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

Finding space for nourish, another magazine launch

nourish is another magazine launch we have to make space for. This one is challenging since it looks like a guys magazine aimed at the fitness section but it could also fit in general health as well as food.

We have it with men’s health and fitness titles. I’d love to know where others have it.

Notice the card sticking out of the magazine – the nourish publisher is taking space from titles behind it in a move sure to upset the affected publishers.

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magazine distribution

Promoting issue #2 of Collective

We are promoting issue 2 of Collective, now called renegade Collective after a stoush with the News Limited owned messenger news group, with our women’s magazine. We have it placed here because this feels right given the cover – even though this is a far more broadly focused magazine than the cover indicated.

We are planning a staff review for the magazine to help draw attention to the diversity of the title beyond what it looks like.

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magazines

Small business lost in Canberra this week

Small business was lost in the budget and the budget reply in Canberra this week.  For me, the best example is the hundreds of millions in benefits delivered to the free to air TV networks to enable them to fund structural change while small business newsagents continued to be ignored as we move through a more significant structural change of our own.

What did I expect? Not much … but this does not block my disappointment.

Politicians care only about where their money comes from and those with the loudest voices. One day maybe they will understand that investing in small business can deliver excellent rewards.

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Ethics

Lottery sales in South Australia to unlock fuel discount

In a move that I expect will divert purchases from newsagencies, a South Australian fuel retailer has announced plans for substantial fuel discounts for lottery purchases and other product category purchases.

With this happening in SA, I wonder how long before we see it in the 7-Eleven owned Mobil fuel outlets.

When Tattersalls did the deal with 7-Eleven they said Tatts products would be at the counter add-on. Over time that has changed with lottery tickets featuring in advertising to drive traffic.

Now we have this announcement in SA yesterday.  I don’t want to call it prematurely but I do suspect that this move is a game changer. It will certainly get newsagents looking at the lottery category more carefully. How can they compete with this.

And to those outside SA, On the Run is more community connected and more local than the supermarkets. I’m told there will be more trust in this being a genuine offer that is the case with Woolworths and Coles fuel discounting.

In the Newsagency of the Future series I’m in the middle of I challenge newsagents to contemplate business without lotteries.  It’s a value question, one that must be considered. Now, in the face of yesterday’s announcement, it is more timely than ever.

If you have lotteries in your newsagency and had a fuel outlet nearby offering a discount off fuel with a lottery ticket how would you react? You can’t do nothing for to do that would invite migration.

On the Run has declared war on lottery product sales with this move. Newsagents need a plan for confronting this challenge.

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Lotteries

Cool retro lava lamp display

Check out the display promoting retro lava lamps created by the team at one of my newsagencies. This is very cool and very clever. They sourced some retro carpet from the Reject Shop and created a sign and a backing that connected visually with the theme.

All of the elements – carpet, backing sheet, sign and product – combine to tell a story and draw shopper attention. It looks much better than simply putting the products on the shelves.

This display is located at the corner of the counter, near our gift department. It shows us off as being different and connects shoppers with the retro fun of the lava lamps.

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retail

Promoting under the magazine

We’re giving up a bit of space below Men’s Health to promote the Win a Car competition from pacific magazines with this placement of the header below the magazine.

While it takes a pocket below, it’s the type of change that could be noticed as it’s not usual and clearly promotes the detail of the competition.

We don’t do this often. In this case, the collateral works a treat – hence our use of it below Men’s Health. I’d encourage other newsagents to try this if they can create the space.

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magazines

New generation shopper loyalty program breaks free from me-too VIP / loyalty cards

For some time I have thought that points based VIP / loyalty cards offer retailers little differentiation. Besides them being in use in many retail businesses, I have felt there is a real doubt among shoppers as to their genuine value.  They are decades old after all.

FlyBys and Everyday Rewards are the market leaders in Australia and they educate shoppers that they need to spend thousands to get even a small reward. No matter how much small business retailers might say their program is different, if it’s points based it will be considered to be the same as these programs and offer similar value.

Shoppers are fatigued by loyalty programs. Some doubt their value. Others are sick of carrying cards. Others don’t like the promotions sent.

Retailers launching a VIP card today rarely offer anything new. Too often they reward shoppers for average behaviour.

