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

New sales benchmark study announced

I am undertaking another newsagent retail sales benchmark study comparing sales for January-March 2010 against January-March 2009.

Tower Newsagents can participate by sending a Monthly Sales Comparison report: tick the box to exclude home deliveries, and tick the box for a category breakdown. Set your first date range (on the left) to January 1, 2010 to March 31, 2010 and the date range of the right to one year earlier.

Once the report is on the screen, click the PDF button to save this as a PDF, go into your email software and send a copy of the PDF to me at mark@towersystems.com.au. I’ll publish the benchmark results here and elsewhere so all newsagents can benefit.

NOTE: If you are running our latest software, you can click on the BENCHMARK icon on your desktop, enter the January through March date range and have the software do the rest.  If you have not used our direct email facilities – to email customer accounts or to email Gordon and Gotch supply changes, the software will ask for some email details from you.  This takes a few seconds to setup.
Non Tower newsagents can participate by emailing me for a copy of a spreadsheet template I have prepared.

As with past benchmarks, I expect to get data from between 100 and 120 newsagencies in the next week.  The results will provide an indication of sales performance year on year and give newsagents something with which to compare their businesses.

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Sales benchmark

Publisher of milk magazine listens to newsagents

milk.jpgIn response to posts and comments on this blog, the publisher of the soon to launch milk magazine is offering newsagents direct supply and a margin of 40%.  They are planning a range of marketing activity to support the new title and will provide newsagents with A3 posters for in-store display.

I always cheer when I see a publisher directly engaging with newsagents in this way.  I am especially thrilled that they are trying a direct supply model.  I hope that newsagents support milk and find sales success from stocking it.

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magazine distribution

Newsagent frustration over Best Bets price increase

It appears that not all newsagents may have receiced notice from Fairfax of a price increase (to $5.25 from April 2) for Best Bets and sold the issue for a day before others alerted them to the change.  If it were just one or two who said they missed the price rise I’d wonder.  Given the number of newsagents I have heard from over the last 24 hours I suspect some failure in the notification processes of Fairfax.

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magazine distribution

Just read: Here comes everybody

here-comes-everybody.jpgHere comes Everybody by Clay Shirky was published in 2008.  Given that it’s primarily about social media, it is already somewhat out of date.  That said, it is a good read about group activities made possible by social media.  He talks about sharing, collaboration and collective action.

What struck me while reading the book is that for a channel so challenged by social media we continue to miss an opportunity to truly embrace it.  Sure, some newsagents are using Twitter, facebook and other social media platforms, we as a channel are not using social media to create an online channel equivalent to presence and connection as we have in the bricks and mortar world.

It’s not too late as Shirky says:  one of the things I most hope readers get out of it, is an excitement about how much experimentation is still possible, and how many new uses of our social tools are waiting to be invented.

I have been helping some newsagents embrace social media at the store level.  What I’d really like to do is engage in a channel wide project which leverages social media platforms and our physical local presence to improve our relevance in a changed media world.

Social media and other online strategies present opportunities for newsagents to promote their businesses and connect with communities outside our four walls.

We see our newsagency businesses as community focused.  Community usually means within a relatively short distance to our shops.  The community Shirky speaks of is geographically further apart but still close in terms of connection to the business.

I see newsagencies, in part, as special interest retailers.  Special interests can draw people from far away if the interest is dear to their heart and if you have what they want.  We have found this with volcano calendars, train magazines and other product.  In these cases, word of mouth is our social media.  Social media sites can be used to supplement this word of mouth.  This is an opportunity for us.

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Media disruption

Our Australian iPad connection

itunes_cards.JPGIs this the magazine stand of the future?  Don’t get me wrong, I am thrilled to be selling iTunes cards in my newsagencies.  They are working well as an impulse purchase, especially with a greeting card.  They are working better than when we were selling CDs.

iTunes cards are as good as music since that is why people buy them.  So, the comparison with CD sales is relevant.  Whether they will be compared to magazine sales will depend on the consumer and publisher uptake of the iPad here in Australia.  It will also depend on whether we have any break-out new publishers creating digital only product which appeals to the Australian masses.

Since we can’t sell the devices, selling the cards and top-up is the closest we can get.

