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

Month: March 2007

Servo savers chasing newsagents

Servo Savers seem to be chasing newsagents to join their loyalty scheme again. When they approached me in 2005 I was turned off by the aggressive tactics used by the person representing their company. They said all manner of bad karma would fall on my business by saying no since they were about to such with some big retailers in my centre and I would be locked out.
Two newsagent colleagues have told me of approaches to them in the past week – both along similar lines. One said the pitch was quite threatening.

It makes no sense to reward customer loyalty in my business by sending those loyal customers elsewhere for their ‘reward’ – especially when that other business sells products I sell. I prefer to reward loyalty in my business with more genuine rewards in my business. Besides, every man and his dog offers fuel discounts.

In checking out Servo Savers this morning I found this story from New Zealand about disgruntled Servo Savers customers. I also found this ad offering $150,000 for a sales person for the company. This demonstrates why participating is expensive for small business – they pay a lot to their member acquisition team.

If a newsagent asks me about Servo Savers I suggest they develop their own in house loyalty scheme which drives customers back into their business. The magazine club card I run in my newsagency is a good example of this.

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Customer loyalty

$21 million superdraw traffic surge

The $21 million lottery superdraw (megadraw in some states) looked like being soft but then traffic increased Wednesday. Yesterday it was up further and today has been excellent. It still baffles me that non lottery newsagent suppliers do not provide tie-in product to push at the times of these traffic surges. We have our own promotions but would prefer something more national.

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Lotteries

Green green green

Today’s Sydney Morning Herald is printed on green paper. I’m surprised they did not green up the website as well. Time magazine on Monday publishes a special Earth day issue. Sydney tomorrow night turns off the lights for an hour – Earth Hour. Newsagents in NSW especially could leverage all this activity in around the various titles and products which relate to global warming and climate change and demonstrate relevance on such an important topic.

I’m in Canberra today and was disappointed to see the green Sydney Morning Herald being treated at the airport Newslink store no different to usual.

Newsagencies are small and, mostly, local businesses. We need to demonstrate our local credentials by connecting with local issues. Okay, airport stores are not local but on this issue I expected to see some effort.

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Uncategorized

Chinese language investment magazine

informed.JPGInformed Investors magazine is the kind of title newsagents need to cultivate. It’s locally published and focused on a specific and loyal demographic – Asian investors. It’s is the only comprehensive Australian wealth and financial magazine published in the Chinese language.

I have been talking by email with Mike Wang, the publisher of Informed Investors. He contacted me through this blog, asking how to achieve better placement in newsagencies. Informed Investors needs to be placed next to Chinese newspapers. Newsagents who sell Chinese newspapers ought to talk to Wrapaway in NSW or Informed Investor direct in other states about getting the title. We currently offer over thirty foreign language titles in my newsagency and we’re a suburban business thirty minutes out of Melbourne.

What I like about Informed Investor is that it is niche focused and that it compliments a category which does well for us and many newsagencies.

It’s interesting to see how Mike and his team are promoting this title compared to, say, BRW. Both are in the same space yet go about their business quite differently. Informed Investor seems more closely connected with its readers, more practical if you will. That is not to be critical of BRW – the difference is one of style I guess.

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magazines

Will the widget trend hurt crossword magazines?

nyt-cross.JPGThe folks at the New York Times announced yesterday a widget providing access from your Google homepage to Times’ classic crosswords. They have an archive of over 1,000 of these and will release new content each Monday.

It’s a great idea and will extend the reach of the Times’ brand. There are hundreds of other crossword widgets already available but with the Times joining the game more mainstream newspaper brands will undoubtedly make the move.

I wonder if there will be an impact on crossword sales from this. I doubt we will notice it this year but it must have an impact at some point. If people can get satisfaction from an online crossword, why pay for a magazine or book? Especially if that satisfaction came through branded and trusted crosswords available on mobile devices which provide the flexibility of a magazine.

