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

Easter card sales up and running in newsagents

We have had our Easter cards out since immediately after Valentine’s Day and just as well based on sales so far. We are quietly confident of another good season with easter card sales up on last year.

While a relatively small season, Easter is a card opportunity newsagents can do well in since supermarkets and others tend to focus on the eggs – undercutting each other.

We have our display unit at the front of the store as a traffic driver. You can watch people and see the placement work.

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Greeting Cards

Newsagency sales benchmark study reveals tough December quarter

Overall newsagency sales decline. 61% of participating newsagencies reported a decline in revenue. Of those reporting a decline, the average was 7%. Of those reporting growth, the average was 4%.

Traffic. Customer traffic was down for 58% of newsagents recording an average decline of 1.8% in the number of transactions.

Basket depth. 54% of newsagents reported a decrease in basket size (items in the basket) with an average increase was 2.5%.

Basket value. 53% of newsagents reported an increase in basket value – with an average of 3%. While newsagents are selling fewer items, they are selling more expensive items.

Product mix. Traditional newsagency lines – newspapers and magazines – suffered the most. This is concerning since these two product categories have been important traffic generators and have been central to the habit based nature of newsagency traffic.

Discounting. There has been a decline in discounting by newsagents. In 2011, more than 70% of newsagents notably discounted. In 2012, this figure was down to 30%.

There is good news in this benchmark study for some newsagents. Those who are working on their business, expanding product range, chasing margin and chasing new traffic are more likely to see basket value (especially) increase.

This newsagency sales benchmark study is based on an analysis of sales basket data from more than 150 newsagencies – city and country, shopping centre and high street, banner group and independent. I have looked at basket data for October through December 2012 and compared this to the same period a year earlier from the same businesses.

Benchmark results by key departments:

1. Magazines. 86% of newsagents reported an average decline (in units) of magazine sales of 7.3%.

Breaking this out some newsagents reported declines approaching 20% while others were in the low single digits. This is one of the worst trading quarters for magazines in recent history of this benchmark study series.

Weekly magazines and many high volume monthlies reported the most significant decline. Categories where newsagents face little or no competition for a reasonable part of the range reported growth.

We are facing a moment of truth in this data:

Newsagents who want to stem the decline of magazine sales need to work harder on the department.

Magazine distributors who want newsagents to maintain their specialisation in magazines need to offer a more equitable magazine supply model. Most newsagents I have spoken with report no decline in the cost of stock to match the decline in sales. If this continues, many newsagents will retreat from magazines altogether.

2. Newspapers. 73% of newsagents reported an average decline of 5% in newspaper sales. International newspapers remain relatively strong as do local titles in rural and regional situations. Targeted news product fares better.

3. Greeting cards. 64% of newsagents reported an average 3.5% revenue growth. Of the rest reporting a decline, the average was 8% with some as high as 25% – this is a serious problem for newsagents with declining card sales.

4. Stationery. 61% of newsagents reported an average decline of 6%. But like any average it is not accurate in that the worst decline was 32% and the best 1%. This is concerning.

5. Ink. 46% of stores participating in the study separate ink sales data allowing further analysis. 59% of these stores reported ink sales growth of 5%.

6. Gifts. 75% of the newsagents in the study have a separate gift department. Of these, 82% reported year on year growth. In 15% of newsagencies with a gift department, gifts accounted for more revenue than greeting cards.

7. Calendars. 77% of newsagencies with a separate calendar department reported growth of 9% on average. This is excellent for a 60% margin department.

8. Tobacco. 70% of stores with tobacco products reported a decline.

9. Confectionery. 58% of store reported an average decline of 2%.

10. Toys. More newsagents are in toys this year than last. 95% of stores with a toy department reported growth.

Shopping centre newsagencies are vulnerable with traffic from core lines falling significantly. Landlords will need to demonstrate flexibility to help these businesses navigate the retail and print media disruption at the moment.

Newsagencies continue to be good businesses to own. They respond to attention. There is good evidence of this in individual store performance data I have seen.

The best type of newsagency to own today continues to be the one where you have the most control over what you sell. This is more likely to be in a high street and / or regional situation. That said, smart newsagents are taking back more control over what they sell and the price they sell these goods for.

We create our own luck, now more than ever.

I appreciate the time given by the newsagents who shared the sales data for this study.

ABOUT THIS STUDY
This study is based on sales data collected from more than 150 newsagents across Australia. These newsagents represent five banner groups as well as independent operators.

