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

Author: Mark Fletcher

Another example of an opportunity lost from our channel

wwpartworksThe Taronga Zoo Super Animals promotion running at Woolworths supermarkets appears to be a tremendous success. Super Animals looks at feels like a part series promotion with elements of building a collection.

Super Animals looks like something that would have traditionally been sold through newsagencies. But it’s being sold exclusively through Woolworths, driving impulse purchases and driving traffic for them.

While I have no inside knowledge, I do expect that the success of Super Animals will result is more kid-focussed collectibles like this from Woolworths and something similar from Coles.

Exclusive product is vital to driving traffic, especially in the collectible space. I know as I’ve had success over the last couple of years with a few exclusive lines in the collectible plush space.

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Competition

Has protection given a misplaced sense of entitlement?

Flowing from the discussion yesterday about Tatts, I have been thinking overnight about calls by newsagents for the NSW government to protect them from the Coles and Woolworths supermarket duopoly when it comes to lottery products.

As I noted yesterday, I am against supermarkets and any business associated with supermarkets. getting access to the sale of lottery products. However, I am against it because they are already too big, not because of a desire for legislative protection for newsagents.

Businesses protected by legislation or government policy are lazy – look at the Australia Post government owned outlets for evidence of that.

We are in the middle of extraordinary change on several fronts in our businesses. Retail is changing at a faster pace than many of us realise. Print media is changing. Personal entertainment is changing. These and other changes are merging drive extraordinary challenges for our newsagency businesses and for the businesses of our suppliers.

The best way for us to have suppliers make decisions that serve us well is for us to be more valuable to them than other retailers they deal with.

I have heard newsagents recently say that a supplier should support newsagents because of the history. I don;t agree with that. I have also heard newsagents say there are thousands of our newsagency businesses and suppliers should respect that. I’d agree only in the thousands of newsagency businesses are serving the supplier well.

Whether we like it or not we are in a free market economy. if our channel wants a supplier to favour us ahead of any other retail channel then it needs to deliver to the supplier commercial outcomes that warrant such treatment.

3,500 (or whatever the number is) newsagents is irrelevant unless we are delivering a valuable commercial outcome.

So, if you are going to fight on the Tatts issue or any other issue, ask yourself what am I doing commercially to drive the outcome I want?

Back to the headline though – I think that more than one hundred years of protection set us up for non commercial behaviour. that suited many suppliers for many years. Today, however, it’s a new world and it is getting newer by the day.

With hindsight, dismantling deregulation in 1999 should have come with support for the proper commercialisation of newsagency businesses, to give them a better footing for a free market unregulated world.

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Newsagency management

What’s your position on Tatts and supermarkets and how much will you back it?

I am against supermarkets and any business associated with supermarkets. getting access to the sale of lottery products.

It’s important I start with that statement as what I say in this blog post will cause some to say that is not my position.

The Daily Telegraph story published yesterday – Survival is a lottery for our newsagents as ticket sales opened up to the big players – has fired newsagents up.

While I say kudos to NANA for getting excellent coverage for the story, I note that the story is not new and that the story as it has been told is not the complete story.

The 2015 sunset for current lottery arrangements in NSW has always been there. The Tatts requirement for shop first has always been there. The Coles Express trial was reported here in October last year to move beyond trial. Smart politicians will challenge newsagent representatives with: nothing new here, why have you not planned knowing there was a sunset? Newsagent representatives ought to have a believable response.

The report is The Daily Telegraph missed what I think is the biggest challenge facing lottery agents, the growth in online sales. This is something I have written about previously. Today, online sales are estimated to account for 10% of Tatts’ revenue.

The migration of the purchase of lottery products from over the counter to online will grow. It is disruption to the over the counter model not unlike the disruption being experienced by newspaper magazine publishers and newsagents in relation print media except that Tatts retains its income. Indeed, it makes more out of online purchases than over the counter purchases. Publishers are not in this position.

So, add online growth to the challenge of a far more competitive market and the infrastructure cost of doing business and it is natural newsagents are concerned. But none of this is new.

Any newsagent in NSW saying they will have to rethink their business plans should the current protection be removed is confronting this issue too late. The time to adjust your plans and your reliance on lottery products for traffic and income was in 2010, when the five-year protection arrangements were put in place. Harsh as it is, it’s the truth.

NANA is doing what any association should do, raising awareness of the issue and calling newsagents to act to maintain the status quo. To achieve that, however, NANA will need to get the State Government to decide for small busies and against Tatts and their own state interests. Successive NSW state governments have put their interests and those of big businesses ahead of the public and small businesses. Look at bus tickets and the cuts to newsagent commission. Many representations by newsagent representatives failed to protect this important stream of revenue for our channel.

