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

Author: Mark Fletcher

Sunday newsagency management tip: compare your basket size

Commenters writing on my Do newsagencies have a future? post have been discussing average basket size with some publishing their number. Basket size can be measured in dollars or units. Good newsagency software reports this easily for you.  There is a considerable difference in basket size, beyond the size and performance of the business, depending on what you include. For example, lotteries, transport tickets and other volume agency lines can skew the results. This is why I recommend not including these high volume low margin items in such analysis.

I check the basket numbers in my own newsagencies every couple of weeks as basket depth – units and value – are a key indicator in what I’d call the small steps strategy for successful newsagency management. These are a range of small steps, measurement points, on which to focus to build a healthier business.

The current channel average basked size is 1.43 items with an average basket value of $3.65.

Easy access to good data is the most common reason I see for newsagency success or failure. There are no excuses. You don’t need to be IT savvy. You don’t need a lot of time. It’s not about business size. All you need is a desire to be successful in your newsagency. Do you check your basket data regularly?

Click on the image to see a a larger version year on year comparison of basket size (dollars and units) as well as a comparison of average item value and total items. This is the final analysis in what’s called the Monthly Sales Comparison report – my favourite report

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Management tip

Sunday newsagency marketing tip: plan for post Valentine’s Day

Depending on how Easter goes for you, the time between this Thursday and early May could be lean – unless you have plans.

After Valentine’s Day is done, what’s next for your newsagency? What do you have planned to bring in traffic and get them spending when they are there?

It’s vital we plan for these things so that we remain relevant between seasons. There is where pure gift shops are vulnerable. Many lurch from season to season, often barely existing in the valleys. This is when we can really hurt them given that we bring traffic in for a range of purposes beyond major seasons.

So, what is your post Valentine’s Day plan?

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marketing

What’s next to your newspapers?

Having your top selling newspapers in a shelf, display or some other stand by themselves is a missed opportunity for every newsagent. At the very least you need to place at least one magazine next to your top selling newspaper(s) always. We place two. Ever since we started this years ago it has worked a treat for us.

By far the best performing magazine next to newspapers is Better Homes and Gardens. This is especially true Thursdays through Sundays. back in the day we counted what we placed with newspapers, to gather data on what works best. hence our certainty that BHG is the best title here for us. For the entire first two weeks of the on-sale we have BHG between the Herald Sun and The Age. We often hve a second title – but that varies based on what we think will work, changing it at least weekly.

If you don’t have a magazine or two with newspapers at the moment, try it – you are certain to sell more copies of the magazines you place here.

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magazines

Latest US magazine circulation results not good for retail

The latest over the counter sales results of magazines in the US are not good for magazine publishers. Once you separate digital and subscription circulation out, you can see that what they call single copy sales are in deep decline for many titles.

Digital circulation more than doubled.  It’s the weekly gossip and entertainment titles that suffered steep declines in retail sales:

Some of the weakest numbers in the second half of 2012 belonged to celebrity weeklies.Life & Style saw its total circulation drop 18.4 percent, OK! Weekly fell 14.4 percent, and In Touch fell 14.3 percent. Star and Us Weekly did slightly better, with circulations declining 4.9 and 2.2 percent, respectively. And People, the category leader and typically its strongest, was the only magazine in the category to see its circulation rise, by nearly 2 percent, despite a 12.2 percent decline in newsstand sales.

I don’t know enough about People but maybe it’s focus is similar to Famous which performs against trend here in Australia.

Read about this at AdWeek and AdAge – interesting perspectives.

So, more bad news about magazines. We can allow ourselves to get caught up in this and do our help the decline – by being average – or we can push against it by being engaged magazine specialists. The latter approach works. We do this by being smart about layout, embracing change and being obsessive about titles that perform well in our stores.

Newsagents remain the largest magazine retail channel in Australia. Our market share is something we can leverage better.

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magazine distribution

Excellent promotion of Cleo dresses

Check out the smart display of the dresses being given away with the latest issue of Cleo. basic but effective.

This photo is from out the front of a transit outlet – facing thousands of passers-by every day. Ideal placement to drive impulse purchases.

Sometimes the simplest displays are the best.

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magazines

Great coffee machine give away

We’re thrilled to be giving away a coffee machine as part of our Hallmark Valentine’s Day promotion. That one of our customers will win this is excellent. Harvesting customer data for future promotion is the bonus. Regular in-store prize promotions like this do help drive sales, they also help is position ourselves competitively against other retailers in the centre offering Valentine’s Day cards.

