The next front in supermarket wars
Check out the excellent report in the Fairfax newspapers this morning by Adele Ferguson and Chris Vedelago. It underscores why the renewed interest of the ACCC in their market share is timely.
Newsagency counters like taxis for canvassing public opinion
While we did sell out of newspapers yesterday, as expected, politicians on all sides will have a battle come the federal election. Shoppers mentioning politics condemned all sides. We are like taxis in that respect, shoppers often tell us what they think about current events. I enjoy hearing people with opinions. Yesterday, however, disinterest in politics was the norm – even though we sold out of papers.
More on SA newsagents protesting loss of stationery contract
Further to my post about the $100,000+ campaign being run by SA newsagents to protest the failure of ANCOL to win a state government contract, see the ANCOL Media Alert providing further information.
The ANCOL pitch seeks to make this a union matter. I’m told staff only recently joined the union with ANCOL paying three months of membership fees.
While I am critical of governments, federal and state, that put dollars ahead of support for small businesses and Australian businesses, I am also aware that some contract bids are lost because they are not the best bids. I’ve been told that is the case here. I don’t know as I have not seen the ANCOL bid or the other bids. If I was a South Australian newsagent I’d want to see the ANCOL bid before I decided whether to invest in the protest.
This campaign is problematic for SA newsagents in terms of cost and pitch. I know it’s concerning some in the state.
If it was up to me, I’d be questioning the value of the $100,000+ spend on lobbying. What if this same amount was spend on TV in the state promoting newsagents as the go to retailers. The result could be better, full margin, business for more newsagents as opposed to discounted government business for the wholesaler.
What do you to with bagged discount magazines?
I’d be interested to hear what newsagents do with these bagged discounted magazines from Bauer. While I understand the publisher’s position is that they grow sales, I don’t see any evidence of that in the data.
I rely on our loyalty program to drive sales based on the reward for customer loyalty. It works – far better than these bagged magazines.
I’ve supported the bagged magazines over the years with placement with the main titles and promotion in discount locations. I don’t give them prime position as I don’t want to detract from full price sales. If I was compensated with full margin then I might.
What do other newsagents do with these bagged magazines?
Promoting new look Gardening Australia
We’re promoting the new look Gardening Australia magazine with prime placement in with gardening magazines. While I don’t watch the show on TV I expect they will be promoting the new look of the magazine so it makes sense to promote this issue.
We are also giving Gardening Australia support to a second location in-store. It’s worth it as gardening magazine sales are up.
SA newsagents spend over $100,000 lobbying on failed state govt. contract
South Australian newsagents, through ANCOL, are spending in excess of $100,000 to protest the failure of ANCOL’s bid to win a government contract. The spend is in the form of professional lobbying. Yesterday in Adelaide there was a public protest as part of the campaign.
While the lobbying focuses on the politicians, some newsagents have said they would like to see the ACNOL bid document to assess for themselves if the business put forward an appropriate tender on their behalf.
There could be more to this story than what newsagents have been told.
Transport tickets inefficient for newsagents
I have been looking at agency line business for newsagents – lottery tickets, phone recharge, transport tickets, event tickets. Transport are the least efficient from what I can see. By least efficient, I mean in terms of other items purchased with them.
85% of transport ticket sales are the tickets and nothing else.
While it could be argued that this is the fault of newsagents, it could also be argued that the nature of the product is that it does ot lend itself to efficiency with other items being purchased at the same time.
It could also be argued that selling a ticket positions you to get the magazine, newspaper or card sale when that shopper wants any of those. I’d disagree with this based on my observations of transport ticket shoppers. They want the ticket and are unlikely to think of you for anything other than the ticket.
There is a time management conflict newsagents need to consider as they evolve their businesses. Card, gift, toy and plush shoppers need more shop floor help than a bus or train ticket customer. One is about retail while the other is about being a counter based shop keeper.
Attracting a shopper because of your gift range is more likely to result in them remembering you than attracting someone to buy a transport ticket. It all comes down to how much you focus on and control your own future.
The question is whether newsagents are prepared to ditch tickets. This is a question about margin focused retail versus slim margin public service operation. It’s about focusing on what you bring to the business versus slim margin volume.
Successive Liberal and Labor state governments have shafted small business newsagents by cutting margin while allowing other contractors to reap huge financial rewards with new ticketing systems. So much for small business policy. Delivering fair compensation for offering what is a public service could have reinforced their small business credentials. What they have done is the opposite.
But back to the data. Currently, transport tickets are the least efficient products / services sold by newsagents.
My personal view is that volume for between 2% and 4% margin is not acceptable. I do not sell tickets in two of my three newsagencies.
