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

Author: Mark Fletcher

Newsagency sales up 15% year on year thanks to POS software discount vouchers

Our sales were up 15% year on year in the September quarter. This is an excellent result which I put down to a combination of a terrific in-store offer, excellent staff and our discount voucher loyalty program.

Indeed, discount vouchers are driving basket depth, shopper return and bringing in new traffic thanks to word of mouth. The discount vouchers are getting destination shoppers shopping more of the shop.

Nowhere is the value of discount vouchers more evident that weekly magazines – up 12%. These are retail only sales by the way. Everyday counter cards are up 10% and stationery up 27%. Calendars are up 28% on last year and in the transactional data I can see the vouchers driving this.

The keys to success are clarity of the discount voucher offer, consistency of the pitch, generosity in value and pulling levers in your software to drive higher margin business.

In addition to the 15% increase in revenue there is excellent growth in gross profit.

POS Solutions published yesterday a post about a newsagency pulling out of what they call discount coupons. In their blog post they link to a previous post of theirs where they refer to a report about my business and suggest that the discount vouchers are not delivering the benefits I say. The evidence does not support the claims they make. It is unfortunate that they have published what they have as it distracts from the truth.

Newsagents need to choose the best loyalty solution for their business. This choice requires thorough research and talking with newsagents with experience. This is why I have published my results here over the years, to be transparent.

The Tower newsagency software offers four different types of loyalty facilities of which discount vouchers is one. I am confident that right now discount vouchers is the best practice approach for newsagents. The success is a combination of good software, properly and fully used in a well run newsagency with a good range of product.

Using discount vouchers or discount coupons in a poorly run business or in software that does not have appropriate business levers will not give you the results I am seeing. It would be wrong to assume that all discount voucher / discount coupon facilities are the same.

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Uncategorized

Learning from watching Better Homes and Gardens

Last night I watched the Better Homes and Gardens TV show through for the first time in years and as a result have a better connection with and understanding of the latest issue of the Better Homes and Gardens magazine in-store now. I was thrilled to see the magazine plugged plenty of times in the show and in ads in which our channel is mentioned first. If you haven’t seen the show recently, look out for it, give yourself an hour and put it down to business research. It’s thoroughly enjoyable.

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magazines

Going behind the scenes with a newsagency supplier

IMG_9478I enjoyed time earlier this week at the head office / warehouse of a wholesaler of gift products in regional Victoria. The visit was an insight not only into their business and their products but more broadly into the segment in which they operate. I learnt plenty.

This post is not about this specific visit though – it’s about the opportunities for suppliers hosting opportunities at their warehouses for newsagents and other retailers learn more about their products and how to sell them.

Often in a supplier showroom or warehouse we will see products displayed in a way that tells us more about them than if we only see them in our retail situation. We can probably talk with the buyers who know more about the heritage of the products. We can learn abut future plans for products. Plus we can see what else suppliers would place with a product.

Often our buying is done in store from a catalogue or at a trade show with relatively limited range on show. At a suppliers own location we can get a more compete picture that can help us be better retailers and thereby improve sales of product from the supplier and thereby benefit our business.

I’d like to see more suppliers to newsagents open their offices to help achieve these win win outcomes.

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Newsagency management

Celebrating 160 years of The Age

The Age newspaper is 160 years old today and some have used social media to say long live newspapers. I wish I could say that. The weekday editions of The Age must be perilously close to the point where printing and distributing them is loss making, where falling advertising revenue is not being covered enough by a rapidly (in newspaper terms) rising cover prices because copies sold are decreasing at double-digit levels.

Fairfax CEO Greg Hywood has said that newspapers will stop being printed when they are no longer profitable. They must have reached that conclusion with the community newspapers they have decided to close.

With costs cut to the bone and cover prices up 50%, they have little else they can change. The reality is there is no upside for print newspapers. They have been trumped by technology for delivering access to news and the print model has not adjusted to provide on a daily basis something consumers want in sufficient quantity. As with anything you cherish, one hopes for a good death.

