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

Rising petrol prices can help newsagents

petrol.JPGThe higher price of petrol climbs, the greater the opportunity for newsagents. People will think before they get in the car and drive to shop. If they can get what they want locally they will walk or at least drive a shorter distance. This is where the high petrol price is an opportunity for newsagents. We are the quintessential local business. We ought to seize the opportunity. Here are some ideas:

  • Local Marketing. Reconnect with households and businesses around your newsagency and remind them that you have locally what they might otherwise drive for – or that you can get it in for them.
  • Improve convenience.  Look at how you can make shopping at your newsagency even more convenient and appealing.
  • Comparative pricing. Make it your business to beat a major competitor on some popular items. For example, at our shop, our printer ink prices are better than Big W, Australia Post and Officeworks. While customers discover this and are thrilled, a small sign near the category could people not in the market for ink to trust us for other categories and shop locally more often.
  • Delivering value. Offer a free delivery service for purchases above a certain value.
  • Save money. Do deal with a local independent petrol outlet. Offer coupons for discount petrol which they provide in return for them handing out discount coupons for use in your newsagency.
  • Talk it up. At your next team meeting share some ways they can let customers know that shopping locally reduces what they spend on petrol.
  • Offer deals for volume. In some areas people will shop less frequently. Drive a deeper shopping basket by offering deals for a bigger spend.

While rising petrol prices present serious challenges for newsagents, they also present opportunities worth exploiting.

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marketing tip

Paperless magazine returns

It’s great to see that Gordon and Gotch has switched to paperless magazine returns for newsagents who are EDI complaint. The time saving is welcome. Even better is the rapid confirmation of credit amount following receipt of the EDI returns paperwork. The Gotch process for verifying that a EDI newsagent is compliant is thorough. While some see the hurdle as daunting, the reality is that compliance is good for business.

I have seen that as the folks at Gotch have evolved their processes the sell through rate in my newsagencies has improved.  Sure there are occasional supply blips but, overall, we are far better off with their supply model today than three years ago.
What is interesting about EDI compliance is that it is a benchmark for people looking at buying a newsagency. A paper based returns process is far more daunting for someone new to running a newsagency than the electronic returns process. The message for newsagents wanting to sell their businesses is to get EDI compliant and make the business more appealing to prospective purchasers.

The Tower Systems advice on the new process is here.

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magazines

The challenge of the shopfit

We are finally developing plans for a new shop fit for our Frankston newsagency.  I say finally because we have been working on this off and on for the last six months.  Beyond the challenge of the physical space itself (columns, no back room etc) is the challenge of developing a layout which is fresh yet flexible to continue to evolve after the new fit is opened.

Too many newsagency shopfits are inflexible and are based around carpentry which is expensive and difficult adjust as the needs of the business evolve.  For example, I expect we will devote less space in three years to magazines than what we do today.  The shop fit needs to be able to handle this evolution without rebuilding fixturing.

We are looking at the Kleerex magazine fixturing options from Europe which provide the flexibility we see as essential. I have had some experience with this at our Watergardens store and there, almost a year on, it is working a treat if sales growth is anything to go off.  The only challenge around the Kleerex product is the price and service levels of the local supplier.

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Newsagency challenges

Grodon Ramsay and politics

review_ramsay.JPGGordon Ramsay is the brand of the moment and nowhere is this better illustrated than on the cover of the latest issue of the I.P.A. Review magazine.  I picked up the magazine curious as to why they would run recipes from Ramsay.  I should have known better.  The article the cover promotes takes a whack at his politics.  I am glad I checked as I had thought of locating this issue in our food section.

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magazines

Promoting Marie Claire at the counter

mc_aug08.JPGWe are promoting Marie Claire at the counter this week. Even though the latest issue has been out a week and has sold well, the free Prevage anti-aging formula gift is the most compelling gift with a magazine this week.  We have enough stock to support the offer so using our premium counter position makes sense.

Our goal is to sell out of Marie Claire by the end of the week. I will be interested to track sales from this counter position compared to the the stand we used last week near our newspaper display.

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magazines

Thanks to the AFL

afl_prod.JPGAFL related products are great for newsagents. Here we are well into the second half of the season and AFL products are selling as well as ever. Cards, figurines, cards, magazines, cards, albums, kids magazine and, did I mention, cards. While cards are the killer product, most of the products are perfect at the counter as an impulse item. On pure sales results, the AFL is the most important sport in my newsagencies.