The only common thread among the newsagencies is that they all use the Tower Systems newsagency software. Around 60% of newsagents with a computer system use Tower Systems.

I have eliminated data from businesses where I knew that unique local factors impacted on the sales data.

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Basket building

Valentine’s Day cards sales up 73%

In the two weeks to Valentine’s Day our Valentine’s Day card sales were 73% more than for the same two weeks in 2012. In the same period, overall sales traffic was up 5%. The sales growth for Valentine’s Day cards, off a good base, speaks to tactical placement, regular refreshing and the prize of a $300+ coffee machine to one lucky shopper.

Gerry Harvey can talk doom and gloom in retail for all he likes. This small business embraces its successes.

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Greeting Cards

Sunday newsagency management tip: expand your buyers

As I mentioned in the newsagency marketing tip this morning, newsagency businesses and newsagents can be predictable. This is especially true in what we sell – primarily because we don’t control a lot of what we sell.

Allocate an amount appropriate to the size of your newsagency to a staff member to spend on a new product line for the business. They choose the supplier, the stock, the selling price point, how it’s merchandised and the training of other staff.

You have a little to lose and plenty to gain.

The goal is to break free from the predictable and to give a team member more ownership of what you sell in your business.

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Management tip

Sunday newsagency marketing tip: promote products you rarely promote

Newsagents and newsagency businesses are creatures of habit, promoting certain types of gifts for Valentine’s Day, other types of gifts for Mother’s Day, school related stationery at back to school and so on. While predictable, it works for most so it continues.

Recently we promoted a Parker pen offer next to our Valentine’s Day cards. We sold more than 40 pens at $13.75 with a 50%+ margin. The display was simple. What got the pens noticed more was that we promoted pens outside their usual ‘season’.

This is my marketing tip today: promote products outside their usual time in the spotlight. For example, stationery outside back to school and mid year, gifts away from a season, magazines promoted by interest at any time and coloured card as it’s something we tend to not promote.

On gifts, plush for lovers could sell well outside Valentine’s Day, gifts for mum could sell away from Mother’s day and toys for kids could sell outside of Christmas.

Think about the magazine idea: when was the last time you did a display promoting, say, all your food magazines. I bet you could create a display showing that your newsagency has the BEST range of food titles in your area. Get known for this with a brilliant display, make it a talking point, something people tell others about. Do this at a time when food is not on the radar – i.e. not at a major season.

Most newsagency shops have the space, you certainly have the product … all you need is some time and some creative flair.

The best way to drive impulse purchases of items is to promote them at times other than  when everyone else is promoting them. This is why we are promoting some homewares items right now … and its working a treat.

Businesses that act in an average, expected, way will achieve average results.

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marketing

Selling for the heat

It was hot in Melbourne yesterday – we placed a water canon product we acquired at the front of the store facing into the mall. We sold six.  The canons drew passers-by to the shop. These are six transactions we would not have achieved had we not seized the opportunity of the heat. Some bought the canon and others bought something else as well.

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Opportunistic retail

Post Valentine’s Day and before Easter is an opportunity to play in your newsagency

Yesterday, we took down Valentine’s Day, as you need to do in a shopping centre to remain relevant, and replaced it with a selection of gifts. We feel it is too early by a week or ten days for our Easter plans so we went with a gift range different to what we have tried before.

Our plan is to use this week and a half to try things – small volumes of ranges we have never had but ranges carefully selected for the trial.

One range we put out was these signs.  Within 30 minutes we had sold three.  Interest continued. We’re working on a plan for other products in this space by the middle of next week. While we don’t have the space to display them as we would like, we are thrilled to find another product to add to our list of products we can use for between seasons, products that attract shoppers from the mall to our business to purchase.

The more customers we bring to our business nor non traditional high margin product the better. This is the thinking we all need for the Newsagency of the Future.

The signs are from Gibson.

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Newsagency management

Making money from the iPad Mini

We’re very happy to The independent guide to the iPad mini have in-store right now. The iPad Mini is a hot product and we’re close to JB HiFi where Apple products are sold.

The independent guide to the iPad mini is another Magbook title from the UK, through Network Services.  We have a standing ‘order’ for five copies of each new Magbook. It’s working well, expanding our range in areas of strong interest and helping to reinforce a point of difference for us.

In transit stores like Newslink at the airports they have all their Magbooks together. We don’t have the space for this so we situate them in the appropriate categories as well as co-locating those we can sell as an impulse offer.  The independent guide to the iPad mini is an excellent of a good impulse purchase title.