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magazines

How about hosting a newsagency customer forum

My newsagency software company hosts around 80 face to face user meetings a year and it was during the current round, listening to newsagent interaction, that I wondered whether a similar type of forum could work for newsagents.

At the Tower Systems forums we meet face to face with our customers, share news, discuss ideas and gratefully receive feedback.  It is a good forum – away from day to day business, more relaxed.  I think it works for our customers as well as it works for us.

So, I was wondering if such a forum could work for newsagents – we do, after all, say customer service is a key point of difference for us.  We say it but do we really ask our customers, do we give them an opportunity to engage with us on the topic.  I have been thinking about my blog post about customer service last week.

It could be held at the shop or a local hall.  The goal would be to ask customers for their feedback so that together you (and them) can build a better newsagency experience – customers are stakeholders after all.

I appreciate that the idea sounds odd, anything new does.  Imagine the benefit if you got one great idea from the forum or if those attending left truly believing in your commitment to the local community.  Both outcomes would be valuable for you and for those participating.

Sometimes we need to play outside the norm and our comfort zone to really innovate.

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Customer Service

Run For Your Life uses newsagent generosity

r4yl-apr2010.JPGI was disappointed to see the subscription promotion on the cover of the latest issue of Run For Your Life magazine (out yesterday).

Their $9.95 promotion looked odd next to our $7.95 barcode label.

While I understand the role subscriptions play in the sales mix for a publisher, it is wrong that they use our generosity of space to try and convert our customers and browsers into subscribers.  By all means have a subscription offer – but promote it inside the pages of the magazine.

I call what we do for them generous because we provide space to promote their title at no cost to them, we carry the risk of theft, we finance the title for a couple of months and we pay to return to them the unsold copies.  This is a considerable investment on our part for their title.

I’d prefer to see the publisher engage positively with newsagents by including a putaway coupon inside the magazine and promoting at clubs and sports events that the title in available from newsagencies.

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Magazine subscriptions

Promoting Dolly and the free Fanpire magazine

fhn_dolly-apr2010.JPGWe are promoting the latest issue of Dolly magazine and the free Fanpire magazine at the exit of our women’s (and teens) magazine aisle.  While not the prettiest display, it is functional – placing both covers ay eyelevel to catch attention as shoppers leave the aisle.  We also have the magazine folded out in double pockets in its usual location with teen titles.

Depending on space availability we may give the title a run with the major weeklies through Easter – the cover of the Fanpire magazine is what will sell this issue to irregular buyers of the title and to fans of the Twilight franchise.

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marketing

Better Homes and Gardens earns the best position

fhn-bhg-apr2010.JPGThanks to the extraordinary sales of Better Homes and Gardens last month – we sold out our initial allocation and all the extra copies we ordered – we have placed the latest issue at our prime counter position.  We also have placed a couple of pockets in with our weeklies and a full waterfall in the usual location for the title.

Better Homes and Gardens responds well to aggressive co-location in the first week and for the weekends thereafter.

This issue is also being promoted on our in-store radio from yesterday morning.

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magazines

NSW newsagents win home delivey fee increase

NSW newsagents have been granted an increase by News Ltd’s Nationwide News of 4 cents a day for delivering newspapers over two or more days a week.  A delivery only on one day a week to an address does not attract any increase.  A seven day delivery achieves a 25% increase in the delivery fee.

The new fees take effect from April 12 and are being announced to newsagents today.

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newspaper home delivery

Why magazine departments are shrinking in newsagencies

newsagency_magazines.JPGMagazine departments in newsagencies are reducing in size based on what I hear from shop designers and newsagents building new stores. Whereas in the past, an average newsagency would have 1,300 or more magazine facings, today, they are more often at 1,000 and even less.

This structural change has been underway for the last two or three years yet suppliers appear to be unaware.

The reduction in space commitment to magazines is the newsagent response to the magazine supply model and a reflection of sales. It centres around low margin (25% for most titles), lack of control over supply and flat or falling (for most) sales.

The best way for publishers to address this shrinking space in newsagencies is to engage on the issues of margin and supply control. I say this from recent personal experience. I decided on 800 facings. I would have allocated more space if the money and control was available. At 800 I have reasonable range without the high floor-space cost of the usual side magazine department.  This is an important factor when you are paying $1,000 per square metre a year plus outgoings.

