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

Author: Mark Fletcher

Terrific one day conference in Victoria yesterday

I was grateful for the opportunity to speak at the Lottery Agents Association of Victoria conference yesterday in Melbourne. It was terrific seeing a large room full of retailers giving up their Sunday to network with others and talk business.

The agenda was varied, full of challenges to build stronger and healthier retail businesses.  I really like one day conference events. People retain more. There is also an urgency since you only have a day to cover your messages.

Talking with people in the breaks I met people embracing change in their lottery businesses and newsagencies. Suppliers too – breaking with tradition and encouraging retailers to make independent moves.  Very encouraging.

For my part I put together a session picking up on some of my Newsagency of the Future themes as well as consideration of the opportunities we find in change in retail.

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Newsagency management

Staff recommendations promote newsagency magazine sales

I’ve written here before about our use of staff recommendations to bring attention to magazines that otherwise be missed in the sea of colour and text we present in our magazine department.

At any one time we have two or three titles we feature with a personal recommendation.  the photo shows our latest recommendation – for new magazine renegade Collective. we chose this title as it needs help in being understood.

Creating these recommendations does not take long once you have looked and understood the magazine. The reward is worth it. At the very least you further separate your magazine offer out from that in supermarkets.

The artwork for the recommendation text was developed in-store by one of our creative team members. It’s is consistent for all recommendations.

Click on the image for a large version.

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magazines

It’s all about Apps

Apps are huge today and we’re trying to tap into the popularity of this software by featuring app related titles at the heart of our IT magazine titles. The free cable with The Essential Apps Guide got it prime place in this small display.

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magazines

Sunday newsagency marketing tip: think Grab and Go if yours is a convenience model

Convenience store owners and their suppliers talk about Grab and Go offers, products that are compelling, easily understood and good value, products places at or near the counter and other high-traffic locations.

The term Grab and Go defines the type of products to place in this high-profile impulse purchase situation. In newsagencies, focussing on Grab and Go items is essential for those with a convenience-centric model.

I mention this term here to help change perception. We have spent too long offering the same old products at the counter. We need to focus on fresh impulse lines that offer more than 25% GP. Newsagents in the convenience space need to get serious about convenience and thinking about products in the context of Grab and Go is part of that in my view.

There is an excellent article at Convenience Store Decisions about this. I encourage convenience-centric newsagents to read this.

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marketing

Sunday newsagency management tip: ring up all your sales

Too often newsagents start ringing up all sales in the Point of Sale software after they have encountered an employee theft situation. I have no sympathy for them since it’s retail 101 to track all cash down to the last cent in your business.

The excuse of it takes too long is nonsense – it takes seconds and can save thousands.

The excuse of we have to then to do lottery sales on two devices is because tatts won’t let your Tatts terminal send the sale value to your register. They do even more than this for 7-Eleven. Get over it.

The excuse of the counter is too busy to make this happen is nonsense – many many newsagents handle this without a problem today.

One way you will certainly reduce the opportunity of being a victim of theft is to ring up everything you sell using your newsagency software.

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Management tip

Newsagency of the Future workshops this week

The free Newsagency of the Future workshop this week are:

  • May 20 @ 11am Canberra Rydges Canberra Capital Hill, Cnr Canberra Ave & National Circuit Forrest ACT 2603 Parking: Onsite parking available $10.00 flat rate
  • May 21 @ 11am Newcastle Crowne Plaza Newcastle, Cnr Merewether St & Wharf Rd Newcastle NSW 2300 Parking: Valet parking $28.00 per day subject to availability or free street parking.
  • May 22 @ 11am Albury Hotel On Olive, 579 Olive St Albury NSW 2640 Parking: Free parking
  • May 23 @ 10am Geelong Four Points By Sheraton Geelong; 10-14 Eastern Beach Rd Geelong VIC 3220 Parking: Cunningham Pier 3min walk to venue $7.00 per day
  • May 24 @ 11am Hobart Mercure Hotel Hobart, 156 Bathurst St, Hobart TAS 7000 Parking: Onsite underground parking available at a cost of $1.00 per hour.

Click here to book online or email bookings@towersystems.com.au. This session is open to all newsagents and suppliers.

