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

Month: July 2016

Stay ahead of coming price rises

Price rises are coming in several key product categories for our channel. In everyday stationery and ink suppliers have started talking about price increases due in August.

The price rises are not unexpected given the situation with the Australian dollar compared with when prices were last looked at. That and the increase in labour and other business costs, it makes sense prices will rise.

My suggestion is you reach out to your key suppliers and ask the question. If they know about a price rise from their supplier early advice to you could help you purchase inventory ahead of the rise being hit.

Some suppliers, like Dynamic Supplies, have been on the front foot, encouraging retailers to get in ahead of the planned price rise.

A word of caution though, buying stock at a lower price can be false economy if you hold the stock for too long. You only make money when you sell the item and even then it has to sell at a good price. This is why I think a back room or a warehouse can be dangerous – because you are likely to fill it.

So, by all means buy today to beat a price rise, but make sure such buying will result in sales in a reasonable period of time.

In terms of finding out about price rises in advance – check in with your marketing group as they will know.

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Newsagency management

Quality discount variety stores challenge newsagents

IMG_0846There used to be a time we could ignore the $2 shops and similar as the quality of what they sold was poor, their layout akin to a junk shop and their customer service left wanting.

Things have changed. Discount variety stores in Australia have lifted their game.

The changes we are seeing here are in-line with what is happening overseas. You could call it the Aldi effect where price does not compromise quality as it once used to. It is far more than the Aldi effect. In categories related to us there are plenty of overseas deep discount businesses challenging in cards, wrap, gifts, stationery and more.

The photo is from a discount variety store I saw in Canberra last week. This terrific display of wrap is a metre from the lease line. The main message to shoppers is we have the range. This is backed with at a price you will love.

This shop is the type of business newsagents would often disregard as a $2 shop or a junk shop while, in fact, their offer is more comprehensive, better situated and more satisfying to the shopper than the average roll-wrap display in a newsagency.

We have to look at shops like this as competitors, businesses we need to understand and compete with, businesses we need to be challenged by. Ignoring this type of shop would be folly in my view.

Wrap is in play, as are cards – as the year on year sales data is showing in newsagencies across Australia. The challenge from discount variety is part of the reason this is happening, not all, but certainly part. They have lifted their game. We need to lift ours.

We need to look carefully at where  wrap is placed. We need to consider our value proposition. We need to make shopping easy. we need to make impulse purchases easier.

My advice to newsagents is do not underestimate discount variety stores, treat them as a well-resourced professional competitor. To do otherwise could see you lose sales you might otherwise have won.

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Competition

Why I said don’t buy that newsagency

Twice in the last month I have suggested to individuals who have contacted my for my opinion that they not proceed with the purchase of the newsagency business they were considering purchasing. In each case the red-flags I saw were similar.

For one business the owner did not have current financials. The only reasonable evidence of income was a lottery terminal report. The rest was a claim in the form of a spreadsheet for which there was not evidentiary support including BAS statements. Without basic bookkeeping as required by law my feedback was the business does pass due diligence. By all means purchase it for stock value, but nothing else.

In the case of the second business, the owner claimed income they could not verify as it was not shown in the POS software reports because they deleted a couple of departments to reduce their tax. The prospective purchaser believed the vendor and argued with me when I said I would not purchase a business based on unreported income. They were desperate to buy a business and were bedazzled by the profitability of the business. The problem is the profitability relied on the unreported income.

Each of these situations damages our channel in my view. Business owners operating businesses without proper recordkeeping and basing a sale price on unreported income deserve to not achieve the price they seek.

There are plenty of well run newsagencies for sale out there, good businesses backed by accurate data. These businesses sell more easily than those with key data missing.

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buying a newsagency

News Corp. and Coles team up on half price newspaper deal

IMG_0926Coles supermarkets are offering access to News Corp daily newspapers at half price when people spend $30 or more in the supermarket.

I noticed the promotion at the checkout counters in three different Coles outlets over the weekend. In two cases newsagency businesses are located less than 100 metres away from a Coles.

