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

Promoting Better Homes and Gardens magazine

bhg_fhn_jan11.JPGWe are promoting the latest issue of Better Homes and Gardens magazine following the successful routine which sees us selling out or coming close to selling out each month.  The sell out usually occurs in the last days on the on-sale.  In addition to the in-location display using the floor for the poster (we have no space above the magazine display), we also have four pockets on the title in with our women’s weeklies titles and a stack next to our top selling newspaper.  The co-locations will remain in place for at least the first week of the on-sale.  Better Homes and Gardens responds well to this additional activity.  After all, sales are what matter most here.

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magazines

Poor Gerry Harvey and his rich mates – lousy customer service is encouraging shoppers to look overseas, not the GST

When the wind is in their sales, nothing can get in the way of Gerry Harvey and his rich retailer mates.  The moment there is a spoiler, they complain and call on the government to help.

Their current shrill campaign calling for the government to act is ill conceived and miscommunicated.

Yes, GST should apply to all items purchased in Australia regardless of whether they are supplied from an offshore warehouse or not.

Where the Gerry Harvey led campaign falls down is that Australians have no appetite for a rich head of a retail group which delivers poor customer service telling the Australian Government that they should be protected.

It is no wonder that there has been a shopper backlash against the campaign.  The common thread of shopper complaints is that customer service sucks in Harvey Norman and other major retail outlets.

This is where small business excels.  Small business retailers are more likely to offer friendlier and more knowledgeable customer service.  Small business retailers generally live locally and hire local employees.  They are better connected to the community.

A small business led campaign educating shoppers about the growing cost to their business of the free GST kick to overseas retailers would have a better chance of gaining grass-roots support and thereby engaging government in finding a solution.

The more Gerry Harvey and his rich mates are on TV complaining the more my small business retail friends can remind their customers of the difference between rich, big and bloated retailers and customer centric small business retailers.

I first published this earlier today at the Tower Systems blog.  I am publishing it here as I think it is a topic which would interest newsagents.

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Customer Service

How to reduce your investment in stationery without hurting sales

Following my post in Tuesday about improving the business performance of a newsagency, I have received calls from newsagents keen to review and refresh their stationery offer.  This is a good place to start as it is where I see many newsagents wasting considerable money in dead stock.

Newsagents usually end up with too much stationery stock when they allow suppliers to order for them, order using manual processes or do not apply tight management to the ordering process.

By ordering only what is selling and applying tight rules to new product opportunities, newsagents can expect to find their stationery stock holding reduce without any impact on sales.  This frees up cash for use elsewhere within the business.

The challenge to moving from old practices to a profit focused approach to stationery will be a challenge for many newsagents as they rely on personal relationships with supplier representatives.  For many, visits from reps are a welcome break in a busy day.  While I understand the social value of the rep visits, there is a cost through oversupply which can diminish the return newsagents achieve from their stationery department.

With more competition in 2011 in stationery – the OfficeMax / Australia Post relationship and the full takeover of Corporate Express by Staples to name two – newsagents need to approach this year differently than in the past if they are to improve the performance of stationery.  Improving stationery starts with ensuring that you have an efficient range on the shop floor.  The best way to achieve an efficient range is to use sales data to drive reordering.

At the heart of this issue is years of habit.  Our competitors rely on this and that many newsagents will prefer manual processes.  Sure, we will say that we offer more personal service and better product knowledge than, say, Officeworks.  No amount of personal service or product knowledge can help you move stock which should not have been purchased in the first place.

In situations where there is little useful or accurate sales data, newsagents can rely on sales data from organisations like GNS.  Their top sellers list is an excellent place to start in building a successful stationery department.

Stationery is one of the few departments in a newsagency over which the newsagent has complete control.  Use this and bank the results.

Newsagents who take stationery seriously usually find that they can increase sales by selling more of what sells.  This creates the ideal win win. Be guided by your customers and this could be you.

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Newsagency opportunities

Ah, to be in Las Vegas

Las Vegas is the place to be this week with the Consumer Electronics Show set to kick off.  All the pundits are saying that this show will be about devices with the Apple iPad in their sights.  This is exactly what happened five or six years ago just after the iPad was released and proven to be successful.  This year’s show will be vital to the business plans of print and electronic media outlets as more devices re released which provide access on a vast array or portable high quality devices.