It was with this background that I got involved in a very different approach to shopper loyalty. I wanted something that got shoppers behaving above average so that my business performed above average.  I am fortunate to have a software company through which I could play with my ideas.

Around a year ago through my software company I started work on creating a front-end approach to shopper loyalty, an approach that did not use points or require shoppers to carry cards.

In February this year I started a secret trial in one of my newsagencies and soon thereafter expanded this to a second newsagency. now, three months later I have an excellent set of data showing shopper behaviour. The data show how the new approach to loyalty, called Discount Vouchers, changes shopper engagement on the shop floor – driving basket depth and margin dollars banked from shoppers.

More important, Discount Vouchers give me a point of difference to the decades-old VIP and loyalty card programs. This point of difference is driving word-of-mouth and generating its won traffic.

I have personally had shoppers tell me how their behaviour has changed because of the Discount Vouchers. In one case, two months in, we won a customer who will spend $1,200 a year solely as a result of this program.

I wanted to trial it in secret as I was not sure how such a radical approach to shopper loyalty would work in a newsagency.  Now, three months on, and comparing my own experience to the experiences from trials in three non-newsagency retail businesses, the results are the same. Shoppers love it.

From a retail management perspective I control voucher value and the items on which the value is calculated.  I also control what can be purchased using the voucher. I can also change these business levers at any time without a need to retrospectively change past vouchers.

There is no paperwork for shoppers and no paperwork for sales staff. This program is easier that VIP and loyalty cards, it saves time.

When shoppers redeem a voucher we gather details to go in the running for a monthly prize draw – harvesting contact details for future marketing.

Having run a VIP / loyalty card program and other loyalty programs, I am confident that in Discount Vouchers I have a point of difference appropriate to today’s shopper and able to give me a competitive advantage in a world of shopper fatigue with VIP / loyalty cards.

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Newsagency benchmark

Too soon for Art of Crochet repeat

The re release of the Art of Crochet part series is too soon.  Judging by our initial allocation they must have a ton of stock left in the warehouse.

Our sales history for this title indicates that we will be lucky to sell 30% of what they have sent us so the distributor has just cost us a ton in freight to send the unnecessary stock back.

It is scale outs like this that make newsagents less competitive than supermarkets when it comes to magazines. It’s a pity the competition regulator refuses to engage on this.

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magazine distribution

Tapping into the Iron Man franchise

Iron Man is huge around the world following the release of the latest movie, Iron Man 3. The movie is breaking box office records and reinforcing interest in the brand. We are tapping into this with placement of the Iron Man related titles in prime position between entertainment and kids magazine titles.

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magazines

News Limited hits some South Australian newsagents with a freight charge

News Limited is hitting some newsagents in regional South Australia with an 80 cent freight charge on The Advertiser, the local SA newspaper, Monday to Friday and $1 per newspaper for weekend titles.

This is an extraordinary charge, one newsagents will have no choice but to pass on to consumers.

It will make newsagents look bad applying a price over and above the cover price printed on the product. It’s a move that us upsetting some newsagents as they think about how regular customers and holiday markers will react.

I am not sure how News has decided the areas to be hit with this 66% levy given that some rural and regional areas of South Australia are hot being charged while others are. Some in the areas being charged feel discriminated against and I am inclined to agree with them.

Beyond the charge itself, the approach by News adds to the workload of newsagents – creating something that they could seek additional compensation (from customers) for.

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Newsagency challenges

Reading what we sell

After reading Political Animal by David Marr, sent out by Network Services, I thought I’d like more time to read more of what we sell.  This is an interesting book. It plays out in an unexpected way and that’s why I’d like to read more of what we sell – to challenge assumptions. While it’s impractical it’s also important – knowing more on what we sell.

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Brand retailing

Big business: the power of one large account to force suppliers to change

Check out a quote from Richard Goyder, CEO of Wesfarmers, from a couple of weeks ago in The Australian Financial Review:

Any business in this country has to be looking at how efficient it is. Our business is not to prop up inefficient suppliers but supply great products to our customers in the best way we can.

This is very true. The problem for newsagents is that we have contracts in place with Gotch and Network that see us propping up inefficient suppliers. We are treated differently to our competitors by these companies, with less efficiency, and this costs us tremendously.

