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Trade Press Works Energising Independent Retailers


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Contents The Independent Retailer Three Years On 4 Success And Optimism 6 Shopper Awareness 8 The Move to Convenience The Trade Press Reader 10 More Engaged 12 More Successful 14 Acting on Advertising Newtrade Publishing: Reaching The Most 16 What are Independent Retailers Reading? 18 More Positive, More Successful Newtrade Publishing: Reaching The Best 20 A More Engaged Audience 2 | Newtrade | Trade Press Works | Research by him!

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20 12


Executive Summary

Welcome “It is well documented that good independent retailers are flourishing. What is not so clear is how they are achieving this success. In order to gain a better understanding of the independent sector, and trade press readers in particular, we commissioned him! to carry out some qualitative research on our behalf. The results demonstrate that advertising in the trade press is the most cost-effective way of getting your messages across to a large group of independent retailers and that the return on investment is significant. The independent sector is more successful than it was in 2008, and this success looks set to continue. Independent retailers believe they are making more money – and are optimistic that this will continue for at least the next 12 months. This success can be attributed to a number of factors, such as an increased willingness to stock new products, a move towards convenience and a more customer-focused approach. This success story is driven by retailers who read the trade press. They have enjoyed the biggest increases in footfall and weekly turnover over the past three years. They are more engaged with the trade press than they were three years ago, reading it more frequently and for longer – and turning to it more frequently when making decisions about new products, launches and promotions. Among the trade press reading population, there is one group of retailers who stand head and shoulders above the rest – those who read Newtrade Publishing titles. In terms of their businesses, they are more successful, more optimistic and more shopper focused. Part of this success must surely be down to their level of engagement with the trade press. They are more frequent readers, turning to our titles for a wide range of advice to help them improve their businesses and grow their sales. What is more, they are more likely to recognise ads they have seen in the trade press, and most importantly are far more likely to take action on seeing these ads – with just under half stating that they will stock a product upon seeing it advertised in our magazines. The results of this study provide you with evidence to justify your investment in the trade press, and provide a compelling argument for why you should continue to grow this investment.”

Kate Dickenson, Head of Marketing, Newtrade Publishing

Sample size: 234 independent retailers Method: Interviews at major cash and carry/wholesale depots across the UK Timing: Various times of day, throughout the month of February 2011 Confidence Level: 90%; Confidence Interval: 3%

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4% are confident “7that their sales will increase or stay the same over the next 12 months�

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78

%

The Independent Retailer Three Years On Success and Optimism Despite the economic downturn, which began in the latter part of 2008, consumer spending in the independent convenience sector does not appear to have been too adversely affected. With an average weekly turnover of £8k, a closer look at the figures shows that the number of retailers with a turnover of less than £5k a week has fallen from 25% to 21%. n 78% state that the number of shoppers visiting their shops is either increasing or staying the same (75% in 2008). n 74% are confident that their sales will increase or stay the same over the next 12 months (69% in 2008).

of retailers state that the number of shoppers visiting their shops is either increasing or staying the same

Average weekly turnover 2008 vs 2011

51%

26%

57%

2008 2011

22% 11%

Less Than £5k

£5K to £10K

16%

£10K to £15K

7%

3%

£15K to £20K

4% 4% £20K+ Source: him!

The fact that 89% of the retailers asked knew what their weekly turnover was (compared to 72% in 2008), suggests that the optimism they are currently feeling is based on facts, figures and a genuine understanding of how their businesses are doing.

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The Independent Retailer Three Years On

How do you feel you can be successful when competing with the multiples?

Shopper Awareness Independent retailers are becoming more shopper focused, with an understanding that in order to survive they have to deliver the products, service and prices that their customers want. n 6  4% said that they pass promotions on to their customers most, or all of the time, vs 51% in 2008. n O  ffering value for money is paramount, and the rise in popularity of pricemarking demonstrates this with 44% of retailers stating that it is the most effective form of promotion available to them, compared to 18% in 2008. Indeed, when asked how they felt they could be successful against the multiples, rather than stating cheaper prices, both value for money and better service were the top ways in which retailers feel they can fend off the competition.

