It has been two months since The Age has a post-it type ad stuck across the newspaper masthead. Today’s ad, for the Royal Melbourne Hospital Home Lottery, is like all the others – peel it off as they ask and you tear the front page of the newspaper. It is disappointing to see a respected brand treated in this way.
With more newsagencies operating as retail-only businesses, newspaper publishers need to review how they handle distribution of giveaways designed to drive sales. Some distribution newsagents refuse to provide retail-only newsagents with suffiicient stock while others provide plenty.
By sufficient stock, I mean enough of the gifts for their own newspapers as well as for supermarket customers who will visit the newsagency and ask for the giveaway.
I have seen a situation where the distribution newsagent operates in competition to the retail-only newsagent and restricts supply of the gifts in a way which stops the retail-only newsagent providing the level of customer service the newspaper publisher would want to see. Such restriction defeats the purpose of the gifts.
We are promoting Burke’s Backyard to shoppers leaving our busiest maagzine aisle this week. While not the prettiest display from a visual merchandising perspective, the display will work well as it is placed next to the waterfall display of the Burke’s Backyard magazine. We will leave this display up for at least a week – longer if sales and supplies warrant.
We are promoting ACP Magazines’ 30 DAYS OF FASHION at the front of our newsagency this week. This is more a billboard positioning for than a display to sell off – although we are hoping to raise sales for Grazia from its positioning. We are a bit soft on this promotion because it is really about engaging with opportunities outside newsagencies.
I have been talking to some magazine publishers recently about different sales models, in pursuit of more economic terms for newsagents than the current sale or return system controlled by Australia’s three magazine distributors.
The contact usually comes in the form of a question: which magazine distributor is recommended by newsagents?
This question is more complex than it sounds and is not one I am comfortable answering without knowing more about what the publisher wants to achieve by getting their magazine in to newsagencies. Some publishers want to be in front of browsers in newsagencies. Others want sales to drive subscription uptake. Others want real sales and to develop a long-term mutually beneficial relationship with newsagents.
It is this third category of publisher I am most interested in as they are more likely to invest in the newsagency channel and reward our investment in their titles.
It is clear that there are some independent publishers looking for an alternative which provides them with more direct to newsagent contact. They are usually open to a direct supply relationship on a sale or return basis for a better than usual margin a firm sale arrangement for an even better margin.
That some independent publishers are looking for alternatives which better suit their business model is good for newsagents. Our goals and the goals of publishers ought to be more closely aligned than the goals of the magazine distributors. This is not a criticism, just an acknowledgement of the services they are paid to provide.
Reducing the supply chain will cut costs and leave more money on the table for newsagents and publishers.
The question is whether an independent publisher is willing to break the system and try a evolve a direct to newsagent model. I am certain there are newsagents who would be willing to try this.
One of our stores has been hit by a co-ordinated team stealing items of value. Our camera system caught the evidence and while we have reported this, we have also introduced two new in-store screens to show that we are filming. One new screen is above the door –showing that we film people as they enter and leave. The second screen is above the counter as we know that the professionals look at the counter.
Theft prevention experts say that the risk of capture is key to reducing theft activity. Hence our investment in two screens in high profile locations.
Check out Tabloid, a site you can use to create your own magazine from a range of feeds covering several areas of interest. The ‘magazine’ is emailed to you.
Our Father’s Day Book Sale is going very well with strong sales every day since we put the new stock out. This is our third year of regular book sales here and we are known for these – thanks to good word of mouth. Customers often ask when our next sale is.
Our approach is simple – books out and arranged by subject on trestle tables inside our shop. They are clearly priced with bright discount price stickers. Even though the books are discounted, our margin is very healthy – significantly better then magazines.
I’d note that we did try an outpost for our book sales but found the return better withut the rent and labout cost of an outpost for us.
We know from our book supplier friends that right now is one of three good Book Sale times of the year. While we call this a Father’s Day sale, customers are buying for a range of occasions including early Christmas gifts. We’re happy to take any business but to also use the sale collateral to strengthen our Father’s Day pitch.
From a sales efficiency perspective, books work well with cards and wrap. Postitioning them on the dance floor, near the counter, also helps them work as an impulse purchase when a customer has visited to buy something else.
A few months ago I wrote about our placement of green related magazines between garden and home and living titles. This small segment is working well for us in part because of the use of hero products on either side to draw attention to the green titles and in part because it is near the exit of the aisle which attracts most of our customers. It look us a while to find this place and make it work for us.
We are looking for titles we can range to expand our offer because we know from reports overseas that this is a growing segment.