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Greeting Cards

Newsagents talk about Justin Bieber

I was fortunate to be part of  newsagent discussion group in Queensland earlier this week. The topic of customer interest in Justin Bieber came up. I was surprised at the lack of support and his commercial value for newsagents. Everyone commented that One Direction was far more valuable.

What interested me was the customer feedback. Bieber appears to be damaged goods in the minds of the customers overheard.

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Newsagency management

Gordon and Gotch charging small newsagents to receive magazines

I have been contacted by a small rural newsagency which has been presented an ultimatum by Gordon & Gotch: pay $30.00 (plus GST) for a once a week delivery or switch to being a sub agent.  Here’s part of their email to me:

The other day i received in the mail a letter from Gordon & gotch informing us that we were an uneconomic store due to the low volume of magazine currently sold in the store. It went on the say that they want us to have a one day a week delivery costing us $30.00 plus GST a week or move to being a sub agent and arranging the pick up of magazines our self’s.

I understand why Gotch would make a move like this on an account worth well under $100 a month to them. That said, the newsagency model was, in part, established to reach into all parts of Australia, bringing country town and hamlet access to newspapers and magazines.

Newsagents have in the past been told by Gotch representatives that the profitable titles help cover you for the loss making titles. Surely, the profitable deliveries for gotch help fund the public service of reaching these remote parts of the country.

One option for this newsagent is to accept the once a week delivery and charge customers more. The challenge for them is that they are 15k away from a bigger town where people do their weekly shop and will be able to get magazines more regularly and for no premium cost.

If this is a change in policy from Gotch – and I’m trying to find that out- then it’s a conversation that ought to be had in the open between the company and newsagents. Gotch needs to be fair and prepared to enable newsagents to NOT have to take unprofitable titles just as it is refusing to service unprofitable accounts.

We do live in a world of user pays. Fair enough. Gotch (and magazine publishers) can’t live that mantra only when it suits them.

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magazine distribution

Publisher sends newsagents free magazines to sell

We received ten copies of Melbourne Renovator Decorator & Builder yesterday with a note saying they are free to us and that we should sell them for $1.00 each.

This is a yellow pages like publication for decorators, renovators and builders.

While it’s an interesting distribution model, the hand written note and packaging of the copies feels unprofessional. I am not sure how many newsagents will respond by putting the title on the shelves.

For us, the 100% GP is only interesting if we sell at least four copies a week given the cost of shopping centre retail space.  One option we have is to set our own price.

We’re going to think about this title before we put it on the shelves. While it has many flaws, there is an established magazine distribution system in place for good reason.

I’d be interested in hearing from other publishers about this model – free magazines to newsagents – as a means of getting space on our shelves.

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magazine distribution

Promoting What’s for dinner?

We have kicked up our promotion of What’s For Dinner? the New Idea brand sister titles released this week. We like the title and wanted to support it more. It’s an easy sell with a good pitch. Hence our new prime position display at the entrance to our magazine department. This is an example of taking a moment after a new title comes in to see if we are doing all we can to get the best result. We find taking a second look at a promotion can help us improve the results we achieve.

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magazines

Kaspersky update illustrates danger for computer users

Okay I’m not a fan of the Russian Kaspersky virus protection software. I prefer and recommend AVG. Kaspersky users had a good reason to dislike their anti virus software vendor following web access outage for many following an update Monday this week. This automatic update, causing the web outage, is another example of damage that can be done to systems by automatic updates. Computer users could control what updates are applied and when.

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newsagent software

Delayed billing support in newsagency software helps reduce early returns and make magazine more viable

The comprehensive delayed billing support provided in some newsagency software packages is helping newsagents and newsagency employees make more informed decisions around how to manage some magazine titles.

From the indication of the barcode label of delayed billing (see the photo) through to the proper management of delayed billing at seven key tough-points in a newsagency, newsagents are better informed about a title subject to delayed billing.

While the most obvious indicator of delayed billing is on the magazine label, this is just the cosmetic step. There are more important places where delayed billing is indicated and managed in the business, using the software.

While not all newsagency software programs handle delayed billing in this way, any of them can since they all have access to the same data.

