Australian Newsagency Blog

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

Meeting with XchangeIT

Mark Fletcher on October 23, 2014 3:55 PM

I met with Chris Leach the CEO of XchangeIT today as part of a regular discussion Chris has with the various newsagency software companies.

I took the opportunity to express concern that newsagents are pressured to provide accurate sales data yet we see little benefit in return.

While it is outside his purview, Chris listened as I outlined the magazine supply issues I have canvassed here on this blog this week and previously. I made the point that the failure of magazine distributors to supply based on accurate sales data leaves newsagents questioning the value of providing accurate sales data and the impact this has on perceptions of XchangeIT.

The shareholders of XchangeIT – magazine distributors and the ANF – need to affect change by magazine distributors if they are to have newsagents provide access to more accurate data.

They need to ensure that newsagents are supplied based on sales data and not supplied to serve the commercial interests of distributors.

The examples this week of gross oversupply of Top Gear reflect a disregard for good data provided by newsagents through XchangeIT. The supply by Bauer of unwarranted extra stock besmirches the reputation of XchangeIT.  It is disappointing that those involved appear to be uninterested.

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→ 5 CommentsCategory: Ethics · magazine distribution · magazines · Social responsibility · XchangeIT

Newsagents caring less about accurate data as a result of worsening magazine oversupply

Mark Fletcher on October 23, 2014 7:48 AM

A newsagents who recently got pinged by XchangeIT for failing to meet their standards expressed anger at abuse of their business by the imagine distributors for overloading them with stock.

Digging into the situation, there was no issue with data quality, just timing. So, the distributors receive accurate sales and return data but it is not always delivered the same day.

In the data from the business I can see more than 60% of titles are oversupplied. That is, for more than 60% of titles this business receives 50% or more stock than they would usually sell.

No wonder the newsagent does’t trust XchangeIT. It is supposed to lead to fairer data-based allocations. That is clearly not the case.

With newsagents more acutely aware of business performance at the product category level than at any time in their past, it is reasonable that the performance of XchangeIT come into scrutiny. All of the attention to accurately recording sales and returns has to play out as a business outcome at some point. Unfortunately, for too many newsagents, the outcome is continued oversupply.

The risk is that newsagents will care less and less about magazines and about XchangeIT – unless this is resolved. But what does resolution look like?

Newsagents deserve:

  1. Equitable supply massed on sales data with an acceptable gap between recent net average sales and supply. I’d suggest no more than 20%.
  2. No new titles unless approved.
  3. Ability to cut a title (in quantity or completely) immediately and without needing to seek permission.
  4. No on-sales greater than 30 days.
  5. No physical return of unsold stock.
  6. Financial penalties for titles that achieve a sell through of vower than an agreed level. I’d suggest 70%.
  7. Financial penalties for SBR supply where there is no data to support it.

Magazine distributors hold newsagents accountable for their level of indebtedness yet they provide no reasonable mechanisms through which we can control our level of indebtedness. Oversupply is akin to them taking interest free loans from us without permission.

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→ 4 CommentsCategory: Ethics · magazine distribution · magazines

News Corp. removes newspaper home delivery price protection in South Australia

Mark Fletcher on October 23, 2014 6:40 AM

News Corp. has advised newsagents in South Australia that it will remove price protection for home delivered product within weeks. Here is the advice the company provided newsagents:

Please note that News Corp has decided to remove the price protect for home delivery customers with the forthcoming price increase for the Sunday Mail on Nov 2, 2014. Thus, please charge full price for all home delivery customers from Monday October 27. At the same your rate for agent collect flat wrap copies will rise to the same as the retail papers.

Many years ago newsagents told News that home delivery customers were not concerned about price for the quality premium service. It will be interesting to see what customers think today with the status of newspapers now compared to then so different.

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→ 3 CommentsCategory: newspaper home delivery · Newspapers

Finally, consistent coverage of news

Mark Fletcher on October 23, 2014 6:36 AM

Screen Shot 2014-10-22 at 10.35.36 amIt was good to have a day where newspaper covers right around Australia parked agendas as they marked the passing of former Prime Minister Gough Whitlam. Regardless of your politics, key aspects of the Australia we have today is thanks to the transformative but short Whitlam years.