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Uncategorized

Traffic jam for caravans and camping

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Driving toward Caulfield Racecourse today I noticed a long line of cars, snaking back well over a kilometre. The car parks were almost full and the traffic was stopped. It turns out that they were headed to the racecourse for the Caravan Camping and Touring Supershow. I had no idea that caravans and camping were so popular. We sell caravan and camping magazines and sales are okay but not as good as the traffic jam suggested. It’s got me wondering what the disconnect is here because I want the people in the traffic jam coming to my shop to buy their magazines.

The traffic jam shows there is a market and I am sure these people want to connect with their interests outside of the show season. I can help with that through the magazines I have. Hmmm…

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magazines

Explode magazine could have done well online

Meredith Corp in the US is closing the print edition of Child magazine and folding this into an online parenting-and-family portal that will also include content from American Baby, Family Circle and Parents. MediaPost has the rest of the story.

Maybe that’s what Pacific Magazines ought to have done with Explode – the teen boys magazine they closed after a few months publication. My blog entry from November 2005 remains one of the a frequently entry out of Google searches, meaning that plenty of people are looking for Explode – for a short lived brand it sure is popular. Check out the comments – I’ve received three times this privately from people enquiring about the title.

Following the example of Meredith and others of recent times, magazines no longer close, they go online and, most likely, find a more profitable existence.

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magazines

Warren Buffet gloomy on newspapers

Not all of our businesses are destined to increase profits. When an industry’s underlying economics are crumbling, talented management may slow the rate of decline. Eventually, though, eroding fundamentals will overwhelm managerial brilliance. (As a wise friend told me long ago, “If you want to get a reputation as a good businessman, be sure to get into a good business.”) And fundamentals are definitely eroding in the newspaper industry, a trend that has caused the profits of our Buffalo News to decline. The skid will almost certainly continue.

These are the words of Warren Buffet in his letter to shareholders published earlier this month and reviewing 2006. If you want to read Buffet’s comments on the newspaper business (2 pages out of the 25 in the letter), the Australian Investment News is a better source.

Buffet is an extraordinarily successful business person. It would be foolhardy to dismiss his views on newspapers. Yet that is what some publishers seem to do in their representations to newsagents – they still want the best retail position and ask for a hefty capital investment in fixtures and do this while cutting margin and pushing more costs onto newsagents – they say that newspapers have a bright future.

Recent sales data for newspapers in Australia is okay – flat and even small growth. No US like downturn. My view is that we are around two years behind the US and that a downturn is inevitable. The publishers demonstrate they believe this by investing so aggressively in online business models and cutting costs in the print operation.

While Buffet is retaining his modest investment in newspapers, newsagents – with a higher proportion of their capital invested in the category – need to consider their position more carefully, just as publishers have been doing.

Newspapers are important to retail newsagencies – but not as much as previously. We need to carefully consider capital and real-estate investment in the context of shrinking returns and more retail outlets in the space. For example: should they have the best real-estate? Should they be given expensive fittings? While the answer is probably yes, we need to ensure that we leverage newspaper traffic better and to do this we need to ignore some rules publishers have set for us.

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Newsagency challenges

Retailing magazines

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I’m in Sydney again today and took another look at the new Watermark store. Their magazine fixturing is the same as I saw at the Relay at Adelaide airport except that this unit is supported by better lighting. This full-face display makes for easier browsing but restricts the number of titles you can display and would therefore not be helpful for newsagents who see their magazine range as a point of difference. The ideal is somewhere between what Watermark has and the traditional nine to twelve tier unit newsagents have.

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magazines

The failure of magazines in convenience stores

I was in Perth yesterday and as is my wont I visited a bunch of convenience stores to see how they are managing magazines. I saw empty pockets for one or more weeklies which came out on Monday. Woman’s Day, New Idea and even TV Week.

With direct accounts, no one is actively managing the magazine category. One store manager, when I asked why he had empty pockets, angrily responded with “they don’t pay me enough”. Another store manager said he would prefer to deal with the newsagent because he could get more when he needed it.