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Newsagency challenges

Newsagents in the news on shop lease

Check out the story in The Morning Bulletin in Rockhampton about the closure of two newsagencies.  It’s a reminder of the importance of getting rent right from the outset and not agreeing to lease unless you are 100% happy.

I have recently walked away from two new lease opportunities because the terms were not what I wanted. A newsagency opportunity I walked away from three years ago because the terms were not good is, I’m told, about to close because the tenants are walking away from a ‘bad’ lease.

Get the lease right at the start. Changing it mid-term is challenging with most major landlords.

A side point about the story is the headline: news agents. Talk about focusing on the agent part. I bet agency business accounted for only a small portion of sales in this business.

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Newsagency challenges

Swamped with applicants for junior newsagency role

I placed an ad on Seek for a full-time junior for one of my newsagencies. I was not happy with resumes being handed over the counter so decided to pay for a proper da.

Within twenty-four hours I had to take the ad down as I’d received more than 200 applications.  Now I’ve used Seek for this type of role previously – but I have never received this number of applicants in the first day.

Beyond the extraordinary response, I am enjoying looking at the diversity of applicants. Most do not come from a newsagency background and I think this is important for our future in the business for which we are hiring.

We are looking for candidates with initiative, fresh eyes, excitement and a love of small business / independent retail.  While it’s a challenge to find these qualities in a junior, I have resumes from some who show terrific promise.

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Hiring employees

UK mums target newsagents in porn campaign

Check out a video targeting how adult-themed titles are displayed in retail, including newsagencies.  The video was produced for National Children’s Day in the UK.

This is a contentious issue for retailers. We don;t control the regulations nor do we produce the product. Too often we don;t control whether we carry the product.

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Ethics

Directioner the One Direction experiencing flat sales

We’ve sold 8 copies of Directioner, the One Direction magazine. I have checked with some other stores and its equally flat there.  We pushed the title for ten days with placement on the lease line, facing the mall. We’re now pulling back as we need the space for products that will deliver better GP for the space commitment.

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magazines

Promoting Harpers Bazaar because we want to

We are giving Harpers Bazaar time in the spotlight this week with prime positioning display – because we want to and not because of the pushy Bauer representatives who visit and try and tell us what to do. This is a special issue, one we are happy to support with tactical displays to drive sales.

I am over suppliers sending reps to my stores to rudely demand space for their product. If they want to pay extra for the space then okay but since they don’t – stop these rude visits.

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magazines

Update on the News Limited move on pricing in some parts of SA

News Limited approached me earlier this week following my post about their imposition of a new freight charge in some parts of South Australia. They provided a press release / statement on their position. I did not publish it here as it did not add to the situation and I didn’t want to put their case. The ANF in SA has published the News statement, unfortunately.

My view is that what News is doing is wrong. They are passing on freight costs selectively.  Also, they are not communicating clearly and do not appear to be communicating with customers – but that may come with time.  The ANF should be as clear on its position.

News should apply freight to all non suburban deliveries – user pays right?! Their selective approach is problematic for them. They could also have produced advice for newsagents to place with the products. Finally, they could have a cover price for the affected areas – to show it’s a News charge and not a newsagent charge.

There are times when publishers treat newsagents as agents and other times when they treat newsagents as retailers. They can’t have it both ways.

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Newspaper distribution

Balancing the business is vital for small business retail newsagents

On Sunday I published a post about the importance of calculating what you need to earn per square metre of retail floor space.  I want to revisit that topic here in this post.  But first a story…

I know a newsagent who is growing sales of magazines, gambling products and cigarettes.  They have a good business in a location that has become a convenience for new traffic.

The growth in convenience traffic has come at a cost as sales of higher margin items have fallen.

Here is their challenge: revenue is up and GP is down. The business is worse off for being busier in some categories.

This is why we need to all know what we need to make per square metre of our stores … so we can chase the GP necessary for us to pay the rent and other fixed costs we have in running our business.  We need to work hard at balancing our business.

By balancing I mean managing the growth of low margin items versus the growth of high margin items. Yes, it’s tricky as one can drive sales of the other – but maybe not as much as we think.  Our data can tell us just how much in our particular business.