Despite all their lip service during election campaigns, we have not has a state or federal government seriously committed to small business for decades.

For NANA to have any hope it needs every newsagent involved, committing time, money and gathering signatures on the petition. I am as skeptical that newsagents will support such a campaign as I am that the State Government will act and protect small business newsagents.

I’d love to be proven wrong. So, that’s my challenge to newsagents: prove me wrong. Put your time and your money where your mouth is on this issue.

However … plan for a business without lottery products because even if a campaign is successful, the success will have a sunset. Plus, online sales will grow and some of your customers will migrate.  Good business planning is all about planning for every contingency. The report in The Daily Telegraph today is about a battle. The war is what’s happening online.

The risk to your business if Tatts products do go to supermarkets is a risk for you to own. It’s something you could have insulated your business from between 2010 and now. No matter, you know now – it is time to act.

At the core of your consideration here is the type of newsagency you want to have. I think this comes down to a choice between: being a convenience business or being a destination business. That is a conversation for another day.

One reason I write at this blog is to provoke newsagents to engage more actively in their businesses. Hopefully, this post does just that.

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Ethics

Sydney newsagents – visit Dymocks for inspiration

dymocksNewsagents close to Sydney should visit Dymocks for inspiration. In the cross over between the two retail locations on Gorge Street in the CBD there is a sizeable area devoted to what I’d call premium novelty products. I say premium as these items are not cheap and nasty.

This section of Dymocks offers excellent inspiration for newsagents who want to get into the novelty space. Go check it out. You’ll see many basket building opportunities that are ideal for any newsagency.

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Geekery

Sneaky magazine interest

magssneakSneaky magazine is generating good interest. It’s a fresh title offering a unique mix of stories. The covers are especially appealing, standing out in the sea of colour in the magazine shelves. We give Sneaky a full cover facing because of the unique covers. Sneaky is a tile we are using to reflect the diversity of titles in our newsagency compared to the less diverse range in supermarkets nearby.

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magazines

Leverage the zombies opportunity

magszombiesThe latest National Geographic should be placed by newsagents where people can see the full cover. If you have calendars, day-t-a-page and other collectible items from The Walking Dead tv show, place them with the magazine. This is an excellent cover that we can use to drive incremental sales of the title.

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magazines

Free newspaper trash in Sydney

freenespapertrashWalking around Sydney this afternoon I’ve seen several stacks of the free mX newspaper left on George Street unattended and blowing away. I hope the council is collecting an appropriate fee for the litter. I’ve only ever seen mX is display units or being handed out – until the mess I saw today.

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Newspapers

Bauer Media ignores newsagent sales data & sends extra stock when there is plenty in-store

bauer-oversupplyThis is not a new story. What I describe here happens in newsagencies across Australia every week, many times over. It’s been happening for years. This is a crime. There appears little or no interest in key spiller businesses in fixing the issue.

Shame on those involved as you are the people hurting small business newsagents and making us less competitive than others selling magazines. Shame on you.

Newsagents are pressured and penalised to provide sales data to magazine publishers so that those publishers can respond to demand and supply more appropriately. That’s the spin. Sadly, there is little evidence from some publishers that it is more than spin.

Bauer Media has been caught out again this week ignoring newsagent data and oversupplying a title with no justification for the supply.

While Bauer allocations people will have excuses, they are worthless as we have heard them before. Many newsagents feel that the company deliberately oversupplies to serve its won purposes.

Take a look at the image. You can see the initial supply of 8 copies of AWW Slow Cooker 4 on June 6, 2014. 1 copy was returned and 3 copies were sold on June 6, June 14 and July 20. yesterday, Bauer supplied an additional copy. The newsagent early returned it – incurring freight and labour costs. The newsagent was effectively fined by Bauer for Bauer’s own oversupply.

Warehouse, trucking and newsagent resources were wasted in this. It’s shameful.

Take a careful look at the image. This is data from the newsagency software being run in this newsagency treated so poorly by Bauer. Take a careful look at the detailed data in this small business. If this small business has access to such well-organised data and can access it in seconds then why not Bauer? Are newsagent IT systems better than Bauer’s IT systems? It would seem so. Either that or Bauer has the data and deliberately ignores it.

The example from this newsagency is one of many I receive regularly from our channel.

Okay it is only one extra copy of one title. Multiply that across our channel and not that it happens many times a year and you soon see the financial cost on newsagents for labour and freight plus the cash flow impact which I’d say is in the millions of dollars.

The newsagent held data is great for business management but it is bad in that it proves consistently poor allocation actions by Bauer against newsagents.

My experience is that no amount of complaining about institutional oversupply by Bauer will drive change within the business. Plenty of newsagents think this too and it’s a reason they strike out at the company with aggressive early returns of Bauer distributed titles.

