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

Month: August 2018

Managing challenging customers, and selling products

I have noticed more retailers using humorous signs at the counter to encourage less stressful encounters terms with customers. In some cases they are signs specifically for that purpose whole in others they are signs that are actually sold in the store. Here is one example I saw in a card and gift shop earlier this week.

I like this sign. It’s sharp but fun. It is part of a larger range that has been popular in the US for a couple of years now.

I saw first-hand that this sign work as a talking point with customers, which can lead to them looking at other signs in the range.

The key with using any signs like this, which are part of a range in-store, at the counter is to keep the counter clean of other distractions. This means no other signs. Plus, you need a quick response to any customer comment or query, to maximise the opportunity. The other thing I would do is change the signs regularly, thereby not focussing on one like this the could offend customers.

How we win some customers today is different to a few years ago. Just as what can constitute a gift today is different to a few years ago. Winning at both requires in playing outside what has been usual in our businesses.

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Customer Service

newsXpress encourages shop local for Powerball $100M

Here is a 9 second video provided to newsXpress members yesterday for promoting shop local for the Powerball $100M jackpot. The objective was to create something different to the usual lottery marketing and something that could be used across Australia.

Most marketing videos for social media are disposable. That is, you use them once or twice and never again. People want fresh and entertaining content. This is also why short videos work well.

I would be happy to detail here marketing collateral from other marketing groups for this Powerball jackpot.

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Lotteries

Melbourne gift fair wrap up

While I was unable to attend Melbourne gift fair this year, I am grateful to colleagues, supplier contacts and friends who shared their insights. Here is a small selection of key insights shared:

  1. Optimism among retailers. Moderate to good. Retailers say fellow retailers talked of tough conditions but were overly optimistic about Christmas and beyond. Suppliers I heard from say they did good business.
  2. Optimism among suppliers. Retailers and suppliers both said some suppliers were less optimistic. A couple of suppliers have mentioned they will not do the fair next year and instead invest in a different route to market.
  3. Range of products. People seemed happy with what was on offer.
  4. Range of retailers. Several commented they saw a broader range of retail businesses represented.
  5. The fair itself. As has been said for plenty of years – one day too long, maybe two.

Looking at my software company’s involvement, I am happy with the results. This is Melbourne fair twelve or so for us. Plenty of retailers from a variety of channels connected with us and booked time to meet in store, which is the main reason for us participating.

Look at the involvement of buyers for shops I own, they are happy with what they ordered and the opportunities available.

This post is an opportunity for others who would like to share their feedback to do so.

12 likes
Newsagency management

Thinning newspapers have other implications

Thinning newspapers in Australia are not dealing well with being rolled. The photo shows The Age from Friday a week ago. Whereas a few years back you could easily fold the paper back into shape, it is hard now with such a thin product.

The photo shows the paper after a couple of goes at straightening it out for easier reading. This presentation that you can see in the photo impacts on product enjoyment and potentially impacts subscriber numbers.

While I understand rolling machine setting adjustment could result in a better outcome, there is a problem with thinning newspapers and how to provide the subscriber with a more enjoyable outcome.

Papers most days are too thin for flat wrap, which was the obsession of parts of News Corp years ago. There was an extensive trial and plenty of debate.

Maybe, the approach in some US cities of a single fold into a slim bag you can hang of a door handle could work or maybe a simple tri-fold into a flatter bag. However, neither lends themselves to throwing. The photo here, taken earlier this week, shows a how a newspaper is presented for a home delivery customer in a town in Wisconsin.

I do think there are issues here to be considered by distribution experts, to ensure customer satisfaction and thereby push back against loss of subscribers due to product presentation.

A distribution newsagent I was talking with last week suggested a return to hand folding. Another who already does this themselves for a small run says they easily adjust the strength of the roll based on the thickness of the product.

It is ironic that thinness is a challenge today where years ago thickness was the issue, a big issue.

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Newspaper distribution

No wonder people are placing fewer classifieds in newspapers

I had cause to place a death notice in a News Corp. newspaper early last week. The website was clunky. I selected a price point based on the word count but the website dropped me to a lower word count and then bumped me up to where I was in the first place. It was cumbersome and frustrating.

However, that is not my main complaint. Here it is…

In the death notice there was mention of a memorial service, within the word count limit. They would not permit this. Either I had to create two separate ads, one in death notices and one in funeral notices for a higher cost, or move the whole ad from death notices to funeral notices.

