155 magazine digital initiatives in 2006
The Magazine Publishers of America has announced that 155 Magazine Digital Initiatives were announced in 2006. Check out the list by the MPA here.
Powerball $33 million jackpot drives retail excitement
We’re promoting the $33 million Powerball lottery jackpot in key non lottery traffic areas of the shop this week. The size of the prize and that Powerball usually produces fewer to share division 1 has heightened customer interest. So, we’ve created in-store materials of our own to punch the excitement for us and our customers. Here’s what we have done at the front of the shop:
Above our top selling magazines:
At our front-of-shop magazine display:
At our newspaper stand:
And, at our main non lottery sales counter:
We spent $50 on the balloons and $10.00 on colour copies of the posters Tattersalls provided us. This investment will generate an exceptional return, especially from infrequent gamblers – those who only jump in when the prize jackpots like this. The theatre created by the materials will also drive non-lottery sales.
Fairfax SEO strategy manipulates Google results
Do a Google search for our startup free online dating site, 3loves, and this comes up in the results.
If you click on the link it takes you to RSVP. This is very clever Search Engine Optimisation by Fairfax Digital, the owners of RSVP and reflects a manipulation of Google search results. In the bricks and mortar world this could be considered passing off your product as something else to get a prospect interested.
I don’t know why Fairfax would go to so much trouble, we are barely an ant to their gigantic online dating site. Maybe it has something to do with RSVP costing around $30 a month for members to do what they can do at 3loves for free. Whatever the reason, Fairfax ought to stop manipulating Google search results as it’s scams like this which will lead to distrust.
People using Google and other search engines need to be able to trust search results and games like those played by Fairfax dilute that trust. Someone searching for 3loves wants to find entries which refer to 3loves, not entries created solely to siphon this traffic off to a website which has no relationship at all with 3loves.
There are enough scammers in the online dating world already. I wold have thought Fairfax too successful to engage in these games.
3loves is a social media site launched to support our Find It online classifieds business – a online model we are launching with newsagents.
Fairfax drives newspaper readers online
The Age has changed its approach to online over the last few weeks. Whereas in the past some stories would list additional information available at The Age website, now they more actively promote the website. The photo is from the story yesterday about the Academy Awards – readers are encouraged online for more information. In the same story in the Sydney Morning Herald there is no such link promoted. However, their website pitch is included in their masthead on page one.
Fairfax is leading the promotion of online extensions of stories. There are some who would say this move is evidence of their desire to shift people online in the knowledge that newspapers are dead. I don’t share that view at present. It’s smart that they use the online medium to extend the reach of the print product.
Newslink newsagency at Sydney Airport
The Newslink store at Sydney airport is three months old. This new layout is a progression from the more traditional Newslink stores which we have seen in Australian airports for many years. Here’s how the store looked from the front yesterday:
The store has an open entrance but with plenty of product to entice as you enter and leave. I also like the way they promote their range above the entrance.
All their magazines are full cover displayed an they are in popular categories. The layout is a bit of a maze but that’s in part due to limited floor space and plenty of stock as well as the designer’s goal to have you browse the maze more.
For newsagents in a high traffic location considering store design, looking at this shop would be a worthwhile visit.
Newslink is owned by HDS Retail, the company which owns the relay stores I blogged about here a week ago.
Newsagent dies as a result of armed robbery
Chinh Nguyen, the owner of Glenfield newsagency in NSW died this morning as a result of injuries sustained during and armed robbery at his newsagency last week. I never personally met Chinh but people in my company did: Chinh was a breath of fresh air. An example of an enthusiastic and excited breed of Newsagent making a positive impact in his shop and the industry. He will be missed.
Newsagents don’t get killed on the job. Chin’s passing will come as a shock to the channel. It’s a reminder to take care.
Chinh’s brother is taking over the running of the business for the family. In addition to the grief of the loss of Chinh is the challenge of learning the business and protecting the family investment.
The news report can be found at NSW Police.
Ink and toner retail success
We’re having great success with the retail ink and toner strategy from newsXpress. The flyers we get (see below) every two months drive traffic to the shop. They’re more successful than the flyers we had before we joined newsXpress. This ink and toner offer is separate to our Inkfast online business – different range, different price points and different customers.
The newsXpress strategy is driving new customers to our retail outlet based, in part, around this flyer:
The keys for success with ink and toner for us have been getting the right range of product in store for a competitive price, professional marketing and access to good product knowledge. By packaging the buying around top brand name sellers and reflecting them in the marketing material we have been able to significantly lift the return on investment.
