers, sharpeners, erasers, bag tags, key rings, pens, puzzle rulers, our big foot highlighters and more. The Colour blocked range across the 4 colours, provides plenty of opportunity for repeat purchases and provides attractive margins to Newsagents.

image010 image011

Similarly, our ‘Urban by Modena’ range, designed for teens and adults, has been ranged by hundreds of Newsagents and ANCOL have also taken up this range. This is a tighter range that focuses on core products, including pens, pencils cases, note books, journals and memo sets. Again, this offers attractive margins to Newsagents.

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We will continue to develop products based on market demand but ultimately need support from Newsagents to justify the investment in developing, sourcing and stocking these products.

Just look at Sovereign brand, seriously, is that the best they can do , the packaging and presentation of that brand is doing a disservice to Newsagents.

Much could be done with new and bold colours enabling colour blocking and a new look to or shelves.

Invoice statement books, time books, ect ect yes they are boring ,but with a revamp you shop would have a new fresh feel.

It seems to me that GNS and Ancol do not have the will to look at stationery as an opportunity to create new and exciting ranges and designs.

Instead they stock product which looks the same as it did 20 years ago.

We are assuming here Mark that you have not seen the new Sovereign Packaging? This is progressively being introduced across the entire range. We think it represents a major advance in presenting the brand in a contemporary and consistent image. The previous Sovereign branding was very out-dated and a rebranding exercise commenced last year, with over 100 products now rebranded and available at GNS e.g. envelope range, packaging tape range etc.

Here are some examples:

image025 image026 image027 image028

We will continue to update and review the ranges and expect to have the full Sovereign re branding exercise complete in 2017. GNS will eventually disappear from all products and be replaced with Sovereign (e.g. Scholastic/ Exercise Book range last Back to School).

There has been a culture within our stationery suppliers to not change but instead wheel out the same product year after year.

Playing it safe has been their game, however this attitude will not cut it in today’s competitive market.

When you have Newsagents suggesting to our wholesalers, they need new products/designs and all you get back is every reason why not to do it , well then you have a problem a big problem , I have encountered this attitude many times over the years.

I can only speak for GNS when I say we have spent considerable time, effort and money to develop new products, brands, ranges. I would like to know recent examples of where GNS has not developed new products or introduced new lines for Newsagents.

There are many current and recent examples including Star Wars® products, improved Art and Craft ranges, Tombow® products, Giftware, Fashion Diaries, Sluben™, Marvel® products, better Xmas Toy lines, improved packaging, Adult Colouring Solutions, Tech Accessories, Impulse Medicines, Lonely Planet™ Travel Accessories and many more items.

We would be happy to hear from Newsagents about suggested ranges and if it makes sense, we will do it. If you believe otherwise, please let me know.

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Newsagency challenges

Sunday newsagency challenge: know how your card rebates are calculated

I was talking with a newsagent last week who had no idea the business was close to a step-up in card company rebates. The step-up is worth thousands if achieved. The thing is, they were denying themselves the step-up by preferencing other companies in some displays where their may company could have served the need.

Knowing how your card rebates are calculated and understanding the steps can help you make more valuable business decisions.

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Management tip

Sunday newsagency management tip: step outside your trade show comfort zone

Next time you are talking to a friend in another retail channel, ask if you can tag along with them to a trade show specific to their channel.

Some of the most inspiring ideas I have implemented have been revealed at trade shows for retail channels far removed from newsagency businesses.

With borders between retail channels more blurred than ever, we need to look for inspiration far away from places traditional to newsagents.

I was thinking about this while at Gift HQ in Brisbane yesterday. It’s a good, but small, show but not inspiring enough to really challenge the traditional newsagency business, to take you outside your comfort zone. Being outside your comfort zone, what is close to being usual for your business, is where you find gold.

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Management tip

Sunday newsagency marketing tip: stop marketing like a newsagency

The biggest mistake I see newsagents making in their marketing is promotion of the business in a way that is traditional for a newsagency.

The best way to find new traffic is with a new message. The same old message will deliver the same old result.

Switching from the old message to a new message starts with new products = then pitched in a fresh way. In writing about this I am talking about displays in-store, social media posts, window displays and advertisements in media outlets.

Is your message new or ol, traditional or seeking people who do not currently shop with you?

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Management tip

Is there an OH&S issue with the Tatts scratch ticket sale changes?

I have observes the new way Tatts requires its retailers to sell instant scratch tickets and wonder if there is an occupational health and safety issue.

In stores where I have observed in the last couple of weeks, talking with employees, there are several extra steps involved now in selling scratch tickets. Besides the additional labour cost involved, there is movement at the counter, a level of movement an OH&S specialist ought to look at in my view.

It could be that an OH&S expert would say the additional movement across the counter in okay. They may also say it is not okay.

This is an issue since Tatts controls what is placed where, their placement decisions and their subsequent changes in how scratches are sold have forced a workplace change that ought to be at the very least assessed.

Workplace health and safety is a big issue for any employer. In this situation where how you operate, the processes you follow and the layout of the workplace are controlled by another organisation … well it complicated things.

