At 1pm at the Qantas Club in Sydney today they had plenty of copies of The Australian Financial Review left to give away. Most papers are often gone by early afternoon so not sure whether there’s been a supply increase or reduced interest in the title.
Here’s a business review I did recently for a newsagency with quite a unique mix of customers:
Thanks for providing your July through september 2013 and 2012 dat for a business performance comparison.
You have quite a unique business. It’s hard to call it a newsagency with 44.42% of your revenue coming from card sales and gifts delivering another 9.82%.
The analysis is somewhat challenging because you have used supplier names for categories. You don;t need to do this as your software tracks sales by supplier automatically for you. I’d use categories for something more meaningful. For example, in gifts,categorise them either by style or gender/age group. This will make the reports more useful for you.
Given the more narrow focus of your business compared to the traditional newsagency I’ll contain my comments to those areas where you focus the most.
Gifts. One supplier accounts for 27% of your sales and while this is good for themI do wonder if you could broaden your range further, Your excellent card sales volume can guide the areas into which you expand. For example, kids gifts and plush. You should be able to grow your gift sales by at least 33%. In fact, I’d set that asa business goal. Look carefully at card sales to guide your gift buying.
Cards. I can see you’re in transition here,moving from one supplier to another.Keep on top of your data. Run the category performance report to get intricate detail about the cards working and those not. With cards at 44.42% of your sales you need to ensure you always have the best range out on the shop floor and the department well managed. To achieve this everyone working in your shop needs to be able to put new product out and to pull tickets for orders.This alone will help you grow sales.
Toys. Your toy sales are good enough to move them out of the gift department and into their own. This will focus your attention.
Plush. I can’t see any significant activity. Based on your card sales you should be able to do at least $25,000 a year in plush. Focus on fun everyday, no more than three suppliers.
Confectionery. Sales are below $50 a week. I’d consider getting out of this and using the space for funky impulse purchase items. Better margin and hopefully faster selling.
Tobacco. Your selling $300 worth a week. If your stock holding is more than $2,000 you;re losing money.
Magazines. Wow. $215 a week in sales. The only benefit I can see is as a convenience offer. That said, your sales help understand your shopper.I can see that 81% of the magazines you sell are female related titles.
Reading your reports I found myself asking what is this business. You are so strong with cards and gifts yet you dabble in some traditional newsagency / convenience lines. That made me wonder if you’re doing this to the detriment of the business. Would you be better off focussing more on cards, gifts, plush and toys with magazines and papers your nod to being a newsagency.
Your shop needs to be very female-friendly, carrying products for them personally and products they will buy for others.
If it were my business and based on the data I have seen I’d probably pull back on some categories and turn this into more of a destination for cards and gifts. I’d want to be known in the busy suburban shopping precinct where you are located for several product categories. I’d range products to be the go to retailer for these selected categories. Your magazine and card sales can help you work out the products you could become the destination retailer of.
I hope this helps. Let me know if you would like supplier specific suggestions.
The Queensland Times gave space this week to a ‘story‘ promoting a business book author in which newsagents were held up as struggling businesses. he’s using fear to promote his wares:
“While newsagencies were once a ‘gold plated’ safe business, the industry is still reeling from deregulation in 1999.
“They have one remaining cash cow in lotteries which could well be deregulated in the next 12 months too, spelling disaster for newsagents throughout Australia.
The article goes on to list 10 ways to save a struggling business. I agree with each idea and have written about all of them at some time or another here.
The balance that could have been brought to the article is that there are many newsagents enjoying success from turning around their businesses or at least starting to see success from this.
Success starts with good business data. This good data feeds better business decisions.
A newsagent asked me yesterday if they could deduct end of shift cash shortages from employee pay? I advised I’d never done it but didn’t know the law.
searching online I found an excellent website, Workplaceinfo, with this advice:
6. Cash shortages
Another common problem is cash shortages by employees whose duties include the handling money.
Generally, the employee cannot be held responsible for the repayment of any shortages which may occur unless the employee has sole access to the money.
An award or agreement may make provision for recovery of any shortages, however, a proper investigation would still need to be conducted by the employer to determine the guilt or innocence of the employee.
The absence of such a provision does not affect the employer’s right to take such disciplinary or legal action as the employer considers necessary.
So it comes down to what you have agreed with your employees. It starts with what is in the contract, what is in any applicable award and the rules of the business. Plus it relies on the evidence you have and the process you go through to determine who is at fault.
The key is to have a structured end of shift process that leaves little to chance and everything to documentation. The more you use a consistent system or process for managing money and data in your business the easier it is to handle cash shortages. Sloppy processes lead to mistakes and undesired costs.
For more reference, check out the University of Southern Queensland’s policy on cash floats.
You can access the latest issue of Giftwrap magazine from the Australian Gift and Homewares Association here. Giftwrap is an excellent title with great product, merchandising and management ideas. It’s not your usual industry association magazine.
I use Giftwrap to get product ideas and to plan for seasons – the magazine is generally at least six months ahead on major season.
