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

Author: Mark Fletcher

Why the 50% increase in supply of Picture Premium?

Despite zero (0) sales of the last two issues of Picture Premium, ACP decided we should get two more copies, a 50% increase. This does not make sense. ACP pushed to get sales data from newsagents, citing more accurate supply as a benefit. Given that we are sending back accurate sales data on time through XchangeIT it appears to me that for some titles ACP is ignoring our sales data. I can’t see any reason for the increase in supply of this title.

My assessment of the data is that we should not get the title at all. However, if we must then one or two copies.

Click on the image to see our historical data for this title.

ACP subsidiary Network Services is agressive in its handling of newsagent debt. Newsagents ought to be equally aggressive in pursuing the company over oversupply.  My experience is that it happens too much with these porn titles.

I’d like ACP to research why oversupply has happened here and for the previous title I wrote about this morning. Yes, I could have approached the company. I am writing publicly about the on behalf of myself and others who experience oversupply like this.

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magazines

Too many home girls for this newsagent

Despite selling 1 and two copies respectively for the last two issues, ACP decided not adjust supply and send us 8 copies of Picture Home Girls annual. I’d take two copies but not 8, these titles don’t sell in our family oriented conservative area. the sales data shows that. ACP has the sales data to supply at a fair level.

Click on the image to see our historical data for yourself. ACP prides themselves on scale our based on sales. Not with this title.

We are early returning four copies just in case there is something in this issue which results in us doubling our best sales of the last two issues.

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magazines

Promoting Men’s Health magazine

We are promoting the latest issue of Men’s Health magazine with this display in the usual location for the title. There is no better way to promote the magazine and the free razor gift with the title than to give it prime position at eye level in with our sports and fitness titles in our men’s magazine area. There is no missing Men’s Health when you walk into this area.  As for the razor gift, I love it – perfect for this title.

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magazines

Trendy / funky gifts selling well

Racing Grannies is part of a range of trendy / funky gifts which account for 10% of our gift product sales now. The range is not what shoppers expect to see in a newsagency so we regularly promote it at the front of the business, facing into the shopping mall. Our simple Racing Grannies display works a treat at attracting traffic and converting into sales as well as into browsers for other parts of our business.

While I think we have room to expand the trendy / funky gift range, we are not ignoring other gift niches. It’s all about balance for us – balance in what attracts shoppers so that we see a balance of ages an interests covered by those visiting the store.

We are also using gifts to drive a point of difference for us. Given that magazines, newspapers, stationery and cards are elsewhere, gifts are an area where we can drive our USP.

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Gifts

Enhancing our support for the marie claire marriage equality campaign

Check out the display created by our team at one of my newsagencies supporting the latest issue of marie claire magazine.

Themed to tap into coverage of the marie claire marriage equality campaign, I love the use of rainbow colours running to the floor.

The display also gives coverage to the free Napoleon Perdis lip gloss which comes with this issue of the magazine.

Placed at the front of the newsagency and facing into the shopping mall, the display has been situated to drive the most attention from shoppers in the centre. I stood and watched as shoppers noticed the display and approached it. This is what a good front of store display is about, getting shoppers to notice, stop and engage with the product.

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magazines

Reinforcing relevance with tech magazines

Our range of iPad, iPhone and Android device titles is proving to be not only a sales hit but also a hit at showing off the relevance of tech titles in-store. Every few weeks we give them a run outside their usual location to shop people not necessarily looking for technology titles that we have titles like these that could appeal to them. Displaying the full cover is vital, especially for the app guide.

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magazines

June numbers show sales balance strategy working

June off to a good start and looks set to continue the trend of a good quarter so far. We compare performance against ourselves and our category of business in the shopping centre – the landlord publishes retail category results.

The categories performing the best are those on which we focus attention: magazines (up 12%), cards (up 6%), gifts (up 214%), stationery (up 23%) ink (up 91%). These are all off healthy bases.

We are thrilled that traffic is up 6% yet sales are up 13%. Our focus on deepening the basket is paying off.  We are also chasing balance across categories. For example, a year ago gifts accounted for 2.92% of our sales. Today, they account for 9.66%. We are wary of turning the newsagency into a gift shop and so are managing the growth within our goals. Stationery sits at 7.85% of sales, up from 7.18% a year earlier. Ink is closer to where we want it at 7.55% of sales, up from 3.41% a year earlier.

While growth is vital to any newsagency, balance across our various product categories is vital. A good balance will ensure a more sustainable business.  I want a business where I am not relying on one or two product categories or one or two other factors to generate the majority of our shopper traffic.

We all have levers we can pull in our businesses through buying, merchandising, shop-floor management and external marketing. Today more than at any time in our past we need to do this. Relying on suppliers doing this for us will fail our businesses.

