I think I like the photos of shoplifters on show in the front window of a store I saw a couple of days ago. I say think because I’m not 100% sure. The number of photos suggests that this shop is a haven for shoplifters. It also says it watches videos and will not hold back in publishing photos of people exposed as stealing. I think the better approach is to promote the images online where more can see them.
A few years ago Dick Smith opened a new store opposite my newsagency in Forest Hill in Victoria. They knocked us around in the ink space. It hurt. We eventually climbed back by focusing on brands, top selling inks and excellent service. We once again did well out of ink.
We just found out that a new Dick Smith store is to open right next to another newsagency I own. It’s replacing a low-traffic entrance of a large pharmacy. The pharmacy was L-shaped and 75% or more of their traffic used the entrance away from us.
I’m glad Dick Smith is opening here. The shop will bring welcome new traffic to our part of the centre. While there will be a challenge with ink, the traffic boost will more than compensate for this. The competition will be good for us.
We expect to see a boost across all departments as a result of the additional traffic. We will leverage this by adjusting our front of store pitch to try and connect with who we expect the Dick Smith shopper to be.
We are promoting the launch of Skylanders Swap Force with this double pocket half waterfall placement with titles most likely to appeal to the Skylanders target reader. My research over the last few days indicates this is a mega brand, one that should sell well in newsagencies.
Pacific Magazines has a limited stock of this well-designed and sturdy floor display unit for promoting Christmas-themed issues of Batter Homes & Gardens and other Pacific titles. If you want one, email Nicholas.Markham@pacificmags.c
I use this unit on the shop floor – moving it around. It helps me grow sales. I achieve this by placing the unit at the front of the shop, near the counter, next to newspapers and other high-traffic locations.
Here is a newsagency business performance report I did last week. I have been very tough on the owners because I know they can do considerably better. They asked for the assessment because of what they would lose if they sold the business on the current numbers.
The suggestions in this assessment could apply to many newsagencies.
Thanks for the opportunity to look at your business performance data.
Comparing July to September 2013 with 2012 I can see that the business is marking time. On first review, the number of sales is flat and revenue is up 2%. If I take out your ticket sales department I get a different picture.
In my comments I’ll be direct and this may come across as being rude. Please don’t be offended. If I’m rude it’s because the business performance data makes me be that way.
It is important when looking at business performance data that you look at the data that matters. In your case, core product departments of magazines, cards, gifts and stationery matter the most.
It seems to me from the data that you are running an average newsagency for the regional situation you have. While your numbers are not awful they are nothing special. If you want to sell your business then you need to make it appealing, appealing on the shop floor and in your performance numbers. The only way to do this is for you to be above average.
This is a key message I have for you. For you to get what you want, a good sale price for your business, you need to be above average in everything you do.
Here is where I would start based on my assessment of your business.
- Lead. You need to lead the business. Set the agenda, decide what the business stands for and live this with every decision. Your business data tells me you are not doing this as performance is barely average.
- Stand for something. Your business appears to be boring based on what you’re selling. Nothing is shining. For example, Gifts account for 1% of your sales and tobacco 29.75%. Are you happy with being a tobacco shop? If so they knock yourself out. If not you need to sort out what you stand for and embrace that.
- Own your business. This ties into my last point. You;re smart and creative people based on displays I have seen. You understand the importance of engaging with your shoppers through terrific displays. These displays were created to win points or prizes from suppliers. THE MOST IMPORTANT PRIZE YOU WILL WIN IS THE CHEQUE YOU GET FOR SELLING THE BUSINESS. Create displays that chase more value for your business and not a supplier prize. Think abut this very carefully. What works for you? Look at your customers and what they buy and think about what you can promote and how to get them spending more.
- Operating costs. Make sure your roster is lean. You also need to make sure that every hour you pay for is efficient and financially valuable for the business.
- Cards are 6% of sales yet they are just about the best margin product you have. Your sales are down 4%. What are you doing to arrest that decline. Based on the channel average your card sales should be up. Your data is poor too with 23% of your card sales in unknown category. That’s not acceptable as you can’t manage what you are not measuring!