Due to an apparent arbitrary rule of News Corp. I either spend more on two notices or end up in a category that I considered inappropriate. This is a rule of yesteryear, a rule that, to me, demonstrates why fewer people run classifieds in newspapers.

It is not as if the mechanics and structures of the classified columns will not permit memorial service details in death notices. There is no reason for the rule from what I can see except to maximise revenue for the publisher.

What is interesting is that I ran the same ad in a small local regional newspaper, not part of the News Corp. world, and they accepted and ran the ad without issue. In their world a death notice can include a memorial service notice. Indeed, the experience with the regional publisher was simpler, faster and more enjoyable than with News.

Based on my personal experience with News Corp. classified ads, I think it is a broken out of date business that charges as if it is the only platform for these life moment notices. Thankfully, there are more options, which can be used depending on the generation one wants to reach with such a notice.

For all their focus on digital delivery, pay walls and more, News Corp. has their classifieds business rooted in the past, in an era when print was the only platform.

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Ethics

Leveraging Fortnite

Fortnite (the game) is massive game and has been for quite some time. While supplementary march is challenging to source, it is out there and will be easier to access soon. In the meantime, the latest Krash is an excellent title to pitch at the counter as it will be purchased on impulse by people who do not usually purchase the title but who love the game.

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magazines

Tips on how to grow card sales in your retail newsagency

Following from the release of the latest newsagency sales benchmark results yesterday, I share small selection of the advice newsXpress members have access to on how to grow card sales. I am doing this today to show that there are actions you can take in your newsagency business to grow card sales.

  1. Pitch at the counter. Always have a small selection of cards for impulse purchase at th counter. Change this every week.
  2. Staff picks. Close to the counter have a selection of staff pick cards. These should change weekly.
  3. Pitch outside the department, disrupting traffic. Ensure that every shopper is pitched cards every time they visit, even with a small format stand. You choose the cards for the start. Do not purchase extra cards.
  4. Reward loyalty. Ensure every card purchase is a step toward a loyalty bonus.l Dfferentiate your business through this.
  5. Train. Ensure every staff member understands your cards and knows how to approach shoppers.
  6. On social media. Every few days, talk about a card in simple way that pitches the card without being to marketing oriented.
  7. Promote to businesses. Businesses send cards – if they do not they should – pitch bulk purchase at an offer.
  8. Focus on low-volume captions. Captions like Thank You Coach and New Home give you the opportunity to remind people about giving cards.

Key in this activity is the objective of getting people to purchase more cards than they otherwise might. All of us in the greeting card supply chain need this as the purchase volume per capita in Australia is behind the US and UK.

I think we as retailers carry the prime obligation to drive card sales and to attract new shoppers to our businesses looking to purchase cards. We need to do this by being engaged with the category, loving it for its high margin and traffic generation and being creative in our pitch. Our influence is greater than we and suppliers have allowed it to be over the years.

As I noted, this is a small selection of a target kit of advice designed to help retailers grow card sales.

I hope you find the suggestions useful.

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Greeting Cards

Retail newsagency sales benchmark results: April – June 2018 vs. 2017

The core category challenge continues for retail newsagencies while new categories grow.

This newsagency sales benchmark study reflects sales results as tracked in 153 retail newsagency businesses in Australia for the April through June quarter of 2018 compared to the same period in 2017.

Only businesses with accurate data are included in the study. There is no banner group dominance, nor is there city over country dominance.

In collating data, I remove businesses at the extremes where other factors are at play such as major construction or a newsagency in a centre with two newsagencies where one closed and thereby giving an unnatural boost to the other.

Each data point is the average, mean, of all data for the data point.

In assessing results at the category level, I have only included data for each category businesses trading in that category.

OVERALL BUSINESS PERFORMANCE METRICS.

  • Customer traffic. Down 4%
  • Overall sales. Down 3.5%
  • Basket depth.
  • Basket dollar value.

CORE PRODUCTS.

  • Newspapers. Unit sales. Down 8.5%.
  • Magazines. Unit sales. Down 8%.
  • Greeting cards. Revenue. Down 4%.
  • Stationery. Revenue. Down 10%
  • Lotteries. Revenue. Flat.
  • Tobacco. Revenue. Down 16%.
  • Agency. Parcels, gift cards, betting account top-up. Down 6%.

SPECIALTY PRODUCTS.

  • Gifts. Revenue. Down 5%.
  • Toys. Revenue. Up 6%.
  • Plush. Revenue. Up 3%.
  • Collectibles. Revenue. Up 3%.
  • Craft. Revenue. Up 2%.
  • Coffee. Revenue. Up 15%.

