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

Patchy GNS Fair in Melbourne this weekend

The GNS Market Fair in Melbourne this weekend was among the best organised I have seen and I’ve been at every one since GNS started them. There was a good mix of product and services suppliers, the floorplan was good and the GNS stand itself was the hero stand it needs to be.

Attendance was softer than suppliers needed to justify the expense. I think the various gift fairs as well as newsagency marketing group conferences with their own trade shows attached pull focus from the GNS fair that we the only fair for newsagents for so many years.

I talked with a few people about a national trade show on one weekend tied in with other events to encourage participation. I think this idea could work with the support of the marketing groups.

GNS applied a margin to all retail products sold at the fair. I expect some suppliers to lobby GNS about this as it’s not what you see at other trade shows. For example, a supplier at the gift fair which attracts 20,000+ retailers pays for the space and furniture with no surcharge on turnover.

Newsagents attend these fairs for a deal and not a penalty.

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Newsagency management

Sunday newsagency marketing tip: get seriously connected with your local community

Newsagency businesses are local businesses. This is how shoppers see them and how many newsagents see them.

How locally connected is your newsagency? Here are four (fresh I hope) ideas you could consider to show off a local connection. This collection of ideas is all about things you could do that are newsworthy for the local newspaper or local radio station:

  1. Tell the town’s story. Invite a school class to create a diorama telling some history of the down in your shop window.  This will be educational, topical, newsworthy and something that gets people connected with those involved to your shop to see the window.
  2. Famous and infamous people. Get your customers to nominate famous people form the area from back since when the area was first settled. Again, educational and newsworthy.
  3. Sports heroes from 2013. Invite all schools and clubs in your area to submit a photo and a brief description of their sporting winners from this year. The display could be your way of holding the winners up for another moment of glory.
  4. Where we come from. get a school class to create a map of the word for your window and get your shoppers to place a flag showing where they come from. Maybe the could have a place to note a story of how they got there.

While none of these ideas is about you selling product, each does better connect your shop with your local community and that is vital, especially for high-street newsagencies where the traffic you see is what you generate as opposed to larger shopping centre newsagencies which rely on the centre to generate traffic.

We all make our own success.

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marketing

Sunday newsagency management tip: wake up, you’re in retail!

I visited a newsagency yesterday to purchase a stationery item and when I approached the counter with the item I wanted, around two minutes after I entered the shop, the person sitting on a stool at the counter was startled.

I didn’t see you come in they said.  That’s because you were too busy on your phone you lazy sod is what I should have said instead of just smiling. I paid, they gave me change and that was it. I turned back to check as I exited and they were on their phone again. The whole time they did not leave the stool.

The person who served me be would be in their early twenties and earning over $21 an hour to work. In the US this person would be lucky to be on $8 an hour and for this they would most certainly provide a much better experience.

This newsagency is in a busy high-street situation. Shops all around are open. The cafe next door was full. Trade could be good in the newsagency if they engaged with the opportunity on the street.

I don’t know the owner of this business but I’ll make contact to let them know my experience. If only this employee would do what they are paid to do … to work the shop floor, make the shopping experience more enjoyable and tidy the front of the shop so it connects with people on the street.

The employee I encountered is around the age of most people I noticed on the street. They could be more help to the business than sitting on the stool taking money and putting it in a drawer.

A business is a product of its leadership.

I am certain anyone could visit one of my shops at any time and have an experience that’s not as good as I would want. the challenge for us as retailers and leaders is to be clear in what we expect. We also need to hire for success and have a process for addressing shortcomings we hear about.

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Management tip

Packaging almost as important as the product

I love the packaging for this mad Cow Money Box. you can see the product, understand what is and get in on the fun. The packaging helps sell the product in terms of purpose and fun as well as showing it’s each to wrap if being purchases as a gift.

We consider these factors when buying gifts as they are factors our customers tell us they consider and we see for ourselves in terms of how they engage.

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Gifts

A lesson in gift placement and brands

We put in  these dangle characters a week ago and for four days did not sell one. That’s not unusual as products take time to be found. A space need saw us move them and we sold almost all our stock in two days. The new location worked better for this type of gift. They appealed to people who love Batman and Superman or those who buy gifts for the fans.

With newsagencies being such general stores, my sense is that shoppers will spend less time on a treasure hunt whereas my experience in a specialist gift shop is that shoppers will spend more time on a treasure hunt. This is why gift placement is important for newsagencies and why we need to keep our products on the move. It’s also why brand is important for us.