This News Corp. / Coles promotion makes our channel look expensive.

The half price newspaper promotion is a campaign that could break the habit of someone who used to regularly purchase their newspaper at the newsagency.

While News Corp. employees regularly say how important our channel is to their business their actions challenge belief in those words.

It is one thing for a supplier to have products located in a nearby competitor business it is another thing for them to support that competitor in a half price campaign such as that we see here.

News Corp. folks may respond to this saying this is a Coles run promotion. While I have no evidence about how it is being paid for, I doubt Coles is funding the 50% discount.

This campaign will be another factor newsagents consider when they assess their commitment to newspapers in-store.

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Newspapers

Two Hemsworths better than one

IMG_0903We shifted these magazines to get the Hemsworth brothers together to broaden the appeal opportunity of their brand. We figured this type of deliberate and thoughtful placement is not what you would usually see so it was worth the moment it too to make happen.

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magazines

Sunday newsagency marketing tip: kittens love to play with wool

FullSizeRender 10Bringing a retail display alive, really alive, attracts shoppers and drives sales. This display created by one of the team at my newsagency is perfect, or should I say purrfect, as it shows the kittens getting up to mischief everyone who has had a kitten understands.

The display is fun, engaging and alive and this is key to successful retail theatre – a display looking alive, the products looking like more than a product with a barcode on the shelf.

I was talking with a shopper in the store on the weekend about the display and they had a story to tell about a kitten they had as a child. This 80 something gentleman is not your usual plush customer. The display and the memories it jogged led to him purchasing a kitten for a great grandchild. He came into the shop for a birthday card into which he was going to put $20 as the gift. Instead, he spent $29.99 with us.

This type of conversion, turning a browser into a purchaser, disrupting a shoppers plan to purchase something unexpected, is vital to all retail businesses today but more vital than ever in newsagencies.

Take a look at your shop and how you display products you could otherwise bring alive to have people see them differently. Next, get your best VM person in-house to create something engaging. Finally, engage with shoppers on the shop floor yourself to learn from what they see, their stories can be inspiring.

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marketing

Sunday newsagency management tip: a crappy looking stand hurts sales

IMG_0847Every branded spinner or stand you have in your business is a representation n to only of the health and professionalism of your business it is also a representation on behalf of the brand of the stand.

A broken stand looks bad as does a half empty stand as does a branded stand with products other than for the brand. Such a stand can turn shoppers off. It gives off a message of a business that does not care and this can tell shoppers you do not care about them.

If a stand has a place on your shop floor it has to add to the business not detract from it.

It does not take much to ensure stands look good, strong, full of the right stock. Sure you could argue you don;t have the money for stock. The thing is – the stand is looking empty because you sold the stock, you have the money.

My advice is to set a policy for all who work in the business to follow:

  1. On a branded stand, only place products from that brand.
  2. Check sales for each stand weekly and be on top of reordering.
  3. Any stand that breaks is to be removed from the shop floor until fixed or replaced.
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Management tip

The flimsy Swisse Olympic scarf lacks value

FullSizeRender 9Further to my post about the appalling treatment of newsagents by News Corp and Swisse over the Olympic scarf we are to sell today, I got to see the scarf for myself yesterday. It is an embarrassment, certainly not worth $2.00 in my opinion.

The scarf is flimsy. It does not feel like a scarf. No feeling of quality. Also, it smells odd. It is not a keepsake. I’d love to hear what other newsagents think about the scarf now they have seen it.

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Ethics

Leverage Tour de France interest

Screen Shot 2016-07-01 at 1.51.08 PMCycling Central, the SBS cycling Twitter account, promoted newsagents in this tweet Thursday this week about the Tour de France official program, reaching 42,500 followers. Their tweet was re-tweeted and favourited, helping it to reach more people. Social media mentions lick this about our channel are important in reminding special interest shoppers of the service we provide.