Early returning is the only way we can effectively deal with this oversupply.

Publishers using Network and who are concerned about early returns could consider this when wondering why newsagents early return their titles.

Smart newsagents like the one who provided me their data have the evidence and they are getting angrier. I can understand them wanting to strike back.

Footnote: I have masked identifying details to protect the newsagent.

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Ethics

Great to see a newspaper publisher promoting print

cpprintKudos to the folks at the print edition of the Cairns Post newspaper for so strongly promoting their print product on the front of their building in downtown Cairns. While many Australian newspaper publishers pitch their digital platform ahead of print, this bold support of print is welcome to see. Cairns newsagents should be happy with this support.

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Media disruption

Yours Woolworths deal

wwyoursThe issue of Yours magazine which I saw in a Woolworths supermarket on the weekend had a gift with purchase which is not on the newsagency channel copy. The Christmas card pack is a good gift delivered with ideal timing, something that would have helped drive sales in newsagencies had we been given it.

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magazines

Boosting a magazine out of the pocket

magsstandoutWith no spare space for displays we are using tactics in magazine pockets to call out titles. A simple cardboard riser under copies of Better Homes and Gardens makes it more noticeable and helps drive sales. It’s a small step that took a minute to execute and the result is worth it.

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magazines

Interesting Stop Staples campaign could offer learnings for newsagents doing school booklists

op-staplesSomeone or some group in the US is running a Stop Staples campaign to encourage people to NOT purchase school supplies from Staples. The campaign is connected with the move of US Postal service outlets into some Staples stores:

Staples and the U.S. Postal Service have cut a deal that jeopardizes thousands of living-wage jobs – as well as your mail service. A no-bid deal between Staples and the Postal Service set up postal counters inside 82 of the office-supply stores in four test markets – staffed with untrained, low-wage Staples employees. Staples and the USPS plan to expand the program to Staples’ 1,500 locations nationwide.

Beyond the campaign itself, their approach is instructive on how a campaign could be waged against a gaint of a business.

Given the growing presence of Staples in Australia the Stop Staples campaign is something which could interest Australian newsagents who are involved in school booklist supply.

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Ethics

Money wallets the most stolen Christmas cards

moneythiefThe irony of money wallets being the most stolen Christmas cards is not lost on me. We have responded by adjusting placement to make capture of those involved easier.

Theft by customers is part of retail. While the figures vary between stores due to local factors such as placement and management, the overall average for the Australian newsagency channel is that theft costs us between 3% and 5% of turnover.

Reducing the cost of theft starts with knowing for sure what is being stolen – like the Christmas money wallets.

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Customers

Mother & Baby another magazine to stop selling

colesmagWith the publisher perpetually marking down the price of Mother & Baby magazine in Coles supermarkets I see no point in offering this title in the newsagency.

The saved pocket is better used to promote titles that are not seeking to make supermarkets look cheaper than newsagencies.

Hopefully one day the publisher will realise that their support of supermarkets over newsagencies is not the best move for their title.

It does not make sense to me that a widely available magazine title has dual pricing like this. They could only be doing it to make Coles look more appealing and all other retailers of the title more expensive.

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Competition

Gympie Times heads the newspaper audit

gtnewsThe Gympie Times has another good audit. As I noted a few months back they were the only daily to achieve growth. They have done it again with this latest audit and the editor took some space in the paper to record the result and thank readers.

This is a good newspaper story worth sharing beyond the Gympie community as it says something about locally focussed newspapers connecting with their local community.

Well done not only to newsagents involved!

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Newspapers

Sunday newsagency management advice: know the efficiency of your top traffic generator products

The top selling item in your newsagency may be among your least efficient.

In a recent study of newsagency shopper basket data where a daily newspaper was the top selling item, it was the item most often purchased alone.

In a typical Australian newsagency, the main daily newspaper is purchased alone 79% of the time. This makes the newspaper inefficient for the business. Efficiency is gauged by the number of items in a basket.

Knowing product efficiency empowers newsagents to act as it’s a retailer problem, not a publisher problem.

  • What do you have placed with newspapers?
  • What do shoppers see on the way to newspapers?
  • What do shoppers see from the newspaper stand to the counter?
  • Is a counter offer made to newspaper customers?

These questions reflect some opportunities for driving efficiency. Smart newsagents will think of others.

Some years ago in one of my newsagencies newspapers were purchased alone 80% of the time. Over several months we pulled that back to around 65% through engagement at the newspaper stand.

Low margin traffic generating products are only useful if we leverage the purchase of other items with them. This is retail 101. It’s essential for today’s newsagent.

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Management tip

Sunday newsagency marketing advice: be bold with your window display and get noticed

xmasattractOur shop windows and front entrances are the most important real estate in our businesses. We have seconds to grab attention, to get noticed.

