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

Author: Mark Fletcher

Newsagent management tip: 5 tips for saving your time

  1. Tell suppliers who do not provide you with an electronic invoice that you will cut them off – they are costing you time.
  2. Put barcode labels on fewer products. If they have a barcode, use it. For magazines – your software will tell you what to return.
  3. Stop ordering replenishment stock manually.
  4. Stop entering sales data into a spreadsheet for analysis.
  5. Run your business with processes as well as checks and balances that enable it to open and close without you.
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Management tip

New survey: How was Christmas 2012 for you?

It’s been a couple of weeks since Christmas, enough time to think about the season and collate some data. I have put together a quick survey, just four questions, seeking your data on how the season was for you. To me the most important question is the last one – where you get to share your most significant learning from the season.  Please participate in the survey here.

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Newsagency management

Nice Valentine’s Day display

Check out the Valentine’s Day themed window display in a Sanrio store here in Las Vegas.  While it is specifically promoting Hello Kitty product (which is huge here) it could be promoting other plush.

Beyond being eye-catching, this display is terrific because of its simplicity. It’s something any of us could create in our newsagencies with the right product mix. The display is something anyone with only basic VM skills could put together.

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visual merchandising

Newsagents in the Coles firing line?

Today’s report of Coles Express outlets targeting corner stores in their latest milk pricing moves ought to concern newsagents. Coles and their duopoly partner Woolworths are certain to target more everyday, habit based, shopping. Some of what we sell fits their model – newspapers, weekly magazines.

The only way to fight this is to band with other independent retailers, before it is too late. We ought to be working even more closely together with butchers, greengrocers, small and independent supermarkets and primary producers and product manufacturers and publishers to drive local shopping.

It will be no use complaining down the track.

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Newsagency challenges

Time to rethink lighting in your newsagency?

I am seeing more retailers use lighting, darkness actually, to great effect. I was in a Hollister store this week, in the US, and their use of darkness is excellent.  The store is made up of a series of small rooms, each with a two or three spotlights.

What I like about the Hollister use of darkness is that it adds to the feeling of stepping off the street or out of the mall and into a completely separate environment. It’s very conducing to shopping.

While darkness would present challenges for newsagency businesses, it is something we could use in certain parts of our stores where we want shoppers to really immerse themselves in certain products that require different feelings. For example, some gift and homewares lines lend themselves to this as would the occasional seasonal offering.

In most newsagencies today, the lights are either on or off. Maybe it’s time we played with this.

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retail

Deep discounting for magazines in the US

Check out the subscription offer from the US publisher of Woman’s Day and Good Housekeeping magazines.

Click on the image to see the detail of the offer.  At it’s best, you can get two magazines for a year for $12 delivered to your home. Just amazing.

The discount for subscriptions is considerably higher than what we see in Australia, reflecting a different magazine distribution model for the US compared to Australia.

I thought I’d post the subscription offer ad here, from a US newspaper this past weekend, to show that when it comes to subscriptions, discounts in Australia are not as high as publishers can get in some other locations.

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magazine subscriptions

Funny newspaper poster

Check out the poster from the Border Mail earlier this week. Unfortunate spelling.  Maybe it was a talking point with customers for those who used it to promote the title.

Click on the image for a larger version.

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Newspapers

Do you sell magazines at other than the recommended price?

I’d be interested in hearing from any newsagents selling magazines for more than there cover price and thereby achieving an above-average GP. Either comment here or send me a private message.

As more newsagents venture into new product categories, the 25% we make on magazines comes under greater scrutiny.

While magazines can generate excellent traffic and thereby provide a broader value than they GP themselves deliver, GP of between 50% and 75% on other products in attention-grabbing for newsagents. Once way newsagents can address this is to charge more than the cover price.

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magazines

Ink is working behind the counter

Since moving Ink from next to stationery to behind the counter sales have risen by 15%. we have not altered our advertising or promotion of the category other than the move.

In terms of performance of the behind the counter space, ink is more financially rewarding for us – from direct sales – than other products we have placed here.

Ink continues to account for more than 30% of our stationery sales.

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Stationery

Time to quit adult magazines?

Our magazine sales were up 13% in the three months to December 31, 2012. Adult titles, Picture, People and Zoo, declined against the overall trend.  Indeed, their sales are so low that they are not paying for the space they occupy. Further, these are not efficient titles – they are often not part of a larger basket.

