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

Author: Mark Fletcher

Smart Officeworks charity campaign enhances their Back To School pitch

owhelpchildThe teaming by Officeworks with The Smith Family as part of their Back To School promotion is smart. People will see it and automatically think that by shopping at Officeworks they are helping needy kids with school supplies.

The collateral I saw in-store at an Officeworks yesterday provided no details. Indeed, it looked like a request for shopper donations to the campaign. But shoppers will not think about this.

The connection by Officeworks of the BTS season with a charity is smart as it plays into the social responsibility / charity pitch we see so much now.

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magazines

3D gaining traction in retail

3dpOne of the shops I got to see in New York last week was 3D printing outfit Makerbot. On the back wall you can see 9 3D printers. Elsewhere in the shop they have items for sale that they have ‘printed’.

While I’ve written about this previously, I am revisiting it today as I think about products and services we might offer in the future and whether they are viable for us.

3D printing is still in its infancy with the printers of any strength and value costing thousands and the products they produce of questionable commercial value given printing times. However, there is an extraordinary curiosity value and this gets people interested – even if they don’t buy.

Today, my interest in a 3D printer in store is as a magnet attracting people who may purchase other items. At Makerbot, the shop is primarily used to sell the printers as this is what their parent company makes. There are plenty who visit the shop to watch the printing – it is mesmerising.

3D printing is a space to watch. yes, I know harvey Norman and others are in the space. The units I am looking are superior and not yet retail friendly.

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retail

Unhelpful commentary from Michael Pascoe on newsagents

Fairfax published a comment piece today by Michael Pascoe, BusinessDay Contributing Editor, about the decision being faced by the NSW government on where Tatts lottery products can be sold and the lobbying by NSW newsagents for continued protection.

While I agree with some of what Pascoe writes on this topic, his commentary is ignorant in some areas. For example:

Newsagencies are blighted businesses, hundreds joining the thousands of newspaper company employees who have lost their jobs. That’s capitalism for you – things changes, markets are disrupted, opportunities arise and fall. Like the local Blockbuster store, they are collateral damage of our technological evolution. They are no more special than every other business that is special in its way.

I’d prefer Pascoe to have commented that there are newsagents with growing businesses, newsagents who saw the changes coming and fundamentally changed their businesses. In the hands of a good retailer, a newsagency is not a blighted business.

For a long time, the newsagencies were a protected species – as pharmacies still are. They enjoyed a monopoly on newspaper distribution that was eventually broken down by the newspaper publishers. That the business of publishing physical newspapers also is rapidly breaking down is immaterial.

I’d prefer Pascoe to note:  deregulation of print media left newsagents disadvantaged, with less control over supply than those they now compete with. We have gone from being protected to being deliberately disadvantaged.

Newsagents used to be a powerful little lobby group, as pharmacy owners still are. They’re not any more, but might be worth a few votes for a policy as vague as an “extended moratorium”.

Pascoe could have noted: attention newsagents have attracted on this issue is more than achieved in recent years.

On the central issue in Pascoe’s piece, I agree – lottery sales need to be considered in the context of a tax, revenue raising for the government. Governments will ultimately choose revenue.

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Lotteries

Newsagents will close unless… stories unhelpful

The stories in media outlets this week that newsagents will close unless they are protected on the matter of lottery ticket sales are unhelpful in my view.

Research by journalists would reveal that in states where there is no such protection newsagencies not have closed as a result. research would also indicate that there are many growing newsagencies without lottery product whatsoever.

I don’t want to be part of channel that survives because of protection just as I do not want to be of a minority and only get a job because of that and not because of my skills.

The stories infer that our businesses are uncompetitive and need help, weak and need life support are out of date yet don’t want to be relevant to today.

The bigger challenge newsagents with lotteries face is not from other retailers getting the products, it is from online. Win the political lobbying on retail and it’s no win at all given the extraordinary growth of online sales and the better service experience for things like ticket checking online.

The newsagents who think their business would close if other retailers like supermarkets got lotteries should think now about how they would react, about the business plans they would implement to survive. Indeed, this is what they should have been doing for years.

Protection is dangerous. It can make you lazy. It can make you feel entitled.

I run businesses in unprotected marketplaces. Competition makes me more focussed and more committed to my own actions for the success of the business. Competition drives me to explore efficient new customer generation – so I am not relying on one path to my door.

By all means lobby the politicians – but in the meantime, act like a professional retailer, make your business more appealing, generate net new traffic for other products and services, make your current traffic more valuable and exert more control over your future than ever before.

While the history of our channel as protected businesses is rich and wonderful, it is history. Our future is in an unprotected market where we are successful because of what we do and not because a politician wants the small business vote.