- Magazines are interesting. Overall sales are down but your craft, food and special interest categories are performing very well. Notice what you are dong with those categories? If it is anything special what can you apply to other magazine categories? Your magazine range is a key point of difference for you in your centre and nearby so getting magazines right gives the business a good foundation.
- Stationery is odd. It accounts for 3.73% of sales yet it accounts for 27% of data categories you track? Why so anal about tracking stationery when sales are down 9%. Your measuring of stationery performance is not helping you manage the business otherwise sales would be better. What is odd is your apparent pen sales. These should be a third of stationery sales yet they are not. They are a fraction of that. Maybe they are in the 11% of stationery in unknown category, stock you are not tracking.
You can do better than this I am sure of it. I think you need to act urgently on your cost base, your leadership of the business, decluttering and making the business stand for something. You need to create a shop that’s attracting people for more that magazines, cigarettes and western union. You need people seeking your store out for higher margin product that you are KNOWN FOR in the area.
What you need to do is hard. Hard because it’s hard work and hard because you have to reinvent your business within the cash-flow resources of what you are doing today.
One option for you to consider is a make over. Set a budget for new stock, I’d suggest around $5,000. I and some colleagues can order stock based on the knowledge of what is working. We can come in and in a day move the shop around and create a new experience and quit what needs to be quit – all at once and all with some urgency. But you can also do this for yourself.
If you want to sell your business for more…
- Sell more higher margin product.
- Sell more to every shopper.
- Charge more for every item possible without impacting sales.
- Cut your costs.
- Get customers talking about your business in a good way more.
You can deal with the situation by being a victor or by being a retailer. Choose to be a retailer. I know you can do it.
Like all newsagents, we received the discount triple pack yesterday of Woman’s Day, NW and OK.
In some situations, Bauer reduced NW supply to less than the usual sales volume, the only way a NW shopper can get the magazine is in this discount bundle pack. Did this happen to you?
Why would Bauer cut supplies of NW below what a newsagency usually sells and increase the supply of these discount magazine packs?
I don’t see the discount packs working. People at Bauer say they are working. Others in magazine publishing say that the discount packs are not working based on supermarket scan sales data with Bauer performance in supermarkets down.
All I know is that we received 37 of these discounted magazine bundles in one of my newsagencies yesterday. 37! This is nuts.
I want to grow all magazine sales and not migrate people from one title I sell to another. Also, I offer a premium service which has costs associated with it. These discount magazine packs are an additional cost to business.
I’d like to know if supermarkets, convenience stores and petrol outlets are compensated as a percentage of the discounted cover price or at the cover price of the three titles. We’ll never know for sure given the variety of stocking, pocket and other fees the majors charge to suppliers.
We need to establish a pricing model that reflects the true value of our real-estate. This is what the supermarkets have done with their fees.
Check out the magazine / newspaper bundle offer at Countdown outlets in New Zealand. Buy a New Zealanad Herald, Weekend Herald or Herald on Sunday and NZ Women’s Weekly, New Idea or That’s Life for a bundle price of $5.00.
This is interesting in that it leverages newspaper traffic for these magazine titles and vice versa. Given that it is retail brand specific I’d not like to see anything like this in Australia as it would only serve to move even more magazine and newspaper traffic from the newsagency channel to supermarkets and nothing good will come from that.
The New Zealand marketplace is quite different to Australia. While it has the Paper Plus group it does not have the independent newsagency retail network we have.
Countdown is owned by a subsidiary of Wioolworths Australia.
Both Vogue and InStyle have benefited from recent premium gift with purchase campaigns. My experience is that the gift selection is important as is placement to ensure the gift is seen. Also, lifting the price to reflect the value of a premium gift does not hurt sales in our areas as sales for InStyle have shown.