What does this mean?

It was a tough quarter on all fronts. While there certainly are businesses achieving excellent growth, too many are not and this impacts the results.

My take is that the decline in traffic the core of papers, magazines, stationery and tobacco is not sufficiently being replaced with new traffic. While some newsagents are well engaged in pursuing new traffic, the majority are not.

I don’t think there is sufficient attention on basket depth and basket value. These are important metrics.

Another point from this latest study relates to gifts. It is unhelpful to group all gifts together when I do know of considerable diversity in the products placed in this category. For example, one store has in gifts cheap china product while another shop has high value collectible pieces. How retailers categorise the products is up to them. I can only assess based on their categorization.

I want to comment on greeting cards. In the benchmark dataset, I can see sales data for all the major card companies. The overall, disappointing, performance I note is not isolated to one company over others.

I am concerned that I am seeing a sales performance trend for cards in newsagencies that requires attention.  While the first response to this by some newsagents will be to demand card companies act, I think the most important and immediate action will come from newsagents.

Newsagents have given over their card departments to card companies for too long. I think we need to exert control on the placement of cards in our shops. While a destination card department is important, we need to pitch cards to all shoppers. This needs to be done by us thoughtfully, creatively and energetically.

I think all newsagents need to act on cards rather than standing by and watching. You only need look at Coles to see their engagement with the category. Their changes started over a year ago and they continue today. Their pitching of cards outside the department continues because it works. We can learn from this.

We need to be proactive when it comes to cards. It is an important category for us. There is only upside available for us from being proactive.

The occupancy cost challenge – a note for landlords.

Landlords want newsagency businesses in their retail mix. They want the store with papers, magazines, lotteries and other core items for the channel. Often, they restrict the space available for non-core, imposing a low gross profit model on businesses, thereby increasing occupancy cost.

Newsagencies today cannot sustain occupancy costs of more than 15% … where occupancy cost the ratio of retail space cost to product revenue lus agency commission. The goal must be 11% for the business to be profitable and able to serve the usual level of debt needed for such a business.

Landlords need to be aware of the changes in product mix, the challenges of low-margin core products and restrictions they place on what businesses can sell. They need to be flexible on rent so newsagency businesses can be sustained and thereby provide the service they want in their centre.

If landlords want a newsagency business they need to price the space to reflect the nature of a sustainable business in that location rather than any premium rent they could get from a retailer with higher margins.

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Newsagency benchmark

Will IPS be a casualty of the Nine takeover of Fairfax?

It is hard to see magazine distributor IPS as having any future, in a Nine controlled Fairfax business or even in Fairfax itself if the takeover collapsed.

With magazine sales continuing to decline and the category of less interest to retail newsagents than at any time in the history of the channel, it is hard to see upside for a business as small as IPS.

IPS comes up in discussion because of the proposed Nine takeover as Nine would be keen to resolve business performance challenges. I could be wrong but I suspect IPS would be a low hanging fruit opportunity it terms of tidying up IPS.

It will be interesting to see how this part of the takeover plays out.

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magazine distribution

Advice on reducing the cost of employee theft in retail

Theft is something to be managed in any retail business. Retailers are  stolen from by employees. Good management is about reducing the opportunity for and instances of theft.

Follow this revised and refreshed advice and the opportunity for theft will be lower and the certainty of detecting it higher.