A good newspaper day
The games played out in Canberra yesterday should make today a good day for newspaper sales. Those of us with newspapers away from the front of the store should consider co-locating the top titles with the best covers at the counter to grab impulse purchases. It’s a news day like today that we could get the card, gift or magazine shopper adding a newspaper to the basket – a reversal of how things happened years ago.
Magazine distributor introduces newsagent delivery fee
Specialist magazine distributor Speedimpex has introduced a charge of $3.50 per delivery to newsagents in South Australia and Queensland. Several newsagents have contacted me to express frustration with the move. I agree, it’s an additional cost on an already slim margin product category.
Pause before you renew that contract
A newsagent approached me last week for help with a five-year contract they signed a few months ago. They don’t want to continue the supplier relationship, saying they are not getting the services and business benefits that were promised. The problem is this particular agreement – it is tight, leaving little room for the newsagent to end the relationship. Worse still, they are forced to not sign with a competitor for a year after the end of the contract. So, it’s a six year contract.
Their only course of action is to complain to the ACCC and seek mediation or legal action. Financially this is not an option.
This is a reminder to all newsagents faced with a long-term contract to sign. Take your time, make sure this is a relationship you really want.
It’s easier to leave a marriage than this agreement.
Latest Girlfriend gives us a status check on One Direction
We’re promoting the latest issue of Girlfriend magazine with a terrific aisle-end display. We also have it in prominent display in our women’s magazine aisle and with our One Direction products.
This is an important issue of Girlfriend magazine as provides us with an opportunity for us to check the current interest in One Direction. I’m keen to see if there is any dilution of interest.
Think Fun range a welcome addition to a newsagency
We are filling our shelves with products purchased at the recent trade shows we have attended. One range we are particularly excited about from Think Fun. It’s a range of fun, educational toy products that represent their name … these products are FUN.
I’ve written recently about the importance of happy , fun and optimistic products. They present a good message to shoppers. It takes the pitch away from the price pitch that the majors tend to focus on.
Actually, thanks to our recent buying our newsagency feels very happy. Customers are noticing.
The other benefit of the Think Fun range is the margin. They will help us get to the above-average GP we want for our newsagency businesses. This is where marketing buying group is key to unlocking additional points a single store may not be able to access.
the average retail newsagency GP is 28% to 32%. This does not cut it any more. We all need to be chasing 50%. We need to chase this with net traffic generating products and not so much with products that rely on existing, often declining, traffic.
Revenue per employee an important KPI for newsagents
On Saturday I wrote what I think is an important piece about revenue per newsagency employee. It is a metric seldom looked at in our channel yet it is tremendously insightful about business and employee efficiency.
I mention it here today since weekday traffic on the blog is double Saturday traffic and you may have missed it.
Work out your figure and share it.
Newsagency Blog introductory video
A colleague shot a video late last week to embed on the landing page for this blog to explain what it’s about and why I write what I write. Check it out:
Plush to newspaper customers
We have taken the opportunity for some exceptional buying of plush and have therefore needed to expand the space we allocate to plush in-store. As a result, shoppers heading to purchase a newspaper are confronted with a large range of plush down the aisle. We have stacked the shelves with the additional stock we have been able to purchase and plan to feed this through our regular plush department, providing it time in the main display. What’s interesting is that this plush is selling from this location too. We’re thrilled about that as it is helping drive efficiency of the newspaper shopper.
To create this space we have compressed the stationery that was in this aisle back into the main stationery department.
Happy Lab is an interesting model
If you get a chance to see a Happy Lab store it’s worth it as it shows how colour blocking and creative packaging can get people spending more on an everyday item than they otherwise might. It’s Smiggle for candy and chocolate lovers. Take the easter chocolates in the photo. At Happy Lab the price is close to three items I’d pay for a similar item elsewhere. However, the packaging and display are stunning, making it easier for shoppers to spend the higher amount. This is the Smiggle model with what I consider to be overpriced stationery for kids. Make something fashionable and people want it without worrying as much about price.
Another point about Happy Lab – I love their name as it’s, well, happy. Happy sells as I mentioned a few months ago about coke.
Why media companies should not be listened to on media reform
I am disappointed that politicians are listening to media companies about media reform. Here is another issue where the voters are ignored in favour of conflicted special interest groups. One only has to look at how the media companies are reporting on reform to see why at the very least a public interest advocate is a good thing.
These media companies have a vested interest – profit. The reform is about a balanced media we can trust. Trust is not part of the profit equation.
Every time I see another story about a media owner or manager lobbying a politician I wonder why smokers don’t get to lobby on tobacco or fat people on food laws or communities on fracking. Hang on, the companies that stand to profit get to do the lobbying.