I love the chocolate coffins I saw in the window of one chocolate show in downtown Auckland earlier this week. Their Halloween display was excellent. It was made up of a series of small displays like this chocolate coffin display. Talking to a team member in the shop they have become known for their themed displays. People come to look at them. The team members get to make suggestions.
This is an excellent example of making an independent and small retail business a destination. Outside of these window displays this is an average chocolate shop – not meaning to put them down. Their window displays separate them and make them a shop to visit, to see what they are up to.
They are generating destination traffic, the most valuable form of traffic a retailer can have.
Click on the image for a bigger version.
Check the placement of a post-it note type ad for Downton Abby stuck on the front of the New Zealand Herald today. It’s covering editorial content. If these ads work so well why put editorial content there to be covered up? Why not permanently carve out the ad space on the front page of the newspaper instead? This way you respect your editorial team.
I know this blog is visited by many new newsagents so primarily for them, here is a brief list of what you need to be doing or have done by now for Christmas and other this-time-of-the-year opportunities.
I’m sure others will add to the list via comments.
I am curious about where newsagents place the Downton Abbey diary. I’ve put it with People’s Friend and magazines targeting an older shopper as this seemed the most logical location. I have stock with diaries but felt that I am more likely to get an impulse purchase if I place this with the type of shopper most likely to be watching the hit TV series.
Don’t do this tactical placement just for Downton Abbey diaries. Look for more opportunities.
We have the floor display unit from Pacific Magazines with Better Homes and Gardens, and the BHG Christmas plus New Idea Christmas located in the card aisle. This is the main traffic thoroughfare in the newsagency as shoppers use it to browse cards and to head to newspapers and magazines. This display unit is currently the first magazine offer they confront. It’s less than three metres into the store.
We have each title in two other locations and will maintain this for the next couple of weeks which Christmas food and party themed magazines sell best in this period. We pocket count what we put into the floor unit so we can measure its success. It’s working a treat.
We will use this floor unit right up to Christmas though to promote other Christmas-themed Pacific titles. But we will move it weekly!
I was in a newsagency last last week and they had their frankie magazine in the magazine department, the frankie diary with diaries and their frankie calendar with their calendars. I urge newsagents to put all frankie products together – you’re more likely to increase sales. In one of my newsagencies we sold a magazine, diary and calendar to a shopper who came in to purchase the magazine.
This is basic retail – place stock to sell in the most efficient way possible. Think like your customer.
I am working with a newsagency at the moment that is not doing any marketing because they don’t have the money. This is an unacceptable excuse.
Marketing your newsagency business does not have to cost anything. Here are some easy to undertake newsagency marketing ideas you can implement without spending any money, just a bit of time.
This list is a fraction of free ideas you could use.
There is no excuse for not marketing your newsagency. These ideas do not cost anything.
Further to my post a week ago about detecting theft, here is advice on reducing theft using your newsagency software.
Used properly, good Newsagency software can significantly cut the cost of theft.
Theft reduction is achieved through consistent use of the software throughout the business. The less consistent a business the less likely they are to uncover theft. Those most likely to steal will notice how the software is used and through this reach a conclusion as to the likelihood they will be caught.
Tracking stock from when it enters a business to when it leaves is the key to detecting and reducing theft by employees and customers. Too often, small and independent retailers do not fully track and manage stock – making them appealing businesses for people likely to steal.
Here are the steps involved in tracking stock and reducing the cost of theft:
Once all stock is setup in your software, the time taken for spot stock-takes is minimal. This time is funded from the reduced theft that will certainly result.
Employees who see you track stock movement through spot stock-takes and other activities listed here will be deterred from stealing from the business as they will see the risk of being caught is higher.
Manage your business professionally and consistently and theft will cost less.
At a Coles supermarket in Melbourne yesterday – a pallet of Halloween candy at the entrance to the business and in the background a near empty pallet of Halloween pumpkins. I’ve not seen any Australian retailer do pumpkins like they do in the US before.
In the back of the same Coles supermarket were these dump bins of other Halloween items – party items and costumes – being quit at a considerable discount.