While we’re pushing our 20,000 personalised flyers out with the local paper, I know of others doing just as well with direct letterbox drops. I’m looking forward to the next flyer and driving this category within my business. Ink and toner customers are efficient in that more than half the time they buy other items.
Disclosure: I am a shareholder in newsXpress Pty Ltd.
Current newspaper model not working well
So says Steven Rattner, managing principal of Quadrangle Group in this interview with the Financial Times. Rattner’s insight is worth reading. The interview contains this quote from Rattner:
I personally believe that fundamentally the problem is a changing appetite for news on the part of consumers, for the worse. And its something that I feel very sad about, because the fact that people are more interested in whether Britney Spears shaves her head and goes into alcohol rehab, or what is happening at Guantanamo Bay, really is troubling to me.
Of course, Rattner is speaking from a US perspective. My view is we are better served by newspapers here than in the US. While we do have a strong tabloid press, we also have a robust more serious press – just look at the on going campaign by The Age about the plight of David Hicks.
Another blow to newspaper classifieds
For decades they were called the river of gold. Not any more thanks to more advertisers migrating classified ad spend online. The Myhome property site launched late last week by PBL will put newspapers under further pressure, Saturday newspapers especially. Myhome is a good looking site with some nice features. But it’s not that different to the Fairfax Domain and News realestate.com.au sites. What Myhome achieves is a seat at the online property classified ad table. It also dilutes interest in the print classifieds and this is the challenge for newsagents.
Newsagents have no national strategy for accessing online revenue. The best opportunity so far is the Find It website I launched last year and which is still in beta (free) release. Unfortunately, newsagents seem uninterested in making Find It a success and thereby tapping into online revenue. Newsagents can still sign up here. It’s free.
Finding good staff
It never rains but it pours. University is back and that means the roster becomes a juggling act. Add to this three key team members taking up full time study and another deciding that nursing is the career for her. What looked a month ago like a manageable roster is now very empty. So, we’ve been interviewing to fill two full time and two casual positions.
The hiring process is tough because it’s often not the first choice for candidates and they take a job to get money waiting for what they really want comes along. I wouldn’t mind if they were up front about it, as one of our team has been. Instead we probe and dig in interviews to try and sort out if they want to make a career in a newsagency.
I’ve waded through 72 resumes, followed up fifteen with our position description and selected seven candidates I’d like to interview. In the week we have been looking four are no longer available.
This is going to be harder than I’d like.
Co-location of magazines works
We’re leveraging increased lottery traffic into solid magazine sales using the unit shown in the photo below in front of one of our lottery counters. This photo from Saturday shows the titles we are pushing. Today it changed again to focus on weekly titles out today.
This co-location approach, seeing weeklies in two locations on the first two on sale days – drives magazine sales – especially when we have bonus traffic thanks to the $33 million Powerball prize up for grabs.
My pitch to magazine publishers and distributors is that you don’t see other retailers – supermarkets, petrol, convenience – take initiative like this. We understand the opportunity of the bonus traffic and are working hard to maximise this.
Roll wrap sells well too
Further to my post on the weekend about sales of flat wrapping paper, I should have also noted that sales of roll wrap are also strong. This display wall works well for us.
Wrapping paper sales down, gift bag sales up
Customers are buying less folded wrapping paper and more bags for packaging gifts. When I first heard of this trend from a supplier a year ago I was surprised because I was not seeing it in sales data. Then, I realised that all the sales data I see comes from newsagencies where until very recently, bags were rarely ranged.
Sales data from a small sample of stores for a year and a half to December 2006 shows, at best, no growth in folded wrapping paper sales and, most commonly, declining sales. With retail real estate expensive and increasing by between 5% and 7% a year, this decline is most unhelpful to newsagent. Suppliers, too, are not served well by the decline.
We have three metres of wrapping paper in my newsagency. Without reducing that and in response to feedback from our supplier and our sales data, late last year we added three metres of bags.
While I would have preferred to locate the bags next to the wrap to demonstrate a wide packaging choice, locating them at the front of our card-shop-within-a-shop is working well. This is in part due to it being close to our seasonal displays.
The next step will be to consider a reduction in the folded wrapping paper space allocation.
Newsagents need to look very carefully at their sales data and discuss this with their wrap suppliers. There is no point in ranging product which is not delivering an economically viable return.
