2016: a year of transition for small business newsagents and their suppliers
I created this forecast in 2009 anticipating revenue by category for a blended average retail newsagency to cover the 2010 to 2020 period.
I have shared it several times here as well at newsagency conferences and Newsagency of the Future workshops over the years.
With 2016 drawing to a close, except for lotteries (shown as commission and not takings) in some locations and stationery overall, the projection continues to prove to be accurate.
I am not happy about it being accurate. I’d rather magazine, newspaper and some other revenue categories to be growing, not declining.
Looking at the projected 2016 column now, some categories reflected my hope in 2009 for transition by 2016. Additional traffic from gifts, toys, plush and new lines was key to achieving the projected GP and GP as a percentage of revenue.
We can look at the changes happening in and around our businesses as if a bystander watching a parade or we can jump in and influence how things go in our businesses. I prefer to jump in. Indeed, I prefer to be ahead of changes where possible.
I hope newsagents resolve 2017 to be the year then bring on change in their businesses, big change, whole of business change.
Doing what you have been doing will ensure you see a continuation of the results you have been achieving.
I have shared the table above as encouragement for newsagents to reflect on 2016 compared to previous yearend to contemplate what can be achieved in 2017. The forecast has guide all of my own business decisions as they relate to the newsagency channel. It has stood me in good stead.
Lottoland attracting customers with double jackpots
Check out the Lottoland TVC that has been airing this month:
OzLotteries has been busy this week promoting the $35M Powerball jackpot. This was on twitter yesterday:
Online is where it is at with lotteries in Australia. This is why I have said for ages now that supermarkets getting lotteries is not the biggest threat to newsagencies. Online is the threat.
It is vital you run your business to be less reliant on lottery commission than ever. While this may feel like an impossible task, it is possible. The sooner you start seriously pursuing this the better.
News Corp. gives Woolworths a competitive advantage over retail newsagents
News Corp has announced that Woolworths, like Coles, will no longer be required to process the returns of newspapers.
If News Corp. was genuinely supporting of small businesses it would implement this change for all retail outlets that comply with scanned based trading requirements and not just its big mates / advertisers.
The less friction for retailers in handling newspapers the longer they are likely to support the sale of newspapers.
Scanned based trading is key to this implementation. This is something smart newsagents have been able to offer News Corp for years.
Here is what News Corp. has announced:
Changes to the Supply of Newspapers in Woolworths Stores.
What is happening?
The physical returns of newspapers is being removed from Woolworth’s stores. Agents/distributors will no longer be required to collect and process returns for any Woolworths SupermarketsThis includes not processing the figures into iServices.
This process will be similar to Coles – whereby no returns are collected or processed by agents.
When is this happening?
This change is effective from Monday , 16th January 2017.The week ending January 15th, 2017 will be the last week agents/distributors will be required to process returns on behalf of Woolworths Supermarkets.
Why is the change being put in place?
The returns process adds complexity and cost in a low cost retail environment. It adds cost to both Woolworths and delivering agents and distributors.This step in the process is being removed to reduce that cost and complexity for both Woolworths and you.
Will the distributing agent’s commission change?
The commission rate for distributing agents will remain unchanged.What happens to unsold papers?
All unsold papers should be placed in Woolworths recycling (paper and cardboard).How will returns be calculated?
Woolworths are providing News Corp scan sales by store, by day and by title. This scan data will be used to derive a return figure – or”un solds” – by deducting the actual scan from the allocated amount. This data will be used to calculate agents/distributors commissions.Is scan sales now accepted by audit
AMAA will accept scan sales as audit compliant.
News Corp. in its papers calls out what it considers to be the unfair practices of politicians and businesses. But they will not publish about this unfairness. This move is another reason for retail newsagents to get out of newspapers. Maybe that is what News Corp. wants.
Who cuts the dick off this funny card and why?
Every so often someone cuts the balloon ‘penis’ off this card. We don’t check the security system as life is too short to worry about the petty criminal actions of the censor. But it bothers me someone would enter the shop and censor what we sell. They can behave how they like in their own homes but in my shop they should respect my property.
If I did catch them I’d report them to the police as this damaging of property is wilful, malicious. If they don;t like what we stock they don’t have to come into the shop.
Ugh.
Will you store Christmas 2016 stock for next year?
Each season we quit everything that has not sold so the next time the season comes around we start afresh. Space is a factor – storage space is expensive in shopping centre space. But outside of the space issue, it is good business practice.
I’d love to hear from others as to what they do.
Do you store what did not sell in a season for the next time that season comes around? Or, do you quit everything and start afresh?
Our competitors quit everything. They like to start each season fresh. If we want to compete with them it is what we must do.
Boxing Day is important for major shopping centre based newsagents
Yesterday in many major shopping centres in Australia it was a battle between retailers large and small for shopper attention and money at the Boxing Day sales kicked off.
Shoppers were out for a bargain and if you did not have bargains on the lease line people quickly passed you by.
We had stock sourced specifically for the opportunity as well as products we are quitting for 2017. Boxed cards were the hero in one store with $4,000 worth sold for terrific GP in the day.