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Gifts

Participating in GNS Market Fair seminars

I’m participating in workshops being run on each day of the GNS Market Fairs. I’ll be sharing the latest newsagency sales benchmark insights and covering how newsagents can grow their businesses – providing some specific tips they can action right away.  The seminar schedule for each day of the fair is:

10:00am Retail Leasing – Retail tenancy legislation, what is it and how does it protect newsagents? Michael Cuda – ANF

11:00am How to make your Newsagency worth more using Point of Sale software Mark Fletcher – Tower Systems

12:00pm GNS Alex Stewart – GNS CEO

1:00pm Creative Publishing – Kids Licensed Products learn about the Australian mum and her life and how to unlock the sales potential in your store.

2:00pm Nexus – How to use this marketing tool and why you should use it. Jane McIllhatton – Pacific Magazines

3:00pm Connect – a new set of products & services exclusive for Newsagencies David McLean – HUBBED CEO & Matt Handbury – HUBBED Chairman

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Newsagency benchmark

Herald Sun discount shows why a direct relationship is vital

The wipe off 5 campaign run with the Herald Sun yesterday which saw a 5 cent discount on the cover price of each copy highlighted the importance of a direct relationship with all retail only newsagents and the publisher.

While some distribution newsagents had communicated about the campaign, others had not – forcing a disconnect for the campaign. In one of my stores the team working only discovered the campaign when seeing the front page of the newspaper. Calling the distribution newsagent did not immediately help as staff did not know about it.

The sooner newspaper publishers communicate regularly and directly with retail newsagents about retail campaigns the better.

As for the campaign itself, good on the Transport Accident Commission for taking this approach. Besides promoting their message it reinforces the newspaper medium as relevant for reaching people.

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Newsagency management

Another tough magazine sales audit for publishers

The latest magazine sales audit results released overnight covering January through June 2013 compared to 2012 show a decline in sales around what I have reported here in the newsagency sales benchmark study.

Overall magazine sales are down around 8%.  Car magazine sales are down on average well into double digits, girl magazines, Dolly and Girlfriend and both down more than 12%.

The Australian Woman’s Weekly has achieved what I’d call a good result, down 1.4%. In this market I expect Bauer would be happy.

Better Homes and Gardens has also achieved a good result with no change. Pacific would be happy with that.

As I wrote earlier today, frankie is the shining light with growth of more than 10%. This is interesting since frankie plays close to the Dolly and Girlfriend space.

In the weekly space, the results are not great but not a disaster considering the overall market situation: Woman’s Day down 4.2%, New Idea down 4.4%, Take 5 down 8.9%, That’s Life down 12.2%, Famous down 14.4%, NW down 6.9%,OK! Down 7% and Who down 8.9%.

I would like to see data comparing titles performance in the various retail channels and even comparing individual businesses in the newsagency channel. I’d like to see if there is migration of the magazine shopper from one channel to another. I’d also like to see how shoppers respond to the different tactics newsagents use in the category.

I have used the magazine club card loyalty program since mid 2004 and for years this helped achieve a better than average result. In February this year I switched, cold turkey, to a unique discount voucher program that front-ended loyalty. My basket data shows that this program has generated considerable incremental magazine sales for us, sales I am certain we would not have achieved.

So, I’d like to see more thorough store level analysis so the channel can understand the success of the various tactical programs being used by newsagents. I’d be happy to share my data, for the good of the channel, to see how what I do stacks up.

From where I sit the evidence is pretty strong that shoppers are over the old points based approach. They prefer a dollar value discount as a reward for above average behavior.

It would be a mistake for newsagents to see the audit numbers and feel encouraged to retreat further from the category.

I am certain we can increase magazine sales by churning shoppers from one retailer or retail channel to us. While it’s hard work, sales are there for the taking.

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magazine distribution

Daily newspaper sales in double digit decline

As we have seen from successful newsagency sales benchmark reports published here, newspaper sales are continuing to decline, presenting traffic-generation and relevance challenges for newsagents. This once staple product category is fading in terms of overall sales and, for our channel, in terms of our own relevance for the product with other retailers offering sometimes a more convenient purchase point option for newspapers.

The latest newspaper sales audit covering April through June 2013 compared to 2012 show a double digit decline for daily newspapers in Australia.  The Australian has a full table of results today on page 27. See B&T for details including:

In the metropolitan market it’s a case of more of the same as circulations continue to fall, with Fairfax’s big two The Sydney Morning Herald (-17% M-F) and The Age (-16.2% M-F) posting weighty declines. It doesn’t get any better for Fairfax in the weekend metro division, with the Sun-Herald handed the unfortunate tag of the steepest decline (-20.4%) of the mastheads audited, while theSMH weekend edition (-20.2%) fared little better.

and…

Over at the News Limited stable, who said that they won’t be commenting on the ABC data, there was little to gloat about, with The Daily Telegraph (-11.2% M-F) and Herald Sun (-10.3% M-F) posting double digit declines.