On the two major Australian publishers, what is different for Fairfax compared to News is the ratio of subscriptions to over the counter sales. For Fairfax, the percentage of subscriptions is far higher. But long-term subscriptions come at a bottom line cost to the business and only those inside the company have the data to know how close to the line their mastheads are each day of the week.

I still expect to see a capital city daily newspaper to cease daily publication in the next twelve months. I don’t want to see it but I expect it will happen.

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Media disruption

Does this banana represents the difference between small and big business?

c-banCheck out the packaging of bananas at a Starbucks outlet I visited recently. I was surprised to see bananas packaged like this. But thinking about it, it’s the type of packaging I’d expect from a corporate business withers it is less about the product and more abut the packaging and how it serves the needs of the business.

If I owned a coffee shop near to this Starbucks and sold bananas I’d have ben, un-bagged, in a bowl at the counter.

This is something we need to think more about as newsagents – not how we package and sell bananas but how we can differentiate ourselves from the supermarkets, convenience stores and petrol outlets that are targeting more of what we do in our newsagencies.  These national businesses are all about the supply chain – streamlining processes, cutting costs and maximising profits. For many newsagents the business focus is different.

My suggestion to newsagents is to look carefully at where these major retailers are competing with you and to find ways to speaks with your own voice through your product mix and how you represent the products.

It feels odd seeing bananas bagged as I did at Starbucks. The packaging is another step away from the natural product.

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Competition

Coles pumpkins intensify Halloween push

coleshalThe arrival of pallets of pumpkins on the shop floor at Coles supermarkets lifts the attention for the season, making it easier for newsagents to promote products connected with the season. The approach front of store appears to be all about pumpkins and candy while at the rear they have costumes and pitchforks and the like. Their support for the season and the support of other retailers  makes it easier for us.

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Newsagency management

Dolly Halloween tatts support the season

dolhalDolly is another magazine supporting halloween and reminding newsagents that this is a season to get behind. Their engagement with the season provides an indication of who we could pitch Halloween products to. Newsagents with Halloween products in-store should include all magazines engaged with the season in their displays.

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Newsagency management

Newsagents can drive sales and traffic by leveraging brands

sylvanianI’m a fan of brands and prefer a branded product over a cheap copy because national and international brands support their products with advertising which helps us turn stock sooner.

I was discussing this recently with a newsagent around an alternative they said they had to the internationally successful Sylvanian Families. Sure the product they sourced was cheaper. However, it had to be sold for less due to poor packaging and product quality and due to the ‘brand’ being unknown.

Buying products for your newsagency on price alone can be false economy. Take Synlavian Families, the products in the range are supported with a strong narrative, consistent TV advertising, excellent in-store collateral, product quality and good packaging. This makes them appealing to kids as well as to collectors – who can be your most valuable shoppers.

When I consider a new supplier I want to know what they are doing beyond their products in-store to help drive traffic and sales. When it comes to cheap unknown brands the answer is usually nothing.

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Newsagency management

Who wins magazine cover of the year at The Maggies

whocoverFor the second consecutive year, WHO Magazine has won the 2014 The Maggies Magazine Cover of the Year award.

Its ‘Sexiest People 2013’ cover (25 November 2013) won from a field of 60 outstanding shortlisted covers in a national online poll voted by the public. The cover features the celebrity judging panel from the X Factor TV show photographed together in a bed.

View the full list of winning covers in all 12 The Maggies categories here.

The Maggies are a good promotion of the print medium.

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magazines

Bauer announces new value cookbook products

Screen Shot 2014-10-16 at 6.22.42 amBauer Media has emailed newsagents with details of a new format of AWW cookbooks to go on sale from October this year.

The notice from Bauer focusses on the positive and ignores the negative. If I read the flyer right, these new format cookbooks will be two and a half times thicker than the current cookbooks. They will take up more space. Space costs us money.

The flyer notes an improvement in revenue of $2.00. Than pans out to an increase in GP of 15.44%. If I am right about the space requirement newsagents will be worse off with these new format cookbooks.

I am able to satisfy customer interest in cookbook titles with proper books off of which I make between 40% and 60%.