3% 4% 10% Offering value for money

40%

18%

Better customer service Open longer hours Selling different products

24% 40% 30%

Better availability Offering lots of promotions Being cheaper than the supermarkets

31%

35%

Greater focus on local sourcing

Source: him!

Further to this, more than half of the retailers interviewed (54%) stated that they have at least 10% of their stock on promotion. The effects of the economic downturn can perhaps therefore be seen in an increased understanding of the importance of knowing your customer. At this time, this relates specifically to offering value for money, promotions, and reassurance that local shops do not have hugely inflated prices (pricemarking). n Number of retailers stocking new products has risen by 14% since 2008, to 89%.

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The second biggest factor influencing these stocking decisions is shopper demand, with TV and radio advertising not far behind – both these factors have seen their influence increase since 2008, suggesting that retailers are becoming more consumer savvy, tuning into the latest trends, listening to their shoppers and adjusting their stock accordingly.

For more information please call Mike Baillie on 020 7689 3367


ather than “Rcheaper prices, both value for money and better service were the top ways in which retailers feel they can fend off the competition�

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lcohol, household “Agoods, milk and packaged/tinned groceries saw the biggest increase in anticipated growth, compared to 2008�

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The Independent Retailer Three Years On

Which three products/services will drive the greatest sales growth in your business over the next 12 months? Alcohol Tobacco

The Move to Convenience It is well documented that the number of independent retailers turning to convenience to attract customers and grow sales is increasing, and the results of this study add to this with 64% of those surveyed stating that they are convenience store owners, compared to 53% in 2008. Further to this, more retailers cited convenience products as drivers of growth over the next 12 months, than they did in 2008. In particular, alcohol, household goods, milk and packaged/ tinned groceries saw the biggest increase in anticipated growth, compared to 2008. It is important to note that while retailers are seeing the value of stocking more convenience products, they are not underestimating the importance of the core categories of crisps, snacks and confectionery, which they still cite as being growth leaders over the next 12 months.

Soft drinks Confectionery Crisps & snacks Household items

2011

Milk Packaged/tinned groceries Bread/bakery products Sandwiches Newspapers Fresh fruit & vegetables Frozen foods Chilled foods (dairy etc) Ready meals & fast foods Hot drinks & fast-to-go Magazines Services (paypoint, ATM, etc) Packaged tea/coffee Health & beauty products Source: him!

Top 5 growth areas: 1. Alcohol 2. Tobacco 3. Soft drinks 4. Confectionery 5. Crisps and snacks These findings also suggest that initiatives such as Big Night In and other cross-promotions and link deals across these core categories continue to provide big opportunities for the independent sector.

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The Trade Press Reader More Engaged

Which of the following does the trade press help you achieve within your business? Knowing what's going on in the industry

53%

Independent retailers who turn to the trade press are reading the titles more often and for longer than they did three years ago.

To get merchandising advice

28%

To get advice on legal issues

23%

To get advice concerning stocking decisions

20%

Adjust pricing to grow sales

19%

Find suppliers

16%

Allows me to benchmark against competitors

14%

Allows me to understand which areas of my business to invest in

14%

n The average amount of time that retailers spend reading the trade press is 17.2 minutes.

To get help concerning staff training & recruitment

n More than half read the magazines at least once a week (55%, vs 50% in 2008).

5% Source: him!

n T  ime spent reading the magazines has increased, with 40% reading for at least 15 minutes (compared to 37% in 2008). So what are they reading? As well as finding out about new products and promotions, retailers are using the trade press to stay informed grow their sales and stay within the law. What do you find most useful in the trade press? 1. Promotions (58%) 2. New product development (46%) 3. General news articles (31%) 4. Legislation (25%) 5. Hints/tips for increasing sales (23%)

And how does it help them? The trade press helps retailers with a wide range of areas including effective merchandising, pricing, legal issues and staff training. There is no other single resource that provides them with the advice they need for all areas of their business. The table above demonstrate the importance of the trade press in helping retailers understand how to improve their business, a key area of which is staying abreast of new promotions and launches.