  1. Value employees. Experts say this is the top step to take.
  2. Share information. Often, theft can be driven by a misconception about the profitability of the business. Sharing accurate business performance data can educate against theft.
  3. Do your end of shift through your software and have a zero-tolerance policy on being over or under. Reconcile banking to your computer software end of shift. One business where this was not done was being skimmed regularly for $200 a day.
  4. Change your roster. Sometimes people work together to steal. One retailer found a family friend senior and their teenage daughter stealing consistently.
  5. Check GP by department. If GP is falling outside what you expect, research it further.
  6. Demand the cash drawer be closed after every sale. A drawer left open is an opportunity.
  7. Keep the counter clean. A better organised counter reduces the opportunity for theft as it makes detection easier.
  8. Have a no employee bags at the counter policy. This makes it harder for them to hide your cash.
  9. Beware employees who carry folded paper or small notepads. These can be used for them to keep track of how much cash is in the register that is theirs – i.e. not rung up in the software.
  10. Beware of calculators with memories at the counter. One retail business employee used the memory function to track how much cash had to be stolen prior to balancing for the day – cash from sales not rung up.
  11. If you sell tobacco products, use stock control. Enter new stock as it comes in, scan all sales and only reorder based on what you software says. Every month do a stock take. Popular daily items such as tobacco stock discrepancies are an indicator of theft. Had one retailer we work with been doing this they would have caught their $250 a day employee theft months earlier.
  12. Scan everything you sell. Do not use department keys as this makes it easier for employees to steal since they know there is no trackback to stock on hand. Using department keys is an invitation to steal.
  13. Do spot cash balancing. Unexpected checks can uncover surprises. One retailer needing to do a banking during the day uncovered a $350 discrepancy that lead to discovery of systematic theft.
  14. Check your Audit Log. Look at cancelled sales, deleted sales and items deleted from a sale. Leaving a cash drawer open from the previous sale, scanning items, taking the cash and cancelling the sale is the most common process used by employees to accrue cash they then take from you. Good software tracks cancelled sales and what was in them. This can be matched with video footage.
  15. Setup a theft policy. Put this on a noticeboard in the back room. Get staff to read it and sign up to it.
  16. Do not let employees sell to themselves. If they want to purchase something make them purchase it from the other side of the counter.
  17. Be professional in your management of the business. The more professional your approach they less likely your employees will steal as they will see the risk of being caught as high.
  18. Advise all job applicants that you will require their permission for a police check. From the outset this indicates that you take your business seriously. In many situations applicants who have been asked for permission to do a police check advise they have found a job elsewhere.
  19. Do not take cash out for your own use in front of employees. If they see you take cash for a coffee or lunch some will see this as an invitation.

These steps work – based on decades of helping small business retailers to reduce and manage employee theft.

Theft, employee and customer, costs a typical small / independent retail between 3% and 5% of product sales revenue.  Management attention can cut this dramatically.  It does not take much time. No, it is more about having professional processes in place which everyone in the business follows.

14 likes
Ethics

Fun video appeals to shoppers for dad gifts and cards

Here is a video I created for newsXpress members a few weeks ago. I wanted too create something pitching to those who buy for dads but I did not want it to be about Father’s Day. This way it can be used through the year. The video was more popular with people under 50 years of age with an interest skew toward girls over boys.

While promoting Father’s Day is something we are doing, promoting being a destination for cards and gifts for dads all year round is more important to me. I am committed to filling the troughs between the peaks with good revenue and we can do this by attracting shoppers in fun and non-traditional ways, like this video.

Note: I share less than 5% of the marketing I am engaged with at newsXpress here on this blog. I mention that for any trolls readying a negative comment. I don’t care if you like the video or not. What I care about is that newsagents, all newsagents under any banner, engage creatively and regularly to attract new shoppers to their businesses.

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newsagency marketing

Melbourne gift fair tips for retailers

The Melbourne gift fair kicks off today. Here are my tips for retailers shopping the fair. Others are welcome to add theirs.

  1. Have a budget. Stay within it.
  2. Have a buying plan, to ensure you are buying to the goals of the business.
  3. Remember that you are not your customer.
  4. Know that your buying is the first step to attracting new traffic to your business.
  5. Write on each order your delivery timing requirements.
  6. Write on each order any promises made, so the order fully documents your expectation. These could include exclusive territory, returns etc.
  7. Note on the order whether you accept backorders.
  8. Note on the order by which time the order is cancelled if they are unable to supply.
  9. Take a copy of every order placed. Use your phone camera.
  10. Ensure you know who the customer is for the products in question.
  11. Do not pay a deposit.
  12. Have rest breaks to ensure you are fresh and alert when shopping.

If you are going to the fair, have a great time!

16 likes
Newsagent suppliers

Promoting newsagents for lottery jackpots

I love this Facebook post from Kerrilyn Page at newsXpress Mount Morgan explaining the importance of buying lottery jackpot tickets through your local small business newsagency. It frames the challenge of online and the importance of shopping local well I think. I also love the optimism of dreaming for the win.

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Lotteries

Supplier distress

A wholesaler who supplies a range of small business retailers including newsagents with whom I have never had any contact or commercial engagement called me late last week to discuss debt collection challenges. They have been owed more than $20,000 by five different newsagency businesses, with which I have no connection, for more than four months.

The purpose of the call was to talk through options.

Theirs is a small family business, with annual turnover of around $350,000. They are not strong on credit checks. They prefer to take people at face value. The $20,000 in bad debts is hurting.

The goods were supplied on time and in good order. No credit claim has been made. They know from personal visits that in three of the shops the goods have been sold.

The supplier is contemplating taking action. however, they question the value of the time and cost investment for the relatively small amount in each case.