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Lotteries

What’s behind the counter in your newsagency?

knox-bbdispHere’s what customers see when they come to the counter of my newsagency at the moment. As the biggest outlet in our region for ty product, we take pride in promoting it differently to promote the brand and to drive impulse purchases. The lines on show at the counter are new and therefore highly sought after by the valuable ty collectors.

This is another way to attract new shoppers, get existing shoppers spending more and growing overall business GP. It ties bank to many management and marketing tips I have published here.

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newsagency marketing

Shocking behaviour by a retail landlord

I heard a story earlier this week about a new newsagent  opening a new business who has been told by the landlord they cannot open their shop until all magazine pockets are filled.

I’d never stand for this unless there was a provision in the lease which gave the landlord such power – but I’d never sign a lease with this.

My advice to the newsagent is to ask the landlord to show where in the lease there have such control over the opening and operation of the business.

Footnote: this is not a major landlord, it’s a small operator overstepping their authority to the detriment of the small business newsagent.

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Ethics

It’s not too early for Valentine’s Day

vday2015Talking with a newsagent yesterday they said they don’t put up Valentine’s Day until after Australia Day. We’ve had it up for a week.

I know of supermarkets that have had it up since the start of the new year. Supermarkets would do this because it works.

We have it on the lease line to attract shoppers who like to embrace seasons early. It’s working, product is moving. I think a four week on-sale is the minimum required for a season like Valentine’s Day if you want to position yourself as a specialist card retailer.

 

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Newsagency management

Confectionery businesses dropping like flies

Last week it was Earnest Hillier falling into administration. Today, it’s liquorice maker Betta Foods appointing an administrator. The ABC has the report. I wonder how much of this is brought on by supermarket pressure on supply terms. Or, is it bad buying as the businesses were only recently acquired.

With some Hillier stock in newsagencies it will be interesting to see how their administration plays out – given the extraordinary changes following the Darrell Lea wash up.

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confectionary

WH Smith on the move again in Australia?

2015 is not even a month old and I’ve heard rumours from two sources of another newsagency channel related WH Smith acquisition being imminent.

WH Smith had a busy 2014 with acquisitions of Wild, Kennys Cardiology and Supanews. This latest rumour, if true, will be the biggest yet.

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Competition

US stationery shops reduce stationery floorspace

staplesI have been visiting US stationery retailers like Staples for years, most recently last week in New York. Staples stores I know well have less floor space allocated to stationery products today than at any time I can remember.

What was stationery space now hosts everyday grocery items one could purchase for office or home use. Toilet paper, paper towels, snacks, cleaning products and more are on the shelves and in the aisles.

There is also an increase in gift lines on offer.

I put the changes down to two factors: overall paper based stationery is flat or declining and more repeat purchases are being made online for convenience.

With the retail space to fill, it makes sense that Staples expands its everyday offer, especially in New York with a large residential population within walking distance.

I compared what I saw at Staples with my local Officeworks yesterday and I can see the trend here in Australia too. I suspect the reasons for the shift are the same.

All this makes me wonder what newsagents are doing about stationery? Is the floorspace and inventory investment the same and how do they compare with sales revenue?

In my own case, stationery revenue is up 33% year on year with no change to space allocation. Pens continue to be the most important stationery category accounting for 28% of sales and growing 21% year on year.

With a tight allocation of space for stationery I don’t feel pressured to reduce the allocation at the moment. Officeworks and Staples, with massive retail spaces to fill, will have to evolve their offers to appeal to more shoppers if they are to maintain revenue targets.

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Stationery

How can a new newsagent not know about returning magazines?

A new newsagent was shocked last week to discover that they could not order the magazines they wanted and that they had to bundle up and return magazines which had not sold.

No, I am not making this up.

I am shocked that such a fundamental part of the operation of a newsagency had not, apparently, been outlined prior to the purchase of the business and that the purchaser had not been tested before being allowed to take over the business.

Years ago, in the highly regulated and protected era of the Newsagency Councils, people wanting to buy a newsagency had to present to there Council and pass their interrogation about the business, their plans and their knowledge about how to run the business. While there were aspects of the old system that were wrong, there was no doubt that people being permitted to purchase a newsagency actually did know how to run the business before they took over.

Those trading under a shared shingle are only as strong as the weakest link. The fewer controls over who can trade under the shingle the greater the risk for the future of the channel.

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Newsagency challenges

Here’s how we use a magazine aisle end

aisleendYears ago this aisle end would have hosted Connections or other magazine promotions. Now, it hosts prorudcts. Magazine sales are up. Not using it for magazine displays is not hurting. Products we place here sell – generating a better return on the space.

To newsagents still doing big aisle end displays promotion magazines I’d ask why? In my own case I’ve stopped the displays and continued to grow overall magazine sales.