A spike in a low margin product category – and by low margin I mean anything at 25% or less – could hurt the business overall.  However, growing higher margin product sales is much harder work. It has to be because of the size of the rewards available.

Now more than ever, newsagents need to balance their business – balance their sales based on GP – for the future health of the business.

No supplier will do this for you. It’s up to you.  I’d be happy to engage with any newsagent wanting to work on this.

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Newsagency challenges

Finding space for nourish, another magazine launch

nourish is another magazine launch we have to make space for. This one is challenging since it looks like a guys magazine aimed at the fitness section but it could also fit in general health as well as food.

We have it with men’s health and fitness titles. I’d love to know where others have it.

Notice the card sticking out of the magazine – the nourish publisher is taking space from titles behind it in a move sure to upset the affected publishers.

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magazine distribution

Promoting issue #2 of Collective

We are promoting issue 2 of Collective, now called renegade Collective after a stoush with the News Limited owned messenger news group, with our women’s magazine. We have it placed here because this feels right given the cover – even though this is a far more broadly focused magazine than the cover indicated.

We are planning a staff review for the magazine to help draw attention to the diversity of the title beyond what it looks like.

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magazines

Small business lost in Canberra this week

Small business was lost in the budget and the budget reply in Canberra this week.  For me, the best example is the hundreds of millions in benefits delivered to the free to air TV networks to enable them to fund structural change while small business newsagents continued to be ignored as we move through a more significant structural change of our own.

What did I expect? Not much … but this does not block my disappointment.

Politicians care only about where their money comes from and those with the loudest voices. One day maybe they will understand that investing in small business can deliver excellent rewards.

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Ethics

Lottery sales in South Australia to unlock fuel discount

In a move that I expect will divert purchases from newsagencies, a South Australian fuel retailer has announced plans for substantial fuel discounts for lottery purchases and other product category purchases.

With this happening in SA, I wonder how long before we see it in the 7-Eleven owned Mobil fuel outlets.

When Tattersalls did the deal with 7-Eleven they said Tatts products would be at the counter add-on. Over time that has changed with lottery tickets featuring in advertising to drive traffic.

Now we have this announcement in SA yesterday.  I don’t want to call it prematurely but I do suspect that this move is a game changer. It will certainly get newsagents looking at the lottery category more carefully. How can they compete with this.

And to those outside SA, On the Run is more community connected and more local than the supermarkets. I’m told there will be more trust in this being a genuine offer that is the case with Woolworths and Coles fuel discounting.

In the Newsagency of the Future series I’m in the middle of I challenge newsagents to contemplate business without lotteries.  It’s a value question, one that must be considered. Now, in the face of yesterday’s announcement, it is more timely than ever.

If you have lotteries in your newsagency and had a fuel outlet nearby offering a discount off fuel with a lottery ticket how would you react? You can’t do nothing for to do that would invite migration.

On the Run has declared war on lottery product sales with this move. Newsagents need a plan for confronting this challenge.

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Lotteries

Cool retro lava lamp display

Check out the display promoting retro lava lamps created by the team at one of my newsagencies. This is very cool and very clever. They sourced some retro carpet from the Reject Shop and created a sign and a backing that connected visually with the theme.

All of the elements – carpet, backing sheet, sign and product – combine to tell a story and draw shopper attention. It looks much better than simply putting the products on the shelves.

This display is located at the corner of the counter, near our gift department. It shows us off as being different and connects shoppers with the retro fun of the lava lamps.

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retail

Promoting under the magazine

We’re giving up a bit of space below Men’s Health to promote the Win a Car competition from pacific magazines with this placement of the header below the magazine.

While it takes a pocket below, it’s the type of change that could be noticed as it’s not usual and clearly promotes the detail of the competition.

We don’t do this often. In this case, the collateral works a treat – hence our use of it below Men’s Health. I’d encourage other newsagents to try this if they can create the space.

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magazines

New generation shopper loyalty program breaks free from me-too VIP / loyalty cards

For some time I have thought that points based VIP / loyalty cards offer retailers little differentiation. Besides them being in use in many retail businesses, I have felt there is a real doubt among shoppers as to their genuine value.  They are decades old after all.