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newsagency marketing

Marketing tip: coupons

coupon1.JPGA good way to promote your newsagency is to offer something of value to another business to giveaway. Using Microsoft Word it is easy to create coupons tailored to your business. These could offer a free gift with a purchase, a discount off, say a magazine, a two for one deal or some other offer available only through your business. The right coupon with a compelling offer handed out at a neighboring retail store should drive additional traffic. You can do the same for them from your business.

The keys to success with coupons are:

  • The offer provides real value.
  • It is only available at your store.
  • You target people who are less likely to visit your shop.
  • There is a time limit on redemption.
  • The retailer you partner with, to hand out the coupon, believes in the offer.
  • The coupon itself is simple – the value proposition has to be “got” immediately.

Many newsagent suppliers will work with you on this type of marketing by providing giveaway items if one of their items is purchase or a discount on incremental sales. The key is to ask.

Coupons are an easy and cheap marketing opportunity. I’d suggest newsagents engage in three or four such campaigns a year. If nothing else they get the name of your business in front of other shoppers and other businesses.

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marketing tip

Promoting stationery in-store

3mad.JPGStationery can be a set and forget department with products rarely moved.  Customers can become as store blind as newsagency staff.  We are using a small screen placed within the stationery department to play TV commercails and other video content (with sound) to draw attention to products.  The key to this is brand name suppliers being prepared to work direct with us on the in-store promotion opportunity as often they prefer traditional in-store marketing collateral.

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retail

Newsagent software exclusives

The term exclusive is tossed around a lot by software companies.  They want to show that only they have some great benefit that will sway you in their direction.  As the owner of Tower Systems it is important to me that when Tower claims something as exclusive, it can prove the claim.  Click here for a list of current facilities and services exclusive to the Tower newsagent software.

Of particular interest to me is the exclusive magazine supply chain projects.  In addition to those listed, there are two others I cannot detail publicly.  Our mission in the magazine supply chain side of our software is to help newsagents reduce workload and improve decision making around the category.  Being newsagents ourselves helps in pursuit of these goals.

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newsagent software

US auto magazines wobble

MediaPost reports that Auto magazines are struggling in the US with many reporting double digit declines. Year on year to June 30 2008, motoring title unit sales are down 4% at our Forest Hill location. I’d expect to see growth this financial year based in part of renewed interest in the category because of the local edition of the Top Gear magazine and TV show – more eyeballs browsing the category provide an opportunity to lift sales.

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magazines

Swobbles and school holidays

swobbles21.JPGLaunching the range of Swobbles at the start of the school holidays have proved good timing.  The colourful window display attracts kids and they bring parents and grandparents.  Once they look at the display they see our card and social stationery ranges and this is a department benefiting from Swobbles in the window.

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retail

Basic newsagent marketing

nx-create.JPGMarketing outside your newsagency is essential to growing the business. Too often I see newsagents rely on existing traffic or natural growth to boost sales. The latest Create Art flyer from newsXpress will bring new customers looking for quality art products at good prices. Some of these new customers will stick. The flyer is part of a broader year long marketing strategy designed to drive traffic, sales and depth of spend across multiple categories.

Major retailers spend a minimum set percentage of turnover every year on marketing. The Australian on Thursday had a story about Woolworths increasing its annual spent to $100 million, up 16% on the previous year. While newsagents cannot compete in quantum, they can compete by establishing a marketing budget which is a percentage of turnover. They can then balance the use of that budget across appropriate activities.

The Create Art flyer is a good example of cost effective marketing. Developed by the supplier exclusively for newsXpress, the store level cost can be zero or small depending on the number of flyers engaged and how they are deployed. The key is regular promotion of the business, using compelling offers for different categories, outside the shop.

Smart newsagents will increase their marketing spend across multiple departments in the face of tougher economic circumstances. Good execution will be rewarded with insulation against any downturn in our retail niche. Doing nothing externally sets the business up for average year at best or a drop is sales at worst. Given that rent, wages and other business costs increase annually, chasing growth is the only option.

I have some questions for newsagents reading this:

  1. What percentage of your turnover do you allocate to marketing?
  2. Is the marketing budget spread across your top four departments?
  3. Is the marketing spent on activity outside your store to pull new traffic?
  4. How do you track the success of the marketing?
  5. When you send external marketing do you engage in-store with a message and theatre to reflect the offer sent out?
  6. Is there a plan to your marketing at least six months out?

The risk is that newsagents and other small business owners see external marketing as too hard, that they cannot compete with the $100 million spend of the likes of Woolworths. There are many newsagencies which offer proof that you can compete. It is a challenge but as small business owners we are more local, flexible and connected than our big business competitors. Individual businesses can use this to their advantage. Groups of newsagents such as newsXpress can use their size to their advantage – as the Create Art flyer shows.