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Media disruption

New look PC Authority

pcauth.jpgPC Authority magazine has been renamed and given a bit of a make over.  It is now called PC & TECH AUTHORITY.

With computer magazine sales continuing to fall and gadget magazine sales in the rise, it makes sense to broaden the appeal of the title.  We are responding to the change with more prominent placement with the gadget titles – away from the computer titles.  This magazine will appeal more to browsers in this space.

The latest sales data shows that computer magazines continue to struggle.  This makes sense – print is not the ideal medium for breaking news on new hardware.  It is also not the ideal medium for advice as it is not searchable.

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magazines

Crazy Crazy Bones supply

crazybones.jpgSeveral newsagents contacted me regarding receiving this Crazy Bones pack which they received yesterday.  This clearly old stock (old price labels and damaged packaging) would not be acceptable to major retailers so why shove it out to newsagents.  If I was sent this stock I’d return it immediately.  It is appalling that newsagents have to fund the cost of return.  While I have no way of knowing, it is as if the distributor wanted to earn the supply fee – to do that all they need do is ship the stock out.  Pathetic.

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magazine distribution

What is the optimum magazine range for a newsagency?

What is the optimum magazine range for your newsagency?  This question is more important in 2011 than ever before.

With magazine sales flat, publishers actively pursuing other distribution channels (tablet computers) and with the cost of retail space increasing, newsagents need to carefully consider their space allocation for magazines.

Magazines are vitally important to newsagencies in that the range we carry is, for many of us, our only point of difference.  The challenge is that the point of difference comes at a considerable cost.

The poor margin on magazines, the continued gross over supply, the challenging rules around returning unsold stock and the poor business processes of the magazine distributors leave newsagents with a cost for the product category which is higher than for most other items in the store.

The financial and operational terms around magazines is one reason newsagents in shopping centres pay too much rent.

In considering whether to adjust the space allocation for magazines,  newsagents need to thoroughly assess the following for their business:

  1. The return on investment delivered by magazines.
  2. The return on floorspace for magazines compared to other departments in the business.
  3. The shopper traffic generated by magazines.
  4. The efficiency of magazines – what else do you sell to magazine customers?
  5. How you would use space reclaimed from magazines?

The 2010 model of magazine supply increasing while retail sales are falling is unsustainable.  Now is the time for newsagents to consider their space allocation plans for this year.

In my experience, the best way to reduce magazine supply is to reallocate space.  Magazine distributors must respond if you advise that your magazine department is not as big as it used to be. In some states, there are channels through which newsagents can pressure the distributor to be compliant.

I would consider 600 titles to be the minimum  range necessary in a newsagency to offer a point of difference over a supermarket.  This would need around 700 pockets to reasonably display. Of course, there are newsagencies where the minimum range, given their location, should be 1,000 (or even more) titles.

The challenge for the newsagency channel is that if many newsagents do cut magazine range, magazine distributors may look elsewhere (Australia Post?)to keep their trucks full.  They are freight companies more than they are magazine specialists.  Having full trucks is the central goal of their business plans.

We each need to make the decision on the basis of what works for our business rather out of fear for how a supplier might react.

The space freed could be used for better margin products which are complimentary to existing newsagency product categories.  Products like gifts, ink, books, a service centre or toys.

What magazine distributors will rely on is that most newsagents will not re-evaluate their magazine space allocation.  These newsagents are happy with not having to take control of this part of their business, risk bringing in stock on a firm sale basis or to refit part of the store for what they will most likely see as risky business. They like the magazine model because they are told what to do and when.

Newsagents who do make a fact-based decision to cut magazine range and floorspace can expect to achieve a higher return for the magazine department as a result.  This is good not only for the newsagency but also for magazine distributors and publishers. 

Unfortunately, magazine distributors and publishers will not see it this way based on their past inaction on the magazine range and oversupply issues. There will be the usual fights over local titles versus imported titles, specialist titles versus spoiler product from larger publishers and the wringing of hands between the distributors who say they cannot work together to create an efficient title assortment for newsagents.

This is what has happened in the past. It is why newsagents need to take control of their own destiny as our suppliers will not do it for us.