We’re still at full price with all Halloween product and sales are excellent.
Queensland newsagents tell me they are frustrated with several Tatts related issues today.
The frustration is peaking today as Saturday is a big day for lottery sales and tatts is essentially closed on a Saturday.
Some people at Tatts will be angry that I have written this. They will complain I am picking on. I did not manage the equipment roll out, the software change, the introduction of the new game nor the communication around any of these.
Here’s an analysis I did yesterday for a newsagency in need of reinvention. Before that can be done they need to fix data issues so that they have meaningful data measurement. This is why the analysis is incomplete compared to what I would usually do.
Thanks for giving me the opportunity to look at your sales data for July through September this year compared to last year. The numbers make for sobering reading but I know you understand that from the changes you are already making in the business
Over the thirteen weeks in this period your non agency sales were just below $20,000, or $1,461 a week. Based on the product mix I estimate your current gross profit to be around 28%. This gives you $409 a week out of which to pay wages, rent and operating costs.
A traditional newsagent would try and build off of traditional newsagency lines and while this could work over time, I think the better approach for your business would be to look at the shop as a blank canvass, using this to build a fresh retail offering to serve the needs of your specific area. For example, with the developments going on nearby consider the people purchasing there – if they are families then their interests and needs will be different to if they are retirees.
In your data I can see that magazines currently account for 32.40% of your sales. But at under $500 a week it is very low. Look carefully at the titles selling as this can provide an insight to your customers. While I’d chase magazine growth if I were you, my core focus would be on higher margin lines, lines that can generate their own traffic and for which you can promote your sales.
Newspapers account for 12.84% of your sales. Add newspapers and magazines and you have 45.24% of sales delivering below average gross profit. While newspapers and magazines generate traffic, these products are also available in other retailers near you so they do not offer a major point of difference.
That gifts account for 7.59% of sales is good news. This is an opportunity in your data. Also, considering what is and isn’t nearby, you have an opportunity to be a destination store in the gift / plush / toy space. But developed over time and within a conservative capital expenditure budget.
Today your business would most likely be known as a corner store or a small local old-school newsagency. I think the future for you is to be known for something completely different. A fun shop, somewhere I can find a gift for any occasion. Somewhere I can shop locally for what I might otherwise drive ten of fifteen minutes to find. Convenient gifts, stationery, toys and items likely to sell to these shoppers.
Achieving this requires careful thought on the type of business you want to create. research you can do on this is to look carefully at your card sales – to see what people are buying and why. For example, if kids birthday card sales are strong what can you do to leverage this? Likewise confirmation / christening / baptism cards. While your card sales are low, $207 a week, the data should at least give you an indication for guiding expanding your gift range.
The other department to assess is stationery. What can you see in this? For example, is your stationery business everyday or office related? What’s popular for you? In one newsagency recently a third of their stationery sales were art and craft related products being sold for kids projects. This opened their eyes to opportunities in the kids space that they had not considered as they were looking at stationery sales as adult focused sales. So my question is – what gold can be mined from your stationery sales data. I’d be happy to get someone to help with this if you would like.
The challenge is for you to remove what’s not working and rebuild within budget constraints. I’d do this section by section, from the front of the shop back. Make the front of your business look full and vibrant, reflecting your aspiration to grow into a respected and talked-about local retailer. Nail just one area of the business and then move to the next.
Using your software right is critical. Scan every single thing you sell. If you don’t do this you do not have good data and without good data you cannot make good business decisions.
You can’t turnaround a business in which you are not measuring the performance of what you sell. This business currently is not properly measuring what they sell – to their detriment.
There is no excuse for not measuring, not scanning, everything you sell. You’re in business to get a return on your investment and the only way you will achieve that is if you are efficient and growth focussed. Neither can be achieved without proper measurement.
We regularly refresh magazine placement in our magazine department to ensure that well-known brands are well-placed. This work is don separately from putting magazines out in the morning. It’s something I usually do myself when I am in-store, to ensure that we are promoting the brands I want to promote and that they are placed to make the most of their mastheads.
