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

SA newsagents spend over $100,000 lobbying on failed state govt. contract

South Australian newsagents, through ANCOL, are spending in excess of $100,000 to protest the failure of ANCOL’s bid to win a government contract. The spend is in the form of professional lobbying.  Yesterday in Adelaide there was a public protest as part of the campaign.

While the lobbying focuses on the politicians, some newsagents have said they would like to see the ACNOL bid document to assess for themselves if the business put forward an appropriate tender on their behalf.

There could be more to this story than what newsagents have been told.

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Stationery

Transport tickets inefficient for newsagents

I have been looking at agency line business for newsagents – lottery tickets, phone recharge, transport tickets, event tickets. Transport are the least efficient from what I can see. By least efficient, I mean in terms of other items purchased with them.

85% of transport ticket sales are the tickets and nothing else.

While it could be argued that this is the fault of newsagents, it could also be argued that the nature of the product is that it does ot lend itself to efficiency with other items being purchased at the same time.

It could also be argued that selling a ticket positions you to get the magazine, newspaper or card sale when that shopper wants any of those. I’d disagree with this based on my observations of transport ticket shoppers. They want the ticket and are unlikely to think of you for anything other than  the ticket.

There is a time management conflict newsagents need to consider as they evolve their businesses. Card, gift, toy and plush shoppers need more shop floor help than a bus or train ticket customer. One is about retail while the other is about being a counter based shop keeper.

Attracting a shopper because of your gift range is more likely to result in them remembering you than attracting someone to buy a transport ticket. It all comes down to how much you focus on and control your own future.

The question is whether newsagents are prepared to ditch tickets. This is a question about margin focused retail versus slim margin public service operation. It’s about focusing on what you bring to the business versus slim margin volume.

Successive Liberal and Labor state governments have shafted small business newsagents by cutting margin while allowing other contractors to reap huge financial rewards with new ticketing systems. So much for small business policy. Delivering fair compensation for offering what is a public service could have reinforced their small business credentials. What they have done is the opposite.

But back to the data. Currently, transport tickets are the least efficient products / services sold by newsagents.

My personal view is that volume for between 2% and 4% margin is not acceptable. I do not sell tickets in two of my three newsagencies.

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Newsagency management

A good newspaper day

The games played out in Canberra yesterday should make today a good day for newspaper sales. Those of us with newspapers away from the front of the store should consider co-locating the top titles with the best covers at the counter to grab impulse purchases.  It’s a news day like today that we could get the card, gift or magazine shopper adding a newspaper to the basket – a reversal of how things happened years ago.

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Newspapers

Pause before you renew that contract

A newsagent approached me last week for help with a five-year contract they signed a few months ago. They don’t want to continue the supplier relationship, saying they are not getting the services and business benefits that were promised.  The problem is this particular agreement – it is tight, leaving little room for the newsagent to end the relationship. Worse still, they are forced to not sign with a competitor for a year after the end of the contract. So, it’s a six year contract.

Their only course of action is to complain to the ACCC and seek mediation or legal action. Financially this is not an option.

This is a reminder to all newsagents faced with a long-term contract to sign. Take your time, make sure this is a relationship you really want.

It’s easier to leave a marriage than this agreement.

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Newsagency management

Latest Girlfriend gives us a status check on One Direction

We’re promoting the latest issue of Girlfriend magazine with a terrific aisle-end display. We also have it in prominent display in our women’s magazine aisle and with our One Direction products.

This is an important issue of Girlfriend magazine as provides us with an opportunity for us to check the current interest in One Direction. I’m keen to see if there is any dilution of interest.

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magazines

Think Fun range a welcome addition to a newsagency

We are filling our shelves with products purchased at the recent trade shows we have attended. One range we are particularly excited about from Think Fun. It’s a range of fun, educational toy products that represent their name … these products are FUN.

I’ve written recently about the importance of happy , fun and optimistic products. They present a good message to shoppers. It takes the pitch away from the price pitch that the majors tend to focus on.

Actually, thanks to our recent buying our newsagency feels very happy. Customers are noticing.

The other benefit of the Think Fun range is the margin. They will help us get to the above-average GP we want for our newsagency businesses. This is where marketing buying group is key to unlocking additional points a single store may not be able to access.

the average retail newsagency GP is 28% to 32%.  This does not cut it any more. We all need to be chasing 50%.  We need to chase this with net traffic generating products and not so much with products that rely on existing, often declining, traffic.

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Fun

Plush to newspaper customers

We have taken the opportunity for some exceptional buying of plush and have therefore needed to expand the space we allocate to plush in-store. As a result, shoppers heading to purchase a newspaper are confronted with a large range of plush down the aisle.  We have stacked the shelves with the additional stock we have been able to purchase and plan to feed this through our regular plush department, providing it time in the main display.  What’s interesting is that this plush is selling from this location too. We’re thrilled about that as it is helping drive efficiency of the newspaper shopper.