The start of 2011 is the time for newsagents to act on the floorspace allocation in their business.  I’d be happy to talk with any newsagents considering this, to look at the data necessary for guiding decisions and to share experiences.  I have done this in two of my stores with success.

If I can help in any way I can be reached on 0418 321 338.

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magazine distribution

Why so much Mr Wisdom Sudoku?

sudoku-ugh.JPGWith net sales of less than twenty copies per issue, there is no justification for being sent 35 copies of this Mr Wisdom Sudoku title.  The oversupply is a waste of paper and a waste of our time. While the publisher and distributor will have their excuses, such oversupply in unacceptable.   The people spending my money should be more responsible.

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magazine distribution

Promoting the Australian Open program

usopen.JPGWe are promoting the 2011 Australian Open Program at the counter this week – chasing impulse purchases.  This type of counter has worked well for us in the past.  The next two weeks are an excellent opportunity for early sales.  The display has been configured so that shoppers see this as they enter the store.

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magazines

How newsagent suppliers should help flood affected newsagents

Magazine distributors and other key product suppliers need to move quickly to support newsagenst in Queensland newsagents affected by the floods.  Here is what I suggest they do:

  1. Immediately extend trading terms.  Many businesses are closed.  This means no revenue … making paying the accounts on time a challenge.
  2. Setup a separate help line.  Give flood affected newsagents a separate, higher priority, help line with a human (with compassion and authority) at the end of the phone.
  3. Don’t quibble. If they say they didn’t get stock, immediately credit it.  This goes for dated stock which did not arrive on the day.  Forcing them to wait to see if a delivery gets through for stock which out of date by this time is a wast of time for the flood affected newsagent.

This is an opportunity for newsagent suppliers to show that they do care.

I am concerned that some suppliers may treat newsagents differently to their competitors.

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Newsagency challenges

Google developing digital newsstand

Google is reportedly in talks with magazine publishers to deploy a digital newsstand.  The Wall Street Journal has more on this story including details on the battle over customer data.  Publishers, as newsagents well know, want to own the customer regardless of the work done by the seller to win the customer.

The Google move joins work by Apple, News corp. and others in offering consumers ways to access digital subscriptions to magazines and newspapers.

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Magazine subscriptions

Too many newsagents ignore the efficiency opportunity

Too many of the close to 3,000 newsagents with a newsagency Point of Sale system in their business do not use the software to manage stock.

This increases their exposure the customer and employee theft, it leaves them overloaded with stock, more than they need for the business, and it is costing them thousands of dollars a year in unnecessary wages.

The majority of newsagents have the technology at their fingertips yet too many do not use it.

It is as if these newsagents want to pay more in wages than they need to, carry more stock than is necessary and accept theft.  Dumb, dumb and dumb.

Is this you?  Do you genuinely manage your inventory?  Do you use your computer system to generate orders or do you order based on gut feel, walking around the shop with a notepad and pencil or, worse still, by letting a supplier representative do it for you?

I have seen newsagents implement full stock control, without spending any more money on technology, and cut wages by $1,000 a month, cut their stock holding by $10,000 and cut theft by $15,000 in a year.  That is a total saving in the first year of $37,000.

Newsagents with these tools at their fingertips and not using them have no excuse.  They are financially hurting their business and the newsagency channel as a whole.

Here are the proven simple steps to saving time, cutting theft and reducing dead stock in your newsagency.

  1. Receive all stock you sell through your computer system.
  2. Scan ALL sales.
  3. Scan out all products you return to suppliers.
  4. Eliminate all department sales – where you type in the amount of the item as you would on an old cash register.
  5. Do a complete stock take with the computer system.
  6. Implement a program of rolling stock takes of the store by section – never pay for a professional stock taker again. Act on the discrepancies reported from your rolling stock takes – this is theft – by moving categories, being more vigilant or eliminating the lines.
  7. Generate stock replenishment orders using your computer system.  STOP relying on supplier reps to order for you – they work for their boss and not for you.
  8. Integrate your stock control plan into the schedules of all who work in the business.

There can be no excuses.  If you want to make the most out of your business (and why else would you be in business?) then following these steps is essential and urgent.

Some reading this will nod their head and agree that they should follow my advice.  That is where it will sit … an idea they agree with but not acted upon.  These people are ignorant, they don’t care about the thousands of dollars they will lose this year in their newsagency as a result of their inaction.