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Newsagency management

Plenty of money for State of Origin products

Several Queensland newsagents I have spoken with recently have raved about the thousands of dollars in sales of State of Origin merchandise. While origin themed circulation product sells, it is the t-shirts, caps and other supporter products which have been flying off the shelves. Sales have been between $4,000 and $8,000 in the newsagencies I have spoken with. In each case sales are up on last year.

Most sales are to existing customers who visit to purchase something else – making for a valuable basket extension.

The success with origin products reinforces my view that people have money for purchases which matter to them. Our challenge is retailers is to ensure that we keep putting such product before existing shoppers while also actively promoting outside our businesses to draw new traffic.

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Newsagency opportunities

Poor supermarket compliance

I was in two Woolworths supermarkets yesterday and each had stands from ACP for promoting ACP magazines half filled with titles from other publishers. I have has suppliers say compliance is easier in supermarkets. Not from what I saw on the weekend. ACP would be more frustrated in that they probably paid Woolworths for the floor display unit space.

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magazines

A reason to promote Reader’s Digest

We are using the cover story relating to the Queen’s Jubilee to give Reader’s Digest magazine some time in the sunshine. Our approach is very simple as the photo shows – we have placed the magazine on top of our magazine filtering, above our british magazines which also feature the Queen’s jubilee.

Reader’s Digest is not big for us but this does not mean we should ignore it when it has a cover story we know will connect with our shoppers.

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magazines

Sunday marketing tip: Do you offer fries?

We are now regularly offering ‘fries’ with each purchase at the weekend in at least one of my newsagencies. By ‘fries’ I mean an over the counter offer, an up-sell as a deal.

Hey would like [insert product here] we have it on special today only for [insert $off offer] off the usual price.

That’s the pitch, plain and simple.

The offer is not promoted in-store, it is only offered as an up-sell at the counter to shoppers who are making a purchase.

There are three key factors impacting the success of this: the product offered, the person offering it and the pitch. Get these right and you should see a terrific lift in sales.

If the up-sell product offer is a magazine we will typically run this late in the on-sale – week three and beyond for a monthly and day five and beyond for a weekly.

Our target discount is around the 20% mark but we will discount to cost in some situations. My thinking is that the shopper has come to the counter with what they want. Also, being a shopping centre and on the weekend, more than half our customers are not regulars so we are likely to not be doing ourselves of a later possible purchase. Every cent we get is bonus revenue we get to bank.

A side benefit is that we are offering our customers a deal which enforces that shopping with us has value beyond the usual for a newsagency.

People have money contrary to what some commentators are saying. The trick is how you help them spend it. For us, this over the counter pitch on weekends is working.

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magazines

Misleading tweets from The Age

While it was terrific to see The Age using Twitter to promote their Good Bar Guide, a disconnect in their distribution system saw not all newsagents with the title. Shoppers see newsagents as newsagents. They don’t know if they are retail only and relying on a commercial distribution newsagent to support their publisher supplier by placing a product in the newsagent outlets they supply.

I did not get the Good Bar Guid yet shoppers see my business as a newsagency.

I wish for a distribution system which enables me to access supply of newspaper related product from elsewhere. I have an account with IPS, why not use IPS for this type of title?

A distribution newsagent making petty decisions in an effort to block or harm my business also lets down their supplier and consumers. Dumb.

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Newspaper distribution

Being harsh on employees who steal

I was talking with a newsagent yesterday who has been stolen from for a second time by an employee. They let them off the first time as they believed it was the first time and the person was in a bind. There should be no excuses. The same with customers who steal – ban them and call security or the police if their return.

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theft

Are you a retailer of last resort?

In a newsagency recently I noticed a selection of fax rolls on a shelf and available for purchase.  I was surprised since we stopped selling fax rolls in my newsagency two or three years ago.

While there is demand for fax rolls, it is not sufficient for us to warrant the stock investment. Instead, we offer to get in any fax rolls a customer wants. Given the range of roll sizes, this is a better course of action.

If I did carry fax rolls I’d have a mark up of 300% or more to reflect the long time fax rolls will sit waiting to be purchased.

Hey, Australians think newsagencies are expensive so why not meet the expectation – especially for hard to source items that turn slowly?

If we are to be a retailer of last resort, we need to embrace this as a value proposition, pricing the last resort type items to reflect the service we provide our customers. This is how diamonds are priced so why not humble stationery items which shoppers visit newsagents for because they can’t find them elsewhere?

I am all for newsagents stocking hard to get stationery items. However, those who do need to do so with a price model which reflects the service.