The image is a terrific gallery created by Mediaweek.

My favourite cover is that for The Age.

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I see plush he sees a dragon

Mark Fletcher on October 23, 2014 6:30 AM

whyplushA boy in the shop was drawn to this dragon and while that is not unusual, how it happened piqued my attention.

Mum can I have this dragon please? He casked. It’s like a teddy bear, said his mum. No, it’s a d r a g o n (yes he said it slowly, emphasising the difference).

To the boy, the dragon is not a plush item, not a teddy bear. It made me look at plush differently as they appear different to different shoppers.

It reminded me of the value of listening to customers on the shop floor and seeing what we sell through the eyes of our customers.

Whereas the mum sees the dragon as another soft toy, the kid sees a character to play into his childhood fantasies.

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Is it unethical to send more stock of a title a newsagent without justification?

Mark Fletcher on October 22, 2014 5:30 AM

Imagine the surprise of a newsagent this week when they received additional stock of Modern Wedding Styling magazine when they still had stock on the shelves from the August allocation. There is no sales history to indicate they will get through the initial allocation. So, the newsagent topped the supply this week and early returned it.

The newsagent has lost time and money on unwarranted allocation. The publisher has copped the cost of shipping out the stock that was topped this week. They will probably cop a return fee and maybe a topping fee.

The distributor could have saved the publisher and newsagent costs had they used the data they have from this newsagent and not sent the extra stock in the first case.

What happened in this situation could be considered to be a poor allocations, poor management or deliberately actions to generate fees for the magazine distributor.

It’s say it’s not a poor system as that’s an excuse Network has used for decades.

It’s say it’s not poor management because network has had plenty of time to address that.

I think the supply reflects a commercial decision to apply and this is what I’d label unethical. Whoever participated in or facilitated this situation ought to be ashamed of themselves.

This is another example that makes a mockery of the pressure newsagents are put under by XchangeIT for data accuracy. There is no evidence of magazine distributors being put under similar pressure.

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→ 3 CommentsCategory: Environment · Ethics · magazine distribution · Magazine oversupply · magazines · Newsagency management · Ugh! · XchangeIT

Evidence Bauer Media sales based replenishment of magazines to newsagents is not based on sales data

Mark Fletcher on October 22, 2014 5:28 AM

Thank you for sending your sales data.

Based on the information you have provided, we have raised an extra order on your behalf.

This order will be delivered to you on the next available delivery day.

Outlined below is a list of what the order will contain.

This is the opening of an email this week from Bauer to a newsagent. The Sales Based Replenishment (SBR) system / experts at Bauer advised he was getting two additional copies of Top Gear. The problem is, he has only sold two copies and has four copies of the initial supply in-store. The sales data sent to Bauer was for the two copies. This is not evidence to support the Bauer claim to supply more. Their email is wrong, it makes this newsagent trust them even less.

It’s not the first time Bauer has said the sales data made them do it to justify sending extra stock. Nor is this newsagency the only one in Australia to receive such an email from Bauer where there is no evidence in the sales data to support the claim.

This action makes Bauer’s systems look broken and their allocations people stupid or deliberately abusing newsagents to serve the company.

My suspicion is that the Bauer SBR system, if it is a system, is broken and raising new allocations without any evidence – causing newsagents to incur more costs over which they have no control and for which they are 100% liable.

This is unfair. It disadvantages our channel. It makes us less competitive against supermarkets.

Looking at Top Gear sales for this newsagency for 2014, I see no evidence in the data for the newsagent to be suppliers more than three copies each month yet the initial Bauer allocation is six copies. Then, weeks into the month, they allocate two more.

No wonder this newsagent does not trust Bauer. The data informs his position on this.

This is another example that makes a mockery of the pressure newsagents are put under by XchangeIT for data accuracy. There is no evidence of magazine distributors being put under similar pressure.