Network needs to respond positively to newsagents who want to opt out of receiving these cookbooks.

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magazines

Leveraging the exclusive Better Homes and Gardens opportunity

nexustinOnly members of the nexus marketing program from Pacific Magazines will have this terrific gift with purchase of Better Homes and Gardens which goes on sale tomorrow. Since we compete directly with two major supermarkets in the centre we are embracing the opportunity of exclusivity with a range of promotions – to show our offer as different.

Kudos to Pacific Magazines for this exclusivity, excellent forward notice to newsagents, a fantastic video on how to assemble the stand, investing in marketing to drive traffic to our stores and the cash on offer to reward newsagent engagement. The video is especially useful – other suppliers should take note.

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magazines

Another day another data breach challenges the benefits of big data and the cloud

Dairy Queen talked this week about the data breach of their systems which provided hackers with customer names, credit and debit card numbers and expiration dates. This announcement continues a sting of such announcements from major corporations, about breaches compromising millions of customer records.

K-Mart discussed their data breach Monday. Click here for an amazing info graphic on breaches by industry.

These breaches are relevant to small business newsagents as a reminder over security arrangements, the risk of storing customer data yourself and the danger of inadequate data you have stored on the cloud. If you don’t understand your risk you need to as you are responsible for your own and customer data.

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Newsagency management

Promoting Frankie and associated products

frankiepitchWe have the latest issue of Frankie plus the Frankie diary and Frankie calendar all placed wityh each other in the middle of our women’s magazine aisle.

We are also giving this issue of Frankie time in the spotlight nearer to our weekly magazines.

The Frankie diary and calendar are products we’ll cop a lower than preferred margin on as they attract a shopper who is valuable to us.

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magazines

A different approach to plush

uglydollI was surprised to see this Ugly Doll stand on a shop floor Monday. Maybe I am being obesely sensitive but this stand and the product name feel like a negative message to me. The Ugly Doll name alone calls out a difference which I think is unhelpful. But maybe the pitch has worked because I noticed it.

Plush products are happy and positive. This product does not feel like that.

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Optimism

Leverage the most often downloaded TV show

wdeadThe Walking Dead is a massive success in Australia and with episode one airing in the US 24 hours ago I bet it’s already been downloaded many times in Australia. If you stock Empire TV magazine, leverage interest in this show by making sure the full cover of the latest issue is on show where it will drive impulse purchases.

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magazines

Thinking about our children in our businesses

Do your kids work in your newsagency? I know many newsagencies where this is the case. Some are even into third generation family employee situations.

It can be a blessing and a curse – all in a day in some businesses. In others it is a delight every day. While in others it can lead to hurtful breakdowns in family relationships.

I know of some family newsagencies where one or more of the kids have resigned or been sacked several times over the years.

It can be tough for your child working in your newsagency – at any age including as an adult. In some cases colleagues will feel that your child has not earned their place – regardless of how well they may be contributing to the business. Your child may feel this too. Often these feelings are not discussed openly, making a situation worse.

I have seen situations where kids of the owner have had it much tougher than other employees – tougher without due acknowledgement.

Some suppliers and or their reps, too, may feel your child has not earned their place. This could play out in how they treat your child and your business. Shame on suppliers and or reps who do this.

I appreciate none of this is new, nor is it unique to the newsagency channel. My goal with this post is to acknowledge a situation in which many newsagents and their kids find themselves and through this to offer some support.

It’s important that there is respect between kids and parents working in the same business and that the family ties are not abused. We need to make sure there are appropriate skills development opportunities. Plus we need to provide opportunities for leadership as skills are developed. Parents and kids need to be appreciative of each other for the additional emotional and practical support family members often provide each other.

If you have kids working in your business, take a moment to think about their role, how you treat them and what it means to have the with you. Talk with them.

If you’re a kid working in your parent’s business, open the topic for discussion.

