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November newsagent sales benchmark study results

Sales were flat in newsagencies in November.

40% of stores reported slight growth, 60% reported a decline in revenue. Magazines continued to be the product category of most concern.

The latest newsagent performance data is from the Tower Systems Sales Benchmark Study. My newsagency software company Tower Systems undertakes these studies on behalf of newsagents. This one month study is based on sales data from 103 newsagencies, trading under four different banners plus independents, businesses in capital city regional and rural situations.

Here are the headline numbers:

  • Magazines. 80% of newsagents reported a decline in magazine sales (numbers of magazines sold) with an average decline of 8%. While the decline is reported across the board, the women’s weeklies category has again suffered.
  • Greeting cards. 55% of newsagents reported a decline in greeting card revenue with the average decline 4.5% year on year. Of those reporting an increase, the average increase was just under 2%.
  • Stationery. 40% of newsagents reported a decline in stationery sales with the average decline 1%. Of the newsagencies reporting an increase in stationery sales, the average increase was 3%.
  • Gifts. 75% of the stores in the study have a gift department. 85% of these reported sales increase in gifts.
  • Calendars.  70% of stores reported growth in calendar revenue – the average was 2%.
  • Newspapers. 80% of participants reported newspaper sales of within .5% of last year’s numbers.
  • Overall sales. 60% of newsagencies reported a decline in sales for November 2010 over November 2009. Of those reporting an increase, the average increase was 2%.
  • Basket size. 37% of newsagents reported a decline in the number of items in the basket. This suggests that people are seeking out lower priced items.

Newsagents need to consider their space allocation for magazines. Giving the same space today to the department as, say, two years ago would be disadvantaging the business.

Suppliers and industry leaders who care about a healthy newsagency channel will engage on the issues reflected in these benchmark numbers.

The performance of the channel and the tough trading conditions many are experiencing ought to be the top priority topic at any conference, meeting or other newsagent channel gathering. The issues reflected in the numbers I have been looking at for the past week go to the heart of the future of the channel.

As previous studies have shown, newsagencies in rural and regional situations fared better than their city counterparts.

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Newsagency benchmark

What do you do if you are missing stock?

We missed a couple of bulks of a weekly title yesterday. We had enough stock to last an hour or so.  While we waited to find out when we would get replacement stock, we went to the local supermarket and bought enough stock to last a few hours.

While this approach will affect the accuracy of our XchangeIT data, it is more important to me to have stock on the shelves than to provide accurate sales data.

I would be interested to hear if other newsagents buy stock from supermarkets or elsewhere when deliveries go missing.

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magazine distribution

Promoting magazines as Christmas gifts

christmas-mags.JPGCheck out the terrific display promoting magazines as Christmas gifts created by the team at my newsXpress Knox store.  The sales counter display shows off one of our Christmas stockings and a range of titles which easily fit into the stocking.

I like the use of food related titles as the category is performing so well and they are a popular Christmas gift.

Newsagents can show off their difference to other retail channels selling magazines with displays like this. Publishers ought to take notice.

I didn’t ask for this display to be created.   I love the initiative!

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magazines

Beware of predatory pricing from banks

National Australia Bank is engaged in what I’d call predatory pricing for tap and go payment units.  The deal sounds real sweet.  For some it has less than half the cost of a current arrangement.  It reminds me of the deals banks put to try and get people to switch credit cards and other accounts.

Under the surface, the deal is not so good.  There are IT infrastructure costs which they neglect to tell you about. Also, they want you to use a platform which is cumbersome to establish and is, in my view, poorly supported.

There will be more tap and go options released next year which are more competitive and which do not have IT hurdles.

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Newsagency challenges

If newspaper publishers don’t care why should newsagents?

age_dec13.JPGNewspaper publishers require newsagents with direct accounts to place newspaper toward the front of the store, in a high traffic (high value) location.  This is how it has been for decades.  Included in their demand is that the full front page of the newspaper is on display.