Given how serious shoppers move between centres and how the Boxing Day Sale in Melbourne is a season, we have gone out today with a new offer.
I’m grateful for the opportunity of this end of year clear out.
Is there no TV guide from News Corp. for this week?
Newsagents in NSW tell me there is no TV guide from News Corp. covering TV this week. I checked online at the Daily Telegraph website and can only find last week’s guide – as you can see in the image.
Hearing from newsagents in other states, News Corp. clearly managed this at the state level. Unless NSW newsagents I have heard from missed the memo, it’s a fail for this week.
It is an opportunity to sell TV Week. That is the best offer newsagents can make. The alternative is to push people online to any of the online scheduled including that from Freeview.
While some customers are grumpy about the situation, be ready with a fun response to neuter their grumpiness. It is not enough to say it is not your problem.
How far customers travel for what they want
We had a customer Christmas Eve driving across Melbourne, for an hour and a half, to purchase in-store a $180.00 product they discovered we have in stock. They have never been to our shop. They found us and that we have the item through a website.
This experience reinforces the in-store value of being accessible online. The shopper was shopping by brand, certain of what they wanted to purchase. They found us through the brand search and in a couple of clicks were able to see what we had in stock. One call and we had the item set aside for them.
This is an example of what retail experts call omnichannel – shoppers using multiple channels to a purchase. In this case, online and in-store.
We all was more people coming through the front door. This year more than any in the past the evidence is there as to the ability for to to attract more people through the front door through smart online engagement, online engagement that is closely linked with our in-store technology, to provide visibility on stock on hand.
Retailers not promoting the purchase of product online are missing out for sure.
Marie Claire a popular Christmas gift thanks to gift with purchase
We have all but sold out of Marie Claire magazine thanks to the terrific J Bronze tanning cream gift with purchase and that this gift was not widely available. We leveraged the opportunity with out of store marketing and it worked a treat. Our main magazine competition is the two Coles’ in the centre and they did not have this gift with purchase.
This was our opportunity to leverage and leverage it we did in-store and online.
In-store, the key was to fan out the title so the bronzer could be seen and understood. we did this in both locations we had the title.
Blamed for the imminent divorce
We sold our of Wife Christmas cards a couple of hours ago. This is good for us and our card supplier. Selling out with a few hours of Christmas shopping to go is good. However, the husband keen for the purchase was not happy.
What am I supposed to do now, he said.
There is always Coles, I said pointing to the Coles a few metres away.
I hate Coles. No, I was not going to challenge that.
You’re supported to have Christmas cards, he said.
We do have Christmas cards, I said, pointing to the range left. Just not a Wife card.
She’s going to divorce me now, you know what don’t you!
Maybe that’s your Christmas gift. I was pretty sure I could get away with this.
Then she’d kill me. Hmm he didn’t think it was funny.
Look, why not a card For the One I Love, I suggested.
That’s taking it a bit far. He folded his arms.
He stood there expecting more from me. So, we talk through options. It was a Disney sound card that got him, His wife loves Disney. That and a Disney licenced Hallmark Keepsake.
Problem solved. Divorce averted. The choice showed he knew something about her and that was more important that the Wife label on a card.
Last minute shoppers can be challenging.
How single Christmas cards worked at the counter
I checked in with the move from last weekend of putting a selection of single Christmas cards at the newsagency counter.
It has worked a treat.
Some customers swapped cards they had selected for cards we had at the counter. Others added cards to their purchase.
The keys to selection were the careful selection of the cards in the unit and their specific placement.
This is a small step move by us, one which has paid off with extra Christmas card sales. It is the type of move all of us in retail need to make more often – small moves at key traffic stops to get shoppers buying that extra item or two.
I hope others tried this move.
The important last two days of Christmas in the newsagency
We made some moves in the newsagency yesterday to make the most of the last two days. This is the fifth major change in the Christmas season. Such changes are vital as the reflect the progression of the season to the climax of this act, which is today, Christmas Eve.
I call it act one because for city centre and major regional centre stores, act two starts Boxing Day.
Yesterday’s reset included a more convenience focus and a reduction in visual merchandising. Those shopping at this point of Christmas want less friction, easier shopping and fast service. Our changes deliver this.
I am excited for today and what it will bring.
A perfect gift for those who can’t have a dog
It is not often you get a Christmas product hero product from a previous year be a hero again the next year. These life-like dogs that breathe are exactly that – a hero two years running.
We have this one on the counter. People love it. And, no, damage has been negligible. We chose the counter location as it is an unexpected sight in a business that also sells papers and magazines.
Leveraging Nicole Kidman on the cover of magazines
I was thrilled to see the latest issues of Australian Women’s Weekly and Australian Vogue placed next to each other in the newsagency yesterday. This is smart placement in retail, leveraging that Nicole Kidman is on the cover of both titles.
This is the type of move newsagents can make that shoppers will rarely see in any other business that sells magazines. Publishers take note.
This is the week for suppliers to shine
We were all but out of single Christmas cards having achieved a 20% increase on what we did all of last year up to Christmas Eve. Things looked bleak, we preparing to take the stands off the shop floor. Then, our core card supplier found product from nearby major retailer and a secondary supplier filled some gaps. This means we are able to maintain close to a full range through to Christmas Eve and this is important so we can see how far we can take it.