In addition to cutting theft, reducing your investment in stock and cutting paid-for hours, you will access other benefits, I promise you…

  • Better business decisions.  When you have accurate sock on hand data in your system you can rely on accurate Return on Investment, Stock Turn and Return on Floor Space data – by department, category and item.
  • Better understanding. Thanks to accurate comparison of supplier comparison data.
  • More informed strategic planning.  Thanks to an accurate and financial performance based assessment of your business.  If you are concerned about the impact of devices like the iPad on your business you will want to contemplate diversification.  Some options will be obvious thanks to more accurate and meaningful business data.
  • An easier business to sell.  Implementing the eight pointed noted above results in a business which is more profitable and easier to run.  This will make it easier to sell your newsagency. A smart broker will point this out when comparing your newsagency with another.

To kick start your newsagency in 2011, I urge you to act on this list.  Today.  If you have questions or comments, call me on 0418 321 338.  I am happy to help regardless of the newsagency software you use.

You can’t plan for the future unless you are fit and healthy today.  My eight point list goes to the heart of the health of your newsagency.  Businesses which compete with newsagencies – supermarkets, convenience stores, petrol outlets, card shops, stationery warehouses, national variety stores – they all do this as a matter of course.  How else do you think they have been able to take so much business from your channel?  They treat their business data seriously.

Are you in? Are you committed to taking these steps to strengthen your business this year?  I hope so.  You need this for your future.  The newsagency channel needs this for its collective future.

On the software side, I’d note that Tower Systems offers an excellent suite of training videos, advice sheets and live online training workshops which cover the area of inventory management and specifically how to unlock the benefits I have outlined above. For Tower Newsagents especially, there in NO EXCUSE.

Please don’t ignore the opportunity I have outlined in this blog post.  You have nothing to lose and thousands of dollars to gain this year.

Remember, I’d be glad to help in any way.

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Newsagency management

1 in 5 Americans to own a tablet computer by 2014

Folio is reporting the results of a survey predicting that one in five Americans will own a tablet computer by 2014.  I expect this penetration to be reached before 2014.  Sales of the devices have been extraordinary and they will grow as a flood of tablets reach the market this year.  In a few days, the Consumer Electronics Show in Las Vegas will a bunch of new devices which will take the tablet hype to new heights.

Those in doubt need to do some research into what happened following the release of the first iPod.

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Media disruption

Calendar Club all over the place on calendar pricing

Calendar Club pricing is not consistent across the outlets.  There are outlets currently selling calendars at 40% off RRP and others offering more than 50% off.  Some were discounting well before Christmas while others were full price up to Christmas.

Maybe it’s just me but they don’t appear to have been as tough a competitor on price this season as they have been in the past.

Calendar Club outposts have dominated calendar sales in major shopping centres for many years, offering a broad range. Their presence has been a major factor in newsagents reducing their commitment to calendars.  In recent years, I have seen stores compete successfully with Calendar Club while maintaining a healthy margin.

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Calendars

Good counter offer: Angel Flames

angelflames.JPGI first wrote about Angel Flames as a good counter offer two and a half years ago.  They are just as good today.  We can easily sell a box in two weeks … at an excellent margin.  If you sell plenty of birthday cards for 1 through to teenage years then they should work for you.  I’d encourage newsagents to put them in the counter offer roster – bring them out probably once a quarter.  We get our stock from Jasnor – other suppliers have them too.

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Counter offers

New sales benchmark study announced

Newsagents are invited to provide data for my next sales benchmark study.  I am looking for sales data for two periods:

  1. December 2010 compared to December 2009.
  2. October through December 2010 compared to October through December 2009.

Newsagents using newsagency software from Tower Systems can participate by producing two Monthly Sales Comparison reports covering the periods noted above – with the 2010 date on the left and the 2009 date on the right and with the category box ticket (for more detail).   Save the report as a PDF and email it to me.  

While overall performance will be interesting, I will be looking at sales efficiency – items in the basket as well as overall basket value – along with unit sales and revenue by department.

By ticking the category box I can look at specific categories, such as women’s weeklies magazines, and compare them with overall magazine performance in newsagencies.

By analysing trends, we (individually and collectively) will be better able to plan for the future and to make good decisions for 2011.