The front page of The Age newspaper today gives newsagents another reason to ignore the demands of publishers.  Covering the lead news item of the day with a half page ad demonstrates that showing the front page of the newspaper is not that important.  Unless of course people will buy the newspaper to read the Deakin University ad.  I think not.

I guess that news is not regarded as not all that important in selling newspapers by the folks at Fairfax.

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newspaper masthead desecration

Freebies weigh down magazines

weight-mags.JPGThe latest issues of Better Homes and Gardens and The Australian Women’s Weekly are being weighed down by the free booklets stuck on the back cover.

The booklet in each case is printed on light paper and looks damaged once the magazine has been lifted out of the magazine and put back a few times.  The glue line attaching the booklet to the back cover is set in from the spine of the booklet, this enables it to bend forward – the result is more easily seen with Better Homes and Gardens in the photo although it is happening with both titles.

The production process with these booklets, for a range of titles and not just the two I list aboce, leads to easily damaged stock.

While I am no printer, the problems could possibly be solved by attaching booklets which run down to the bottom of the magazine (rather than starting a couple of centimetres from the bottom) and which are glued closer to the spine of the booklet.

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magazines

Customers prefer charity boxed Christmas cards

Boxed Christmas card which support a charity are easily outselling boxed Christmas cards which do not support a charity based on what I am seeing in my stores this Christmas.  You know you are on a winner if a customer asks for a specific item and only wants that item.  This is what we are finding with charity Christmas cards.

I was with a couple of customers yesterday who wanted to buy eight boxes of cards. We did not have enough stock supporting a charity so they will be back in today or tomorrow once our next shipment arrives.  They passed up the opportunity to buy and excellent range of boxed cards we had on display, not even looking at the designs. They were adamant that they would only buy Christmas cards which support a charity.  They came to us because of our history of carrying a good range of charity Christmas cards.

While I have no research to back this, it feels to me as if Social Conscience Shopping is on the increase.

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Greeting Cards

Customers helping customers – the Christmas spirit in a newsagency

A customer asked for help in choosing a car magazine as a gift in my newsXpress Forest Hill store last week.  She didn’t know much about cars and wanted to make sure she purchased a gift which would be liked.

Another customer offered to help as he was a car magazine enthusiast.

The two customers talked for ten minutes about cars and the car magazines we had on offer.  They worked together to make the selection for the Christmas gift.  They were a delight to watch.

We were most appreciative of the knowledgable assistance given by the customer who stepped into help.  He was glad to have the opportunity.

This true story is not unique. I bet it happens many times each day across the newsagency channel.  People come to newsagencies for magazines because we are the specialists – like the lady looking for a gift. People with special interests come to newsagencies because of our range, our browser friendly attitude and because the environment is personal.

This difference – range, customer comfort and personal service – is vital to our entire channel.  We owe it to each other to do our best in these areas as they reflect our point of difference.

We rely on the two customers in my story – the lady looking for a magazine as a gift and the guy who shops in newsagencies because of the range and the browser friendliness.  We need to do more to attract and keep them.

The Christmas spirit is on show in many newsagencies right across Australia.

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Customer Service

Using the lottery counter for impulse purchases

counter-opp.jpgI saw this in another newsagency this week and share it here for others – placing roll wrap and giftwrap tape just below the lottery serving counter.  Click on the image to see a larger version of the photo.  While doing this is probably against lottery company rules, I’d expect many of their representatives to turn a blind eye for Christmas – especially if you are promoting their lottery products outside the usual area in a reciprocal move.

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giftwrap

Talking about magazines

I recorded a podcast for mediaweek magazine late yesterday, looking back at magazine performance from this year, the impact of the iPad and some other issues of interest to newsagents from 2010.

Click here to access the podcast – it’s free.

Brenden Wood (moderator), James Manning (Editor of mediaweek magazine) and I had a good conversation.  It was an other opportunity to talk about the difference between the newsagency channel and other channels when it comes to selling and supporting magazines.