Once we have a few more magazines in this segment, we will run displays at the weekend near newspapers as I suspect this is when we are more likely to achieve browser based sales.
BNET reports that in death Michael Jackson will be worth between US$55 million nad US$67 million to the magazine industry. Based on Michael Jackson related magazine sales and pre-orders for the official Jackson calendar I’d suggest that it is too early to preduct the number. With each turn in the story a new opportunity opens plus I expect there is a variety of retrospctive angles yet to be covered.
One of our team members at newsXpress Forest Hill created this magazine display around coverage of the Twilight film and cleverly brought together several magazine titles. This is on display at the front of our shop – in addition to the display we have for Dolly at the counter. We are seeing customers interested in Twilight picking up additional titles to fuel this interest.
The current magazine coverage of the books and movie is an excellent opportunity for newsagents as other magazine retailers would not make this cross-title connection.
My only frustration is that the display combining titles from two publishers would not be publicly acknowledged and embraced by publishers as good strategy. They tend to like only their own titles in a display. This display in the photo is very healthy for the whole category as well as for newsagents as magazine specialists.
I was interested to read that Blockbuster branded DBVD kiosks are entering supermarkets in the New England region of the US. Called Blockbuster Express, the kiosk is an NCR self serve vending unit. Each kiosk houses more than 800 DVDs. They plan to have 10,000 of these kiosks installed by mid 2010. The retailer gets a share of the US$1.00 a night rental fee. What is interesting is that you can rent from one location and return at another.
Photo creditL Endgadget.
These magic trick packs were on the Gibson stand at the GNS market fair in Melbourne a few weeks ago. The price was 15% off their usual wholesale price. They were not popular with Market fair attendees. We bought them for our newsagencies as we felt they would be a good impulse product. We have had the stock out for a couple of weeks and they are selling well. They are being bought as birthday gifts for boys as well as for early Christmas stocking fillers.
While they may not be the most attractive product or generate hundreds of dollars of profit, we will sell through all the stock quickly – pickling up sales we would otherwise not have achieved.
We need to look at trade shows like the Market Fair for even the smallest opportunity to extend each shopping basket. That means magic tricks today and who knows what tomorrow.
It was good to read yesterday of the change in approach by the federal government to the introduction of the Modern Award. By seeking to take the full five year implementation period, the government has slowed the introduction of higher costs for many retailers including newsagents.
The cost of labour is a challenge for newsagents because of the proportion of what we sell which is fixed margin business. The challenge is compounded by falling margins is some areas – mobile phone recharge is one recent example of this. The other compounding factor is falling margin in real terms for newspapers and other products where retail price changes are rare – where the price of the product does not adequately reflect a real cost of the item.
Smart newsagents are expanding their range to rely less on products over which they have inadequate control – such as gifts, stationery and in-store services.
There are two new high impact issues with the new XchangeIT link:
These problems are being experienced by newsagents regardless of the newagency software they run.
The incident team from my software company, Tower Systems, has been working directly with Network Services to understand the problem and develop a resolution. We were fortunate to be able to discuss this with senior Network Services representatives face to face yesterday at the Connections conference in Cairns. The discussions have continued today by phone.
The fix for both problems will come from the supplier and XchangeIT side and not the software companies. I mention this because of the huge spike in support call traffic from newsagents seeking an answer to the problems.
No one wants these problems and all on the supplier side I have spoken with certainly understand the impact on newsagents.
I don’t see these two problems as damaging XchangeIT in the long term. They are part of settling in new software and back office processes.
UPDATE (5:28PM) We have just received this communication:
Given the number of issues we experienced this week with missing DD2 files, Network Services has opted to resend files as a back up to XChangeIT Link members only. This will result in many agents getting duplicate files, which they will need to be aware of. XChangeIT will send out a headline informing agents that we are sending out the DD2 files again and advising agents to not download them if already received.
Sales of RUSSH and frankie have been growing steadily over time in my newsagencies. They are now important titles in our magazine mix, titles which we can use to signpost their particular segment. It is terrific to notice this growth and have more titles we can use to support broader magazine sales growth. What I especially like about RUSSH and frankie is that I don’t see them in supermarkets, convenience stores and petrol outlets. They support our positioning as magazine specialists.
Further to my post earlier this week about charges for copying in newsagencies, click on the photo to see our fax price list. We settled on this pricing following discussion of the managers of my newsagencies and considering what I had see others charge. Customers don’t complain about our charges for faxing or copying. They are happy to have a locally available service accessible seven days a week for long hours each day. We took $2,600 in fax revenue last financial year.
A DR WHO partwork series launched on Spetember 9. It will be distributed by Network services. Part 1 will retail at $4.99, Part 2 – $9.99 and Part 3 and beyond – $19.99.