I will publish the results here and elsewhere.

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Newsagency benchmark

Barnes & Noble sells 1 million eBooks

US bookseller Barnes & Noble said a couple of days ago that its Nook e readers are the biggest-selling items in its history.  It also said that sold nearly 1 million e-books on Christmas Day.  Click here to read the press release from the company which includes the following…

Barnes & Noble, Inc. (NYSE: BKS), the world’s largest bookseller, today announced that with millions of NOOK eReading devices sold, the line has become the company’s biggest bestseller ever in its nearly 40-year history.  The new NOOKcolor Reader’s Tablet, introduced just eight weeks before Christmas, is the company’s number one selling gift of the holiday season. Barnes & Noble also announced that it now sells more digital books than its large and growing physical book business on BN.com, the world’s second largest online bookstore. With its growth across device and NOOKbook™ sales over the critical holiday selling season, Barnes & Noble has successfully established itself as a leader in digital reading.

The curve we are in with sales of physical books versus digital is similar to the curve we saw with music five or six years ago.  What is different this time is that key retailers are riding the wave rather than scrambling to catch up.

When I first started writing about tablet computers a few years ago, some in the newsagency channel derided me.  History is proving that I was right in saying that these devices would significantly impact how we operate.

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Media disruption

The late Collingwood magazine misses Christmas opportunity

blackwhite.JPGOn the last day of the year, three months after the AFL Grand Final, we received Black and White magazine – celebrating the Grand Final victory by Collingwood.  While we will place the title on the shelves, I suspect it will not sell that well.  But who knows, Collingwood supporters seem to hang onto their wins for a while.  Had this title arrived a couple of weeks ago it would have been snapped up as a Christmas gift by many.

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magazines

2010, the year that was

What a challenging, memorable and terrific year.

I have enjoyed 2010.

I like that tablet computers and other disruptive devices are making their moves.  I feel like sending an I Told You So card to some people.

I like that newsagents are starting to realise that their future is in their own hands.

I like the customer traffic, sales and margin growth some newsagents are seeing through embracing change.

I like the benefits of a smaller format newsagency and achieving a significantly better per square metre return.

I love the excellent continued growth in ink sales.

I am looking forward with excitement to 2011, the changes it will bring and the opportunities which will be mined from them.

I own two newsagencies and have a 50% share in two more. Yes, 2010 has had its challenges, especially for shopping centre newsagencies.The year is finishing very well though.

On a technology front, my newsagency software company has had a terrific year.  Our market share is up, major new software for newsagents is out, newsagency efficiency has improved and millions of dollars in employee theft has been discovered, stopped and is being pursued.

With more than 1,700 newsagents using our software, the Tower newsagent community remains the largest newsagent community in the country.  In 2010, this community has helped the channel by providing access to the only regular sales benchmark data – data which is widely used and reported.  The growth of the Tower newsagent community will continue in 2010.

I am excited about 2011.  It will be a year of great change and, I hope, achievement.

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Newsagency opportunities

New Year’s Resolutions

Here’s a grab bag of resolutions for 2011 newsagents could consider.

  1. Reconfigure the floor space allocation of your newsagency to reflect your plans for the future.
  2. We drive serious debate about the green challenges of the magazine supply model.
  3. To act on what you think needs work with the traditional newsagency model.
  4. To get serious about theft management in your store.
  5. To stop supplier reps from placing orders and take full control of reordering for yourself.
  6. To reconnect with the local community.
  7. To carry stock which actually sells rather than being the retailer of last resort for many lines.
  8. To more actively engage in managing the magazine floorstock by more intelligent and timely early return.
  9. To present a fresh face to the newsagency from the front window and throughout the store.
  10. To introduce at least one completely new department.

This could be a year of significant change if we decide to lead our businesses rather than follow.

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Newsagency opportunities

Why aren’t we using women to design newsagencies?

More women shop in newsagencies than men yet our businesses, which depend on women for survival, are designed by men.

Why is it that we do not have women designing newsagencies? 

If we did, what changes could we expect to see in newsagency layout and the overall experience provided by the shop fit?

Too often, a newsagency shop fit is approached as a carpentry job when it should be approached as the single most important business development and positioning investment by the business.

If you expect to attract women to your next shop fit, consider adding their voice to your design team.

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retail
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