The photo shows the placement of four titles in our home and living section from Thursday this week. I’m using the front two pockets to promote four key titles. Blocking the titles in this way not only supports the four titles, it also supports the section more generally since these four titles blocked in this way become a signpost for the section.
I try and block key titles like this in four or five sections. Being able to do this depends on space availability. Sometimes I will half-pocket titles to be able to do this double-pocket type of layout.
Newsagents can grow magazine sales by managing the placement of magazines outside the early morning work of putting new titles out. This activity is management activity and is best done separately as I have said.
Click on the image to see a larger version.
We’ve sold out of this melting monsters in the run up to Halloween. It has delivered easy impulse purchases without a thought by customers. Extending the basket with a good margin product is always a pleasure.
It’s small moves like this with the right impulse purchase product that drives basket value.
Too many newsagents are looking for a big bold move they can take to make their business more successful. I think success comes from many small steps – like the right good-margin counter offer.
The questionable claiming of travel expenses by many Australian federal politicians as disclosed over the last few weeks is disheartening. If some of what I have read is true it amounts to theft. I would sack employees for such blatant and systematic misappropriation of money from a business.
What is more disappointing is the double standards being applied. One person’s dishonesty is another person’s oversight. These matters ought to be black and white. The wriggling over the last couple of weeks on some claims and the support from within especially the Coalition parties is shameful.
The only solution is for oversight of politician expenses and salaries to be handed to a commission of everyday Australians outside the control of politicians.
The way the stories are coming out, in a tit for tat game, indicates that each party knows what people on the other side have been up to and that the disclosures are being fed for political purposes.
Shame on the media in Australia for not uncovering this story sooner and for not relentlessly pursuing all politicians with the same vigor. News Corp. stands out for its double standards most recently given their pursuit of Peter Slipper.
The same politicians who are claiming travel expenses to go to weddings, buy a home, attend an AFL game or for other dubious reasons set policies that affect us and our small family businesses. They tell us there are not enough funds to more effectively support small business. They tell us that they have to increase this charge or cut that service because money is tight. Yet they vote themselves pay increases every year and too many of them rort travel and other expenses in acts of utter dishonesty.
What does this have to do with newsagents? We have been let down by politicians for decades. They have fed excuses to us for too long and those representing newsagents have, in the main, accepted the excuses. All the while the politicians have looked after themselves. We have every right to feel let down. They have not served the Australian voters or the national interest ahead of serving themselves.
I love the poster I saw in the window of a Grill’d hamburger outlet recently. It perfectly connects with the type of businesses Grill’d is. This poster is promoting the business as well as inviting applications for work.
I love how this is a local pitch even though Grill’d is a chain. I also love the approach and am likely to copy it.
Click on the image for a larger version.
Several customers have complained several times about the Spirit humour cards we have at one of my newsagencies. One makes a scene when they complain. Excellent sales t sales tell me that many customers are happy we have the range. While I don’t like offending customers I don’t see it as my job to shield people from everyday languages and images.
We listen to the complaint, thank them for their concern and explain that ours is a shop for a broad cross-section of people. While most accept this and appreciate us listening to them, there is this one customer I expect to see out the front one day with a protest sign.
Okay so we sold the coffin centrepiece of our Halloween display in a couple of days so the Zombie head decanter has taken prime positioning. Damn! We’re thrilled.
The Zombie head decanter is part of a zombie range he have sourced to help us reach a broader audience with Halloween. It’s working a treat. Halloween sales are up on last year despite a bigger push from majors in our shopping centre.
Halloween is an excellent example of a traffic-generating opportunity for newsagents acting as retailers. Do Halloween right and you get excellent word of mouth and this drives valuable new traffic. Halloween traffic converts to Christmas traffic.
A modest spend of $500 on Halloween product can return $1,100 and more in direct sales and another $300 to $500 in additional product sales in a few weeks.