The trade press plays an important role in this area; along with cash and carry promotions and sales reps, it is one of the top three ways in which all retailers (readers and non-readers) find out about new promotions and launches. Further to this, it is the second most used source of information in this area for regular trade press readers, with just under half (44%) stating that they use trade press to find out about new promotions and launches.

rade press is one of the top “Tthree ways in which all retailers find out about new promotions and launches�

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For more information please call Mike Baillie on 020 7689 3367

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Trade press readers are selling 23% more – with an average weekly turnover of £8.7k vs £7.1k for non-readers

XX

%

of reatilers state that the number of shoppers visiting their shops is either increasing or staying the same

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The Trade Press Reader

More Successful Trade press readers are turning to the titles more often, using them to stay informed, improve their shop and grow their sales. And it appears to be working. Not only do a higher proportion of trade press readers know what their store’s weekly turnover is (91% vs 87% for non-readers), they are also selling 23% more – with an average weekly turnover of £8.7k vs £7.1k for non-readers. As well as being more successful in real terms, they are also feeling optimistic about their businesses: n2  5% of trade press readers state that the number of shoppers visiting their store is increasing vs 16% of nonreaders. nA  lmost a third (27%) of readers think that sales in their stores will increase over the next 12 months vs 14% for nonreaders. Why so successful? Looking at the habits of the trade press reader, we can see that their success and optimism is based on the way they run their businesses.

of convenience, with a greater number of trade press readers stocking household items (+13%), health and beauty products (+13%), ready meals or fast food (+12%) and sandwiches (+19%) than their non-reading counterparts. In addition to stocking a great range of products, trade press readers are: n More likely to pass promotions on to their customers most, or all of the time (69% vs 57% for non-readers). n More likely to always stock new products (31% vs 19% for non-readers). n Have a higher percentage of products on promotion compared to their non-reading counterparts (19% vs 16%). Trade press readers are therefore more informed and have a better understanding of the wider market and their customers needs. They understand what they need to do to stay successful – and they do it.

Trade press readers stock a wide range of products; this is particularly evident in the area

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The Trade Press Reader

For more information please call Mike Baillie on 020 7689 3367

Acting on Advertising To fully understand the benefit of advertising in the trade press, it’s essential to understand the impact that your ads have on trade press readers, and most importantly what they are doing with the information they receive. When shown a series of six adverts, 49% of trade press readers recognised at least one. This is exceptional, especially given that some of the ads were more than three months old. When asked what they did as a result of seeing the ads promoting a specific product: n 38% started stocking the advertised product. n 14% made an enquiry. n 1 2% talked to a friend or colleague about the product.

Looking at these figures, you can put together a compelling argument for advertising in the trade press. Take the universe as 40,000 independent retailers; 58% of these read the trade press and 70% of these take action as a result of seeing an ad. Advertising in the trade press will therefore result in 16,240 retailers taking action as a result of seeing your ad campaign.

hen shown “W a series of

six adverts, 49% of trade press readers recognised at least one�

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The top three titles have maintained their positions, demonstrating that not only are they the most read titles, they are also the most valued

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Newtrade Publishing: Reaching The Most What are Independent Retailers Reading? Retail Newsagent, Retail Express and Asian Trader have seen the biggest increases in market share since 2008, with Convenience Store and The Grocer maintaining their share. The focus on the core range of products has increased, with less retailers reading ‘other’ titles. And what would they recommend? We asked trade press readers which titles they would recommend to their fellow retailers. This is an important measure of value; if a retailer not only reads a title but will also recommend it, it follows that they find the magazine informative, containing advice that helps them with their business:

Which of the following trade publications do you read? 0%

10%

20%

30%

40%

50%

60%

retail newsagent Convenience store

retail express

ASIAN TRADER

2011 2008

INDEPENDENT RETAIL NEWS THE GROCER

THE FED

OTHER 0%

10%

20%

30%

40%

50%

60%

Source: him!