Politicians go where the money is for counsel. Media companies go where the money is on lobbying.
The reporting of the debate on media reform in and of itself demonstrates the need for reform. The sad thins is that many Australians will not see this as they have been told otherwise – by some of the media companies most in need of more oversight.
Small regular employee theft can be hard to track
I’ve been helping a business recently where an employee was stealing between $10 and $30 a day. They were stealing by not recording services the business charged for, services which were not reconciled in the business – thereby making uncovering the theft difficult.
It was only when the employee was not in the business for a time that it was noticed.
It’s important that you have processes to track everything, that all revenue, including for services, is reconciled.
This low-level theft, lunch money theft I’d call it, is as disgusting as employees who steal tens of thousands of dollars. The emotional cost is as high and the impact on the business can sometimes be almost as great.
Zoodle continues to evolve
The Zoodle new retail concept from WH Smith I mentioned in December continues to evolve. The Melbourne airport store is more complete today – as one would expect. There is no mistaking the focus of the business – it’s all about kids. They are using excellent signage in-store to direct you to key sections. They are also using well-known brands to attract shoppers. Being able to see Scooby Doo and Hello Kitty high above the product from a distance outside the store is very smart.
I could imagine that a Zoodle shop in a major Australian shopping centre would do excellent business.
It’s almost worth newsagents booking an international flight out of melbourne just to look at Zoodle live.
Well done WH Smith.
Peppa Pig is an excellent traffic-generating brand for newsagents
We have been enjoying good sales of Peppa Pig products for some time. Now, thanks to a new range of products in-store, we are set to generate more traffic and sales from Peppa Pig.
This is another example of the importance of brands to our businesses. Good brands generate traffic for us and generating traffic is vital as other key traffic generators do not generate the traffic they used to.
There is no big new traffic generator for newsagents but there are plenty of these smaller, valuable, traffic generators – such as brands like Peppa Pig. Thanks to more suppliers being prepared to sell to newsagents we can play in this space, leveraging well established and popular brands to bringing new traffic to our businesses.
Every trade show and product buying opportunity we attend we look for brand-name products we can add to our mix to make our newsagency more appealing to shoppers who are not currently regulars with us.
We currently have the Peppa Pig display at the entrance to our magazine department.
OK! to close?
The Daily Telegraph has run a piece asking whether Bauer is to close OK! magazine on the back of falling circulation. In the latest audit, sales were down 11.4%.
Moves like should not be unexpected of Bauer, new owner of the ACP business. I expected them to take a look at all current titles and close some in preparation for some launches.
A newspaper is a public trust
Re the media debate where publishers don’t want an independent public interest advocate. Check out the masthead of BusinessWorld in the Philippines:
A Newspaper Is A Public Trust.
How can you price compare when other retailers don’t have the products you have Officeworks?
I received an Officeworks catalogue at my home on the weekend and went to check their ink price against ours. The few ink products listed were value packs. Most I’d not seen before. It’s possible that Officeworks has products exclusively for a period and that their price, for such a period, would always be the lowest as it would be the only price. If this is the case, Officeworks should tag the product as exclusive so shoppers know they can’t price compare.
Why does this matter? Officeworks make a big deal about having the lowest prices and that they themselves regularly price compare. This can’t be done for products they have exclusively.
I’d love the see Choice do some work on this. Better still, maybe the ACCC could look at it given their renewed interest in the supermarket duopoly.
The Officeworks catalogue says they do price checks twice a day to make sure they are the cheapest. This work is easier if some of the products are exclusive to them.
Australians think newsagency businesses are expensive. This is in part due to the advertising might of our major competitors like the supermarkets of which Officeworks is part.
New Visa card surcharge rules come into force today
New rules come into force today on the application of surcharges for processing payments made by a card. The RBA website has background to the creation of rules relating to surcharge here. It’s worth newsagents checking out the Visa press release here. Visa’s new rules apply from today.
It’s also worth reading what change.org is saying and doing about this in terms of Jetstar.
Newsagents who apply a surcharge to any card payment transaction need to look carefully at how they calculate and apply the surcharge.
Appealing to cat lovers drives plush sales
We usually don’t see plush as plush. No, we see it as the recipient will see it – the expression of love, the message of congratulations, the warmth of a hug or something offering companionship. Yes, these plush cats are something customers purchase as gifts for friends and family in hospital or other places where they can’t have a cat. Appealing to cat lovers is proving to be good for business with these cats being picked up on impulse, adding to a deeper and more valuable basket.
Often, newsagents and other retailers have looked at plush through narrow eyes. By focusing on the occasion we see more opportunities than ever in plush products.