To create this space we have compressed the stationery that was in this aisle back into the main stationery department.

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Gifts

Happy Lab is an interesting model

If you get a chance to see a Happy Lab store it’s worth it as it shows how colour blocking and creative packaging can get people spending more on an everyday item than they otherwise might. It’s Smiggle for candy and chocolate lovers.  Take the easter chocolates in the photo. At Happy Lab the price is close to three items I’d pay for a similar item elsewhere. However, the packaging and display are stunning, making it easier for shoppers to spend the higher amount. This is the Smiggle model with what I consider to be overpriced stationery for kids. Make something fashionable and people want it without worrying as much about price.

Another point about Happy Lab – I love their name as it’s, well, happy. Happy sells as I mentioned a few months ago about coke.

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Colour blocking

Why media companies should not be listened to on media reform

I am disappointed that politicians are listening to media companies about media reform. Here is another issue where the voters are ignored in favour of conflicted special interest groups. One only has to look at how the media companies are reporting on reform to see why at the very least a public interest advocate is a good thing.

These media companies have a vested interest – profit. The reform is about a balanced media we can trust. Trust is not part of the profit equation.

Every time I see another story about a media owner or manager lobbying a politician I wonder why smokers don’t get to lobby on tobacco or fat people on food laws or communities on fracking. Hang on, the companies that stand to profit get to do the lobbying.

Politicians go where the money is for counsel. Media companies go where the money is on lobbying.

The reporting of the debate on media reform in and of itself demonstrates the need for reform.  The sad thins is that many Australians will not see this as they have been told otherwise – by some of the media companies most in need of more oversight.

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Ethics

Small regular employee theft can be hard to track

I’ve been helping a business recently where an employee was stealing between $10 and $30 a day. They were stealing by not recording services the business charged for, services which were not reconciled in the business – thereby making uncovering the theft difficult.

It was only when the employee was not in the business for a time that it was noticed.

It’s important that you have processes to track everything, that all revenue, including for services, is reconciled.

This low-level theft, lunch money theft I’d call it, is as disgusting as employees who steal tens of thousands of dollars. The emotional cost is as high and the impact on the business can sometimes be almost as great.

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theft

Zoodle continues to evolve

The Zoodle new retail concept from WH Smith I mentioned in December continues to evolve. The Melbourne airport store is more complete today – as one would expect. There is no mistaking the focus of the business – it’s all about kids. They are using excellent signage in-store to direct you to key sections. They are also using well-known brands to attract shoppers. Being able to see Scooby Doo and Hello Kitty high above the product from a distance outside the store is very smart.

I could imagine that a Zoodle shop in a major Australian shopping centre would do excellent business.

It’s almost worth newsagents booking an international flight out of melbourne just to look at Zoodle live.

Well done WH Smith.

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Newsagency management

Peppa Pig is an excellent traffic-generating brand for newsagents

We have been enjoying good sales of Peppa Pig products for some time. Now, thanks to a new range of products in-store, we are set to generate more traffic and sales from Peppa Pig.

This is another example of the importance of brands to our businesses. Good brands generate traffic for us and generating traffic is vital as other key traffic generators do not generate the traffic they used to.

There is no big new traffic generator for newsagents but there are plenty of these smaller, valuable, traffic generators – such as brands like Peppa Pig.  Thanks to more suppliers being prepared to sell to newsagents we can play in this space, leveraging well established and popular brands to bringing new traffic to our businesses.

Every trade show and product buying opportunity we attend we look for brand-name products we can add to our mix to make our newsagency more appealing to shoppers who are not currently regulars with us.

We currently have the Peppa Pig display at the entrance to our magazine department.

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Gifts

OK! to close?

The Daily Telegraph has run a piece asking whether Bauer is to close OK! magazine on the back of falling circulation. In the latest audit, sales were down 11.4%.

Moves like should not be unexpected of Bauer, new owner of the ACP business. I expected them to take a look at all current titles and close some in preparation for some launches.

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magazines

How can you price compare when other retailers don’t have the products you have Officeworks?

I received an Officeworks catalogue at my home on the weekend and went to check their ink price against ours. The few ink products listed were value packs. Most I’d not seen before.  It’s possible that Officeworks has products exclusively for a period and that their price, for such a period, would always be the lowest as it would be the only price. If this is the case, Officeworks should tag the product as exclusive so shoppers know they can’t price compare.

Why does this matter? Officeworks make a big deal about having the lowest prices and that they themselves regularly price compare. This can’t be done for products they have exclusively.

I’d love the see Choice do some work on this. Better still, maybe the ACCC could look at it given their renewed interest in the supermarket duopoly.

