Zendesk, developers of excellent help desk software, recently released an excellent report on customer service from Clickfox. It’s relevant to any business with a customer-facing component – like newsagencies. Of particular interest is what people do, how they react, to perceived poor service.
The one thing successful newsagency businesses have in common is good business data management. Good business data management starts with meaningful product departments and categories.
Don’t fall asleep! Too often newsagents and other small retailers I speak with roll their eyes at this point and say it’s too hard. Nonsense. You’re lazy if you do not setup and maintain a good department and category structure in your newsagency software.
Departments should be high level: stationery, gifts, cards, plush, magazines, newspapers. No, newspapers and magazines don;t go together. No, art products should not be in stationery. No, gifts should not be part of cards.
Categories – these sit within each department – should be meaningful to you. Do not use suppliers as a category as newsagency software can report separately on suppliers. Use categories to help you understand what is selling. here are two examples:
Come up with your own, that are meaningful to you. The goal here is to help you easily see in reports from your software what is working. departments and categories report at a high level. Once you see something of interest you can dig deeper in detailed reports.
get this right and you have a foundation in place to grow your business.
We achieved a 71% sell-though in four weeks for the Complete Guide to Home Workouts magbook. We supported the title by placing it next to Men’s Health and ensuring the full cover was on show. It’s in the niche space, where we have a difference from the submarket magazine range, that we can most easily drive magazine sales.
Our Movember products have been selling well. We needed the prime display space for Christmas so moved Movember to the counter. I love the signage by one of our team members – professional and fun. Product left at the end of the month will revert to our funky gifts display.
Footnote: 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.
Basic branding of your newsagency is the best way to let people know who you are, what you offer and what you stand for. Here is the bare-minimum branding a newsagency needs just to be recognised and remembered:
Every use of your branding must be consistent and it must connect back to the business, what it stands for and what it offers.
Shopping basket analysis from newsagencies indicates that newspapers and lottery products continue to be inefficient for newsagency businesses. Between 70% and 90% of purchases with either is for that category only: a newspaper alone or a lottery ticket or two and nothing else.
Too often newsagents blame customers and or suppliers for the inefficiency. This is a mistake. The reason for inefficiency lies in the business itself.
If your sales of your top selling (volume) items are inefficient embrace responsibility. Complaining will not change the situation. Act.
Here is one tip that I have found works. When you are closed for the day, run masking or gaffer tape on the floor from the door to where customers go to get their newspaper. Next, run tape from there to the counter. Finally, run tape from the counter to the door.
Walk along the tape. Look at what’s along that route. Look at what customers see, if their eyes are open. Look at what you are promoting along the way and at each destination point: papers, counter, doorway.
Look at the floor, how are you using that?
If your lottery sales are inefficient do the same thing.
Don’t remove the tape and go home until you have an action plan of things to do to make newspapers and or lottery product sales more efficient. Next, act on the plan first thing in the morning.
A good action plan will involve a series of small steps. I’d suggest posters on the floor, maybe a game, with one or two stop points where you feature product. I’d have an over the counter promotional offer. I’d also have an offer at the door. Plus, regardless of what suppliers say, I’d have impulse purchase items right next to the popular inefficient products – including at the lottery counter. If what you do doesn’t work. Go through the process again. This is what a retailer would do. A shopkeeper would stay behind the counter and complain.
Product inefficiency is a challenge for the retailer to resolve.
We are actively promoting both issues of Better Homes and Gardens currently on sale: with newspapers, in the regular location for the title and on the shop floor in the promotional display unit. I head of a newsagent this week who took the regular issue off the shelves. I explained this was a mistake as both would sell. We continue to find the placement between newspapers works very well for us.
We’ve lost money on the discount pack of NW and Shop Til You Drop. The GP from the copy sold has not paid for the space. I wish we could permanently stop supply of these discount magazine packs. Instead, we’re forced to lose money.
I heard of a newsagency discounting boxed Christmas cards this week – buy one and get the second pack for 50% off. This is nuts in my view for a couple of reasons: boxed Christmas cards sell easily right now without discounting and if you are trying to drive loyalty then use a whole of business loyalty approach like discount vouchers or, groan, a points-based loyalty program.
Okay giving the second box of cards at half price may drive sales. I know in my own newsagencies it would not be useful since 73% of boxed card purchases are two or more boxes. Why would I discount for a volume purchase I would get regardless?
I suspect the newsagents running this promotion will find themselves discounting sales they would have got anyway.
It’s vitally important that discounting has a business purpose, that it results in purchases you would otherwise not have achieved. Structured discounting, beyond that to move dead stock, needs to be well thought through with justification deep within your business data. Doing it on a whim, based on gut feel or because you’re told to will more likely result in your giving away margin you need not give away.
The discount voucher approach, of a cash off the next purchase via a voucher printed on the receipt, is a whole of business approach. In my newsagency where we have been doing this since February, more than half the vouchers issues for greeting card purchases result in redemption purchases in other departments. It’s important we promote our whole business and not just isolated categories.
I’d encourage newsagents to think carefully before they run a Christmas card discount like the one I have described. Sure they will feel they are getting good sales. I suspect a review of business data will show they are unnecessarily giving away margin dollars. There’s no sense in that.
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.
I terminated the employment of someone this week because they deliberately disconnected the security camera located directly above a sales register. Their explanation was that the camera had been faulty and they were trying to fix it. The video evidence shows the camera working days prior to them reaching up and behind the camera and removing the cable that connects it to the recording device.
The wanted the camera off and the only reason could be one that compromises the business.
When it comes to business security we need to take a zero tolerance approach. Yes there are labour laws to respect. When it comes to casual employees we have some more flexibility.
How the Mighty Fall is a good book to read if you want to understand how successful businesses have missed opportunities and ultimately failed. The case studies are quite detailed. You get to the moment of failure, the opportunity lost.
Jim Collins explains why good companies fall and how leaders react. I found it fascinating and relevant.
This book is relevant to newsagents because of its coverage of businesses dealing with disruption to their traditional model – like we are. The big business examples are relevant because the challenges are common to us.
This is the current window display at the Kikki K store in the Qantas terminal at Sydney airport. I love it, especially how they have framed the window and so boldly connected it with Christmas and made the products the hero. This framing draws your attention. Plenty of people stopped to have a look when I was there this week.
Newsagents with glass windows could do something like this, framing the window to focus more attention on what’s being promoted.
Some disappointing news for newsagents selling Optus mobile recharge. Optus is cutting margin while our costs of providing the service is increasing. How Optus can justify cutting margin is beyond me.
If their costs have gone up they should deal with it in call charged and not by clawing margin from small businesses like ours.
I’d also like Optus to be transparent with us on the commission they pay Coles and Woolworths.
Here is what ePay is advising retailers:
epay Australia has received written notification from Optus/Prepaid Services advising that your new margin for all Optus products is 3%.
The new margins will come into effect on Monday 16th December 2013. Please update your internal systems as appropriate to avoid complications in reconciliation.
As an agent of Optus/PPS delivering electronic recharge services, epay Australia is contractually obliged to activate the new margin structure, as advised to us, on the above date.
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.