The more complete the solution the better for newsagents and magazine publishers.  The latest comprehensive software developments, released last year, provide magazine publishers with another mechanism with which they can challenge the early returning of their titles on the day of release or close to the day of release.

I urge newsagents to use the new delayed billing facilities – beyond the information on the magazine label.

Range is vital to our pitch as magazine specialists. Delayed billing can make some titles we range more viable.

Publishers of longer shelf life titles, greater than a month, should take note of this and consider delayed billing as a means of combatting early returns and providing newsagents more reasons to treat your titles differently.

The extensive delayed billing enhancements have been delivered at no cost to newsagents, publishers or magazine distributors.

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magazine distribution

What are you doing for Chinese New Year?

Since we don’t have lotteries in any of my newsagencies, Chinese New Year is not the focus for it was where we did have a newsagency with lotteries.

I’d be interested to hear what newsagents are doing locally to connect with the season?

The season lends itself to cross promotion with local Chinese restaurants, Chinese community associations and others. Engaging with it in a co-operative way could open your business to a more valuable connection with customers who themselves embrace the season.

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newsagency marketing

Essendon AFL club drug story a lesson in media consumption in today’s connected world

Like many Victorians today, I have been closely following the story about the use supplements by the Essendon Football Club. While the newspapers had the story it was old news by the time ink hit newsprint last night. Crikey provided genuinely fresh coverage in its email news bulletin at lunchtime.  I’d rate Crikey’s report by Andrew Crook as the best coverage so far.

I was on the road through the day and found Twitter to be more useful, and entertaining, than radio.  I was flicking between 3AW, ABC Local and SEN. Indeed, the radio coverage felt tired compared to what I could access through Twitter. The challenge, however, with Twitter is reliability for news. Sure the fun tweets are a hoot but when it comes to news you need to check around before you believe something that’s explosive.

I’ve not seen TV coverage but I suspect it would be tired as well in part because of AFL connections but also primarily of lead times.

This story has many twists and turns and many players (excuse the pun). This is where social media works best because of the broad range of contacts who could have the tiniest bit of information. Yes, it can lead to less than accurate information being published. It can also lead to better and faster news coverage. We have to be our won filters.

My phone was the best delivery medium for the day thanks to access to Crikey and Twitter.

Print news publishers can protest all they like about fact checking and our desire for curated content.  Immediate access even part of a story is more important for  some news stories than a more objective piece you can wait hours or days for.

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magazines

Do newsagencies have a future?

I am questioned several times a week by potential newsagents and existing newsagents about the state of the retail channel and its future – at the individual business and channel-wide levels.

Last week I received an email I share here:

I got your contact details from the Australian Newsagency blog as I am looking at taking on a newsagency that recently closed and was wanting to get some information support to assist with my decision making process. I don’t have any previous newsagent experience but I have some retail experience and my background is accounting to a fairly senior level in corporates.

Everything I read indicates that newsagencies are a declining business but I was hoping to get access to information that would support my analysis and provide ideas to ensure that a business would have the best opportunity to be successful.

My correspondent asks common and good questions.  Here is my response. I share it here to reflect publicly my thoughts on this.

Newsagency businesses can be excellent businesses or dogs of businesses. It all depends on what you make of it.

The traditional newsagency is dead there is no doubt about that. by traditional I mean a mix of low margin products, relying on others to drive traffic.

If you create a business that is fresh, offering what local shoppers want and with a retail feel that is relevant it will do well. The keys are to be in control and own the business as a retailer and not as an agent.

This is the future … newsagents stopping being agents and becoming retailers, best practice retailers in a tough, competitive but fascinating world of retail. These are our days to shine, to reinvent our businesses to become fresh and exciting, to the swatch of retail – they turned the dying watch business around and made it desirable and highly profitable.

So, are we dying? yes, the current old school model supported by some dinosaur operators. The new approach is thriving. I am seeing businesses with excellent growth. Those who complain the most about the current model and question the optimism of others will often be from the old school. Beware.

In taking on the new business, focus on traffic drivers, margin drivers and basket builders. These three combined are our future.

I’m happy to expand the discussion from here…

One of the challenges we have as a channel is how we talk about the channel – in our businesses, with family, with friends and to others we pass along the way. Too many talk the channel down. Too many who have exited or are about to exit complain.

The future of the channel is vital for those here today for the long haul and for those coming into it tomorrow. They (we) are the future. What we make of it is up to us.