What was interesting from the supplier was the comment that they think in at least several cases, the newsagents involves moved from supplier to supplier, buying on credit knowing they could not pay and expecting they would not be pursued for relatively small levels of debt. I don’t know if this was the plan of the newsagents in question,. However, it is concerning that the supplier thinks it was.

This small business supplier I spoke with is distressed. They say others are too. This is not good news for our channel in terms of reputation and in terms of supplier strength.  We need successful suppliers. A reduction in number will only hurt newsagency businesses.

I write about this today because the supplier asked me to, to see what conversation follows.

16 likes
Ethics

Cute drives traffic and revenue for engaged retailers

We are in a period of glory days for all things cute. You only have to look at the shelves of K-Mart, Target, Typo, Smiggle and other retailers to see the value they place in cute products to drive traffic and revenue.

Cute comes in many sizes, shapes and colours, and in different products including cards, games, toys, gifts, wrap and more.

What is interesting abut cute is that people purchase cute items because they are cute, nor necessarily because they have an immediate need or because of product function. This is what makes cute products valuable.

The Guardian published an article in 2016 that explored the science of cute. A quick online search soon reveals pen ty of articles about cute and why cute products sell. While rooted in Asian, and, in particular, Japanese, culture, interest in cute is worldwide.

In a newsagency today you can leverage cute through existing product categories of cards, gifts, plush and toys, even more. To maximise the opportunity, however, you need to promote outside the business, to connect with people who might otherwise not visit the shop to see what you have to offer in the cuteness space.

Using a keyword analysis tool, I can see that there are in excess of 100,000 cute related searches online in Australia ever month. man of these searches relate to products. People are looking for cute products. This is a need we can serve in our evolving newsagency businesses. Sure, it is hard to play in a space that is not easily understood. However, there are groups, suppliers and others ho can help.

Take a moment and do your own research. be aware of what other retailers around you are selling. Test some products yourself. Test, too, a cute approach to product displays – there are many inspiring images online to guide you.

Testing is important because playing in the space of cuteness is all about playing in a way with products and opportunities outside what may be usual in your business. You are unlikely to have a relevant reference point. This is why I suggest playing, experimenting.

Cute is popular right now. Find ways to embrace not and you may tape into a new source of customers for your business and that has to be goal #1 right now.

17 likes
Management tip

Tatts pitches digital purchases

Here is a Facebook ad for Tatts that came up in my feed last night. While it mentions purchasing in-store, the only path from the ad is direct purchase from Tatts.

This marketing of online purchase is what I would do if I was Tatts. However, it is a reminder to retailers to not over-capitalise the lottery offer in the shop.

Lottery purchases are migrating online and Tatts will make this easier and more enticing in my opinion.

6 likes
Lotteries

Newspapers work well at the back of the newsagency

With the return from newspapers declining in most retail newsagencies, due to declining over the counter sales and higher space related operating costs, retail newsagents need to find ways to retain the category but at a lower cost.

One easy move is to place newspapers in less valuable space, usually at the back of the shop. While many newsagents have made this move, many have not. Indeed, there are plenty who retain the old-school large format newspaper display in prime position facing the entrance to the shop.

In an average size retail newsagency with rent of $60,000 a year you would need to sell 30+ newspapers a day to cover the cost of the space before you even consider labour and other costs.

Since newspaper sales are declining rather than increasing, it is important to consider options – hence my thoughts today on newspapers at the back of the shop.

The common objection to newspapers at the back of the shop is that customers will complain. My experience is one or two right, but most will not. This is especially true if they are easily found, can be browsed and are well displayed.

If you have not relocated newspapers yet, I suggest you try it with good signage, an easily shopped space and a plan to make good use of the front of store space you free up. In fact, this is crucial. If customers see you making good use of the only memorial (boat anchor) newspaper stand at the front of the shop they are more likely to support your move.

So, make a deliberate move, make it easy for shoppers, show through actions why you have made the move and ensure everyone on the team understands why.

Since you pay the rent, the wages and other costs, moves like this are 100% yours to make. If you feel this is the right move for you, do it without worrying too much abut the folk who may complain or have a negative opinion but will nit contribute to the operating costs of your business.

I appreciate some want newspapers at the front of the shop as they want to identify as being a traditional newsagency. That is 100% cool, as long as you make the decision that serves your needs and how you see hour business.

Oh, and here are ideas for the freed space: Toys, Homewares, Gifts, Fun, Retro and more … products through which you can pitch to new traffic.

12 likes
newsagency of the future
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