We have had terrific success with our post Christmas sale, achieving excellent revenue and terrific GP thanks to buying for the event. We have been open for business every day except for Christmas Day.
Being in a major shopping centre with 250 stores, we benefit from the traffic spike of sales shoppers trawling for deals. Take Monday and Tuesday this week, while many suburban newsagencies were closed, we were open and did terrific business. It was well worth it.
the sale traffic is a benefit of being in a centre. However, it is competitive. Anything less than half price and people walk on by. A bookshop near us pitched their sale as 25% off and the shop was empty each time I checked.
Starting today we are pulling the sale back as we have new seasons for 2017 to kick in. That and the fact that we have little sale stock left.
The big category for us as been boxed Christmas cards. We have done well over $10,000 in the last week. At a terrific GP. It grows each year and never hurst boxed Christmas card sales in the next year.
On January 1 I emailed newsagents with details on participation for the latest benchmark study. I am thrilled to already have data from fifty businesses. Here is what I emailed out:
Q4 2016 NEWSAGENCY SALES BENCHMARK STUDY.
I am preparing a fresh benchmark study for the newsagency channel to look at the latest sales trends overall and in key product categories for the last quarter of 2016. This quarterly newsagency sales performance study will help newsagents see the future based on the data trends. It will also reveal the difference between emerging newsagency model changes. Click here for my last report.
How to participate.
Please run a Monthly Sales Comparison Report for 01/10/2016 – 31/12/2016 compared to 01/10/2015 – 31/12/2015.
Tick the category box. IMPORTANT.
Tick to exclude home delivery and sub agent data.
DO NOT tick the supplier box.
Preview the report on the screen. Save as a PDF and email this to me at mark@towersystems.com.au.
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 Blogas 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. It has been rewritten from scratch six times as software technology has changed.
I own and run two newsagencies. Over the years I have had three others.
Tower Systems serves 1,750+ newsagents with best practicenewsagency software. Overall, Tower Systems serves in excess of 3,500 small business retailers.
Fairfax newspapers today run a piece by Brian Robins questioning the future of the shopper docket in the wake of the sale of Woolworths fuel outlets to BP.
I am glad to see the value of the supermarket shopper docket questioned as it is, in my opinion, of dubious value, offering little or no genuine discount to shoppers.
Regulars here would know that since 2013 I have been using discount vouchers in my newsagency for a whole of business easily understood loyalty offering. The vouchers continue to have a measurable and beneficial impact on the business as they drive shopper engagement during a visit and encourage return visits.
I have countless stories from shoppers telling me that the discount vouchers have changed where they shop, often winning business from the supermarket a few metres from our front entrance.
Shoppers today want real value, value they understand. They wan to be able to access this easily. People are tired of having to sign up for a program, especially if this is their only likely visit to your shop ever or for a while.
In my newsagency, a third of all shoppers are first-time or irregular. This is where discount vouchers work well – they pitch a loyalty offer for greater engagement on the spot. And plenty of then do engage. Just yesterday I saw a $9.99 purchase grow into a total visit spend of $45.00 thanks to a discount voucher. That is $35.00 of good margin business I would not have won had the voucher not been offered.
What the supermarkets and other big business retailers have done is to damage loyalty programs in the minds of shoppers. They have trashed the value of a point. But I am happy with that as I choose to not use points.
I know of hundreds of small business retailers using discount vouchers to differentiate their businesses. Like me, they cite ease of use and ease of understanding as key benefits. With the right settings, the vouchers easily pay for themselves, delivering measurable bottom line benefit.
The best loyalty program a small local retail business can offer is one that promotes that small local retail business. Keep it inside your business rather than inviting purchases outside.
The software from my software company does offer points based loyalty, FlyBys integration. Vii Accumulate integration as well as the discount vouchers offering $$ off the next purchase. So, from a software perspective, I’m flexible. But as a retailer I want the program that works best for me in my situation … and that is discount vouchers. Hence my interest in the Fairfax report today.
FYI, here is an infographic video produced in-house at my software company that simply explains the value of discount vouchers:
I sat down yesterday to write a post about what 2017 holds in store for Australian newsagents and their businesses and the resolutions we should contemplate. I have decided that would be a waste of time.
Everyone in the channel knows what will happen. But here is a list of what I think will happen in Australia anyway:
Magazine sales will continue to decline. Some magazines will close.
Newspaper sales will continue to decline. Some daily newspapers will cease to publish daily.
Tobacco product sales will continue to decline.
Stationery sales in newsagencies will decline.
Greeting card sales in newsagencies will decline.
Over the counter lottery sales will decline.
At least 400 retail newsagencies will close.
The situation will be worse than it need be because too many suppliers ignore the specialist nature of our channel and too many newsagents do not run competitively engaged businesses. These are suppliers who chase mass, thinking that is the answer (when it is not).T hese are the retailers who think opening their door in the morning is the only marketing activity in which they need to engage, the retailers who only buy from traditional suppliers, the retailers who are more comfortable as agents than entrepreneurial retailers, retailers who see the ownership of a business as their pension rather than a career.
The resolutions for 2017 ought be: chase change is if your life depends on it, do less agency revenue and more 50% GP and more revenue. Chase having people asking if they are in a newsagency when they are in your shop.
Challenging their perception of your business ought be mission critical in 2017.
Selfishly, though, here is what I’d like to say – if you are not going to seriously change your business and would prefer instead to coast on the tracks of steady decline in traffic, revenue and profitability, shut up shop now and get out of the way. A decaying retail newsagency harms the many others who are transitioning their businesses. A decaying newsagency is taking some revenue the rest who are here for the long term could benefit from for a brighter future.
The thing is – I don’t want you to close or decline. I want every newsagent to be in the group of transformers. I want every newsagent to be experiencing seriously growing overall GP percentage. I want every newsagent to make more money fro their business in 2017 than they did is 2016. But achieving these things requires a change in mindset, renewed energy and guts to stop being an agent.
Imagine the power we would unleash is the 3,000 newsagency businesses in Australia today all turned 90 degrees or more away from their current path. We can take on supermarkets, gift shops, toy shops and other retail channels if we play outside what has been traditional for our channel. I am optimistic that enough are doing this and more will join them. For those there can be good times ahead.
I guess that brings me to the simplest resolution: nice as traditional is, for newsagents there is no future in being traditional so stop it, ditch it and go make your own business based in what you want to stand for in your local community.
In 2017, let your business whatever that is and not a business defined by an out of date shingle.
While I have not seen it for myself, several newsagents tell me the Herald Sun has the wrong price printed today – $2.20 instead of $2.40. One newsagent says they have been told they will be compensated the 20 cent difference for each copy sold.
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.
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 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 Supermarkets
This 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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
Place this issue of New Idea Jumbo Puzzler in a more prominent position and leverage that Patti Newton has been in the news this last week as a result of a Christmas gift robbery from her car. While bad news for her, her photo on the cover of the magazine could help you gain an extra sale or two.
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.
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 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.
We have had terrific success with our post Christmas sale, achieving excellent revenue and terrific GP thanks to buying for the event. We have been open for business every day except for Christmas Day.
