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

Author: Mark Fletcher

Smurf products deliver valuable margin dollars

smurfimpulse.JPGThis past weekend provided an excellent example how we can drive business growth. On Saturday, I was thrilled to see people visiting our newsagency to purchase a Father’s Day card add a Smurf figurine to their basket. This extended each sale by at least $7.95. At a 50% margin that’s a nice extension.  I was delighted to see this.

Add to these impulse purchases shoppers who visit specifically looking for Smurf products thanks to good word of mouth and we have a limited time niche delivering good revenue for our newsagency.

Most newsagencies have good base traffic for newspapers, magazines, greeting cards and lotteries. We need to tactically leverage this by engaging in opportunities … like the Smurfs. The best opportunities are those which are current – ideally promoted on TV or connected with a high profile movie.

The Smurf movie opens on September 15.  Those who remember The Smurfs from years ago know about the movie as does a whole new market – kids discovering the Smurfs for the first time.  This is why the figurines and other items are an easy sales pitch for us.

I have found that the best opportunities for leveraging good base traffic are those outside what would be expected from a newsagency.

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Newsagency opportunities

That’s Life TVC airs tonight

Newsagents in regional Victoria and regional Queensland are set to benefit from a new TV commercial which airs tonight for That’s Life. This TVC is the first of three 30 second commercials promoting the new Real TV section in That’s Life.  If you are a Facebook user you can see the TVC here.

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magazines

Angry Birds sell out

It only took a few weeks but the range of Angry Birds products we brought in last month has sold through.  It’s been a terrific success, bringing in new shoppers.  A brilliant range we are sure to carry again.

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Gifts

Symply Too Good cookbook promotion

symply-aug11.JPGNewsagents who are wondering about all the Symply Too Good To be True stock which they received yesterday need to know that the titles will feature in two upcoming issues of Take 5.  The Symply cookbooks will also not be billed until September, giving us until October 20 to move the stock.

We are getting in early in one of my newsagencies with this triple pocket display featuring Symply Too Good to be True #1 through #6 on an impulse unit which faces shoppers as they enter the store.

We will replace this with a fresh promotion for the range when the Take 5 promotion hits.

Our sales data indicates that half the sales of these cookbooks include two or more editions.  The key is to display them together.

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magazines

Another display promoting Feast magazine

feast-water.JPGCheck out the display created by the team at another of my newsagencies promoting the new Feast magazine from SBS and Pacific Magazines.

You can see shoppers stop and look at the display – it stands out that much.  This is what a good display is all about, drawing attention to a product.

I love the look of celebration about the display.  The magazine is a celebration of food and food travels.

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magazines

New Coles formats deliver double digit growth

The new Coles retail formats which I first wrote about around two years are delivering the retail giant double digit growth according to a report in The Australian Financial Review on Monday (page 56).

This is an excellent result for a major format change.

There was a time when newsagents implementing a new shop fit could expect similar growth. The numbers are not so strong today because our shop fits are not delivering change equal in scope to that currently being implemented across Coles.

Now before newsagency shopfitters get angry, I think that the problem with our shop-fit changes is that we newsagents are not being bold enough in our direction to designers.

The change in revenue we achieve is a measure of the change we deliver in the design.

With shopping centre rents increasing at least 5% a year, a major re-fit needs to deliver at least 10% to justify the investment.

If you have not seen one of the new format Coles store I urge you to do so.

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Newsagency challenges

Promoting the launch issue of Feast magazine

magfeastaug11.JPGWe are promoting the launch issue of Feast magazine with this display on one of our gift tables which faces shoppers as they enter the newsagency.

We also have Feast with our food magazines as well as a pocket located with our weeklies.

We have a plan which goes beyond the launch week to support the title through the on-sale to help connect shoppers with Feast and our business.  This plan includes a more ‘set’ display which connects with the title itself.

New Australian magazine titles are good for business.  Yes, I understand the frustration expressed by some here yesterday about the subscription offer in the launch issue of Feast.  I accept that subscriptions play an important role in the circulation mix of many magazine.  A healthy subscription base helps publishers in selling advertising and advertising is what helps keep these titles afloat and coming into our shops.

What I don’t want to see is the US style subscription discounting of between 50% and 75%.  That would be a killer to retail.  Australian publishers I speak with understand that.