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magazines

Not happy to sell this book

fat-book.JPGNetwork Services sent out this book, Losing the last 5kg by Susie Burrell, to newsagents yesterday.  It’s a book!  With a magazine margin!  With display challenges!  Unlike my previous blog post, I an NOT HAPPY to sell this book.  It has no local community, no newspaper or magazine connection.  There is no reason for it to be sent to us other than for Network Services to make money.   We rely in magazine distributors to be fair in their dealings with newsagents.  The distribution of this book is, in my view, grossly unfair.  It is an abuse of the trust newsagents place in Network Services.

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Book retailing

Happy to sell this book

tyler.JPGWhile the margin is awfully slim, I am happy to promote this book, Tyler, from the Herald Sun.  It tells the story of Tyler Fishlock, a story which has grabbed the hearts of Victorians thanks to coverage in the Herald Sun newspaper and on radio 3AW.  Just having the book on the shelves near the newspaper reinforces the difference between a newsagency (with a heart) selling newspapers and the coffee shops, supermarkets, petrol and convenience outlets which will not have this book in a prominent (expensive) position.

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Newsagency opportunities

Donna Hay sales lift

donna-hay-xm.JPGThe latest issue of Donna Hay magazine is selling better than the previous issue in my stores.  While the previous issue had a better looking cover, in my view, this issue is easier to purchase – it is not sealed in a plastic bag.  Yes, the oven mitt gift with the last issue was a premium gift and well targeted to the Donna Hay customer.  However, people like to browse food titles.  The delicious looking dishes lead to aspirational purchases.  While some of the sale s kick I am seeing with the current issue relates to Christmas purchases, I do think that the browser friendliness of the issue is a key factor.

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magazines

Price stuff up with Sportsman

sportsman.jpgThe latest issue of Sportsman out today has two prices on the cover: $7.00 and $5.50.  Customers are expecting the $5.50 price.  Some newsagents have not been told by their distribution newsagent about the price increase.  It makes me wonder what communication was provided by the publisher.

My view is that this issue as to be sold for $5.50 and that distribution and retail newsagents need to be compensated by the publisher.

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Newspapers

Delivery delays frustrate Herald Sun iPad app experience

hs-ipad-dec10.JPGI have given up using the Herald Sun iPad app. It is too slow. I want immediate access. Waiting more than a minute to download is too long, especially when I can get the New Zealand Herald, the benchmark newspaper iPad app in my view, in a fraction of the time it takes do download the Herald Sun. The New Zealand Herald has more content yet access is much faster.

On the Herald Sun iPad app itself, it is no groundbreaker. The experience is out of touch with modern apps. They say they wanted to keep it simple. If I want a simple access to news I would buy a newspaper. I have an iPad. Give me an iPad experience. That’s one reason I have this device, the experience.

Given what I can access on the website for the Herald Sun, the iPad app, in my view, does not deliver value.

The app for The Australian was better than that for the Herald Sun when I last subscribed. But it too needed work. News Limited needs to truly innovate if they want to capture the hearts, minds and wallets of iPad and other tablet users.

I don’t plan to renew my Herald Sun iPad subscription.

What I would really like to see is APN release a new iPad only newspaper app in Australia based on their New Zealand Herald app platform. That would be a game changer for newspaper apps in Australia.

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Media disruption

Christmas gifts selling out!

merry-giftmas.jpgWe still have fourteen days to go and Christmas gifts in our catalogue are selling out.  What a terrific season!

The app magnets, m-cups, Hallmark recordable storybooks, bears with speakers in their feet (seriously), dolls and the doggy bank have all been hits.  The flyers distributed to homes have driven new traffic.  The gifts themselves have driven excellent impulse business in-store.

Margin on some items is excellent while on others it is good.  No matter, banking the margin is the key issue, as I noted in a blog post a few weeks back.

While I do bang on here about magazines more than any other product category, Christmas is a season which separates newsagents.  It tests us as buyers, visual merchandisers and retailers.  It is when we can leverage our good magazine, newspaper and greeting card traffic into other business.