The publishers who suffer the most from the space reduction are the small independents.  While some are responding with better margin and are considering a direct (more control for the newsagent) supply model, others are missing the opportunity of embracing change.

There was a time when publishers, distributors and newsagents would say that the magazine supply model in Australia was the best in the world.  Chipping away at the edges, putting magazines into other channels and lack of structural support for newsagents has meant that claim may no longer be accurate.

I would like to see more publishers engage commercially: better terms, more control over supply and more marketing driving shoppers to newsagents as the magazine specialists.  Of the three, a united campaign promoting newsagents could help address the first two.

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magazine distribution

Missing Passover

I wonder how many of us are missing an opportunity with Passover.  While the Jewish holiday may not have strong interest for many newsagents, we are all bound to have customers with Jewish friends.  Besides the cards, books for children appear to be a popular and well accepted gift.

I’d be interested to know if there are any newsagents embracing Passover in their shops.

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Newsagency opportunities

TIP: check four slow cooker title stock

fhn_slowcooker_mar2010.JPGWe are about to sell out of our second supply of the ACP Magazines Slow Cooker cookbook in a couple of my stores.  We are also close to selling out of another slow cooker cookbook we have in stock.  All we have done to promote the titles is to place them in high traffic areas. While somtimes we need to appreciate a win and move on,  we will be ordering more stock as our feeling is that interest in slow cooker titles has some way to run yet.

I’d encourage newsagents to check out their sales of the slow cooker title.  If you have sold out, consider ordering more.  It’s good money, especially if it is an impulse purchase.

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Newsagency opportunities

Change drives the book sale

booksale.JPGWe have changed the main display of our book sale for the third time in just over two weeks and one of my shops. Experience has shown that regular refreshing of the display which faces into the mall is crucial to drawing new traffic. We have a plan and are cycling through popular categories: food, children’s, self help, fiction and men’s. The latest changes put children’s titles on display. As is often the case, while making the display passers-by are drawn in and make a purchase.

Our experience with books is that they are not a set and forget category. The more attention you provide the better they perform. In addition to regularly reconfiguring the display (by taking everything off and rebuilding), we tidy every couple of hours for the duration of the sale.

Book sales are up 15% on a year on year same store basis.

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Book retailing

Promoting healthy Easter gifts

rabbits_20101.JPGOur range of plush rabbits is selling well as Easter gifts.  Besides a good display, sales are helped by regular promotion on our in-store radio and by marketing collateral – both of which are promoting healthy Easter gifts.  What is interesting is that chocolate sales have not been affected by this – indeed, they are strong.  The growth in plush sales is a bonus.

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Gifts

Promoting House and Garden

house-and-garden-mar2010.JPGWe are promoting House and Garden at the entrance to our women’s magazine aisle this week as part of the ACP Connections promotion. While not your usual billboard display, we have found this type of display to work well for us. Customers face it as they head to our busiest magazine aisle. It is also seen as people turn from our newspaper display and heads to the counter.

Since the unit is on castors, we can move it easily – we have done this before a couple of times in the week. Sometimes simple changes like this can do wonders for sales.

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magazines

Promoting the new look Burke’s Backyard

burkes-backyard-march2010.JPGWe are promoting Burke’s Backyard at the sales counter, between two registers, for the next couple of days.  The refresh of the magazine and its popularity with our customers make it a good title to promote in this prime location.  We may leave it up for longer depending of what we see on Wednesday.

This counter location continues to work extremely well for us – driving excellent impulse purchases.

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magazines

How can a paywall improve revenue for publishers?

newspaper_paywall.JPGNews Corporation’s The Times and Sunday Times newspapers in the UK will to turn on a paywall, permitting access to content only to those who have paid for the privilege.

If we agree with this business model for charging a fair price for access to products and services then we need to take newspapers out of the public area of our newsagencies and provide access only when we have been paid.  Distribution newsagents would also need to start charging a fair price for the newspaper home delivery service provided.

Publishers, newspaper and magazine, like the newsagency channel because of the ease of browsing. They know that free sampling, of a headline, part of an article or the whole newspaper, is key to sales. It appears that some publishers don’t agree that free sampling is key to generating sales online.