Our competitors are petrol, convenience and supermarkets.  Not subscriptions.

I’d urge newsagents to get behind Feast.  Let’s lock shoppers into the newsagency channel for this title.

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magazines

Promoting the Cadel Evans cover stories

magnicadel.JPGHere’s what we with New Idea and Woman’s Day yesterday to promote their Cadel Evans cover stories.  In addition to this impulse purchase driving placement with newspapers, we also had the titles on show facing into the shopping mall, on our in-store weeklies impulse unit and in their usual location.

It’s great to see both magazines running positive stories.  While these may not sell as much as scandal, customers certainly comment on feel good stories.  They are commenting on Cadel’s win since we claim him as Victorian.

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magazines

Cutting out the middleman

Jo Rowling is to self-publish the e-books to her successful Harry Potter series through Pottermore, her newly-announced proprietary platform. Some are calling this the Radiohead moment for publishing.  Radiohead did this with music years ago and started a trend of self publishing by major performers. Read the article at Wired about this.

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Media disruption

UK high street retail mix changing

The Guardian newspaper published an interesting report yesterday on the changing nature of the retail mix to be found on the UK high street.

A stroll down the high street used to be about buying pork chops at the butcher and a bunch of carnations from the florist, but a new study suggests a haircut and a nail buff now top our shopping lists.

The rapidly changing face of Britain’s high streets shows an army of hairdressers and beauticians on the march but the number of newsagents, butchers and independent fashion stores in marked decline as they struggle to compete with the onslaught from supermarkets and larger chains.

A third of independent high street stores are now cafes, pubs, restaurants and takeaways rather than traditional retailers, according to a study of 75,000 retailers by an insurance company.

Notice the role attributed to supermarkets in these changes?  Have you seen the newsagency store within a store concept developed by Coles and which is evolving to a new level here?

Australian newsagents thinking about the future are sure to find the report interesting.

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Newsagency challenges

Cardeaux opportunity for newsagents?

I have been told by a couple of sources that the Cardeaux card and gift stores have hit difficulties and are closing.  Newsagents near Cardeaux locations could have an opportunity to take back card and gift business. While this may seem unfair against Cardeaux, business is business and anything newsagents can do to build their market share of core categories, even at the cost of a weakened competitor so be it.

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Gifts

Promoting Good Taste magazine

goodfood.JPGWe are promoting the latest Good Taste magazine with an in-location display, making it a hero title in our food section for the next week. This simple display is driving sales … food is such an easy category to promote. With in-location displays we have one on each side of each aisle.

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magazines

Why retail space is a cost of carrying magazines

I was discussing the magazine supply model with a representative of a magazine distribution business recently who was arguing that full retail real estate costs should not be apportioned to the magazine department as if it were a profit centre of thee business.

The argument was that magazines pulled in traffic and that this presented newsagents with an excellent opportunity for other sales. It was put that the full rent for the magazine space should not be applied to the magazine department cost centre because of this traffic pull.

Maybe, just maybe, prior to deregulation and the direct supply to petrol, convenience and other outlets this argument about traffic may have had some merit to at least consider. Today, definitely not.
More than 50% of magazines are sold outside newsagencies. While they do generate traffic, this has declined considerably since deregulation.

My newsagent sales benchmark data shows that magazines are sold alone around 50% of the time. That is, around 50% of people purchasing a magazine purchase other products at the same time.
While I accept that the efficiency of magazines is very much up to newsagents and their retail skills, there is no case to argue that magazines are effectively a loss leader for newsagents. Rent and labour costs are too high.

It is entirely appropriate that the magazine department operates as a cost centre. This is why it must stand or fall on its results. It is why I will continue to factor in retail real estate costs when I undertake magazine title cash flow analysis.

To magazine distributors and publishers who say that an assessment of the profitability of a title should not include the cost of retail space occupied by the title – I say you are wrong. Walk in my shoes for a year, pay the rent, labour and other costs. You will soon see that while magazines are important, they MUST pay their way … every title must pay their way.

In too many Australian newsagencies, there are magazines which are not paying their way – they are riding off the coattails of top selling and profitable titles.

I am concerned that lack of attention by newsagents, publishers and magazine distributors to this will irreparably harm the newsagency channel.  We all need the magazine department to be a good profit contributor to newsagents.