So, we are considering cutting adult titles altogether. We can use the space support magazine segments that are growing.

Here is the challenge for newsagents – I want to grow magazine sales by allocating space based on sales. The current newsagency magazine distribution model makes this difficult. While our competitors can do this, we can’t. It’s unfair and impedes our ability to run efficient businesses and compete.

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magazines

News Limited favours new retailers over newsagents in its Valentine’s Day promotion

News Limited has emailed newsagents in NSW, asking them to promote the Valentine’s Day edition of The Daily Telegraph to other retailers on terms not available to retail newsagents.

This move disadvantages retail newsagents. It is a disrespectful move by News because of the trading terms advantage given to these other retailers and by chasing sales outside the well-established and loyal newsagency channel.

In this year of extraordinary change driven by News and their T2020 project, they should be more sensitive toward newsagents than ever. This move goes against the spirit of support for newsagents the company has been espousing when promoting T2020.

Here is the email from News:

VALENTINE’S DAY DAILY TELEGRAPH OFFER

Attached is a Valentine’s Day Daily Telegraph offer to help you increase sales on the day.

Valentine’s Day falls on a Thursday this year.

Please approach all florists, restaurants or any small businesses in your area that would be interested in taking up the offer:

 50-99 x The Daily Telegraph @ $0.75 per unit (cost saving 37%)

 100-199 x The Daily Telegraph @ $0.65 per unit (cost saving 46%)

 200+ x The Daily Telegraph @ $0.50 per unit (cost saving 58%)

If you would like me to print off any flyers for you, just let me know. All orders need to sent back before Feb 6th.

Several newsagents who have contacted me have expressed their disgust at this move.

It’s an issue newsagents might consider taking to the ACCC. While the ACCC will question the consumer impact, newsagents could explain that it is moves like this that make newsagencies less profitable and could add to the closure of businesses. It would also be reasonable to question why a florist should get up to 58% GP when a retail newsagent will get anything from 12.5% to 25%. We could also argue that this is an abuse of market power by News.

If News Limited wants retail newsagents to support its products it ought to urgently reconsider this Valentine’s Day promotion. Either it gives retail newsagents the same terms or it withdraws the offer to florists and others.

News Limited needs to prove to us that its words of support for newsagents in 2012, through its T2020 presentations, were real and that we can trust the company.

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Ethics

T2020 driving newsagent management decisions

As I talk with newsagents about their October – December sales as part of the latest newsagency sales benchmark study, T2020 is often raised as a driver of change in the business. Newsagents tell me that they are making changes to their shop because of T2020 and the effective break up of the traditional multi layered newsagency business.

This is a good thing, newsagents making conscious business decisions. While I understand the pressure many are feeling as a result of T2020, the motivation to look at the business and to plan for change can only be considered to be good.

Some newsagents are embracing the retail only opportunity with gusto, some are tinkering at the edges and some are waiting.

When you consider the challenges and opportunity in retail this is not a time to wait. Outside of T2020, we retailers need to innovate in terms of products and service. We need to prove our relevance in every transaction. Too much of what we sell, even those of us with diversified products, is available elsewhere.

In the early review of the benchmark data I am seeing some terrific success for newsagents who are innovating.  Most growth is in gifts but the term gifts is not appropriate given that this can and does cover a myriad of product categories.  As newsagents evolve as retailers it will be interesting to see how far we push into gifts.

In the meantime, T2020 remains an excellent opportunity for newsagents, to take it as encouragement and motivation for significant change in 2013 no matter which course you decide on.

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Newsagency benchmark

Appreciating the history of newspapers with an eye to the future

I was in the offices of the West Australian just before Christmas and appreciated seeing this relic from a bygone era. It was terrific to see the display, a wonderful reminder of the history not only of the West Australian but newspapers more generally.

Going through photos yesterday I was reminded of the display. It got me thinking about the history of newspapers and, in turn, the history of newsagents and newsagency businesses.

While we are in the middle of a tornado of change in and around our businesses, we need to connect with history through the change, to bring our customers with us. This is a massive challenge as there is the economic imperative of future relevance yet the emotional connection of a rich past.

There is the business we want to be and to be known for, the business we are known for today and the business we will be able to sell in the future. All three rely on customers who are prepared to spend money.