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magazines

Getting ready for Easter

We’ve struggled with Easter Eggs so this year are going for a more dramatic and engaging Easter display. In the box we have some Beanie Ballz ready for placement in what we hope will be a fun and enticing Easter display.  We’re on a bit of a mission with this, bringing in fake grass, showing off our Easter plush and other products in a fun situation.

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visual merchandising

Significant magazine sales declines in latest audit

The audit results for magazines for the six months to December 2012 is challenging for many publishers.  Marie Claire dropped 9.6%, InStyle 8.2%, Family Circle 33.1% and Men’s Health 2.8% for Pacific Magazines in the monthlies. They’d be very happy with Women’s Health – up .3% facing considerable competition and Better Homes and Gardens – up 2.5%. They’d also be happy with Diabetic Living – up 8.4%.

In the weekly space, New Idea fell 4% and Who 4.6% while Famous rose (again) 2.5%. Overall good numbers here for Pacific.

Bauer had a tougher audit. Cleo dropped 23.6%, Cosmopolitan dropped 16.2%, Madison dropped 23.3% and Shop Til You Drop dropped 14.9%. Tough numbers to face.

In the weeklies, Grazia dropped 24%, Woman’s Day 5.8%, OK! down 11.4%, Zoo Weekly down 18.1% and NW losing 6.9%.  This is interesting in the face of the continuing Bauer discount program at train and airport locations and their regular bundling of titles at a discount. While I don’t have detailed data, these sales numbers, compared to like titles from Pacific, indicate the discounting program from Bauer is not working.

The Australian Women’s Weekly sales remained the same – a good result for Bauer in this marketplace. They’d also be happy with Good Health – up .5%, Real Living – up 15.3% and Belle – up 13.4%.

Good news in the audit for Frankie – year on year sales up 5%. The continued Frankie success shows that content is king. Indeed, good, well-targeted, content can support a high ($9.95) cover price without the need for free gifts and other tricks too often used by magazine publishers to drive sales.

I say give the editors more control over the product and the marketers less control. Also, support newsagents more as the magazine specialists – so people can have the time, space and support to fall in love with the medium and specific titles.

Check out the B&T report on the magazine results.

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magazines

Australian Newspaper sales plummet in latest audit

The Age and The Sydney Morning Herald each reported more than 14% decline in circulation in the October to December quarter. The Herald Sun and The Daily Telegraph reported declines of more than 4%. The Australian circulation fell 8.4% and the Australian Financial Review 7.7%. B&T has the details.

The declines I am seeing in across the counter sales in retail newsagencies are not as great because the audit numbers, especially those from Fairfax, include a continuation of a clean out of the promotional copies circulated. That said, the importance and value of daily newspapers continues to decline for newsagents.

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Newspapers

DeAgostini need to stop using the N logo

I caught the TV ad for the My Animal Farm partwork last night and next to the text saying it’s available at newsagents is the latest version of the N logo.

Someone should tell DeAgostini that the N logo is being used by 10% or less of Australia’s newsagency businesses. It’s not a relevant marketing banner. It is also not used consistently with three (or more?) different versions in the marketplace.

So, DeAgostini – please stop using the N logo to promote partwork titles. Either list all the newsagency groups or just promote newsagents. What’s you;re doing now is a missed opportunity.

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newsagency marketing

Promoting a different looking Dolly

The latest issue of Dolly magazine looks different to usual. While I am no expert it feels targeted at a younger reader. The silver bagged packaging gives that feeling to me. Whereas there can be a sameness to Dolly and Girlfriend next to each other, this month they look very different.

Like I suspect other newsagents we received more than a 10% bump in supply of Dolly. his is odd given our 60% to 70% sell through iof past issues. Bauer has sales based replenishment, they should use it rather than loading small business newsagencies. It’s what SBR is for.

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magazine distribution

Using partworks to assist other magazine titles

Here is how we have been using the highly successful Cake Decorating partwork to drive sales of other titles. We have the partwork at either end and have placed six pockets of food themed titles in the middle. While titles like Better Homes and Gardens sell exceptionally well elsewhere, this additional location is an opportunity to grab extra sales.

While magazine sales are declining in many newsagencies, newsagents who obsess about product adjacencies and engage in co-location can achieve an increase in sales. This is where we can shine and prove our credentials as magazine specialists.

If we act in an average way magazine sales will fall.