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magazine distribution

Now is the time to consider boxed Christmas cards

I have enjoyed tremendous success with boxed Christmas cards over the years.  The keys are to get in early (immediately after Father’s Day), to promote cards with a charity connection and to display them on trestle tables.

The suppliers I like and which have worked well for me are: Simson Cards (brilliant design range and excellent charity selection), Cardpac (brilliant range and a Peter Mac Hospital connection), Charity Greeting Cards (good charity support) and Hallmark Cards (not so good charity connection last year but much better this year).

I have had no trouble competing with supermarkets and majors as they take a different approach to boxed Christmas cards.  They tend to not go out as early.  Also, their range is usually more limited.

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Greeting Cards

Newsagents – be careful implementing power saving advice

The Queensland Newsagents Federation recently published power saving advice which could inadvertently lead to newsagents to causing computer problems for themselves.  Do not change power settings on your computer until you check with your computer supplier that doing so will not impact on your use of the system.

While the QNF recommended power saving options for a computer screen, a non computer literate newsagent made setting changes on the computer which caused system challenges.

Any supplier or association providing computer settings advice to newsagents should run this by newsagency software companies first.

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Newsagency management

Promoting health magazines to women

whealthmags.JPGWe have been promoting our three top-selling health related magazines for women with this full face display in our women’s interests section.  This is in addition to a co-location campaign for each which sees the titles in another location in store.  In addition to showing off the full cover of each magazine, our goal with this placement is to drive sales of more than one title.

Our women’s interests section is next to women’s fashion.

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magazines

Strong Mother’s Day 2011

mothersday-k1.JPGEver since Easter, Mother’s Day cards and gift sales have been strong.  I think that the Royal Wedding has played a role.  I have certainly seen some wedding magazines purchased as Mother’s Day gifts.

The Royal Wedding effect aside, the feel about Mother’s Day this year is more optimistic than in 2010.  This is reflected in traffic as well as sales.

We have been running with cards and Mother’s Day books right across the front of the newsagency, facing into the mall. This prime space commitment has worked a treat.  Sure there is far more browsing of cards and therefore work to tidy them – but the sales result is worth it.

With the big day now here, the challenge is … what’s next?  It is months to Father’s Day.  We are planning a series of promotions back to back, some we will advertise externally while others we will run using existing shop traffic.

So, while Mother’s Day is (almost) over for another year, the marketing calendar is full with activities to leverage the growing optimist we see and hear from shoppers.

Happy Mother’s day to all the mum newsagents.

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Gifts

Mother’s Day Books Selling Well

mothersdaybooks.JPGWe have been enjoying good sales from our Mother’s Day Book Sale with shoppers usually buying at least two books in each sale.  Since we are not a book shop, many book sales are in addition to the destination purchase of cards, magazines or newspapers.  Given the good margin, book sales are performing a welcome role enhancing our overall margin story.  We have been promoting the Book Sale with a terrific catalogue featuring Mother’s Day focused titles as well as with tactical placement – to drive the impulse business.

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Book retailing

More Royal Wedding opportunities for newsagents today

newidea-royalwedding.jpgWe continue to make the most of every Royal Wedding opportunity presented to us.  Today this New Idea Royal Wedding Special Souvenir Magazine is receiving prime positioning in several locations in-store.

I am not seeing any sign of interest in the Royal Wedding waning yet.  We even had a customer in one of my newsagencies yesterday asking if we would sell them one of the posters for this New Idea special – we had a locally printed copy on display yesterday announcing today’s on-sale inviting pre-orders.

Today we have more stock of Monday’s New Idea thanks to a reprinting decision.  We also have the AWW Royal Wedding special and more stock of AWW itself.  So we are well setup for the weekend.  I know that not all newsagents are this fortunate so I am not crowing too much.

What a terrific fillip this wedding is proving to be for us!

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magazines

Promoting range for Mother’s Day

mom-cross.JPGWe have included the Mother’s Day themed Lovatt’s BIG Crossword title from as part of our Mother’s Day displays.  We do this every year – because this tactical placement delivers incremental business.  Simple as that.  It is easy to place with Mother’s Day gifts.  I have seen shoppers drop this into their basket with a Mother’s Day card and a gift.  Where else could they purchase this crossword title for Mother’s Day.  I see it as a terrific point of difference.

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Gifts
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