Take a look at Mia Freedman’s comments at her Mamamia site about the future of magazines in the wake of plans by Bauer to merge the editorial teams of Dolly and Cleo. She pulls no punches and speaks from authority given her background in publishing.
Check out how one storage box of magazines looked this morning in one of my newsagencies. Plenty of stock un-merchantable. I’ve heard from other newsagents recently of similar damage to magazine stock delivered. Very frustrating for us and disheartening for publishers.
Next to Recent Comments on the right hand side of this blog now you will find Popular Posts. This is a new feature. The blogging software tracks traffic by post and creates this list dynamically based on traffic. I’ve had this added since there are some older posts that get a fresh burst of traffic.
A good example of this new Popular Posts feature working is the listing of a T2020 blog post from March this year in the list.
This change and the captcha security code change are part of a new version of the blogging platform that has now been fully installed.
Here’s a newsagency business performance analysis I recently completed for a business in a tourist location:
Your business is in a unique situation being located on a major tourist area. Your situation demands you carry a broader range of products that the traditional newsagency with some of these products being very seasonal in nature.
Looking at your data it makes me wonder if you stock some products to sell out within the season, so you are not burdened with those highly seasonal products until the next season. This is certainly the approach I would take – even quitting at cost or below anything I;d have to put in storage until the next season. Otherwise you’re bound to find yourself holding stock for months on end.
Stock not on the shop floor has a high cost to the business.
In comparing sales July 1 through September 30 2013 with the same period in 2012 what stands out the most is what I cannot see. You are not managing your data well. Too much product is sold without a category. take Arts & Crafts. Your sales are $5,713 in the 2013 quarter but 99.76% of this is in unknown category. This poor data management hides a management opportunity for you.
Tracking inventory at the category level takes a bit of work to setup but once done you are better served. The quality of your business decisions, your buying especially, will improve considerably and this will help you make more money.
I’m not going to comment on all departments. Rather, I have notes about what really stands out.
- Coke. our sales are down 34% year on year. needs work since Coke is a beacon brand.
- Fax & Copy. You’re clearly offering a valuable service. Revenue is up 191%. Well done. Chase more growth. Promote this well and at every opportunity. Also look at your prices. Do they reflect the convenience of the service you offer?
- Gifts. Almost no sales. Based on your card sales you ought to have been able to do more than $4,000 in gift sales in this quarter. Get on it.
- Lottery. Up 8%. Well done. Whatever you are doing, keep it up. Also look at up-sell opportunities. What do people see as they approach and leave the lottery counter? What else is offered at the lottery counter? It looks like the majority of lottery customers make their purchase and then leave. Consider offering a coupon for a purchase that day only. Date the coupon. Make the offer compelling. make your good lottery traffic count for more!
- Magazines. I can see from the categories of titles you sell that yours is a genuinely mixed business in terms of gender and age. I trust your magazine department is zoned guys and girls and that your relay is fresh – a magazine relay takes between four and six hours to do. Your overall magazine sales are down 26%. This is dreadful compared to the channel average – indicating you need to put some serious work into your offer. If I were you this is where I would start in re-energising your business. Create a fresh look for magazines, chase more sales. What you are doing right now is failing.
- Stationery. This is up 7% and that’s god.Because of poor data management I can’t see where the growth is coming from. Whatever has changed between this year and last – do more of it.
Here are my top three things you need to do immediately and once they are done we can work on next steps:
- Do a magazine relay.
- Fix your data – assign categories to everything you sell. This is pretty straightforward to do.
- Leverage your lottery traffic with an offer.
Oh, and look at how you handle seasonal product.make sure you don’t hang on to anything.
I hope this helps. You should aspire to act on the three items above in the next two weeks.
Here’s a brief analysis I did recently for a business under the control of new owners:
Thanks for providing your July – September 2013 versus 2012 Sales Comparison Report. In addition to considering this for the benchmark study I have looked at your data separately.
As new owners you have an opportunity to refresh the business, to put your own stamp on the business without being handcuffed to history. Here is what I can see in the data in terms of headline change opportunities.
Cards. Cards account for 5.96% of your total sales. revenue is down 13% year on year. I suggest you meet with your major card suppliers to review performance and to develop a plan for pursuing growth. I do wonder whether you have too many card suppliers to the business and whether this dilutes your caption coverage.
Gifts. Sales are down 13% off of $45,751 between July and September 2012. While this is against trend in the newsagency channel, the business you have just taken over has been strong in gifts for many years. So, the challenge is to reinstate growth. This is hard work but can be achieved by by careful management of the entire category.
Magazines. While your year on year decline of 10% in unit sales is not too far from the channel average, the 17% decline in weeklies is most concerning given this accounts for 18.32% of your sales. I suspect this is related to your 10% decline in sales (traffic). You need to act to arrest your magazine decline since magazines account for 10.27% of your sales and generate good traffic for the business. I’d suggest a relay and a fresh approach to magazines.