While this is only anecdotal evidence, I’d suggest there is an opportunity for newsagents to mount a structured research campaign with a view to making a case to win back management of convenience store accounts. I have no doubt that this would result in fewer empty pockets, happier customers and broader support for the magazine category. We (newsagents and publishers) have to decide whether we are seriouys about sub agents.

The empty pockets I saw today are a disgrace.

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magazines

Time Inc. puts local titles in play

Time Inc. has announced the appointment of Goldman Sachs JBWere to consider ‘strategic alternatives’ for their magazine businesses in the South Pacific region. The announcement says it may include the sale or licensing of certain titles. I reckon we’re going to see plenty more rationalisation moves like this.

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magazines

Reinventing the News Business

Scott Karp has an excellent post, Reinventing The News Business Requires A Little Imagination, in which he discusses the idea of people paying for newspaper classifieds as a means of supporting local journalism.

Karp’s article is an important contribution to the debate about the future of newspapers and even journalism as we know it. Even if it does not resonate with you today, print it for future reference.

We’re around two years behind the US on this issue of the future of newspapers – insulated in part by strong home delivery penetration. The US situation will hit here and when it does we will be ‘surprised’.

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Newspapers

Why would I pay for a Playstation 3 magazine?

p3zine.JPGWhy would I purchase a magazine if I can access more up to date content in a digital magazine (ezine) for free? Playstation 3 fans now have P3Zine. XBox fans have had 360zine for a while. Publisher of both, GamerZines, has a range of titles which gamers tell me are better than the over the counter product – because they are free.

I have blogged here before that retail sales of game and computer related titles are down in Australia. No wonder when good content is available free and through a medium of more interest to the target audience.

It’s not just the technology area which is affected. Take look at Monkey Magazine. It’s a UK title competing with several weeklies – for an Australian context, think Zoo. Monkey, being free and an excellent product, is bound to succeed.

Ziff Davis last week reported 144% growth in digital business earnings for Q4 2006 and 70% earnings growth overall for A4 2006. Earnings overall rose 70 percent. Source: Paid Content. No wonder Ziff David will focus more on their digital business and less elsewhere.

The International Herald Tribune published an article exploring the impact of the Internet on magazines last week. Publishers seem to acknowledge that the impact will be significant even if it is not yet in their patch.

The question I started with is key – why would a teenage boy purchase a Playstation 3 magazine when he can get what he wants from a free online product, which he can even access through his Playstation?

This is why newsagents need to consider carefully future capital investment. There is no point to the traditional newsagency shopfit in these changing times.

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Media disruption

Bumper edition uncertainty

Easter is ten days away and still no word from Fairfax about bumper editions for their newspapers. They usually do them but unfortunately they leave the advice until the last minute and rarely let the software companies know. So, to the calls we’re getting daily we say we don’t know. We have asked Fairfax but so far have not heard back.

This is an important issue because it can alter how newsagents process home delivery and sub agent accounts and manage distribution. The greater the heads-up the better the newsagent is able to manage the situation.

So, here we have newsagents wanting to better serve the needs of their supplier and lack f communication denies them that opportunity.

We, at my software company, need a heads-up so we can create a bumper edition advice sheet specific to dates etc.

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Newspapers

Long queues and indifferent service

Paul Wallbank at his Cranky Tech blog writes about why he shops less frequently at newsagencies these days – indifferent service and long queues.

Our only point of difference is customer service. No matter how tired or how little we make from a transaction the experience needs to be exceptional. If it’s not, the customer has countless other places they can purchase the newspaper, lottery ticket, greeting card or box of staples. What’s worse is that the poor service in one newsagency drags others down.

Rather than criticise a colleague for poor service or a crappy shop, newsagents want suppliers to treat these bad operators as if they are the best of the best. Many still live in the world of authorisation where you had a territory which you ‘owned’. Good newsagents need to cast poor newsagents adrift and realise that there is no protection for poor service.

Wallbank rightly notes that newsagents need to stand up to those who cut into our margin. I’d add that we also need to stand up to weak newsagents and demand that they earn the right to be called a newsagent.