Back when the machine in the photo was in use we were agents, the final step on a tightly managed conveyor belt. Today, we are not agents. Today, our future is 100% up to us. We have many decisions, large and small, to make. Whereas in the past these would have been made for us, today, we have to decide our future, and out connection with the past, for ourselves.

T2020 is the nudge many newsagents needed / need. It is loaded with opportunities. Embracing them and finding our own way will dilute the newsagency channel and maky many businesses stronger at the same time.

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newsagency of the future

Smart use of bookmarks to promote magazines

I like the bookmarks being used by Bauer in the current issues of Good Health and women’s fitness as they are a smart way to promote the issue.

That said, I would not like to see the bookmarks overused. They partially cover the magazine behind and this is not fair on that title. Look at women’s fitness – the main cover headline shows as Your … the key message is covered.

Occasionally the bookmarks would be okay but not every issue.

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magazines

PMP shares fall 25% in six weeks

A check of the share price chart for PMP, parent of magazine distributor Gordon and Gotch, shows shows a decline of 25% in six weeks.  Various restructures over the last couple of years have failed to arrest the share price. It can only be a matter of time before shareholders demand another approach.

I’d love to see Fairfax acquire the magazine distribution business from PMP and to bring to the Gotch titles the control I have today over IPS titles. Yes, I know others have complained here about IPS.  I see it working. Yes I have to commit to new titles for a while – but I get absolute control over what I sign on for and the quantity. They also promote my business through a terrific website.

Of course, fairfax will not buy the Gotch business given what they have said recently about acquisition plans.

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magazine distribution

New advocacy opportunity for newsagents

The establishment of the Small Business Commissioner office by the federal government provides newsagents with another place where we could seek to have disputes, such as magazine distribution disputes, resolved. The website is clear on the role:

The role of the Australian Small Business Commissioner is to provide advocacy and representation of small business interests and concerns to the Australian Government, including referral to business-to-business dispute resolution services.

I think this provides us with an opportunity for advocacy around issues affecting newsagents as small business owners, particularly in areas where we are treated differently to competitors as is the case in magazine distribution.

As a channel we have failed to adequately explain to successive governments, state and federal, the disadvantage to us, and to our customers, of the current magazine distribution arrangements.

I urge newsagents to remember this new small business commissioner office when next contemplating a course of action on a business challenge. If they can;t directly help – because of state versus federal jurisdiction – they should be able to point you in the right direction.

To those who may say this new office is not what small business needs, it is better than not having such an office at all. It’s a promise kept.

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magazine distribution

TECHLife magazine oversupplied

With a sell through hovering at 60%, I was surprised that Bauer (formerly ACP) decided we needed more stock of TechLife magazine. Our supply was bumped up by one copy. Okay,not much … but there is no justification in the sales data.

Every extra copy supplied to us above what we can reasonably sell makes us less competitive.

I suspect that most of our competitors – supermarkets and some others – do not have the same financial risk with oversupply that we face. If I am right it makes even one extra copy being sent to us appalling behaviour.

Bauer demands payment on time for a level of indebtedness over which we have too little control.

I’m committed to making progress on this issue in 2013.

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magazine distribution

Featuring Mollie Makes

We are featuring the latest issue of Mollie Makes magazine at the front of our craft section. We are still growing sales, chasing our capacity for this title. I suspect we are barely half way there based on interest expressed after we sell out.

Mollie Makes magazine is the ultimate special interest title. My experience is that it generates new traffic for us as shoppers come in to purchase the title having been recommended by friends.

I am concerned that the damage done by oversupply is causing newsagents to pass on opportunities presented by special interest titles such as Mollie Makes.  If I am right then shame on those who have dilutes and even killed the passion of newsagents for magazines.

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magazine distribution

Newsagency marketing tip: hype drives retail sales

I was in Vietnam recently and saw this terrific display in front of an electrical goods store. The containers stacked next to and op top of each other looked impressive. They made it look like there was a lot of sock to move and this supported the discount pitch.

While it does not look like good visual merchandising, it was, in fact, perfect for the pitch. Shoppers were queueing up to purchase the items. The no-frills approach felt believable even though, upon reflection, it was more likely part of a sophisticated strategy by the retailer.

We use a similar approach but on a much smaller scale in my newsagencies – cutting the tops off boxes of products we are selling at a good discount. This worked particularly well with boxed Christmas cards we bought in for our post-Christmas sales. However, we do it infrequently as we don’t want to educate shoppers.

Click on the image for a larger version.

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marketing tip
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