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

Author: Mark Fletcher

Suppliers promoting retailers on social media need to lift their game

The publisher of Breathe magazine promoted newsagents on social media, and Woolworths.

The post from yesterday says participating newsagents. You have to go to their website to find them.

However, on their website it is all about them selling direct to the shopper.

It is only when you scroll down to the bottom of the home page that you see the store finder link. Once you click that you enter a suburb and it them displays a map of stockists.

Once you get to the map it is terrific. They need to make this easier to find. It could be in front of people landing on their home page, without needing to scroll or even click on a link. That is what they should do if theirs is a over the counter purchase first strategy.

If the publisher strategy is that retail serves to facilitate the publisher / reader relationship then they should continue doing what they are doing.

I like to see suppliers promote stockists and do appreciate that newsagents get a mention from the folks at Breathe. However, I (selfishly, of course) want them to do it with a retailer first approach. In fact, a newsagents first approach. That approach would drive our engagement is it demonstrates respect for the us.

Re this pitch for Breathe: Woolworths is at an advantage and that is unfortunate.

21 likes
Competition

TV campaign for newsXpress

newsXpress yesterday kicked off a national TV campaign promoting jigsaws. 93% of purchases with jigsaws have only one jigsaw in the basket. The goal o the TV campaign, in-store promotion and social media engagement is to drive basket depth – in addition to making newsXpress stores destination stores for jigsaws.

Last year, jigsaw sales increased by more than 10% in Australia, off a strong base. Jigsaw shoppers are loyal.

The more newsagency businesses are promoted outside what have been traditional traditional traffic attracting offers for the channel the better.

21 likes
marketing

In 2018, make every day your payday

For several years, I have written that newsagents need to make every day their payday.

This is an important message as it focuses on the goal of driving business value. Too often, I see retailers working about, being focussed on, the wrong things, things that do not directly affect business value.

As 2018 gets under way, I am pitching this again, with revisions.

Make every day your payday.

There was a time when small business retailers could rely on selling their business for a handsome increase on the price they paid thereby providing a good pay day, when businesses sold for a good multiple of net earnings.

No more. Today, the best way to extract value from our businesses is to make every day your pay day, to not rely on your pay day being the day you sell the business. In fact, the typical newsagency today will sell for somewhere between 1.l5 and 2 times actual net profit as shown in the business P&L.

The P&L matters as this is what you need to be guided by in all business decisions and actions.

The challenge is how do you do this?

Retailers need to look at their businesses differently. This starts with the mindset of every day being your pay day. Each decision needs to be considered in this context, in the context of the P&L impact.

Focusing on profit today will give you a better result today and make your business more valuable tomorrow.

Here are some suggestions for making every day your pay day:

  1. Run with the leanest roster possible. Just about every retail business I review has capacity to lower labour costs. In a typical newsagency, one hour saved today is worth between $75.00 and $100.00 in revenue.
  2. Ensure you can sell when the business is closed. Yes, this means sell online.
  3. Promote the business outside your usual foot traffic area … increase your customer base.
  4. Promote your business outside the brand people know you as. or example, online pitch under a brand other than your newsagency brand.
  5. Have your best people working the floor, helping customers spend more.
  6. Have stunning displays that attract people from outside the shop.
  7. Have compelling displays in-store that encourage people to browse beyond their destination purchase.
  8. Always have impulse offers at high traffic locations.
  9. Charge more every time you can. Loyalty programs such as discount vouchers, bundling into hampers, multi buys such as 2 for 3 and other opportunities enable you to do this by blocking price comparison.
  10. Buy as best you can.
  11. Grab settlement discounts every time you are able.
  12. Measure product category performance by gross profit. Quit the categories that are not paying for themselves.
  13. Promote outside your store using online and social media opportunities.
  14. Leverage adjacency information. Chase a deeper basket – people purchasing more each visit.

Be responsible for the profitability of your business. Don’t blame your suppliers, your landlord, your employees or some other external factor … it all comes down to you – the decisions you make and the actions you take.

If you relentlessly pursue profit with a clear focus you are likely to see profit grow. That’s better than waiting to make money when you sell because that’s less likely to happen in this market.

Doing all this relies on your measuring the performance of your business. The Tower software helps with this. It is easy.

26 likes
Newsagency benchmark

You are not your customer

The next time you decide to not stock something because you do not like it, stock it and give it a good location and good support.

You are not your customer.

Think about the magazines you sell, the diverse number of titles. What percentage of the magazines you stock would you read if you had time? I would be surprised is the percentage was higher than 25%. That would mean 75% of the titles are not to your taste.

You don’t have to like what you sell. You don’t have to like it to be able to pitch it. All you need to do is to understand what you sell. Understand who the customer could be, how they would choose what they buy and how to best represent the product.