Stationery. The 16% decline in revenue demands attention as it’s a decline outside of the overall traffic decline.I could comment on more departments but I don’t see value in that since you’re still settling into the business. If you’ve not done so already, I think you need to think about the business and undertake some planning. Where do you want to take it in the next year, two years? It may be that you need to undo some of what is in place today before you pursue your own goals for the business.
The data suggests that you need to pursue change, maybe cutting back on some traditional lines and pursuing more new lines. You certainly don’t want the current trend of decline across the board to continue. If it were my business I would be driven by traffic and margin. I’d focus attention of any traffic generating product category while at the same time working on margin products – products delivering north of 50% gross profit.
In thinking about change, I’d also consider what the business stands for. Right now the business is broadly based. The data does not reflect specialisation. I’d pay more attention to this and develop a strong specialisation in several areas to strengthen your traffic pull.
I hope the comments are helpful. I’d be happy to discuss them at any time in-store.
I’ve found another magazine I’d like to stock but don’t because the amazing magazine allocations system has failed to consider my business appropriate for it. I like the look of One Handed Cooks and am sure I could sell it even at the relatively high price. All they need is a smart website to help us find and order titles like this. Magazine distributors would make more money trusting newsagents.
Singles Day, November 11, has grown into a massive business opportunity in China. Check out the Business Week story on Alibaba and their massive turnover. The Telegraph in the UK provides more background.
While it’s another commercial occasion and therefore open to criticism, I’d be all for it. Anything to attract various sections of society into shop for even a made-up occasion.
Allan Wickham from newsXpress Eli Waters is going a mo as part of a Movember fundraiser. Click here to support Allan. I’ll happily promote any other Movember fundraisers here.
It used to be that Tuesday was quiet for newsagencies. With OzLotto and Powerball regularly jackpotting and with the change in magazine delivery days it’s time to ask newsagents about their busiest and quietest trading days.
This survey has two quick questions by store location and type. Click here to take the brief survey.
This bear is an example of plush products that work as gifts for more occasions that we traditionally target in our plush (or soft toy) ranges. It’s an adult style bear that could work for an older person. It could also work as a gift for someone dealing with health issues.
This is my favourite bear in-store.
25% of our plush appeals to non-traditional plush situations. This has been key in driving our sales.
See the effective use of balloons I saw recently to draw attention to a business. I love the two columns, on either side of the door, in the corporate colours. We could do this for at seasons or other times to draw more attention to the entrance – and get people inside.
Click on the image.
We’ve had an excellent start to boxed Christmas card sales. We’re up more than 10% on last year. Placement flat on a table is the best way to merchandise these.
I caught the final episode of Recipe to Riches on Network Ten tonight and wish I had seen more of this excellent reality show. Packed in this food / cooking themed show was some excellent business information about developing commercially successful products. It’s this business side that I loved. There was excellent education about key business terms such as sell through and practical information shared about the process of bringing a product to market.
That the winning product was selected based on sales is an excellent lesson in what makes a winning product.
Too often game show winners and other business award winners are not selected based on data. A lack of transparency of process and criteria can be a turn off. Not so here. Recipe to Riches was a lesson in transparency, business education and delicious food all rolled into one.
I was talking with a newsagents today who faced the challenge of employees spending time handling text messages and checking Facebook on their phone. When I said they should have a no phones policy the newsagent, a new owner from a public service background, questioned a no phones policy. I said I’d open the topic here for discussion.
My view when it comes to employees what’s okay at the counter is: no phones, no bags, no notebooks, no food, no drinks, no smokes, no wallet. the counter is a work place and only items related directly should be there.
It used to be that Tuesday was quiet for newsagencies. With OzLotto and Powerball regularly jackpotting and with the change in magazine delivery days it’s time to ask newsagents about their busiest and quietest trading days.
This survey has two quick questions by store location and type. Click here to take the brief survey.
Blackhawk has advised that new Blackhawk Merchant Applications will not be processed between 18 Nov 2013 and 3 Feb 2014 due to the seasonal closure of the Blackhawk offices during this time. Last re-orders for card stock will be processed up until 6 Dec 2013 and will recommence on 13 Jan 2014.
If selling store branded gift cards is important to you, get onto this.
The latest issue of Enduro magazine is taking considerably more space than usual thanks to the free calendar packages wit it. While I like the idea of the gift, we have to increase space with either a second pocket next to the mag or by not using the pocket behind the mag. The publisher needs to realise that their decision has doubled the retail real estate investment that has to be made by newsagents to support this issue.
Okay, this is one title, let it slide is what some would say reading this. Newsagents carry between 700 and 1,500 titles. Multiply this type of challenge out by, say, 33% of all titles. No wonder we get frustrated. We’re taken for granted too often.
We are promoting the latest issue of Feast magazine with this in-clocation display right at the start of our food section. We also have Feast with weeklies as the featured title.
Next week we will run it with newspapers for a week. Feast responds well to this type of promotion.
A perth newsagent has been fined $1,000 for selling outlawed lanterns.
This video of part of a speech by Kevin Spacey is excellent. While it’s about disruption to the traditional TV distribution model, his core call is relevant to print and to newsagents.
Yes, we need to give customers what they want, where they want and how they want.