FlyBys and Everyday Rewards are the market leaders in Australia and they educate shoppers that they need to spend thousands to get even a small reward. No matter how much small business retailers might say their program is different, if it’s points based it will be considered to be the same as these programs and offer similar value.

Shoppers are fatigued by loyalty programs. Some doubt their value. Others are sick of carrying cards. Others don’t like the promotions sent.

Retailers launching a VIP card today rarely offer anything new. Too often they reward shoppers for average behaviour.

It was with this background that I got involved in a very different approach to shopper loyalty. I wanted something that got shoppers behaving above average so that my business performed above average.  I am fortunate to have a software company through which I could play with my ideas.

Around a year ago through my software company I started work on creating a front-end approach to shopper loyalty, an approach that did not use points or require shoppers to carry cards.

In February this year I started a secret trial in one of my newsagencies and soon thereafter expanded this to a second newsagency. now, three months later I have an excellent set of data showing shopper behaviour. The data show how the new approach to loyalty, called Discount Vouchers, changes shopper engagement on the shop floor – driving basket depth and margin dollars banked from shoppers.

More important, Discount Vouchers give me a point of difference to the decades-old VIP and loyalty card programs. This point of difference is driving word-of-mouth and generating its won traffic.

I have personally had shoppers tell me how their behaviour has changed because of the Discount Vouchers. In one case, two months in, we won a customer who will spend $1,200 a year solely as a result of this program.

I wanted to trial it in secret as I was not sure how such a radical approach to shopper loyalty would work in a newsagency.  Now, three months on, and comparing my own experience to the experiences from trials in three non-newsagency retail businesses, the results are the same. Shoppers love it.

From a retail management perspective I control voucher value and the items on which the value is calculated.  I also control what can be purchased using the voucher. I can also change these business levers at any time without a need to retrospectively change past vouchers.

There is no paperwork for shoppers and no paperwork for sales staff. This program is easier that VIP and loyalty cards, it saves time.

When shoppers redeem a voucher we gather details to go in the running for a monthly prize draw – harvesting contact details for future marketing.

Having run a VIP / loyalty card program and other loyalty programs, I am confident that in Discount Vouchers I have a point of difference appropriate to today’s shopper and able to give me a competitive advantage in a world of shopper fatigue with VIP / loyalty cards.

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Newsagency benchmark

Too soon for Art of Crochet repeat

The re release of the Art of Crochet part series is too soon.  Judging by our initial allocation they must have a ton of stock left in the warehouse.

Our sales history for this title indicates that we will be lucky to sell 30% of what they have sent us so the distributor has just cost us a ton in freight to send the unnecessary stock back.

It is scale outs like this that make newsagents less competitive than supermarkets when it comes to magazines. It’s a pity the competition regulator refuses to engage on this.

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magazine distribution

Tapping into the Iron Man franchise

Iron Man is huge around the world following the release of the latest movie, Iron Man 3. The movie is breaking box office records and reinforcing interest in the brand. We are tapping into this with placement of the Iron Man related titles in prime position between entertainment and kids magazine titles.

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magazines

News Limited hits some South Australian newsagents with a freight charge

News Limited is hitting some newsagents in regional South Australia with an 80 cent freight charge on The Advertiser, the local SA newspaper, Monday to Friday and $1 per newspaper for weekend titles.

This is an extraordinary charge, one newsagents will have no choice but to pass on to consumers.

It will make newsagents look bad applying a price over and above the cover price printed on the product. It’s a move that us upsetting some newsagents as they think about how regular customers and holiday markers will react.

I am not sure how News has decided the areas to be hit with this 66% levy given that some rural and regional areas of South Australia are hot being charged while others are. Some in the areas being charged feel discriminated against and I am inclined to agree with them.

Beyond the charge itself, the approach by News adds to the workload of newsagents – creating something that they could seek additional compensation (from customers) for.

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Newsagency challenges

Reading what we sell

After reading Political Animal by David Marr, sent out by Network Services, I thought I’d like more time to read more of what we sell.  This is an interesting book. It plays out in an unexpected way and that’s why I’d like to read more of what we sell – to challenge assumptions. While it’s impractical it’s also important – knowing more on what we sell.

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Brand retailing
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