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→ 4 CommentsCategory: Competition · Ethics · magazine distribution · Magazine oversupply · Newsagency challenges · Newsagency management · Ugh! · XchangeIT

The Agatha Christie Book Collection: A good partwork

Mark Fletcher on October 22, 2014 5:19 AM

christie61The Agatha Christie Book Collection continues to work well for us. While volumes are not large, supply is consistent and our customers loyal. Customers receive a text message when the next issue is in. We easily track who has collected and who has not as each customer’s copy has their name and barcode. The labour invested is minimal. This is a somewhat rare example of an efficient and reliable part series. More please.

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Make the most of gifts

Mark Fletcher on October 22, 2014 5:18 AM

magsgwpI encourage newsagents to shop off the gifts with Marie Claire and InStyle to make the most of the gift opportunities. In both these cases the gifts are driving incremental sales. In a shop at the weekend I saw InStyle folded back and there message of the gift was all but lost.

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Terrific gift with purchase for Australian Country Style

Mark Fletcher on October 22, 2014 5:17 AM

cs-gwpThe Crabtree & Evelyn moisturising soap packaged with the latest issue of Australian Country Style is an excellent gift for this title. While it’s packaged so that it blocks the title in the pocket behind we can work with that to be fair to that title. After I took the photo I moved the title out of this pocket and placed it in a stand above the section as the feature title of the section. This respects the gift and the other titles in pockets in the section. What looks like a good idea for a publisher can hurt sales for another publisher. As newsagents we have to navigate situations like this weekly. And publishers wonder why we have little time.

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Magazine publishers who make supermarkets more appealing than newsagents risk the future of our channel

Mark Fletcher on October 21, 2014 5:41 AM

For years there have been differences between how suppliers who supply newsagents and supermarkets with the same products treat these competing retail channels. While newsagents have complained, they have done nothing about it. I think we are approaching a time when we will need to act.

The challenges now are about much more than better gifts with purchase for supermarket shoppers.

The supply model used today disadvantages newsagents as it encumbers our businesses with financial,. labour and space costs that our competitors do not have. But even that is not why I say we are approaching a tipping point.

Price is the issue. More and more I am seeing different pricing in supermarkets for titles we sell in newsagencies.  News Life Media and Bauer Media are the main publishers engaged in this. They must be doing it to drive traffic to supermarkets and away from newsagents for their products. Why else would they make their products so much cheaper in our competitors?

Why price Inside Out $2.00 less in Coles than the newsagency 50 metres away?

Why bundle weekly Bauer titles in supermarkets at a discount to nearby newsagents?

The only reason can be to drive supermarket sales.

Think abut the long-term implications – either newsagencies close or they reduce their reliance on magazines. What that may not hurt many of the titles sold by Bauer and News Life Media, it will hurt them and it will hurt many other publishers.

Today, the Australian newsagency channel is the largest single magazine retail channel in the country. But for how much longer? Those publishers who appear hell-bent on directing shoppers away from us need to consider the bigger picture for all publishers as well as for small business newsagents and the vital and quintessentially Australian role they play in there communities. Thankfully, not all publishers are so inclined to kill our channel.

Publishers: every action you take against us makes magazines less profitable for us and informs our own actions. Every time you facilitate supermarkets presenting your product as better value from them you harm our businesses.  You’ll blame us when we are less interested in your products or quit as you have blamed us in the past, not thinking for a moment about the role you played in us deciding as we have done.

Every benefit you give supermarkets, every time you make them more appealing than newsagents is another decision against the future of the Australian newsagency channel. Shame on you as we have served you well. It is newsagents who have been key to your success and newsagents off of whom you make more money.

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→ 12 CommentsCategory: Competition · Ethics · magazine distribution · Magazine oversupply · magazines · Newsagency challenges · Newsagency management · newsagency of the future · supplier arrogance · Ugh!

Fun with gross body parts

Mark Fletcher on October 21, 2014 5:24 AM

bodypartsThis display unit of miniature slimy body parts is generating a terrific reaction from shoppers as they pore over our Halloween products. We have a heart out of its bag so that people can feel it. When they screw up their faces it’s terrific to see – almost as much fun as when a boy hands the heart to an unsuspecting friend or parent. For a tiny cost, these gross body parts are playing unimportant role in our interactive approach to Halloween 2014. I love it!