Suppler support like this is invaluable, especially in this last week before Christmas. We are grateful to ur suppliers for their help, especially going to a competitor business and moving stock from them to us.
It’s the Christmas spirit!
Winning the price comparison with Wild by WH Smith
At $49.99 our Cards Against Humanity packs are priced $20.00 less than the product is available for at the nearby Wild store. Wild is owned by UK giant WH Smith. Our strategy with this product this year has been all about driving traffic.
We have had plenty of product available at this price. It has worked a treat. These customers are valuable too as they purchase other items to complete the gift.
Gordon and Gotch forecasts changes to newsagent magazine distribution model
Gordon and Gotch sent this message to newsagents earlier this week:
Dear Newsagent
Since the industry consolidation in March this year we have been reviewing a number of processes that have been in place in our industry for many years. In our survey in July newsagents again said the work involved in processing and returning physical returns was cost prohibitive and time heavy.
We have now completed a six month review of EDI sales versus return data processed and the outcome of this has been encouraging. Approximately 350 newsagents have been identified as fully compliant as well as meeting the gold level standard through XchangeIT.
We will be advising these newsagents in January that as of February 2017 they will not have to make any physical returns excepting partworks and specific trading cards.
The full criteria on how you can meet the standards required will be posted on our website in January but an overview is:
- GGA will use the services and technical support of XchangeIT for this program to generate the initial integrity, timing and continuity checks on the data files received.
- XchangeIT will also run monthly variance checks across a sample of GGA titles for each newsagent and produce a regular customer classification.
- GGA will use the top tier customers (Gold Members) from the XchangeIT classification process and run further validation checks for all returns processed.
We believe this to be a step in the right direction and hope that the number of newsagents participating will increase throughout 2017. We will be doing quarterly reviews and adding newsagents who meet the criteria.
We will contact you again once the details have been posted on our website in January.
May I also take this opportunity to wish everyone a Merry Christmas and Happy New Year!
Sincerely
David Hogan
General Manager
Gordon and Gotch Australia Pty Limited
While this move has taken a while to happen, that is has been made is welcomed by plenty of newsagents. Gotch needs to not stop here though. I have pitched that in my discussions with them this year and prior. They need to keep evolving.
On the decision 350 are fully compliant. I suspect the number is greater than this. The challenge is the reliance on XchangeIT to measure compliance. There are instances where this is less than ideal.
Why I don’t pitch shop local support small business retail in my business
I don’t promote the shop local message from my local small business shops. You know the message I mean – the signs saying what small businesses mean, how it keeps people in work locally and similar.
I understand the messages and how they make local small business retailers feel good when they pitch them. However, I suspect the messages are not cutting through – nowhere near as much as small business retailer want.
We are not entitled to demand people shop with us because of our size, our location or who employ. Regardless of the role we play in the local community and for the local economy. We are not entitled.
Yet too often the signs are put out, posters put up and posts published on social media with an air of entitlement.
It would be terrific for people to support local small businesses. The benefits for the local community are obvious and plentiful. But does telling people to support make any difference, like really make a difference? I don’t think it does. In fact, I think with so many of these messages out there people have become blind to them, making the marketing wasted.
People get the intent. They get that small business matters. But they are time poor like us and choose what works best for them in the limited time they have available.
The best thing we can do is show the value of our businesses to our local community. We can do this in many small practical ways, hoping some of them are noticed enough for people to talk about and thereby become word of mouth local marketing that helps our businesses.
We can demonstrate local community support by things we publish on social media, things that support and serve the local community. we can provide practice help to loved local groups.
These actions I think are more important than a poster in the shop or out the front telling people why they should support local small business.
Garnering local support is best achieved by the local support we demonstrate. It is the whole actions speak louder than words message. If we are acting local then our message its more likely to be heard.
I’m not against people putting the support local small business posters up. The objective of this post is to encourage thinking abut whether it really makes a difference.
NANA says Tatts has relaxed retail image requirement for newsagents
NANA, the NSW newsagents association, released this yesterday:
The retail franchise administration group at Tatts Group Lotteries has advised lotteries outlets in NSW and ACT which have a 30 June 2017 deadline to upgrade to the Generation One DigiPOS Retail Image that an across the board extension to 30 November 2017 is now in place. The extension gives Newsagents and other lotteries outlets in NSW and ACT previously due for the upgrade by 30 June 2017 a five-month extension.
If I was a Tatts retailer I’d be frustrated at the moving targets over the course of this project. The moving targets have altered the costs and this could have disadvantaged those who moved earlier.
Also, their decision to put in place a delay now is odd given the heavy handed notices sent out last week.
Maybe Tatts could use the delay to gather evidence of the commercial benefit of their demand retailers install DigiPOS. For the size of the spend retailers deserve more than a hope of a revenue increase. tatts should have evidence from the retailers who have it already. My suspicion is there is no noticeable increase in revenue that justifies the increase cost imposed on small business retailers by Tatts.