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marketing

Stealing the crucifix

prayers.JPGThe crucifix from the front of a children’s book, My Little Book of Prayers, was stolen from our book sale table earlier this week.  How pathetic is that?  Given the price of the book, the crucifix would have to be worth less than 20 cents so I ask why?  Because they can I guess.

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theft

The Classic Australian Movie Collection

I have see the TV commercial for the Classic Australian Movie Collection partwork series which is to launch July 16.  Like other partwork TV commercial, it is designed to drive traffic exclusively for the newsagent channel.  The first five movies are: The May From Snowy River, Gallipoli, Sunday Too Far Away, Rabbit Proof Fence and Picnic at Hanging Rock.  This series has the potential to be HUGE and it is exclusive to newsagents!

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newsagency marketing

ASIC looking at Bill Express

Today’s Australian Financial Review reports that ASIC is investigating Bill Express.  This is on top of reported active investigations by the ACCC and the Federal Police into matters related to Bill Express.

My understanding is that more former employees are prepared to speak out about matters relating what they saw while with the company.  Someone has suggested that this is what will lead to further attention on OnQ and ETT.

Yesterday, OnQ, a major shareholder in Bill Express, announced that it would no longer consolidate, take over, Bill Express.  In the same announcement the company said it was withdrawing fdrom International projects but did not provide details.  My understanding is that the Vietnam operation is one such project.  If this informatuion is current, it will be intresting to see the broader ramifications for the BOPO offer.

Bill Express has invested considerable funds into the launch of BOPO and while it has gained some traction, the return is probably not where it needs to be at this point.

One executive within Bill Express has been putting it about that what has been published here about Bill Express is fiction.  I clearly identify what I have been told versus what I know to be true.  He or anyone else in the company is welcome to let me know what is inaccurate so I may publish a correction.

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Bill Express

The problem with overseas crossword titles

os_crosswords.JPGNewsagents must take action on overseas crossword titles.  All three magazine distributors, Gotch, Network and NDD are supplying us with these titles.  Collectively, overseas crossword titles perform appallingly.   This performance is driven by having too many titles on offer.

Given that the distributors seem unable to resolve this problem, the only option is to tell one or two of them I no longer want overseas crossword product from them.  This will leave me with selection from one distributor and, hopefully, better sell through rates from a smaller range.  Based on performance, I am likely to drop NDD and Network (except for Puzzler titles which perform well).

The only alternative is for distributors to agree to a pay for performance model.  If a crossword title has a sell through of lower than 50% they pay me a service fee. This has been put before and rejected.

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crosswords

Intralot scratchie sales strong

intralot_scratch.JPGThree days in and our Intralot scratchie sales at Forest Hill are better than where they were under the old brand. At Frankston and Watergardens where the category is new for us sales are good but with room to grow. Still little comment about Intralot vs. Tattersalls.

The Intralot launch has been a bit rocky but nothing more than I would expect for a new business. Given some of the hurdles they have had placed before them I’d say they’re doing okay.

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Lotteries

Promoting wedding magazines

weddingmags.JPGWe have created a column of wedding magazines next to Australian Women’s Weekly, a column of crossword titles and our top selling weeklies. This is in addition to our usual wedding display further into the magazine department.

The display has been up for two days and has resulted some sales. We will leave it in place for two weeks before we replace it with another category we want to feature in the high traffic area.

Since it is wedding season the time is right to co-locate wedding titles in this way. There is no shortage of stock to display.

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magazines

The newspaper honey pot

newspaper_honeypot.JPGNewspapers generate a tremendous amount of traffic for newsagents. The photo, taken yesterday at Forest Hill, shows how we try and leverage add-on sales from this traffic. We have more items around papers than usual because all other display spaces are being used. Usually, we would have only two stands next to newspapers. That said, what may appear to be a cluttered look is working well without hurting newspaper sales. We will leave the display setup like this for several more days, a week in total. Anything longer and customers don;t notice.

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newsagency marketing

Maghound magazine subscriptions

Maghound is an online subscription website developed by Time Inc. in the US for selling magazine subscriptions. They have close to 300 titles already. What is interesting is the ability to subscribe to multiple titles and have one charge.

Maghound subscribers will also be able to switch between titles mid subscription – that’s weird. I am surprised publishers accept it. I can’t see a subscriber switching from one title to another happily given that when they sign up they committing to a title long term. It has always been this way. I’ve not heard people talk about wanting to switch so why create the proposition. Okay, there is the point of difference but it’s not that good for a point of difference.

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magazines
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