I hope those with Tatts have considered this from an OH&S perspective.

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Lotteries

Newsagents should embrace the Magda opportunity

IMG_0988The Australian Women’s Weekly out yesterday is an opportunity for us – if we all act right away. Magda Szubanski’s appeal makes promoting this issue essential. Place it with newspapers, at the counter and promote it outside the business – especially if you run a magazine loyalty program.

AWW sells best in the first week. This is why I suggest we all ought to urgently act to embrace the opportunity.

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magazines

Gift trade show ideal for newsagents in Brisbane this weekend

Gift HQ is on in Brisbane starting tomorrow and running for three days. With 153 suppliers participating this is an excellent event for Queensland newsagents to meet with suppliers without having to navigate the massive Melbourne and Sydney Fairs and the crowds at those.

I will be there and would love to catch up. I’ll be on or near the Tower Systems. I’ll have my phone with me: 0418 321 338.

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newsagency marketing

Full house at Connections conference

There were 300+ at the Bauer Media Connections conference in Brisbane yesterday. This will be the largest gathering of newsagents in 2016. All marketing groups were represented too, in response to their strong member representation.

While the sessions were terrific and offering practical guidance to attendees, the real takeaway for me was the upbeat mood of the room and at networking. Newsagents are optimistic, embracing change and focussed on the future. There was good talk in some groups of excellent GP achievement.

The optimism speaks to the difference between change-focussed newsagents and those running traditional businesses, achieving traditional GP.

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Newsagency management

How you balance your register at the end of the shift matters

It is tiresome talking with a newsagents, or any retailer for that matter, where theft has occurred and only recently been discovered, and where the business has few or no rules around the processing of cash at the end of the shift.

I say tiresome because my advice has not changed in years. It is advice I have shared here before and elsewhere. It is also basic business management advice.

Retailers who are sloppy with cash management and end of shift reconciliation are more likely mohave employee theft in their business that is undetected for longer.

Using your computer system and taking a structured rule-based approach to end of shift processing means you are more likely to detect theft sooner. You also provide fewer opportunities for theft to occur, because of the structured checks and balances.

Balancing the register is easy if you and your employees are disciplined in how they transact business the=rough the day and to the end of the day. Get this right and the cost of theft in your business will be less.

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Management tip

Using video on Facebook to promote the newsagency

Video is an effective tool for promoting the newsagency in-store, in the window, on Facebook and other social media platforms as it allows you to bring to life the business in a way that challenges traditional views about that the business and what it stands form.

Here is one of four new marketing videos produced by newsagency marketing group newsXpress in the last month to launch new products. This video is one of two launching the Teeny Tys range where newsXpress stores represent 25% of all outlets nationally.

This and other videos are provided in two forms: a YouTube link and an MP4 file. The MP4 file can be loaded to Facebook for autoplay while the YouTube link is good for websites and other places where you prefer integration.

The videos are professionally produced, exclusively by the newsXpress marketing team for the group. This gives the group control over the intellectual property and enables it to speak with its own voice rather than relying on supplier created content.

Here is another video produced to launch new Britto Disney product.

The videos are deliberately short to fit with social media user expectations. They are also non newsagency like – this is vital.

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marketing

Beware suppliers selling without a tax invoice

There are several suppliers pitching to newsagents with excellent deals at the moment that sound too good to be true. One newsagent received the stock and no invoice. When they asked for an invoice the request was ignored for a week. Eventually, they received a spreadsheet of the items supplied but no invoice. Further digging revealed the company’ they purchased from is no company. GST has not been paid and the provenance of the goods is not certain.

If a deal sounds too good, it probably is. Always get a tax invoice.

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Ethics

News Corp. acquiring APN regional

Contingent on regulatory approval, News Corp. is acquiring APN’s regional division, giving News Corp. an extraordinary footprint in Queensland as Mumbrella reports.

There was a time such a concentration of media ownership would concern Australians. No more. Maybe that is as a result of the level of concentration of media ownership we already have in Australia.

From a newsagent interest perspective, the Mumbrella article includes this:

Potential areas for News Corp to examine in which savings could be made include:

  • The Ipswich Advertiser/The Queensland Times
  • Mackay’s The Daily Mercury/The Midweek
  • The Whitsunday Coast Guardian/ The Whitsunday Times
  • Rockhampton’s Morning Bulletin/The Capricorn Coast Mirror
  • Bundaberg’s NewsMail/The Guardian
  • Childers’ Isis Town & Country/Maryborough’s Fraser Coast Chronicle/Maryborough Herald
  • Hervey Bay Observer/The Hervey Bay Independent
  • The Gympie Times/The Cooloola Advertiser
  • Noosa News/Caloundra Weekly/Kawana Weekly/The Sunshine Coast Daily
  • Southern Downs Weekly/The Warwick Daily News
  • Toowoomba Life/The Chronicle
  • Lismore’s Northern Star/The Lismore Echo
  • Grafton’s The Daily Examiner/Coastal Views
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Newspapers