Some newsagents will say the decline is being facilitated by significant cover price increases. While I think the cover price hikes are impacting sales, they are only a more recent factor.

Most of the decline we are seeing is a shift on home when and where people access news and the failure of the print product to offer an alternative appropriate to their slow delivery medium.

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Media disruption

frankie sales grow 10.75% year on year

In the latest magazine sales audit results frankie reported an increase of 10.75% in sales. This is an excellent result at a time when many other magazine titles areporting declines.

The publisher acknowledges the role of newsagents in this success:

With the Australian reader moving away from glossy and fad mass-consumer titles, frankie is still connecting and experiencing growth throughout its eight-week on-sale period. But this wouldn’t happen without loyal newsagents and retailers pushing and promoting frankie to their customers.

“In a volatile market, and even with tougher trading conditions, newsagents and retailers continue to find frankie worthy of supporting with each issue.” says Circulation Manager Alf Santomingo.

“We’ve also seen a continual reduction in early returns with our allocation policy of reducing supply in outlets which do return copies within the first month. This has resulted in stronger sales efficiencies for each store selling future issues, and allowing more copies to be available to outlets who continue to sell out”.

“It’s humbling to know that against more mainstream and more frequent publications, frankie is worthwhile in connecting with sellers’ communities, as well as their day-to-day trading. We’d like to thank these ‘frankie hubs’ for their continued support.”

Newsagents should support frankie with excellent placement. My own experience is that it sells right through the on-sale. This is NOT a title to early return.

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magazines

How a $7.95 purchase led to $45.00 in additional purchases

A customer visited two days ago to purchase a solar system chart, a $7.95 sale. A friend with them liked the discount voucher from this purchase and purchased two kids art sets for $21.90.  The first customer used the discount voucher from that purchase to buy a Top Model book for $24.95.  In all we gave away less than 10% of the total purchase value. For an additional $40.00 in revenue I’m happy with that.

There is no doubt that without the discount voucher the purchase value would have been $7.95 for the solar system chart.

These shoppers would not benefit from a traditional old style points-based VIP card.

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newsagency marketing

New Darrell Lea fixtures attractive

I like the new merchandise units from Darrell Lea, they’re modern, space efficient and visually attractive … a good advance on the old-school units from the previous owners of the brand. While there are frustrations with how the brand is being handled, I’m happy to endorse the good moves being made for retailers.

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confectionary

Newsagent locked out magazine distributor invoices

Magazines distributors and XchangeIT need to look at barriers put in place by some that block access to electronic invoices. Another newsagent recently was blocked from accessing electronic invoices because they decided they did not want to continue with software support coverage for their newsagency software. They did not want to pay the close to $3,000 a year fee.

When the date came at which their support coverage lapsed their software, for which they had paid many thousands of dollars, denied them access to the invoiced provided through XchangeIT. The harm to their business was considerable. They say they were not warned when they purchased the software that the annual support fee was mandatory. They say they were not told that they would be locked out of such a business-critical function.

Even though their current software meets current XchangeIT standards, they either pay what they consider to be an excessive fee to their software supplier – around $3,000 – or they live with not getting electronic invoices or they switch software to one of the newsagency software programs that do not lock you out if you don’t pay software support.

XchangeIT wants to ensure that newsagents have software that meets their standard. I understand and agree with this. To have a software company, not XchangeIT, block access to business-critical data when the software continues to meet XchangeIT standards is appalling. The magazine distributors and XchangeIT need to address this issue.

In the meantime, newsagents need to be aware before they purchase newsagency software. Ask these questions before you buy software:

  1. Will I be able to receive and process electronic invoices directly through my POS software if you choose to not continue software support coverage?
  2. Will there be any barrier, impediment or block to me using my POS software in any way should I choose to not continue software support coverage?

While there are other questions newsagents should ask before they purchase any newsagency software, these two questions go to the heart of this issue – the blocking of a newsagent accessing an important function for any newsagency business.

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newsagent software

Where the money goes in a typical newsagency

In helping a mid-size unbranded newsagency business recently I put together an educational flyer outlining where each dollar goes that they receive from customers. I created this to show that each dollar does not belong to the newsagent, that the wad of cash counted at the end of a shift is not their money.