I have talked to newsagents about this recently, the need to price items, stationery particularly, in a way which reflects time on the shelf and ease of availability of the item elsewhere.

We need to shake off the fear of being as expensive as shoppers expect us to be.

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Newsagency management

Featuring Empire magazine

We are giving the latest issue of Empire magazine the star treatment with placement in the high-profile single title display unit we have in our men’s magazine section. The cover story on the next Batman instalment is sure to drive shopper interest – hence our high profile off-location placement.

We also have Empire in front-pocket full cover display in its usual location.

This stand is working well. It is placed so that guys in this area can see it as well as ladies walking down our women’s aisle.

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magazines

ePay suspends UKASH

ePay has suspended access to the UKASH range in response to reported fraudulent activity. Here is the advice from ePay:

Please be advised that we have taken the steps and immediately deactivated the Ukash product to all Australian retailers in light of recent fraudulent activities.

Retailers are being targeted by people claiming to be from epay and instructing them to print Ukash vouchers from their terminals to verify the PIN and/or terminal. It would now seem they have gone a step further. For those wary retailers reluctant to provide the PIN’s over the phone they are instructing them to call a new epay CS number to verify it is epay. They have in turn set-up a number (02 8014 7198) that when called, by all intent and purposes sounds like epay Customer Services. This number is answered by several people stating ‘Welcome to epay how can I help’. THIS IS NOT AN EPAY CUSTOMER SERVICE TEAM!.

While this is being investigated the decision has been taken to protect our retailers first and foremost and the product is now shutoff.

I have been in contact with Crime Stoppers and our phone service provider. I will be speaking to the Police tomorrow and making a formal statement. Please send me any correspondence that you have had with any retailers affected.

Please note that there are several terminal blasts hitting retailers as we speak, as well as a letter that will be sent to all Ukash enabled retailers (attached).

Should you have a store that has been targeted please advise them to contact the local police immediately.

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theft

Handling newspaper distribution changes

Through my newsagency software company Tower Systems I’ve been involved in newspaper distribution restructuring for several years from before the migration project in South Australia to a range of newsagent-led distribution changes in Victoria and elsewhere.  Click here to see a brief document going to Queensland newsagents to open discussion about structuring for change. While it’s a promotional pitch it does touch on challenges and opportunities for newsagents.

I see the distribution changes as changes newsagents need to drive. There is nothing stopping newsagents consolidating into more commercial distribution businesses today. This is what some leaders in Victoria have done. here’s the opening text from the distribution document I have put together:

There is no doubt that newspaper distribution is undergoing extraordinary change.  This will affect every newsagent, retail and distribution.

The changes are being brought about by falling print newspaper sales due to customers migrating to devices such as the iPad and iPhone and news being accessible from more outlets and not just publishing companies.

Newspaper publishers will protect the return they achieve from their print product by cutting costs and / or increasing margin through cover price and newsagent margin changes. One way they are cutting costs is reducing the number of newsagents they deal with.

Newsagents face business-defining decisions through this period of structural change.

In 2005 I knew I had to either expand my newspaper home delivery business or get out.  I created a model which I grandly called Circulation Fulfillment Australia and sought to work with nearby newsagents to bring this to life.  With no takers I subsequently sold my distribution business and shelved the idea.

You can access a copy of the 2005 plan here.

Newsagents who wait to be told what to do will be left behind. Now is the time to act – on your own terms and serving your goals.

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newspaper home delivery

Advice for another newsagent based on their business numbers

Here is advice I have just sent to another newsagent after a review of their year on year performance numbers.  I am sharing this here with their permission:

Thank you for the opportunity to look at your Monthly Sales Comparison Report. I offer the following comments:

SALES: 6% growth. The downside is that the majority of this is lottery business. While the 104% year on year growth is terrific, it is a significant risk. You need to drive lottery business to include other sales for the future viability of your business.

CARDS: Excellent growth. 12% year on year is a good result. I’d urge you to produce a Card Performance report – your software has this – it’s industry standard card performance reporting. Look at the categories which are performing best. This data will guide other business decisions. I see no reason in your current card performance data to consider introducing cheap cards as you had asked about – your current range is performing well.

CIGARETTES: I am concerned that 20.78% of your sales are not categorised. This makes assessing performance challenging. You need to fix this.

CONFECTIONERY: With gum accounting for 20.85% of your sales yet growth lower than the average for the department I wonder if you could life the profile in some way. Look at where it is and how it is merchandised. Darrell Lea is also a concern – under-performing. I am guessing you have a movable stand. Move it. Try new locations and chase impulse purchases.