Newspaper publishers like distribution newsagents because they are prepared to provide a service for barely the cost, and often less, that the service costs to provide.  Publishers are not prepared to be as generous with their own money when they are funding the distribution channel.

Newspaper publishers go to extraordinary lengths to facilitate free or at a steep discount full copy sampling of their print products – at sporting events, shopping malls, through sporting clubs, to students and through other affiliations where you can take a year-long subscription for 10%, and sometimes less, of the usual price.

The newspaper cover price itself, $1.00 in Sydney for the Daily Telegraph for example, does not reflect the cost of the product. The 25 cents (or less) a newsagent makes selling it certainly does not reflect their cost. Yet, the publisher and newsagent subsidise this because it is seen as important to maintaining sales.  The few cents a day a newsagent is permitted by the publisher to charge for home delivery is often just a token of the real cost.

If the paywall approach is about building a sustainable revenue model from online because of a belief that migration from print to online will continue then there must be smarter revenue solutions than hiding the product behind a paywall.

The only people I can see paying to get through the paywall are those who know the product. New customers, the holy grail of any business, are not likely to pay to sample the product.

Back in the print world, the only people not happy with newsagents charging a fair price for newspaper home delivery and a fair price for each copy purchased at retail are the publishers themselves.  Surveys by newsagents show that consumers are happy to pay a fair price.

While the real discussion topic here is the introduction of the paywall at The Times, I see this through the context of how newsagents have been treated by publishers when it comes to charging for our services.

Jeff Jarvis (of BuzzMachine) has written an excellent piece for The Guardian, a competitor of The Times, about their move.

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Media disruption

Foreign language newspapers continue to grow

An early look at benchmark sales data for the soon to end first quarter of 2010 shows that foreign language newspapers continue to perform better than their mass market counterparts.    Across Australia, foreign language newspapers are showing strong year on year same store growth based on the data I am seeing.

Foreign language newspapers are more efficient too with around half sales including at leats one other item in the basket.  Mass market newspapers are purchased with something else on average 40% of the time.

Foreign language newspapers are an excellent opportunity for newsagents wanting to tap into a loyal and growing customer base.

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Newsagency opportunities

Another lucky shopper

lucky-shopper1.jpgWe are rewarding another Lucky Shopper if we can find out who they are.  We’re placing a poster at the door inviting them to contact us for their reward.  For the three months we have run this campaign it has worked well – until last week that is.  Hopefully, we will have success again with a new lucky shopper as the target of our affection.  Yes, I know there are questions about this.  The police advice we have is that a poster like the one we are using doe snot break any laws.

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retail

Seriously, how good is our customer service?

How does your newsagency stand out in the crowd? Whether you are in a small country town or a large capital-city shopping mall, you are in a crowd. Now more than ever, given that everything we sell (except for magazine range), is available in many other places including online.

So, how does your newsagency stand out?

National retail chains spend vast sums of money and time advertising their buying power, convenient locations and friendly service. Their slick ads get into the heads of customers and lead them to think service is good. Newsagents don’t have the funds to promote on the same scale outside our businesses.

We rely on what we do to show off our point of difference and for this to drive word of mouth.

The best competitive strategy for retail I know is to make the shopping experience truly remarkable.

As I travel around the country speaking with newsagents at conferences, workshops and individually, the most common point of difference I am told newsagents have over national retailers is customer service.  This is what most newsagents think.  They share horror stories they have heard about experiences with national chains – as if these horrow stories make newsagencies look good. I don’t think it works that way.

If customer service is the differentiating factor for newsagencies, we have to ask ourselves: is our customer service truly remarkable? Is this what your customers really think? Is what you think of as your point of difference what your customers actually experience?

In newsagencies, customer expectations are higher than those buying a magazine, a pen or a card in a supermarket or department store.  Because customers expect us to be more personal and friendly we have to be better – plus more.

The higher expectations customers have of their experience in a newsagency means that our own goals for remarkable customer service have to be higher.

So, how does your newsagency stand out in the crowd in terms of customer service? We need to challenge each other on this, to lift our game across the country. Whether we like it or not, we are connected by business type and, in most cases, shingle.

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Customer Service
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