This business had recently experienced an employee theft situation which had cost tens of thousands of dollars. The person committing the crime told the police that the newsagent could afford it they make loads. While I’ve heard this ignorant excuse many times when investigating theft in newsagencies, the newsagent affected was shocked.

The goal of the educational flyer is to show employees where the money in this business goes and to illustrate the point that the owner ends up with less than three cents in the dollar out of which they take payment for their time and service their loans.

I firmly believe that the more information we share about our businesses the greater the opportunity for our employees to make better business decisions with and for us.

Anyone questioning the percentages in the flyer can be shown invoices from the landlord or supplier invoices. Being prepared to prove the percentages claimed is important. To those who would say it’s none of their business I’d say it is their business. If you get them thinking more about the business, more connected with the numbers of the business they are more likely to support the business.

Jack Stack many years ago lead a turnaround of a reengineering business in the United States. His story is told in his book The Great Game of Business. It outlines the principles of open book management. The core principle driving their turnaround success was sharing business data and educating all who wanted so they could understand the data. What Jack led has become a movement – The Great Game of Business.  The principles apply to businesses of all sizes including newsagencies. I’m fortunate to have met Jack a couple of times including for several days last year at a small conference for small business owners.

I mention this to show that the idea of sharing business information with employees is not new and that it is backed by research as to how it can positively impact a business. My flyer idea is a small start in this direction. It goes nowhere near as far as Jack Stack would suggest but it shares way more than many newsagents do today. It’s a start, a necessary start in taking your employees by the hand and showing what happens to each dollar they put in your cash drawers.

I’d be happy to share the original file with anyone who would like to customise it to their situation.  Please email me at: mark@towersystems.com.au. It is vitally important that the percentages you present are yours.

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Newsagency management

Accountants sometimes fail newsagents

I’ve heard several stories in the last few days about accountants giving what appears to be bad advice re newsagencies. Too often I see newsagents rely on their accountants to guide them on basic business decisions that don’t need accountant input.  Here are the four stories (without names) to illustrate my point.

  1. An accountant advising a newsagency purchaser assessing the business records of a possible acquisition failed to properly assess the business performance and then charged too much. A $5,000 bill to assess business numbers seems steep to me.
  2. An accountant told a business to stick with manual business records when more automated processes would have cut the billings levied by the accountant against the newsagency business.
  3. An accountant said that a particular in-store equipment investment was not appropriate only to recommend the same item be purchased from a client of the accountant. The deal was no better for the newsagent.
  4. An accountant failed to draw to attention of the owner falling GP and thereby failed to facilitate the uncovering what was later found to be employee theft in a timely manner. The data was there for the accountant to see.

Some accountants handing newsagency business records don’t understand the businesses and therefore fail to provide the advice the business needs. This can get in the way of newsagents making good business decisions.

For what it’s worth, I think newsagents should back themselves more. They’re the ones in the business. They should have the business skills and knowledge to make decisions too often I see pushed onto accountants who are not in the business and who often do not understand the business.

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Newsagency management

Magazine distribution changes benefit shopping centre newsagents more than high street newsagents

While we are only a few weeks in, I am seeing data indicating that shopping centre newsagents are less likely to experience a negative affect from the recent magazine distribution changes which saw Wednesday and Friday deliveries combined to a Thursday delivery. High street newsagents, however, appear to have lost some sales.

Looking at sales by day reports I have looked at sales on Thursdays and Fridays in particular and they show a difference between shopping centre and high street businesses.

I did check a couple of rural / regional newsagencies and there was no discernable change.

Not all shopping centre newsagents have benefited from those I looked at. It’s clear that how one engages with magazines is a factor. Guiding shoppers to change their habit is important given the risk of losing sales to supermarkets on Thursday especially.

I’d like to see the major magazine publishers more fully research the impact of the magazine distribution change. If they do not want supermarkets to significantly grow magazine sales at the cost of newsagent sales they will need a plan to support our channel.

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magazine distribution

Debate in UK over raunchy magazines

Convenience Store in the UK is facilitating a debate about whether newsagents should display soft porn magazines – called lads mags. There is a difference between what independent retailers do and would do compared to national groups. This is similar to Australia with how we handle, for example, Zoo compared to 7-Eleven and the major supermarket chains.

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magazines

Hubbed is being promoted by the ANF!

I was talking with a newsagent yesterday who had been pitched Hubbed Connect by and ANF staff member who visited their shop. This is evidence that the ANF is promoting Hubbed. I was disturbed to hear this, to hear that an industry association employee is visiting newsagents selling or promoting Hubbed, especially when I have not seen any critical assessment of the Hubbed offer. The public enthusiasm for Hubbed being expressed by the ANF indicates that there is a commercial arrangement in place.