The more people who shop with you buying what you would not buy for yourself the better for you and the business.

Don’t think about your shop as an extension of your home, filled with what you want ton see.

You are not your customer.

Hang on to this mantra. Buy with it in mind. Take it as a challenge to see how far you can stray from your comfort of what you like. Let this straying show you what is possible in your business.

The desk nameplate in the photo is an example of an item several newsagents I know stocked under protest. They were shocked that it and others from the sarcastic range sold out in a matter of days, leading them to reorder these products they do not like.

Chase opportunities outside what you like and outside of what people expect for your business or your type of business. This is key to attracting new shoppers.

24 likes
Gifts

Advice: retail visual merchandising for blokes

This advice could also be called VM merchandising for people who think they can’t do it. Everyone can do Visual Merchandising! Experience is not necessary.

Visual merchandising is about display products in a way that attracts people to them, to look, touch and feel. It is about displaying products so you sell more.

Sales determine success, and only sales. A pretty display that does not drive sales is a waste of time and space.

A display that wins a supplier prize that does not increase sales is a waste of time and space, despite the supplier award.

Here is my advice on VM for blokes.

  1. Start with a clean space, a flat surface, in a good location.
  2. The best display looks like a pyramid.
  3. Your hero product is at the top of the pyramid.
  4. A seasonal poster hangs above the display or is placed next to it to signpost the display.
  5. Flowing from the hero product down to the base of the display are other products. But not so many that you can’t see what you want people to see.
  6. The display is balanced, even.
  7. A display of gifts always includes cards.
  8. Use coloured paper to highlight certain products. But don’t go for a rainbow.
  9. From a colour perspective, a good display has no more than two core colours as the focus.
  10. Don’t put signs in the display itself unless absolutely necessary.
  11. A display can look untidy and that is okay in some circumstances. For example, a box of Beanie Boos exploding from a box .
  12. Mistakes are okay.
  13. Oh, and don’t treat this as an engineering challenge. Keep it simple and fun! :

Remember, the alternative is no display at all.

A note to others who may be around when someone is doing their first display – we all did our first display once … be gentle.

23 likes
Newsagency management

Bauer shutters Reader Rewards program

Bauer Media has announced the end of the Reader Rewards loyalty program. Here is the announcement from the company:

As part of Bauer Media’s ongoing commitment to continuously provide effective and sustainable support to the newsagency channel we regularly review the range and efficacy of resources we offer.

After reviewing customer feedback as well as the low newsagent participation, Bauer Media has made the strategic decision to close the Reader Rewards loyalty app. The available funds and resources will be diverted into Bauer’s keystone trade development program, Connections with Bauer.

Please note the following closure timeline and details.

·         Reader Rewards will continue operating until Monday 22nd January 2018.

·         From the 22nd January customers will no longer accrue any additional stamps.

·         Customers will have until Wednesday 28th February to redeem any remaining free magazines they have earned.

·         Customers will be notified of the closure via email encouraging them to redeem any remaining stamps they have accrued.

This decision has been carefully made in response to channel feedback and an increased demand for alternative business building resources, such as social media support.  Bauer Media’s ongoing priority is to continue to deliver a host of optimised tools through the Connections with Bauer program in-line with new and exciting developments in the retail landscape.

10 likes
magazines

Are the banks closing accounts of newsagencies with Western Union?

The Australian published a report Friday claiming that banks have ended services to 100 customers (newsagents) offering Western Union services.

The rift between the small business ombudsman and Australia’s largest lenders has widened further, with Kate Carnell set to pursue the big four banks over their decision to end banking services with more than 100 customers ­offering remittance services through Western Union.

As the threat of being ensnared in a legal stoush with anti-money-laundering regulator Austrac continues to loom large, following the explosive suit against Commonwealth Bank late last year, lenders may be too aggressively ending business banking relationships with newsagents who offer Western Union services.

The report in The Australian is the first I had heard of such action being taken. I have searched online and cannot find any other reports.

12 likes
Newsagency management

Newsagency management tip: handling charity donation requests

I have written before about the need for policy and process around community group and charity donations. I like the approach of a cafe I visited recently. Every person approaching on behalf of a charity was given a card.

While the cafe is part of a small chain, their approach of bringing structure to handling the request is good. A single local business could easily do the same. Groups expecting you to support them need to show support for your business.

9 likes
Management tip

Pitching Valentine’s Day at the entrance of the newsagency

This photo shows our opening pitch for Valentine’s Day in the newsagency. This is at the main entrance to the business.

I call it the opening pitch as the placement will move twice through the season. We are supplementing this in-store placement with a series of social media posts starting later this week. Social media is playing a big role in our marketing spend this year. We have a budget, which is measured against sales outcomes.