Every issue comes with a DVD featuring two episodes of DR WHO. The pull apart and file magazine contains detailed profiles of all the favourite monsters and heroes, in-depth files on the technology and brand new artwork, a look at the Doctor’s first adventures, plus exclusive behind the scenes interviews. Part 2 comes with a free binder and divider cards come with Part 3.
I mention the new DR WHO this here because I often receive correspondence from newsagents saying they did not know a new partwork was coming.
This new partwork should be a great success.
I attended the ACP Magazines Connections Conference in Cairns yesterday along with a couple of hundred other newsagents. It was a good event with speakers appropriate to proactive newsagents and an excellent opportunity to network with colleagues.
I was especially impressed with Bernard Salt. The data he shared was fascinating about the changes in demographics and how this shift, if understood, can be useful to retailers. He also shared some interesting stats about newsagents and newsagency staff: the 2001 census showed this pool to be 38,000. In 2006 it had falled to 33,000. 28% of newsagents and staff are over 55. This will mean 28% exit within the next five years or so.
The Conference presented other excellent data to drive some good business decisions. With Newsagents accounting for 57% of ACP magazine sales and with the Connections Emerald group accounting for a significant portion of growth, the investment by ACP in the conference is sure to pay off in better engagement and sales.
Someone needs to tell Harold Mitchell that next time he wants a magazine he should go to a newsagency. We are the magazine specialists. Supermarkets are the shopper challenge Harold describes in his article in The Age today:
MAGAZINES are in the news, so I headed off to the supermarket to get the latest. It’s another world in there.
Last summer I managed a four-wheel-drive track through the Australian Alps with just a satellite navigation device.
But a supermarket! More aisles than fire trails. And all I wanted was a little reading matter to have with my traditional breakfast porridge.
Harold is an advertising guru. He should know that advertising is about reaching consumers. More magazines are sold in newsagencies than any other retail channel in Australia. We also provide a better shopping experience for the magazine consumer.
Newsagency counters for decades featured bag rails. They were used primarily to flat stack display popular weekly and monthly magazines. While I have not used them in any shop fit I have done in the last ten years. I wonder if they are useful in newsagency businesses.
We have a bag rail in our Frankston location (see photo) from where we sell plenty of magazines. You can see customers looking at magazines as they approach the counter or wait to be served. I am certain we get sales today which we would otherwise not get if we did not have the bag rail.
Hence my question: Are bag rails obsolete?
I can see that they look like old retail. However, if they generate sales, why eliminate them? I am interested to the opinions of others on bag rails.
We are promoting the latest issue of Australian Women’s Weekly with Therese rein on the cover at the entrance to our women’s magazine aisle.
While AWW is not scheduled for a major in-store promotion for another week, I chose to go with a display from the on-sale day because of the news coverage for this issue. It was in yesterday’s newspapers as well as on the radio. I’d rather get the impulse sale than Coles or Woolworths.
While I will still do the scheduled in-store promotion for AWW when it falls due, I recognise that it is important to seize opportunities with magazines immediately they present – as happened yesterday with several news stories getting a run as a result of coverage in AWW.
While our display is very simple, the location and a compelling cover are what should make this a successful pitch for us.
We will leave AWW in this location for a week.
Computer company Western Digital may find the campaign they are running in the latest issue of Macworld magazine does not result in the success they had forecast. Most of the flyers in copies of Macworld sent to us fell out when placing the issue on the shelves. While inserts often fall out, my experience with the Western Digital ads is the worst I have seen. It seems to me that the inserts were too heavy. And, no, I didn’t put the inserts back in.
I watch OzLotto jackpots more so now after the $100 million jackpot of a couple of months ago. As a result of this, OzLotto is a better known and understood game. We are seeing earlier entry in the jackpot cycle. Whereas previously people would wait until Oz Jackpotted to $30 million or more before being encouraged to buy a ticket, now they take the upsell opportunity sooner. The key is to set the pitch right so that it is simple and compelling.
My newsagency software company, Tower Systems, is participating in the review of progress to-date of the new XchangeIT platform. I requested a review to assess some customer service issues and, in particular, the timeliness of support and newsagent communication. I am glad that XchangeIT agreed to the request.
Newsagents, magazine publishers, magazine distributors and newsagent customers all rely on the service and software provided by XchangeIT. Enough newsagents are using the new platform to make a review of this and the supporting infrastructure to be useful.
If anyone has feedback they feel would be useful, please email this to me directly at mark@towersystems….
Hopefully, the review will facilitate continued improvement of the new platform and benefit those newsagents yet to switch.