As I wrote on July 22:

Here are questions I’d want answered before contemplating Hubbed further:

  1. What is the nature of the relationship between Hubbed and any of the newsagent associations or anyone connected with the associations?
  2. Specifically, is there any money or other benefit whatsoever flowing from Hubbed to any of the associations and if so on what basis?
  3. What due diligence has been undertaken on the Hubbed business model?
  4. What due diligence has been undertaken on the proposed Hubbed contracts?
  5. Have all the claims made by and about Hubbed to newsagents been investigated?
  6. Is the ANF, NANA, QNF or any other association endorsing Hubbed and if so why and if not why?
  7. Has the ANF, QNF, NANA or any association promoting these sessions considered what of the Hubbed services are already available in newsagencies?

From what I can tell Hubbed is not offering anything significantly different to what newsagents have FREE access to today through ePay and Touch Networks. My understanding is that Hubbed will cost newsagents $7 a day or $17 a day depending on the level of service they choose. That’s a lot of money compared to the free services available already.

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Ethics

Cash-flow crunch for Queensland newsagents today

Tatts changes its lottery bank account sweep to Tuesday today, from the usual Friday. While the money being swept in Tatts’ money for tickets sold less payouts, the change itself will be a challenge for some newsagents to adjust to as they use lottery cash to support their business through the trading week and this change of day is not easy for them to switch.

I’ve been contacted by eight of nine newsagents expressing concern at the single step nature of the change. They would have liked a more phased approach. One even said they would have preferred a daily sweep. My advice has been they approach Tatts to express their concerns regarding their situation to see if they can handle the change differently in one-off situations.

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Lotteries

Hallmark’s Samsung Galaxy Tab 2 Father’s Day competition popular

The Win a Samsung Galaxy Tab 2 competition from Hallmark for Father’s Day is popular and it’s only been running for a day. One of our customers will win this tablet and we’re promoting this by showing off the actual unit they will win – it’s the centrepiece of the display.

Too often competition prizes promoted are retail network wide. We always get good take up when we show off that one of our customers will win the prize on offer.  This helps us reinforce the local focus on our business.

we are promoting the prize in this display behind the counter so all shoppers can see as well as on the lease line with our Father’s Day cards. Note the placement of a selection of Father’s Day cards with the display in the photo. I love that the team member creating this display included some of the product being promoted.

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Gifts

Time Australia cover popular

We have ordered more copies of the latest issue of Time magazine because of the cover story about Australia. Within an hour of this placement with newspapers we sold a copy to a customer purchasing on impulse. We expect to sell all out allocation.  Time works well with this news placement when covers will have local interest.

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magazines

Discussion on why the Washington Post should cease the print edition relevant to newsagents

Check out the report at Gigaom by Matthew Ingram on why the soon to be owner of the washington Post should cease the print product.

If I’m reading it correctly his central thesis is that print newspapers, emphasis on news, will die so why not act now and reduce the pain and force ourselves to pursue the alternative more vigorously.

This same thesis applies to newsagencies. We continue to offer products and services today that are in decline. We invest capital in supporting products and services that are migrating to non retail store platforms (lotteries for example).

We ought to more carefully think about our capital investment and consider the long-term returns we are likely to get should these migrating products and categories migrate as many expect.

As Ingram says about the Post, making a decision for yourself could be a better business move than to find yourself reacting – and playing catch up.

Our channel has spent too long being told what to do and too many expect to be led to their future. The future for each of us in our businesses – newsagents and newsagency spillers – is 100% up to us.

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Media disruption

How plush works at the newsagency counter as an impulse line

Last week I saw first-hand how plush works as a sales counter impulse line. A customer came in and purchased one of our dogs, happily paying $24.95. She told me that she saw it earlier in the week when getting a magazine. I never thought of you for buying these she said handing the dog to me. She collects them and was going to another centre to buy them. I fell in love with this one when I bought That’s Life. Yes, that’s exactly what she said. As we chatted she revealed she’d buy one or two a month for herself and as gifts for friends and family.

I love this lady because she says a soft toy (as she calls them) is the best gift you can give someone. Her pitch was a perfect sales pitch and a reminder of the broad reach a good plush range can have.

When I handed her the receipt which included a discount voucher she beamed a smile and declared she will be back soon!

We won the sale solely because we have the range of dogs at the counter. She will be back because of the range and because of our front-end loyalty program. The one dog sale is worth a lot more confectionery than we used to sell in a dave from the same location.

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Newsagency opportunities
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