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Ethics

Newsagency management: best practice performance reporting

Year on year revenue and unit sales comparison across two trading periods is the most useful management reporting for newsagents. Regardless of the software you use, I’d expect this type of reporting the be available. Here is a video I shot a few weeks ago for newsXpress members explaining how I use the report to assess business performance:

We are our most important competitor. This report shows if we’re moving forward or backward.

i urge newsagents to rely on hard evidence (data) when considering ow their business is performing.

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Management tip

Network fixed journal delayed billing error

dbillNetwork Services late this afternoon issues an email to newsagents advising that the journals distributed today from Universal magazines are , indeed, delay billed. While this is welcome news I suspect some newsagents will have processed returns already – because of lack of advice from Network and because they don’t need journals at sub-par margin.

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magazine distribution

Newsagents frustrated at journal supply

journalI’ve heard from several newsagents about the Paper Pocket branded journals received today from Network Services.  These are from Universal Magazines. They are part of the calendar offer newsagents were given the opportunity to opt out of. Billing is delayed. While they are 33% margin, that’s short of where they need to be to be interesting to many newsagents. I have suggested to Universal that instead of opt out, they go with opt in. They are reviewing distribution plans for next year.

The products themselves look good. It’s the terms and the push model that frustrate newsagents.

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Calendars

It’s a mystery

mysteryNetwork Services sent us a new product: Bungees. Mystery Pack it says.  Well, it’s a mystery to us why they would send us this item. No thanks. 25% if an offensively low GP for a toy item. It makes us less competitive when suppliers send us unrequested product that it not appropriate to our business model.

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magazine distribution

Are newspaper brands out the front of your newsagency still relevant today?

Passing a newsagency in Sydney on Saturday I noticed that of the three signs on the front of the business, above the door and front windows, Newsagency was the smallest. It took around 20% of the space. Two daily newspaper brands took 40% each. With sales of one of the newspapers declining around 15% year on year and the other down 7% year on year I wonder about the value of the promotion of the mastheads on such prime real-estate.

Do signs of newspaper brand attract shoppers to a newsagency? Maybe. Maybe not. I am not aware of any research into tho. My personal view is that with newspapers now available in so many locations, the value of a masthead as a traffic driver is noir what it used to be.

While I am happy to sell newspapers and do promote them in-store, I think we are at a point where there is no value in using the newspaper brands to attract shoppers. I say this because the newspapers themselves are giving over considerable space in their pages to encourage readers of the print product to migrate to digital product.

Newspapers publishers through their own actions are showing us that the brand is not as connected to retail as it once was.

So, maybe it is time to take down the newspaper signs.

Newspaper publishers will say I am wrong. They will make a case to anyone who listen that they believe in the future of print and want to work with newsagents supporting print. They have to say this as the print product today is key to their future – whatever mediums they make deliver advertising and other content through. I’d point them back as the ads they are running in their own newspapers.

So, I think it’s time masthead signs came down. The problem for many newsagents will be what do you replace them with?

The newspaper signs are easy – newspaper companies pay for them, they are professional and they can cover unsightly parts of the building. That’s a short-sighted and lazy way to look at it.

An engaged retailer will think carefully about how they want to pitch and signpost their business. They will do it with a sign that attracts new shoppers, a sign that is relevant to the future of the business.

The choices you make about the signs you use at the front of your newsagency are about what your business is, who you want to attract and your unique selling proposition.

Whatever you do, it’s up to you. Your business must serve its shareholders above all others.

We make our own success.

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Newsagency management

Pacific Magazines supporting newsagents in Marie Claire promotion

mcinstagram42,000 followers of Marie Claire on Instagram have been told to get to their local newsagent for the November issue and some terrific gifts with purchase. This is excellent promotion directly supporting our channel.

Newsagents are quick to complain when magazine publishers run promotions outside our channel. Here is an opportunity to praise a publisher for specifically supporting our channel.

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magazines

For your customers who are into their bucket list

cketlistBucket lists have been come a thing in recent years – more and more people talk about them and actually work through things on their bucket list. The latest issue of Australian Traveller magazine is one to promote as this is the annual Bucket List issue. Check where you have your copies and consider giving it a better location in your newsagency.

I love their tag line: Honestly Australian.

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magazines
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