There was a crisis meeting of all newsagent associations almost a year and a half ago about this and to my knowledge nothing has happened.

I predict that once the issue of newspaper home delivery efficiency and value is resolved, more newsagents will turn their eye to the value of magazines. I have already heard of several newsagents actively considering closing their magazine distributor accounts because of inefficiencies they cannot overcome due to the poor business practices of Gotch and Network.

Magazine publishers should get engaged in the issue of supply efficiency – otherwise they will find newsagents not wanting to carry the category.

Richard Goyder is lucky, his one account is so big that suppliers must take notice.

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magazine distribution

Stunning look for Real Living

I love the monochrome look for the latest issue of Real Living magazine. Indeed, the look has encouraged us to put this issue in the spotlight. In addition to excellent full cover placement as shown in the photo, our plan today is to promote the title outside its usual space – with an appropriately monochromatic display.

Looking down the aisle of magazines, this issue of Real Living stands out. Kudos to those behind this look.

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magazines

Promoting Slow Cooker 3

We are cautiously promoting the AWW Slow Cooker 3 cookbook. I say cautiously because Slow Cooker 2 was a dud for us – on the back of Slow Cooker 1 being an amazing success selling between 200 and 300 copies.

Others flocked to the slow cooker space once they saw the success AWW had with their first slow cooker title and this segment saturation, in my view, diluted interest in Slow Cooker 2.

We are promoting Slow Cooker 3 in three locations this launch week including the location in the photo – with our range of AWW cookbook titles.

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magazines

More evidence of structural change in retail

The Australian Financial Review today has a report about how David Jones is dealing with structural change in retail. I urge newsagents to read the article.

The key takeaway for me is the acknowledgement by David Jones’ CEO Paul Zahra of the structural change confronted by retailers. The scope of the structural change is considerable, it goes to the very foundation of retail – what people buy, when they buy and how they buy. It challenges what we invest in our businesses and our plans for our future.

I cover this in the Newsagency of the Future workshop series.

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retail

One Direction lollypops demonstrate abuse of the newsagent magazine distribution model

We are early returning the two boxes on One Direction lollypops and patches we received with our magazines last week. We should never have been sent these in the first place.

Besides the lollypop / patch packs not being magazines, I have no interest in selling One Direction product for 25% GP.

The other issue is that we have nowhere to place them except at the counter and I use that space for products for much higher gross profit.

I have access to a broad range of more relevant One Direction product from which I can achieve 50% gross profit and more. I’ll take the magazines but nothing else.  I don’t need a magazine distribution company getting into this space – their interests are not aligned with mine.

That newsagents have been sent this and have to fund its return is another example of the disadvantage we face over other retailers selling magazines. The costs of being in the magazine space are far greater for us that for petrol, convenience and supermarket outlets. This disadvantage could hinder competition if newsagents get out of magazine altogether because of our continued inability to manage magazine (and other product supply to our businesses by magazine distributors.

Having to pay to send this product back disgusts me.

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confectionary

Multiple locations for for My Kitchen Rules cookbook

Our strategy of displaying the My Kitchen Rules cookbook in multiple locations worked for us. At three separate locations – the front of the shop, mid point and toward the back – we have this product on show, ready for purchase as part of our Mother’s Day strategy. We saw an uplift in sales. It was the free standing unit near Mother’s day gifts that worked well for us. We will pull back to two locations now that the season is over.

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magazines

Sunday newsagency marketing tip: use a celebrity to drive a traffic spike

Ricky Martin caused havoc when he visited the centre where I have one of my newsagencies yesterday. One entrance to our newsagency was blocked by people lined up to see him. The other entrance was hard to navigate because of the thousands wanting to see him on the stage just across from us.

The marketing people for shopping centres hire celebrities to spike traffic. This only works for the retailers if their sales are up. We can’t tell in this store since it’s our first Mother’s Day. The feeling, however, is that the Ricky Martin crowd hampered our sales by blocking traffic and making our part of the centre less appealing for shoppers who may have purchased Mother’s Day cards and gifts. But we don’t know for sure.