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→ No CommentsCategory: Fun · marketing · Newsagency management · newsagency marketing · Newsagency opportunities

International airport duty free retail displays educate on visual merchandising

Mark Fletcher on October 21, 2014 5:21 AM

vmabsoluteI get a kick out of displays I see in international airport duty free stores. They teach plenty about visual merchandising.

This Andy Warhol themed Absolute display is a good example. The detail in connecting the floor mat and the lamp cover, for example, is excellent. The layering of the elements on the display gives it a depth which works very well. The brand is the hero – as should be the case with any retail VM display.

Newsagents could say this type of display is not appropriate in our type of business. I know of newsagents who would disagree, newsagents who enjoy sales success from similarly stunning displays in-store and in their front windows.

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Promoting Bauer Christmas cookbooks

Mark Fletcher on October 21, 2014 5:19 AM

xmasmagsWe have all three current Christmas books from Bauer together as part of our Christmas themed titles placement. While it is unfortunate Bauer has chosen to not use its sales base replenishment facilities for these titles we’re giving them prime positioning together to attract early Christmas food title shoppers. Placing them together is important in my view.

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Retail theatre at the counter – clever visual merchandising

Mark Fletcher on October 20, 2014 6:04 AM

halcountitA team member created this display of Halloween-themed Mickey and Minnie Hallmark Itty Bittys at the counter.

I love  Mickey and Minnie cascading out of a cauldron watched over by a spider, spilling across the front of the counter.

I call this retail theatre because it tells a story and represents movement. It is not your usual static counter display. It makes the products more noticeable and more appealing.

We need to create different displays like this if we want different outcomes at the sales counter. By different I mean better. By outcomes I mean sales.

sales come from grabbing shopper attention, interrupting their line of sight and through thoughts. This display is doing that. People are noticing the Itty Bittys, picking them up and purchasing them.

the products themselves provide a safe and fun way with engaging with halloween. The Disney theme is key here.

Average displays generate for us average results and that is not a win for our businesses. We have to lift our game, if we are to commuter effectively. Displays like this are a small part of what we have to do.

Next time a new display is done in your business, stand back, look at it and ask yourself – is this average or is it a fresh approach that will deliver an above-average outcome?

The days of the average traditional newsagency are over. We have to each play in areas that work for us in our own situation and we have to do this by being creative and playing outside the rules that have been traditional for our types of businesses.

I love this display and am proud to have it in my shop.

I have loaded a high res version of the photo so you can see how the display has been created.

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Our card vandal is back

Mark Fletcher on October 20, 2014 6:00 AM

rippedcardWe found these cards torn in our Spirit Humour stand on Saturday. Our prude shopper who judges what we sell by damaging our stock is back.

What an arrogant yet weak act. Arrogant in that they clearly want a world reflecting only what they approve. Weak in that they don’t have the guts to speak to us.

People are entitled to their views and interests as long as they are legal. What they are not entitled to is to deny others of their views and interests. What a horrible world this prejudiced shopper wants.

We will identify them and when we do let’s see if they stand up for their convictions.

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→ 7 CommentsCategory: confectionary · Ethics · Greeting Cards · Newsagency challenges · Newsagency management · Social responsibility · theft · Ugh!

Leaky magazine

Mark Fletcher on October 20, 2014 5:56 AM

balmoopsI let a staffer at Coles know that the cap was off the balm on the cover of a copy of Elle. These gifts are terrific but when a cover comes or a tube is punctured the damage to stock can be time consuming to address and costly to the business and publisher.

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That’s Life supporting Halloween

Mark Fletcher on October 20, 2014 5:54 AM

tlhalThat’s Life is another magazine supporting Halloween. This is another reason all newsagents should embrace halloween as a season. It’s growing in interest in Australia and those not selling Halloween products are missing out.

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Funny title placement of the day

Mark Fletcher on October 19, 2014 8:54 AM

placementCheck out magazine placement I have seen this morning. I suspect this was done by a shopper having some fun. Made me smile. Adapt your strategy to any location … nice.

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Sunday newsagency marketing tip: immerse yourself in your seasons

Mark Fletcher on October 19, 2014 6:24 AM

spiderPlacing a spider on his polo as shown in the photo immersed Chris at one of my newsagencies into Halloween in a way that is fun for plenty and scary for some.