GIFTS: Based on your card sales you should be doing at least $3,000 a month in gifts. You seem to focus on cheap and cheerful gifts. I think you could carry more premium gifts. I’d start with one or two collectible ranges: Beanie Boos (selling very well) and Beanie Kids. Look at the TSK range too – they have gifts which could work with and for your male shoppers. You need to work on gifts and know that YOU ARE NOT YOUR CUSTOMER. You need to develop a gift strategy. This should be based on card and magazine sales as your category data from these two departments informs you about interests of your customers.

MAGAZINES: What an awful operator the last newsagent must have been – they sold magazines without scanning them. Dumb! Your crossword titles should be doing better, 1.72% of total sales is too low. Put a column with weeklies, place a new title at the counter or with newspapers. I wonder about your magazine layout too. Is it the same as when you bought the business? If so, change it, urgently. This will help you own the department. With your overall year on year growth of 3% you are certainly influencing magazine sales in the right way.

NEWSPAPERS: With foreign language newspapers accounting for 12.15% of your newspaper sales I wonder if you could lift this even further. This is a segment of news[papers where I am seeing good growth. Chase it. Foreign language newspaper customers are very loyal.

STATIONERY: Sales are down 16%. What’s going on? Why? I hope this is concerning for you. Pens would be where I should start. In your case, they account for only 5.28% of your sales. The average I see elsewhere is 25% of stationery. I bet people use pens in your area. Look at your range and where it is located. Something is not working for you and I bet some changes in-store could fix that. I see fixing stationery as your top priority. GNS could help you with a range review.

TRANSPORT TICKETS: Wow, a big increase. But why? Are yo chasing this convenience business? If so, what’s the plan? Hopefully not for the sake of convenience business itself as that is not a good plan given the slim margin. There has to be companion business. Make sure you have a strategy for that.

Thanks for the opportunity to look at your numbers. You have a good business with growth potential. I’d be wary of chasing too much low margin agency type business without a strategy for leveraging this traffic into purchases of higher margin items. You can do this with professional queue management and bordering this with up-sell opportunities.

Remember that everything you do in your business needs to reflect what the business stands for – your USP. Make sure that you and your team know what this is as it will guide your business decisions and actions.

Hopefully others reading this get value from my comments. I’d welcome feedback.

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Newsagency management

Aussie ATM situation challenges newsagents

I have been contacted by some newsagents running Aussie ATM cash dispensers asking if I had heard anything about the company. What I can see online is that the company was put into voluntary liquidation some months ago and that EZEATM has taken control of some Aussie ATM sites. Newsagents affected should speak with the liquidators Korda Mentha or EZEATM to try and sort out where they stand.

I was personally not affected by this since I don’t have an ATM machine in any of my newsagencies. I hope the information posted above helps.

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Newsagency management

Promoting home and living magazines at the counter

As part of an off-location campaign we, we setup a placement of a selection of home related magazine titles at the counter on the weekend to drive impulse purchases. By off-location, I mean that this is the second location, away from the usual location, for each title.

I selected the titles to reflect the broad range of magazines we offer in this segment of our magazine department.

Our recent placement of comfort food titles worked in this same counter location.

Our plan is to leave this display here for a week.

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magazines

Launching TechLIFE

This is the display our team created in support of TechLIFE magazine. It’s at the counter so that the more than 50% of shoppers in-store who do not go part our technology section get to see the new title. We also have the title featured with our technology bakeries toward the rear of the store.

We’ll leave this counter display for a week and then run a secondary placement in another location for the second week of the on-sale of the launch issue.

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magazines

More Newsagency of the Future workshops

I am scheduling more Newsagency of the Future workshops – for Melbourne and Sydney initially. These sessions will go beyond the recently completed round. I will share data from several stores, showing how they are evolving the newsagency model and helping newsagents explore these and other changes in their businesses. Some newsagents have a lot to show other newsagents about embracing change and what this can mean for a business.

I hope to have dates sorted out by early next week.

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Newsagency management

The value of the floor display unit

As the photo shows, the Blooming Expressions product from Hallmark has worked well for us. Key to the success, in my view, has been the floor unit provided by Hallmark.  This helped explain the product while at the same time providing a professional visual pitch for the product.

How we merchandise items is often the difference between success and failure for products we carry.  A professional plug and play floor display unit, like this unit for Blooming Expressions from Hallmark, eliminates the risk of us getting it wrong or not presenting the product in the best possible light.

Suppliers spend considerable sums testing products before they are launched. These tests are often done with professionally merchandised displays. Display units which enable everyday newsagents to represent a product as well as was done in trial help newsagents and suppliers achieve the results seen in the trial.

We have a used several floor display units in store already this year and each has worked a treat. I put this down to them offering a professional display, clear branding and making the product on offer easy to understand.

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Newsagency opportunities
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