The top three titles have maintained their positions, demonstrating that not only are they the most read titles, they are also the most valued.

1. Retail Newsagent 2. Convenience Store 3. Retail Express 4. Independent Retail News 5. The Grocer 6. Asian Trader 7. The Fed 8. Other

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Is the number of shoppers visiting your store increasing, decreasing or staying the same? 3%

More Positive, More Successful

11%

The results of the research suggest that readers of NPL titles are more successful than readers of competitor titles; they enjoy higher footfall and see a bigger opportunity for growth. This success can be attributed to a number of factors, including: n 98% of NPL readers will always or sometimes stock a new product when it first comes out, compared to 93% for readers of competitor titles.

5%

29%

19%

NPL READERSHIP

NON-NPL READERSHIP

57%

Increasing

25%

51%

Staying the same

Decreasing

Don't know Source: him!

Do you think sales in your store will increase, decrease or stay the same over the next 12 months?

n 37% always pass promotions on to their customers compared to 32% for readers of other trade press titles.

5% 7% 17%

As well as being more willing to stock new products and offer value to their customers, it is perhaps how readers of NPL products are using the trade press, and the information they receive, that is helping them to stay successful.

32%

NPL READERSHIP

27%

19% NON-NPL READERSHIP

46%

Increase

47%

Staying the same

Decrease

Don't know Source: him!

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Newtrade Publishing: Reaching The Most

Which areas of the trade press do you find most useful? 0%

10%

20%

30%

40%

50%

60%

70%

letters/ comment category focus

latest developments in the industry Case studies from other retailers

npl readership

Shopper research/ customer opinions

Non-npl readership

industry events

hints/tips for increasing sales legislation

General news articles

New product development Promotions 0%

10%

20%

30%

40%

50%

60%

70% Source: him!

When asked which areas of the trade press they find most useful, readers of NPL titles stated that our products help them with the key areas of the business, such as promotions, new product development and hints and tips for increasing sales. This demonstrates that they are willing to invest in their business, first collecting information on what’s new, before deciding what to introduce in their shops.

The above tables demonstrate that the information we are providing is more useful, helping our readers to achieve more within their business; and that they are more successful both in terms of shopper numbers and future projected sales, is further evidence of this.

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Newtrade Publishing: Reaching The BEst A More Engaged Audience

Which of the following advertisements from suppliers have you seen in the trade press recently? 0%

20%

25%

30%

35%

40%

45%

50%

npl readership Non-npl readership

advert 3

n 33% of NPL readers use the trade press when making a decision about stocking a new product, compared to only 24% for non-NPL readers.

advert 6

advert 5

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Source: him!

What did you do as a result of seeing this advertisement? 0%

10%

20%

30%

40%

50%

Talked to friends/ colleagues about the product advertised

npl readership Non-npl readership

visited their website started stocking the advertised product

As a result of seeing these ads, readers of NPL titles are far more likely to take action than readers of other titles. Retailers who read Newtrade Publishing products are more successful, have a greater understanding of what they need to do in order to attract more customers and grow their sales, and are more engaged

15%

advert 2

advert 4

Furthermore, advertising recognition was better in readers of NPL titles, with more than half (55%) recognising at least one supplier advert, compared to only 38% for readers of competitor titles.

10%

advert 1

There are also differences in how the readers of different trade magazines consume information:

n 53% of NPL readers find out about promotions and launches from the trade press, compared to 40% for readers of non-NPL titles.

5%

made an enquiry 0%

10%

20%

30%

40%

50% Source: him!

with the trade press, in part because they feel that it helps them achieve a wide range of things within their store. They are more likely to act upon seeing advertising in the trade

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press, demonstrating that we are reaching innovators and early adopters, retailers who understand how to stay ahead of the pack.


For more information please call Mike Baillie on 020 7689 3367


Newtrade Publishing 11 Angel Gate, City Road, London EC1V 2SD Tel: 020 7689 0600 Fax: 020 7689 0700


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