This is a terrific marketing initiative in that it encourages engagement in-store with a category of products many shoppers may not have come in to purchase. Even if it gets one shopper a day engaged with Halloween products who otherwise may not have it’s a success.

The added benefit is the customers who are taken aback. Their momentary fear is quickly followed y a smile and that, too, is good for business. Were the shop where we don’t take things too seriously.

It’s not new to engage on our uniforms with seasons. I like the subtlety of the spider over the usual dress up.

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Sunday newsagency management report: get it in writing

Mark Fletcher on October 19, 2014 6:21 AM

I should set this post to re-publish every month as every week I get a call from a newsagent with an issue about a supplier that would be resolved if there was a signed contract documenting all obligations.

This week I have had calls about a newsagency software company and a shop fitter. Last week it was a landlord situation for which there was no signed lease. Earlier this month it was about a supplier who promised goods were sale or return but did not back this with a written contract.

If you agree terms with any party on any matter, document it and have the agreeing parties sign it. Anyone refusing to document anything they have agreed to is not actually agreeing anything with you.

It is that simple.

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Promoting Better Homes with newspapers

Mark Fletcher on October 19, 2014 6:18 AM

bhgnewsWe also have Better Homes and Gardens with Newspapers. Stock counts tell us this is working a treat for us. While it’s a bigger pack size and we have space for less stock, that it’s exclusive is the winner for us here.

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Promoting the Christmas tin with Better Homes and Gardens

Mark Fletcher on October 19, 2014 6:17 AM

magsbhsxmas2014We are doing a rare aisle end display to promote the Christmas tin gift which comes with the latest issue of Better Homes and Gardens. In the three days on-sale so far sales have been excellent, ahead of usual for BHG. We’re very happy. A couple of customers who purchased the mag elsewhere and didn’t get the tin have commented. You can click on the image for a larger version if you like.

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Unnecessary increase in supply of Yours

Mark Fletcher on October 19, 2014 6:16 AM

magsyoursoversuppThere is no evidence in our sales data going back three months for Bauer Media increasing supply of Yours magazine by 5%. IIt is increases like this that demonstrate sending data back through XchangeIT is a waste of time. For all their bluster against newsagents and data, XchangeIT should look closer to home for misbehaviour with data.

FFS Bauer why can’t you get your allocations right?!

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→ 8 CommentsCategory: Ethics · magazines · Social responsibility

Newsagency sales up 15% year on year thanks to POS software discount vouchers

Mark Fletcher on October 18, 2014 9:17 AM

Our sales were up 15% year on year in the September quarter. This is an excellent result which I put down to a combination of a terrific in-store offer, excellent staff and our discount voucher loyalty program.

Indeed, discount vouchers are driving basket depth, shopper return and bringing in new traffic thanks to word of mouth. The discount vouchers are getting destination shoppers shopping more of the shop.

Nowhere is the value of discount vouchers more evident that weekly magazines – up 12%. These are retail only sales by the way. Everyday counter cards are up 10% and stationery up 27%. Calendars are up 28% on last year and in the transactional data I can see the vouchers driving this.

The keys to success are clarity of the discount voucher offer, consistency of the pitch, generosity in value and pulling levers in your software to drive higher margin business.

In addition to the 15% increase in revenue there is excellent growth in gross profit.

POS Solutions published yesterday a post about a newsagency pulling out of what they call discount coupons. In their blog post they link to a previous post of theirs where they refer to a report about my business and suggest that the discount vouchers are not delivering the benefits I say. The evidence does not support the claims they make. It is unfortunate that they have published what they have as it distracts from the truth.

Newsagents need to choose the best loyalty solution for their business. This choice requires thorough research and talking with newsagents with experience. This is why I have published my results here over the years, to be transparent.

The Tower newsagency software offers four different types of loyalty facilities of which discount vouchers is one. I am confident that right now discount vouchers is the best practice approach for newsagents. The success is a combination of good software, properly and fully used in a well run newsagency with a good range of product.

Using discount vouchers or discount coupons in a poorly run business or in software that does not have appropriate business levers will not give you the results I am seeing. It would be wrong to assume that all discount voucher / discount coupon facilities are the same.

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