Supermarkets and lottery products
Based on what I see happening at Tesco in the UK, it is easy to see why our Coles and Woolworths would like lottery products at their checkouts. Check out this pitch from Tesco, they make it sound like you’re doing the community a favor buying lottery product with them. Their Fast Pay pitch certainly addresses the long line issue. Unless lottery agents get engaged in thins issue, supermarkets will get lottery products and we will be the losers.
Inkfast ink and toner cartridge business going strong
It’s been a while since I have blogged about Inkfast, our online ink and toner business. Inkfast is two years old. We run it out the back of our newsagency. We advertised heavily online through Google, Yahoo and Yellow Pages online. All those campaigns are now off and have been since third quarter last year. Sales are strong with around 70% coming from existing customers and the rest from new business won through word of mouth. Most customers are corporate and most items purchased and not items we would usually carry in our newsagency. Thanks to our turning off of the expensive advertising spend, profitability is good, even with tight margins due to a very competitive marketplace.
I’d go out on a limb and claim that Inkfast is the most successful website created out of a newsagency. Traffic numbers are high and sales strong. It is bringing new customers to us, even though we never see them, every day. We transact more business in a week than we do in the stationery department of our shop in a month. This is in part due to our demographic. Being online, Inkfast is not bound by the demographic feeding our retail location.
The Inkfast experience is unlocking for us supplier rebates as well as an understanding about ink and toner which is helping us create a more successful offering in store for our retail customers.
What we are most proud of is that we created this ourselves from scratch and we rely on no one major supplier. The feeling of freedom is wonderful.
Beyond Intralot, the Vic. Government is set to hit newsagents again
I’ve been told that the Victorian Government transport ticket tender (see my post of 11/9/06) will see retailer commission cut to .25%. That is, a quarter of one percent. While I don’t know if what I have been told is true, I do know that anything less than 4% offers an uneconomic return on labour. This is another question Victorian newsagents would do well to put to their local member of state parliament.
Liquorice regularity
This pack of Darrell Lea liquorice is one of the most efficient products we sell. Rarely is it sold alone. So, it is either a great add on or a great destination product for customers who buy other items while in store. Either way, it’s one of the most efficient products we sell.
I like liquorice because it’s a habit based product. It is. And in my experience liquorice customers are brand loyal, meaning they are prepared to visit our store specifically for liquorice rather than purchase another brand while shopping elsewhere.
It’s habit based products like this which are crucial through this transition time as fewer newspapers are sold in newsagencies. We need every destination product we can get. While I’d prefer killer destination products like newspapers as they were in the 1960s and 1970s, I am happy with the small steps type growth liquorice is providing.
I like Darrell Lea because they understand the importance of not being in too many locations. This loyalty to retailers is returned with good space allocation and strong promotions.
Newspaper masthead trash
The Age today has another post-it type ad stuck above the masthead. It’s covering the promotion of a free DVD they are giving with the paper today which is odd.
The publisher needs to understand that these post-it notes frustrate customers. Just look at how many are removed at the counter or outside the shop and thrown on the ground.
Also, as a retail only newsagent I don’t want to help the publisher convert retail sales from my shop to home delivery sales.
Magazine relay grows health title sales
Our decision to break with magazine layout guidelines and consolidate health magazines from a couple of locations into this new space next to food is working well. Browsing of the category is up as are sales. This is one of an anticipated eight to ten category location changes we will undertake this year.
Home and furnishing magazines have lost 15% of their space allocation as a result – their sales support such a reduction.
We know that half the battle with magazines is the browsing experience. Our approach is to focus on faster moving categories, provide an easy to navigate layout and support the category with logical adjacencies.
I know I complain here about the magazine supply model, particularly the extraordinary oversupply of fringe titles. For all that doom and gloom, magazines do provide fulfilling experiences such as with health.
Powerball sales driver
The Powerball jackpot last night to $33 million is fantastic. Many newsagencies will see a 10% to 20% increase in traffic and lottery sales. Smart newsagents will have up-sell opportunities at their sales counter. We are using the opportunity to drive magazine sales and stationery with some very specific offerings. Our Magazine Club Card is a key offering. We’re also dressing the store to create some excitement. Hey, it’s $33 million so the dream is very exciting!
The jackpot has come at an excellent time. School is back, work is back and Easter is a way off.
Supplier thuggery from NDD
I sent this letter to magazine distributor NDD last week in an effort to gain agreement on magazine supply terms. They have responded today in a most bizarre way.