In all of the challenges we face today are opportunities. I see many newsagencies doing very well. Yes, some are failing and doing poorly.

Overall, I’m optimistic.

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Newsagency management

An example of the value of partworks

I checked our sales numbers at the weekend to see the performance of the Cake Decorating series. In a week we sold more than 30 copies.  This is by issue 20, well into the series.

While we have been helped by certain supply, for which I thank Network Services, we have driven the success with good placement and co-location.

Beyond the sales of Cake Decorating itself, our sales of baking and cake decorating titles are up, there is a solid knock-on effect of a successful partwork series.

While some shoppers get putaways, most come in a purchase off the shelf. Since we are in a shopping centre with more irregular shoppers than a high street or rural newsagency this makes sense.

Cake Decorating is a valuable success for us.

That said, not all partworks are as successful. The key is to fully embrace every opportunity as it’s the only way to learn if a new title will work for you.

Footnote: Herein lies the schizophrenia of the newsagent / magazine distributor relationship.  Yesterday I complained about network sending me a fishing title I had no hope of selling (kept it for six weeks and it didn’t sell) and today I praise them for helping me achieve excellent sales week in week out for this port work. We inhabit a strange space.

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magazine distribution

Promoting What’s For Dinner?

From the excellent title through to simple pitch on the cover – Quick and easy weeknight solutions, What’s For Dinner, the New Idea brand extension, is an excellent title to pitch.  We have it with our weeklies, between our two major daily newspapers and at the counter. I think it’s a title we will easily sell on impulse – hence out considerable activity supporting the title.

I’d urge newsagents to promote this title while it’s fresh and while it’s getting some terrific supporting marketing.

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magazines

Leveraging one-off deals to make a price pitch

We are always on the look out for end of line and other special buy opportunities with which we can make a value-based pitch at the front of the store, to attract traffic from the mall.

Our latest value-based offer is these heavily discounted Parker pens we found. While the stock is a couple of years old, they still work fine and come in nice packaging.

We find that the dump bin approach works well for this type of stock in our store. It does not detract too much from the overall front of store message yet presents a magnet for people in the mall looking for a good deal. Within the first four hours of putting these out we sold seven pens. This is nice basket-building revenue.

We took care to create a sign at the top that reflects value more than discount. We presented the stock in such a way that supports this too – neat, organised. yes, we have a pack open. No, they will not be stolen. We track inventory carefully and theft is rare in this business. This is in part due to the time team members spend on the shop floor.

Beyond attention to detail through shop floor execution, the key to success here is getting the right stock at an excellent price. This is where direct supplier relationships are crucial. Here are my suggestions:

  1. Ask your reps – sometimes they have end of line stock with them.
  2. Negotiate – sometimes the starting price is not what they will sell for.
  3. Plan – try and have a terrific shop floor deal at least once a month regardless of the seasons you are running.
  4. Manage the offer – don’t keep it out for too long, consider moving on price to quit the stock.
  5. Target margin – we look for at least 60% for floor offers like this as part of our overall business GP goal.
  6. Target basket builders – products regular shoppers will find easy to add to the item(s) they visit you to purchase.
  7. Target new traffic – make sure the offer will also attract new shoppers to your business.

This Parker pen meeds all these goals and it’s working a treat.  We were able to acquire plenty of stock to keep the offer live for two weeks. This is our goal.  We were not given special treatment with the offer. As I mention above, the key is to talk with reps, to cultivate relationships.

Click on the image for a larger version.

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Newsagency management

Tasmanian Fishing News is not the right title for my Victorian newsagency

I can’t see any reason we would have been sent Tasmanian Fishing News by Network Services. We’re in Victoria and while fishing magazine sales are okay they are not at a level where we would expand titles – certainly not to include a title like this covering another state.

We had the title for six weeks and sold nothing. All this has done is suck cash from us for use internally by Network.

And publishers wonder why newsagents early return. Here is a reason.  Network has failed me and the publisher.

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magazine distribution

Promoting Grand Designs Australia

We are supporting the latest issue of Grand Designs Australia with this half waterfall placement in the usual location for the title and placement, at the weekend, with newspapers and at the counter.

While sales aren’t quite where we would like them to be, they are building. I like the title as it plays to our magazine specialist pitch and acts as a good beacon in this segment.

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magazines
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