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Newsagency challenges

Essays about the future of newspapers

Beth Lawton has posted a list of essays on ‘how to save newspapers’ and ‘why print isn’t dying’ at the Digital Edge (Newspaper Association of America). The list is well worth reading as it provides balance and perspective to the queston over the future of the newspaper. Mark Glaser’s essay at MediaShift and Robert’s Kuttner’s essay at the Columbia Journalism Review both make valuable contributions to the topic and crystallise the discussion – journalism has a future even if paid for print product is challenged.

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Newspapers

Sophie Randall – a new retail concept for newsagents

I talk a lot here about the need for newsagents to take ownership of their future. For more than a year I have been working on a new retail concept to complement my newsagency investment, a concept which affords me more control. Last Friday, we opened Sophie Randall Cards and Gifts at Forest Hill Chase in Victoria.

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Even though I own this first store, the Sophie Randall concept has been developed by the same people behind newsXpress. We have created it to provide newsagents with a complimentary retail strategy – enabling a second store in a centre without creating just another newsagency.

Startups are challenging and Sophie Randall is no exception. It has been an intensive year negotiating with the landlord, developing the unique design, choosing product and building a concept which can be easily replicated. Most important has been the work developing who Sophie Randall is and what she stands for.

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We opened Friday afternoon and trading for the last three days has been most promising – even though we have plenty of work to do before we are satisfied. It has been a wonderful experience creating a retail concept from scratch and without supplier rules – challenging too because of a lack of supplier rules. This is why we will take some time to finesse the offering before we have a noisy opening celebration. We have not promoted the store whatsoever at this point.

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Landlords have been watching our model develop and we already have three offers from centres keen to get access this new concept. We’ve told them that we need time to settle this first store in before we contemplate our next moves. Our preference is to work with newsagents who are keen to develop their own retail portfolio.

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Many of our products are unique. We have sought to provide our customers with a broad selection covering all key gift and card giving occasions. Our range includes Italian master craftsman boxes, Italian glass, American stationery sets, monogrammed paperweights, journals, candles, photo frames and soap which look like cupcakes.

We’re creating a website which will tell more about the Sophie Randall story. It should be live next week sometime.

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Greeting Cards

Almost free newspapers

I feel for the newsagents handling delivery of school subscription promotional copies. The school gets papers for 40 cents each. The newsagent is told to deliver the papers, bill the school and manage the account for 12.5% of the cover price. While the offer is good – it’s designed to build relevance with students – newsagents are forced to be stakeholders in the publisher by taking a 50% cut in commission. For some in regional areas it will be loss making.

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Newsagency challenges

Construction disruption

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This is the scene behind and next to my newsagency. The in tact wall is the rear wall of my shop. K-Mart closed a month ago and immediately upon its closing construction commenced. They have been drilling, banging and digging for a month. While it is supposed to end by 9am, the work usually goes until the afternoon. The noise is unbearable for some customers – they walk out saying they can’t bear it. Dust is also a problem.

Last week is the heavy duty nature of the work was enough to knock product off the shelves.

After Easter we lose 33% of our stationery space as the builders creep into our space so they can replace 35 year old steel columns with more modern and capable concrete columns.

We’re not the only shop in the centre affected nor are we the only newsagency in the country affected by such construction.

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Retail tenancy

Easter, chocolate and seasons

The Easter retail season is truly under way. Card sales are strong as well as the sale of eggs. We have the Darrell Lea range and it helps us present a bold message on what we call our ‘dance floor’ our main promotional area. We’re running the promotion in store rather than an outpost because of the hike in outpost costs – we could have outposted in the mall right in front of our shop but the direct sunlight would not be good for the chocolate.

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We’ve had this display out for two weeks. While sales have been okay – they usually are early on with Easter – it provides a bold difference to the traditional newsagency – something we are always keen to achieve. Card sales have been strong, justifying their early placement.

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Greeting Cards
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