NDD says that since my trading name has changed I need to compete a new credit application. While the trading name has changed, the economic entity has not. My legal and accounting advice is that there is no justification for demanding a new credit application and that the request may be for other reasons.
The NDD letter says they welcome the opportunity to formalise their trading terms but will discuss “business rules”, and by this I am guessing the content of my letter, only after I have correctly completed the Application for Credit Account and Guarantee.
The NDD letter also says that all discussions with them have to be conducted in the strictest confidence. This is unfortunate yet not uncommon in the newsagency channel. Keeping deals secret means that the broader newsagency community is less able to leverage its strength. They want me to agree in writing to confidentiality. They want me to stop blogging about their gross over supply. that means I could not talk about the Bargain Shopper mess when they sent too many, sent more, sent more and sent more again – all in a grab for my cash.
I am disappointed that NDD is playing a game on this by demanding accounts paperwork before discussing the far more important issue of the failure of their supply model to transact with my newsagency and other newsagents on an equitable basis.
Print is Dead?
A scary photo (for anyone involved in print media) of slide from a presentation covered at the Print is Dead blog.
I know many think that the claim print is dead is unhelpful and will be proven to be untrue. I am inclined to agree. However, print won’t last as we currently know it. Look at music and the upheaval of the last ten years. Stores like JB HiFi have grown because they and reengineered their business model.
The Print is dead blog is a good read and forces us to get our collective heads out of the sand.
The Government on Australia Post – it’s not our fault
Here is the response from Helen Coonan, the Minister responsible for Australia Post responding to my letter of November 16, 2006. This is the third crack at a response from the Minister’s office.
The letter does not respond to my queries and continues the Government’s hide and seek game with the Act under which Australia Post operates. See for yourself – below is, part of what I wrote to the Minister three months ago:
For decades, Australia Post stuck to post products and services. Now, with a considerably broader retail offering, the benefits of its exclusive brand and post products provide an unfair advantage.
Australia Post offers products which I consider are not permitted under the Australian Postal Corporation Act 1989. I urge you to look at the enclosed Christmas stars at Australia Post catalogue. Over the twelve pages, I counted one hundred and fourteen items which I consider to fall outside of what is permitted under the Act.
[Here I listed items such as specific books, stationery packs, and other traditional newsagency lines now sold by Australia Post.]
These products, and others in the catalogue, are not incidental to nor do they relate to the supply of postal services. They are products outside what the Act permits. Of course, this comes down to interpretation. But what do Cookbooks, Gardening Australia magazine books, Chess Sets and Binoculars have to do with what is permitted under the Act?
For decades Australia Post was profitable without selling calendars, greeting cards and the broad range of stationery it offers today yet now it seems that Australia Post and the Government consider such product categories essential to its commercial viability. I would have thought that the postal product offering ought to be viable as a stand alone business – it is a monopoly after all.
Australia Post is using its powerful brand and exclusive postal products to draw traffic into Government owned stores and away from independent small businesses like mine. Is this an outcome that the Government wants? Is the Government happy to ignore the pleas of small business so that its own national retail network profits?
For decades, newsagents were profitable while they had a monopoly on the distribution of newspapers and magazines. In 1999 the Government facilitated the deregulation of the distribution of newspapers and magazines. As we have lost the benefits of exclusive traffic as a result of this deregulation, Australia Post has increased its range of newsagent type lines and thereby very successfully leveraged its continued exclusivity to more effectively compete with us.
The Government is profiting at the expense of my newsagency and other businesses like mine which compete directly with a Government owned Australia Post outlet, yet the Government refuses to even acknowledge that I may possibly be right. In response to my letters documenting breaches of the Act all I receive is vague government-speak.
In my September letter I said that “Australia Post is our droughtâ€. A review of their Christmas catalogue illustrates how much this is the case. For many years now it has been draining newsagencies of revenue. Many are close to death as a result.
This is a very serious problem, causing families much heartache. Please take notice. Please understand that Australia Post is stealing our customers by straying from what is permitted under the Act and that its behavior, under your watch, makes a mockery of your claimed support for small business.
I urge the Government to amend the Australian Postal Corporation Act 1989 to limit what Australia Post can sell through its own retail outlets and to names postal items such as envelopes and Post branded packaging materials. Such would be the action of a Government committed to small business.
For the record I did not write from newsXpress. I wrote from Springfield Consulting, the company I own which trades as newsXpress Forest Hill.