Despite the experience yesterday, I am all for newsagents using celebrities to drive a traffic spike. The keys are to choose a celebrity relevant to what you are promoting / selling and to live within your budget.

For as little as $1,000 you could get a celebrity in-store to boost a promotion. While anyone with a national profile will cost considerably more, a local radio personality, a local TV personality or a local reality show contestant could be accessed for this type of money. Promoted appropriately and for a decent amount of time you could get a good return on your investment.

If you want to get together with some nearby retailers, you could get someone with a higher profile for around $5,000. Well known comedians and current chart singers would appear for this amount – especially if they have something of their own to promote too.

We can’t rely on the name or type of our business to attract shoppers. We need to get outside our four walls and actively promote our shop, we need to grab only people in our catchment area and drag them in for a reason beyond what they remember about our business.  And, when they get there, we need to excite them and get them happily spending money with is.

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marketing

Sunday newsagency management tip: calculate what you need to earn per square meter

It’s important to know how much each square metre of retail space costs you so that you have a gross profit target when assessing the performance of stock. What I propose is not conventional. However, I have found it to provide a more genuinely useful assessment for newsagents.

Here are the steps I suggest:

  1. Calculate your retail space. Work out how many square metres of customer accessible retail space you have. Do not include the back room or space behind the counter.
  2. Calculate your costs. Tote up all the fixed or semi fixed costs fo your business: rent, outgoings, labour, power, marketing, insurance etc. Do not include any inventory costs.
  3. Divide your costs by your space. This gives you an annual cost a cost per square metre of retail space. It’s the gross profit you need per square meter to cover your costs.
  4. Divide the cost by 52 for the cost per week or your trading days per year to get a daily cost. WARNING: the daily cost per square metre is not for the feint hearted.

Once you have the number, get your daily or weekly sales data for a department and work out where you stand. Find out what departments are working and what are not. next, find out what categories within each department is working or not.

While this sounds time consuming, you could just focus on one part of the business that interests you the most.

The result is data that helps you manage your business by numbers. The result will be empowering for you.

Good newsagency software can do this for you – return on floor space and return on shelf space.

 

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Management tip

Is News Limited giving away free newspapers?

I heard Thursday from a regular here that they observed a Herald Sun branded vehicle delivering wrapped newspapers (throwing them) to every home in an outer suburban Melbourne suburban earlier this week. Our correspondent stopped and watched as every house in the street was delivered a newspaper.

Is anyone aware of a News campaign blanket delivering free newspapers like this?

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Newspapers

Mother’s Day in high gear

Today is the day most newsagencies will see Mother’s Day products sales peak.  If yesterday was anything to go by from the data I have seen this morning we’re in for a terrific day today.  Cards and gifts very strong.  Magazines way up for a Friday too – more than 50% in my stores.

It’s thrilling to see the high-end Mother’s Day cards sell very well. It makes me wonder if we could sell more of the large cards like I’ve seen in the UK.

Happy trading today everyone!  Enjoy!!

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Gifts

Dragons loved, just like owls

We are finding success with a range of dragon-themed gifts as part of out pitch around various animals and other special interest categories in our gift department.

Like we have found with owls, there is strong interest for dragons – particularly for people buying for younger shoppers. Our little dragon section is ticking along well.

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Gifts

Some newsagents are making excellent moves

It’s been a thrill this week to meet plenty of newsagents attending the first of the Newsagency of the Future workshops for 2013. I say thrill because I have noticed a change of mood. Whereas in past years there would be more attendees with a mindset of doom and gloom, this year I am meeting more newsagents who are either embracing change or who are preparing to embrace change.

I love to hear newsagents talking about playing outside the traditional newsagency square and exploring how far they can take their business.

One couple I spoke with are innovating in terms of products while another is building a café into their newsagency. This is all great stuff, exciting.

I’ll share more on the innovation I see and hear about when people are happy for more to be shared. In the meantime, this first week is drawing to a close with more good news than I expected to hear.

The image is the first slide in my presentation. It’s a photo I took at the Hong Kong Gift fair a couple of weeks ago. I use it to talk about complacency in the newsagency channel. Some of the newsagents I have spoken with this week are the opposite of complacent. As I said, it’s exciting.

9 likes
Newsagency management
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