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magazines

Grazia to close?

The Australian Financial Review is reporting this morning that Bauer is set to announce the closure of Grazia magazine tomorrow on the back of another poor audit result.

This will be a welcome move for those newsagents where Grazia sales do not even cover the cost of the retail space it occupies. Unlike supermarkets, newsagents are not paid a fee for space allocated to a title.

UPDATE: Bauer has confirmed the closure of the title this afternoon.

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magazines

Theft check service helps newsagents

My newsagency software company, Tower Systems, has emailed its customers reminding them of a free theft check service. It’s this service that has helped uncover hundreds of thousands of dollars in employee theft in the last six months. The processes followed result in evidence that is police, court and insurance company ready.

Newsagents tend to not want to check on employee theft because they are worried about what they will find. Ignorance is bliss I guess. It’s not when theft is discovered – often after the cost to the business is almost unbearable.

Here’s the reminder sent to newsagents this week:

We consider ourselves experts at helping our customers eliminate employee theft within their businesses. Employee theft can cripple a business and is often perpetrated by those you least suspect. We have found numerous instances of employee theft costing the businesses involved tens of thousands of dollars to hundreds of thousands of dollars.

With our assistance, businesses have been able to prevent further theft and, in certain cases, recover some of the money lost. We will gather evidence from your data and provide you with facts you can use.

Theft checks are available at no cost to supported users. They provide  piece of mind.

We understand the importance of discretion in matters like these and will do our utmost to protect you data and deliver information to the relevant parties.

All newsagents should speak with their software company about what they can do to help uncover employee theft and act on this.

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Newsagency management

Local magazines offer an important point of difference for newsagents

I like these local magazine titles, with Melbourne in the title. They allow us a point of difference, a local point of difference, in magazine range.

As magazine titles navigate challenging times for print and retail more generally, having a point of difference in a title and in our magazine range is vital.

In the case of these titles, from Melbourne based United Media, we have home town product, priced keenly and with content targeting local consumers. This is ideal for local small business newsagencies. It’s a reason to feature and promote the titles.

Experience has shown that displaying these titles together drives sales.

We need to embrace opportunities to show our magazine range as different to, deeper than, what shoppers see in supermarkets, petrol and convenience outlets.

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magazines

Leveraging Ellen DeGeneres

We are promoting the latest New Idea Jumbo Puzzler next to New Idea, where it should always be but also becaiuse of the Ellen DeGeneres cover shot. Ellen’s TV show is popular in Australia and this is set top rise when she broadcasts from here as part of a tourism push. The Ellen cover should help drive sales – as long as the full cover is on show.

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magazines

Valentine’s Day spend higher later in the day

I have been running some data tonight and love seeing the average basket value for Valentine’s Day related purchases. There is a measurable jump in basket size after 4pm each day this week.

These 4pm and beyond shoppers purchase two or more items whereas up to 4pm, the majority of customers purchase a card. While we don’t currently tag gender, we feel we see far more male shoppers for Valentine’s Day after 4pm.

Last minute Valentine’s Day shoppers are the best.

We are currently tracking plush sales equal to more than  50% of card sales.

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Gifts

How’s the Valentine’s Day season for you?

Valentine's Day at a US Hallmark.

I am hearing mixed reports from newsagents about Valentine’s Day this year. Those with lower than expected numbers say it’s because it’s in the middle of the week. I disagree – the day of the week should not affect sales except in rare circumstances.

From what I see, newsagencies which went out early, (4 weeks ago) with a broadly appealing Valentine’s Day display tend to be doing better.

In my own stores we have tried to create an offer that appeals across the age groups. This is what I saw in the US recently. Over there, they chase customers to purchase multiple Valentine’s Day cards.

How’s Valentine’s Day doing for you?

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newsagency marketing

Launching My Animal Farm

We have the new partwork, My Animal Farm, at the front of the newsagency, facing into the shopping mall. You can see it’s next to the start of our plush department. This adjacency makes sense given both products appeal to the same shopper.

National TV advertising starts today. I urge newsagents to make sure they have the title in prime position – to leverage the TV campaign for maximum benefit.

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partworks

Promoting the triple j hottest 100

The latest issue of triple j magazine is the one you need to promote as it has bropader appeal than most issues. The hottens 100 is the hottest promotion by triple j, it receives excellent media coverage. So, we have taken the opportunity to reconfigure our small music magazine display to promote this as the hero product while still respecting the important Rolling Stone.

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magazines
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