Getting a passer-by to turn their head is a bankable result because a percentage of those who notice will come in and a percentage of those will purchase. We are competing with other retailers plus we are competing with mobile devices people are spending more time looking at while walking today.

The sole role of front window and or entrance of your shop is to get noticed – to get people turning their heads, stopping and walking toward your business because of what they have seen.

Newsagents in every situation face this same challenge for attention: in shopping malls, on the high street and in rural and regional locations.

We need to offer stunning displays and use light and sound to catch attention in our newsagencies – especially at Christmas when every retailer lifts their game chasing the attention you want.

Average displays will deliver average results. Displays that are the same as other nearby businesses will not help us break away from them and achieve our own greatness.

Our front of store traffic-generating display is just about the most important marketing statement we make yet too often retailers don’t treat it as such.

The photo shows the display on the main table facing into the mall at one of my newsagencies. The tree-shaped display is a computer controlled display standing 182cm tall. Each small rectangular box is a light box. Each character lights up. There are multiple coloured lights per box. It plays Christmas songs and lights up in sync to the  music. We are the only shop in the 250 or so shops in the shopping centre with anything like this. It’s attracting terrific attention.

The display cost us $230.00 and two hours to assemble. Already we think it’s a valuable marketing investment for the business.

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marketing

Pacific Magazines trumps Bauer Media in latest magazine audit

The July – September magazine audit results will give the folks at Pacific Magazines encouragement and the folks at Bauer Media reason to reconsider their discount packs. In key head to head competition, Pacific won out on key fronts:

  • New Idea sales declined 2.20% while Woman’s Day sales declined 5.90%.
  • That’s Life sales declined 4.00% while Take 5 sales declined 4.90%.
  • Famous sales declined 18.9% while NW sales declined 18.03%.
  • OK! sales declined 4.10% while WHO sales declined 11.70%

There is a fundamental problem with the Famous / NW type of title and unless the publishers urgently recast these titles for today’s marketplace, there must be a doubt about their future. The same is true for Zoo Weekly which suffered a decline of 27.90%.

On the Pacific vs. Bauer competition, the results are all the more interesting when you consider that Bauer does considerably more discounting than Pacific.

We must expect magazine closures with these circulation declines and an accompanying decline in ad pages.

As my newsagency sales benchmark results will show next week, there is good news in magazine sales with some newsagents achieving growth. Smart publishers will want to find out more about how they are doing it. The gap between success and failure is widening.

Read more at Mumbrella.

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magazines

Newspaper sales decline in Australia continues

auditThe decline in daily newspaper sales in Australia continues apace according to the latest audit. While all capital city dailies recorded significant declines, the Fairfax mastheads were hit hardest. While I am no newspaper publisher, I doubt Fairfax is making money from The Age at least several days a week. The year on year decline of 19.6% would have to be hitting the company hard.

It’s a matter of time, months maybe, from when we see a capital city daily retreat from daily publication of their print product. Newsagents need to factor the real prospect of this into their business planning.

I am surprised (maybe I am not surprised actually) that newspaper publishers are not more creatively and actively engaged with retail newsagents in driving over the counter sales. These are the times we need fresh initiatives and not the same old.

The audit results are reflected in the latest benchmark study results.

Read a full report at Mumbrella here.

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Newspapers

Instant take-off of Grumpy Cat sales

gcatWe started selling the new range of Grump Cat products as we were putting them out this week. Customers love this little cutie. With the moving coming out and plenty of social media coverage, the Grumpy Cat is well-known and very popular.

This is another example of leveraging a worldwide brand to drive impulse purchases. Shoppers purchasing the Grumpy cat are not coming in with this purchase in mind.

The more we leverage known brands in our businesses the more we can drive impulse purchases and make our businesses more meaningful to a broader cross-section of shoppers.

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Newsagency management

Promoting Christmas Better Homes and Gardens

magsbhgWe have the floor display unit promoting Better Homes and Gardens, Family Circle and the BHG Christmas cookbook at the end of the main magazine aisle. The placement is the third location for each of the promoted titles. It’s designed to draw shoppers down the aisle. This location is the best place currently available for promoting the titles without too much distraction around.

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magazines

How is Bauer Reader Rewards working for you?

I don’t offer Bauer Reader Rewards in my newsagencies and so cannot answer this question. I’m asking it here because a non circulation product supplier asked me today as they are considering an app based loyalty program.

My view is these brand based loyalty programs are not helpful to newsagents as our businesses are not at the heart of the promotion. Our business should be at the heart of any loyalty offer in our business.

Also, any loyalty program must be easily understood and simple in execution. The Bauer program is neither.

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magazines
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