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marketing

Strong bonbon sales

frank-bonbons.jpgWe are seeing excellent bonbon sales this Christmas. Well up on last year. We are well into double digit growth. Indeed, our bonbon sales are another reason we are enjoying what we thought would be a flat Christmas. This has probably been helped by our sourcing of a broader range of bonbons than in previous years. It has been useful to buy outside traditional newsagency channels. This is the only change to our bonbon approach – we are displaying them in the same way as we always have.

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Newsagency opportunities

Promoting marie claire

frank-mc-dec10.jpgWe have been promoting the latest issue of marie claire with this column based display at our Frankston store. In addition to this feature display facing our dance floor, we have the title located in our women’s magazine section. Like all good feature displays, it is easy for our customers to purchase right off the column. We choose titles for these displays based on what we see as their opportunity for cut through. This so often depends on the cover.

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magazines

Christmas theft advice for newsagents

I first published this advice to the 1,700+ newsagents using the newsagency software from Tower Systems a few weeks ago.  I publish it here because of  the concerning number of recent thefts in newsagencies.

With sales up and cash in the business up, Christmas time is the time for newsagents to be more vigilant than ever in managing cash. From taking care at the counter in customer interaction to ensuring honesty of employees, now is the time to revisit processes to ensure that the business is protected.

  1. Use employee initials or codes for each sale. Yes, this adds time to each sale. The benefits far outweigh the time cost.
  2. Require that the amount tendered be entered for each sale.
  3. Run refresher training on handling giving change to customers.
  4. Remind your team about counterfeit notes.  (See my blog post yesterday on this.)
  5. Give out receipts for all sales over, say, $5.00.  This helps you avoid disputes down the track if someone asks for a refund.
  6. Be on the lookout for over the counter scams by customers – scams around change given or getting free mobile phone credit.
  7. Take a zero tolerance approach to end of shift balancing.  All too often I see newsagents turn a blind eye to cash being out by $50 or even $100.  Good Point of Sale technology when used properly can help you drive zero tolerance.
  8. Do spot cash balancing during the day, at random times.
  9. Use stock control for high at-risk items such as cigarettes. This will quickly identify a theft problem. Indeed, you should use full stock control for all stock items.  Ideally, you will use stock control for everything.  Not managing stock on had in an invitation to be ripped off.  No excuses.
  10. Talk to Tower Systems about theft check options within our Point of Sale software and the FREE Theft Check Service for newsagents.

Yes, some of these measures take time. The financial saving from greater vigilance to the business could be considerable. Christmas in retail is a time of higher than usual risk.

Take care. If I can help in any way, please contact me.

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Newsagency management

Julian Assange to help sell Time magazine

assange-time.JPGThe Julian Assange cover of Time magazine presents newsagents with a perfect opportunity to achieve excellent incremental business with this title.   We have it placed prominently with newspapers.  His arrest in London and the controversy around the WikiLeaks have ensured that Assange is easily recognised.  This is another example of the attention we need to give to magazine covers.  Covers like this one on Time magazine can drive sales.

Other retailers of magazines are unlikely to be tactical in placement based on a cover.  This is another way we can demonstrate our point of difference.

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magazines

Performance car heroes … seriously?

perf-cars.JPGWe received Performance Car Heroes yesterday for the first time.  The only way to fit this title in our trimmed down magazine department is to take another title off.  I decided against that and early returned Performance Car Heroes.  Had I been asked if I wanted this title I would have declined in our current location.  What happened here with this title is a perfect example of anti competitive behaviour.  Newsagents are the only magazine channel treated in this way.  The lack of flexibility we have makes us less competitive.

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magazine distribution

Oprah should help sell Mindfood

mindfood-oprah.JPGOprah on the front cover of the latest issue of Mindfood magazine earns this low volume magazine prime position with our women’s monthlies.  Oprah’s in Australia in case you have been living under a rock.  Maybe she can help achieve some incremental business for us.  I’ll watch how the title performs – if we see movement by the weekend we will give it some more premium space time.

I am a big fan of newsagents putting out magazines when they arrive in-store.  This way tactical decisions can be made based on the cover or some other opportunity with this issue of a title.

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magazines
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