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Gifts

Different Valentine’s Day gifts

aynilWhen selecting Valentine’s Day gifts we have given preference to gifts we can carry outside the season – like this officially licenced music themed cup and saucer. It will sell easily outside the Valentine’s Day season, appeals to magazine shoppers and fits well with our retro offer from other suppliers.

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Gifts

Good counter offer from Pacific Magazines

ni30mWe’ve had a terrific run of purchases of On the Table in 30 Minutes from Pacific Magazines. It’s been the right title at the right time, packaged well and pitched at the right price. We started it at the counter and that’s where it has worked best – purchased on impulse.

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magazines

Beware of Bee Printing

In one of my businesses we contracted a company called Bee Printing to print some boxes for us. Our contact at Bee Printing was Steve Davis. We though we were dealing with a local company. Events since indicate that they may be offshore using phone routing to make them look local. The goods arrived more than a month late, the material was not to spec and the printing is not what was approved with the proof. On raising these issues with Bee Printing they have not responded to me. I will never use them again.

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Ethics

Newsagents would hire more people in weekend penalty rates were abolished

Screen Shot 2015-01-18 at 7.52.36 pmA survey of 163 newsagents last week through this blog elected a result of 85.89% of respondents indicating that they would hire more staff if weekend penalty rates were eliminated. While the sample size is small, I am confident that a more comprehensive study would reveal a similar result.

Screen Shot 2015-01-18 at 7.55.52 pm83.33% of newsagents responding to the survey said they would work less hours themselves. I am surprised at this – I expected a lower percentage, maybe half the result. If this happened,if newsagents worked less, imagine the improvement in their quality of life and that of their families. What a terrific outcome!

Screen Shot 2015-01-18 at 7.57.24 pm144 of the respondents said they had discussed the topic with their employees. This is terrific. Of those who had discussed the topic with employees, 65.97% said their employees had indicated they would be happy to continue working for the business if weekend penalty rates were cut. This is a good number.

While this is an unscientific survey, it presents results that ought to encourage politicians to seek thorough research into the economic benefits and costs of the elimination of weekend penalty rates.  While I am no economist, my sense is that such a move would be positive for the economy.

I hope that people find the survey results interesting and useful in discussing the opportunity.

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Newsagency management

If you sell Country Life

magclpadIf you sell Country Life magazine be sure to get the latest issue out with the full cover on show. The Paddington cover story feature is timely given the terrific publicity for the movie. We have an opportunity – thanks to the Paddington cover – to get people buying this title who would not usually look at it.

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magazines

No sales for Triple J Annual

magtjhot100I’m a Triple J fan – I like the station and have enjoyed the magazine. I’m disappointed to note that we did not sell a single copy of the Triple J Annual – and this is why we pulled it off the shelves early. No sales in weeks … it’s not paying for the space.

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magazines

Sunday newsagency management tip: be responsible for what you order

How many times do you receive stock that you have not ordered.  I am not talking here about stock you do not usually order such as magazines and newspapers.  No, I am talking about greeting cards, stationery, gifts and other items which you have control over in your business.

If you receive stock you have not ordered and complain to your supplier only to have them say that you did order it when you spoke to their rep – I;d say the problem is yours.

Establish a structured approach to placing orders which includes a paper trail of approval. Explain to your suppliers your process – make it clear that you accept no responsibility for goods received for which there is not evidence of your approval of the order.

Sure, suppliers will not like this. However, if you want genuine and full control over the stock in your business you need to take these steps. representatives of suppliers will soon learn that your processes need to be followed if they want to be paid.

Next time you complain about receiving goods you did not order – have a structured process on which you can rely. 

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Management tip

Sunday newsagency marketing tip: stop following the leader

Newsagents and, indeed, many small business retailers, think that the only way to compete with big business competitors is to match them on price.

I think chasing a big business competitor on price is a mugs approach.

Big business will beat you on price every time. Not necessarily on a real price comparison but absolutely and certainly on perception. They spend millions compared to your pittance convincing shoppers they have better prices – even if the claim is not true.

So, my marketing advice is – save your money promoting on price.

Newsagents spend too much money competing on price with no long term gain.

Instead, spend your marketing dollars on a different promotion. The jigsaw promotion we are running at the moment is a good example. Here are some more to get you thinking:

  1. Instead of a back to school promotion in January, run a back to work promotion after Australia Day.
  2. Or, instead of a back to school flyer based on price, write a letter explaining what it means for the community, your employees and you when people buy their school supplies from you.
  3. Create your own card season in between major seasons.
  4. Promote everyone in your business as an expert.
  5. Be part of an important local community group – giving of your time and expertise could be more useful that donating cash.
  6. Distribute flyers in low seasons – not when letterboxes are full.

The better you explain the value you bring to a community, especially if your newsagency is away from the city, the greater the opportunity for locals to engage with you because of the emotional value proposition you offer.

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marketing
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