While we will get good traffic for Valentine’s Day card purchases, those who actively promote outside their businesses set themselves up for great success.

2018 is already showing itself to be a year for making our own success.

11 likes
Greeting Cards

Good jackpot start to the lottery year

While the OzLotto $40M jackpot went off a couple of days ago, last night Powerball jackbooted with next’s weeks top prize worth $55M. This is a nice start to the year for lottery retailers for we know the best sales growth comes from natural jackpots.

While I don’t have lottery products in the newsagencies I have today, I did for many years at Forest Hill. Our most successful marketing for jackpots was by papering the newspaper stand. This was back ten and more years ago, when newspapers were a valued destination category.

If I had lotteries today, I’d look at by top destination lines outside of lotteries and pitch the jackpot there.

9 likes
Lotteries

Pitching Pilot Frixion pens

With tv commercials promotion Frixion pens on high rotation on free to air TV right now, promoting them at the counter or some other high traffic area of the business as well as on social media would help you maximise the opportunity. My only wish is that Pilot offered a file of the video so that newsagents could use to promote the pens more easily.

6 likes
Stationery

Good early Valentine’s Day card sales

Several have reported excellent early Valentine’s Day sales. Each went out a day or two after Christmas, replacing Christmas singles. While most Valentine’s sales are in the last week, early display captures those who plan ahead and reminds others you are in this space.

Valentine’s Day is an excellent season for pitching the broader gift range in the business. It for this reason that I suggest newsagents not purchase gifts that are too Valentine’s focussed. Rather, they can buy items that will sell all through the year as well as for this season.

The season is also an opportunity to pitch the business as a card destination. It is important for Valentine’s day cards to be close to other cards, to encourage purchases outside the Valentine’s purchase.

I was in  the US last week and saw plenty of Valentine’s displays. The photo shows the range in a Walgreens store in the midwest, in Winconsin in December 27. The major retailers, like Walgreens, run like clockwork with stores required to take down and put up seasons on a national calendar.

Note their use of the shelf at the top of the card fixture, pitching bags. This is excellent use of the space and drives gift bag purchases.

Newsagency businesses remain a key destination for Valentine;’s Day card purchases. We can leverage this by in-store and out of store promotion, especially out of store.

7 likes
Greeting Cards

Tatts ads running when retailers are closed

A newsagent contacted me this morning about Tatts running ads promoting the OzLotto jackpot after 6pm, when stores are closed. They say this happens often. I agreed to post about it here for others to comment.

From a Tatts prospective this is the right move. For shareholder value, growing online is important.

8 likes
Lotteries

Q4 2017 newsagency benchmark study under way

On January 1 I emailed newsagents inviting their participation in the Q4 newsagency sales benchmark study. The call for data will be open for the next three weeks.

I am reviewing data as it comes in. The dataset already has data from more than thirty newsagencies. More than half the participants so far are new to the study. This is okay in that they provide 2016 data and 207 data, making the year on year comparison useful.

While there is not enough data to draw conclusions for the channel and its sub groups, the results suggest a possible slow down in decline of magazine sales but less than ideal Christmas card results. As I noted, the dataset is small at this point though.

For those interested in the call for participation, here is the email I sent to newsagents January 1:

Q4 2017 NEWSAGENCY SALES BENCHMARK STUDY.
I am preparing a new benchmark study for the newsagency channel to look at the latest sales trends overall and in key product categories for the fourth quarter of 2017. This quarterly newsagency sales performance study will help newsagents see the future based on the data trends. Click here for my last report.

How to participate.

  1. Please run a Monthly Sales Comparison Report for 01/10/2017 – 31/12/2017 compared to 01/10/2016 – 31/12/2016.
  2. Tick the category box. IMPORTANT.
  3. Tick to exclude home delivery and sub agent data.
  4. DO NOT tick the supplier box.
  5. Preview the report on the screen. Save as a PDF and email this to me at mark@towersystems.com.au.
  6. Read the report yourself and see what it shows you about your business.

I will email the results to all participating newsagents and publish the results on theAustralian Newsagency Blog as a service for all newsagents.

My work with this channel goes back to 1981 when I wrote newsagency software to manage newspaper home deliveries. That software evolved into Point of Sale software and has been rewritten as software technology has changed. 

I own and run three newsagencies. Over the years I have had three others. I am a 50% shareholder in and CEO of newsXpress, the newsagency marketing group.

Tower Systems serves 1,750+ newsagents with best practice newsagency software. Overall, Tower Systems serves in excess of 3,500 small business retailers.

Mark Fletcher
M | 0418 321 338

12 likes
Newsagency management

It’s 2018 and News Corp. continues to publish propaganda

This front page of the Herald Sun today is ridiculous. They have given over their front page to an attack on politicians for taking annual leave in January. There is far more important news today. But the Herald Sun pushes real news further into its pages. They prefer to given their front page to telling people what to think.