The Officeworks catalogue says they do price checks twice a day to make sure they are the cheapest. This work is easier if some of the products are exclusive to them.

Australians think newsagency businesses are expensive. This is in part due to the advertising might of our major competitors like the supermarkets of which Officeworks is part.

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Ethics

New Visa card surcharge rules come into force today

New rules come into force today on the application of surcharges for processing payments made by a card. The RBA website has background to the creation of rules relating to surcharge here. It’s worth newsagents checking out the Visa press release here. Visa’s new rules apply from today.

It’s also worth reading what change.org is saying and doing about this in terms of Jetstar.

Newsagents who apply a surcharge to any card payment transaction need to look carefully at how they calculate and apply the surcharge.

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EFTPOS fees

Appealing to cat lovers drives plush sales

We usually don’t see plush as plush. No, we see it as the recipient will see it – the expression of love, the message of congratulations, the warmth of a hug or something offering companionship. Yes, these plush cats are something customers purchase as gifts for friends and family in hospital or other places where they can’t have a cat. Appealing to cat lovers is proving to be good for business with these cats being picked up on impulse, adding to a deeper and more valuable basket.

Often, newsagents and other retailers have looked at plush through narrow eyes. By focusing on the occasion we see more opportunities than ever in plush products.

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Plush

Supporting the latest Smith Journal

We are supporting the latest issue of Smith Journal with placement in three locations in-store including this placement with men’s magazines. We have found the best way to cut through with this title is to show off the full cover in this type of wide placement. It’s eye-catching without needing to be dressed up with anything more. Smith Journal appeals to an important demographic for us.

 

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magazines

Sunday newsagency marketing tip: reward genuine loyalty and customers will reward you

There are loyalty programs and then there are loyalty programs. The former are more about collecting shopper data than offering a reward for loyalty. The latter are about getting shoppers to act in an above-average way – rewarding you business in return for you rewarding them.

It’s easy to accrue points on purchase … what are you doing with them?

It’s easy to let a lucky customer win a prize … how do other customers feel?

Before you start with a loyalty program, work out the sort of program you want. This means working out the outcome for your business.  It should be to drive sales and achieve a higher sales efficiency from your customers.  If this is the case, then your loyalty program has to relentlessly target these goals.

In my experience working with a broad range of programs – at the single store as well as networked group levels – programs operating at the single store level work best. They drive loyalty to your business.  Next, programs that reward shoppers and encourage them to return sooner work a treat.

Setting up and managing a loyalty program takes time to get right for your business. Invest in this and the rewards should be good.

In my newsagencies at the moment I am trialling three different programs to see which best achieves my goal of bringing shoppers back in sooner. As with any loyalty program tracking shopper engagement using the newsagency software is the key … tracking, reporting, tweaking.

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marketing

Sunday newsagency management tip: how do you manage your time?

This is pretty basic really. Management 101. But I have to ask everyone who manages a newsagency: do you start your day with a to do list? My follow-up questions is: do you check that you’ve completed everything?

I am sometimes surprised at how much management time is spent running a newsagency. It’s usually considerably more that a chain store (or department) of a similar revenue size. I’ve noticed in some newsagencies where there is way more management time spent that I;d expect – there is no plan for the day, week or month, no to-do list. Days happy … they’re always busy … I am told.  But I am also told that they don’t get to important projects because there is no time.

Time availability is a function of how you manage it.

I start every day with a to-do list. Always have.

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Management tip

What’s your revenue per retail employee?

I have been doing some work with newsagents recently on labour cost and comparing revenue per employee to gauge the roster efficiency, or otherwise, of a newsagency.

Revenue per employee is a good metric to compare as long as you agree on some common rules.  For example, I don’t include hours or revenue for non directly retail related activity, I add up all hours worked for a year and divide by 38 to get to employee years and I include commission only on agency lines.

I have seen newsagencies with annual revenue per employee as low as $98,000 and others with annual revenue per employee as high as $304,000.  In one of my newsagencies for which I have done the calculation the figure is $246,000 per employee per year. This is a retail only newsagency with what I’d consider to be a lean roster. However, we are into growth in gross profit.

Comparing newsagencies demands that the businesses are similar and this is becoming more of a challenge as our channel evolves and diversifies. For example, a newsagency with a higher than average GP could sustain a lower per employee revenue figure. This is why annual GP per employee is probably a better measure.

I’d love newsagents to share their annual revenue per employee figures here. Just calculating it is instructive and eye-opening. Working on it by trimming the roster and or driving sales is the essential challenge.  I’d love people to share their number so we can get a feel for the range in the channel.

This is not a competition, not at all. It’s a KPI we need to each be aware of for our respective businesses and to drive – for our future. Sharing can be motivating.

Check out revenue per employee data from the US National Retail Federation from 2010.

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Hiring employees
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