This Tour de France program guide is something we all ought to have in at least two high-traffic locations in-store to make the most of the opportunity. My suggested locations are: with newspapers and at the counter, in addition to placement with cycling magazines.

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magazines

What is the value of a brand

IMG_0858I saw this N branded newsagency business earlier this week and wondered about the importance of the N that is situated in prime position out the front of the business. This version of the N is around fifteen years old. The N has changed twice since, meaning this N is not relevant and, most likely, not delivering any value to the business.

Business branding is important. Any brand you use needs to be relevant, understood and valuable. This N that I saw earlier this week is useless.

Those providing brands under which newsagents trade under have an obligation to ensure their brand image is maintained. In the case of the N, it falls to the ANF to have supervised the use of the N image in and on newsagency businesses. The lack of action and enforcement devalues the N.

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newsagency marketing

Small business policies of the major parties this federal election

As often happens during election campaigns, we are fed headlines and little policy detail. Click on the links below for the small business policy pages of each of the major parties and see for yourself which small business policy you prefer. There is a difference in detail and detail matters for it reflects understanding. The greater the policy detail the more serious the party is on an issue in my view.

I have not posted the links here to suggest one is better than the other. Mo key interest is to ensure opinions about small business policies are fully informed.

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Newsagency challenges

Hosting another collectible event in Melbourne today

Screen Shot 2016-06-29 at 5.49.30 AMAt my newsXpress Knox store this afternoon we are hosting a collectible bear event featuring hand made collectible bears and dragons priced from $100 through to $1,000. We have been promoting the event in-store, by email and on social media.

Events like this, that pitch the business as not being a traditional newsagency, are important as they help us find new shoppers. This is mission critical for any newsagency.

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marketing

Are newsagents getting left behind in the shift in stationery?

IMG_0850A seismic shift has occurred in stationery that appears to have left newsagents behind, even newsagents with good stationery sales today.

Understanding the shift starts with and understanding of what constitutes stationery. To many newsagents, the definition of stationery is traditional: pens, pencils, rulers, tape, pads, folders, the types of items you would have seen in a stationery department ten and twenty years ago.

To understand stationery today we need to ask shoppers what they consider to be stationery. We also need to look at what other businesses are marketing as stationery.

The shopper definition has changed. Sure, the old-school everyday items such as pens, pencils, rulers and the like are considered to be stationery. There is also a more relevant to today range, like you see in Smiggle, Kikki.k and Typo – what we typically call social stationery but what shoppers call stationery.

I am sure there are shoppers visiting a newsagency today and walking out because they are not seeing Typo or Kikki.k type products.

Do a Google search for stationery in any major city and you will see Typo, Kikki.k and even Smiggle come up in search results. These businesses that many newsagents do not consider to be direct stationery competitors are coming up in search results. They are positioning themselves as newsagent competitors.

While many newsagents have focussed on the traditional and see flat and falling sales, growth in this new segment of the stationery marketplace has been rapid. More stores have opened and they have got better in terms of ranging and pitching.

Smiggle, Typo and Kikki.k have been educating shoppers and it is paying off.

Talking to someone from a mid-size business earlier this week, the admin person responsible for stationery has permission to purchase desk supplies from Typo because it makes the staff happier. While that is only one story, it is an example of the seismic shift I am talking abut.

Where are newsagents and their traditional suppliers in this? While some are engaged, that engagement is nowhere near the scope I see from our competitions, those leading shoppers to re-think what constitutes stationery – like Typo and Kikki.k.

For us to be relevant in this new world of stationery we need a fresh offer in-store. This comes from fresh products, fresh ins-store placement, fresh out of store marketing. Most of all, it starts with us redefining for ourselves and those in our business a fresh approach to stationery.

We can do it. Some of us are. But not enough for newsagents to be top of mind for the shopper out there heading to Typo or Kikki.k for their next stationery purchase.

Footnote: the photo is from the Typo store at the Canberra centre that I visited yesterday. It is large, impressive and busy.

7 likes
Newsagency challenges
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