In my view, this is not a newspaper, it is political trash. sadly, we have to sell it.

14 likes
Newspapers

Newsagency management tip: end of year declutter

If you are working this weekend and not in a busy Summer holiday location, things are bound to be quiet. My suggestion is to take the opportunity to declutter.

At this time of year in retail, decluttering to me means quitting a product, category or even department that is not relevant to how you will see your business in 2018.

The departments that could be vulnerable based on data I see from a bunch of businesses:

  1. Everyday confectionery.
  2. Tobacco.
  3. Ink and toner.
  4. Low performing stationery.
  5. Transport tickets.
  6. Newspapers.

It is easy to get data for your business, to be driven by the numbers. By this I mean, look at the GP the target product / category / department is generating, consider the space and labour costs. This process will soon reveal if you should quitting any.

This is a good, practical, project for a quieter trading day.

11 likes
Management tip

Reducing magazine floorspace allocation in the newsagency

We have moved magazines off the floor, to the back wall of this newsagency. While it is the back wall, it is a feature, and easily shopable. It is also not too far from the front of the shop. This magazine wall can be see from outside the shop – this is important to us.

To cover the range of magazine titles we want we have, in some sections we have three titles where we would usually have two, and four sometimes where we would have two.

This move reduces the cost overhead of magazines to the business. This is essential with any product category that is at the low end of product margins in the business.

This latest most is another step in the regular dance of shop floor changes. In this shop, over the last three years, we have changes magazine floorspace allocation six times. Each was considered based on the data and reflecting what we want the business to become.

The days of traditional floorspace allocation based on traditional newsagency layout and operation are over. We are in a world of ever-increasing rent and labour costs, tougher competition from other retailers and tougher competition from online.

The extent and pace of change in our businesses needs to reflect these factors. It also needs to reflect how we pitch our businesses.

In the case of the store I am writing abut here, it identifies as a newsagency. Hence the extent of the magazine offer on the back wall. However, it is clearly a newsagency that is some distance from traditional as the majority of the floorspace is allocated to gifts, collectibles, cards and other high margin lines.

23 likes
magazines

The value of older employees in retail today

Older employees can being terrific value to a retail business that is keen bring change to the business. Young employees cost less and this is a common appeal among retail business owners.

An older employee could bring more value to the business, they could leverage a better return on labour investment for the business. Here are other benefits that can be available depending on the background, skill set and work interest of the older employee:

  • Maturity. An older employee understand work.
  • Appreciation. If they have been to of work for a while they are more likely to appreciate then job and could therefore invest more in it.
  • Experience. An older employee could have experience in a field from which the business can benefit. I am not thin king here about retail experience. rather, they may have business management skills, special interests or experience that you can leverage as you change the business.
  • Flexibility. With less focus on establishing themselves and a social life they could be more available and this could help the roster.
  • Communication. An older employee is more likely to be better with oral communication given they had less tech when they were younger. While this is a rash generalisation, I’d back it to be likely.

When you are looking to fill a vacancy or a new role in the business, consider older person for these and other reasons you can think of. The could bring to the business skills and interest the you can leverage more valuably than the skills and interest of a younger lower cost employee.

Of course, the value of any employee depends on your hiring, training, management and motivation of them.

The post of this post is to suggest that next time you hire you think about an older employee.

Note: The federal government jobactive restart program can help Australian businesses that hire older employees financially:

Restart is a financial incentive of up to $10,000 (GST inclusive) to encourage businesses to hire and retain mature age employees who are 50 years of age and over.

Older employees can bring new insights and energy to a business. The right hire could be just want the business needs to explore new traffic opportunities.

18 likes
Newsagency management

Many businesses closed over the Christmas / New Year break

It is now tradition that many suppliers to retail and newsagency businesses are closed in these days between Christmas and New Year.

With so many in business saying how tough things are, seizing every opportunity possible to serve customers is important.

I know of several suppliers benefiting from being open this week while competitors are closed. The same is true for newsagencies. I know of newsagency businesses that are closed this week – yes, all of this week. That does not make sense to me, especially if they sell lottery products.

In my own case at my newsagencies are open and at my newsagency software company, every day newsagency businesses are open they need access to support. The challenge is that with some suppliers closed you get queries that they should have got.

With online playing such a big role in business today, those with strong online businesses are never really closed. Given that business today is a race to the cash, being always open is necessary.

17 likes
Newsagency management
Trending Articles

Fairfax changes approach to TV Guide, disrespects newsagents

Published on April 20, 2011

What do you think of the Powerball changes?

Published on February 16, 2018

IPS releases new magazine contracts

Published on June 21, 2011