In a departure from my usual blog posts here, I’d like to comment about the cover of Famous magazine this week. It is an excellent example of embracing a theme. This issue is sure to be of strong interest to Twilight fans given that it goes beyond a cover photo, it is as if the magazine has been embraced by the Twilight theme. I also like the cover because it stands out from the sea of colours in a busy magazine rack.
We are promoting Woman’s Day at our busiest lottery counter this week because of the preview of the Master Cheft cookbook which comes with the magazine. A second reason this prime space promotion is their front page photo of Trishna and Krishna, two babies which have won the hearts of Victorians. These factors make it is good issue for driving impulse purchases.
Tabcorp announced on Friday a new agreement with Australia Post to deliver over-the counter TAB betting account services. From early December, Tabcorp TAB account holders will be able to deposit, withdraw and obtain balances of their betting accounts at most Australia Post retail outlets. Read the Sydney Morning Herald piece from this morning on this.
I have a couple of issues with this: connecting the government owned brand with gambling (where will they stop?) and the further strengthening of Australia Post retail traffic. Government should not own such a commercial business in a well-serviced and competitive marketplace.
Australia Post government stores are the toughest competitors for newsagents. They get their traffic through government protected customer traffic. They leverage this by competing directly with us on a growing range of fronts. It is Government policy which has allowed their model to diversify over the last ten years.
News Limited has been clear in its contract documentation that it is reviewing all aspects of newspaper distribution. This must also include financial modelling on the future of the medium itself.
While publishers struggle with objective assessment of new digital delivery platforms of news – see this article at Pittsburgh live – other observers note that digital delivery of news is growing.
Publishers and others look at devices like the Amazon Kindle from the perspective of a newspaper. This is like looking at an iPod from the perspective of a CD of music. Today, people buy single songs. In the future, we will buy individual articles by topic, by author or by category.
Technology will be the single biggest disruptive influence on the future of newspaper distribution in Australia. Maybe not this year or next, but certainly in my lifetime. This is what we must plan for. This is why we must diversify.
With the additional space requirements for Christmas crosswords, we moved them out of our women’s weeklies area a few weeks ago. Late last week made room deeper into our women’s magazine area, between our British titles and women’s fashion. In two days we sold four magazines from this display. We will see how this space performs – we do this by regulating the number of copies we place in each pocket.
Newsagents who have crosswords online in a dedicated area, I’d encourage you to co-locate a selection of top selling titles in the women’s weeklies area. Many who have tried this have experienced double digit growth for these titles.
We sold our second shipment of the latest issue of Good Food magazine, taking our November numbers to more than double usual. Our most successful location for Good Food is proving to be next to our newspaper stand. While we cannot place every magazine there, we have a small selection which perfrom particularly well.
Our success with this issue of Good Food is good on several fronts: many purchases were on impulse, we are gaining growth from a traditional category and we are seeing local sales tactics work – this is most encouraging.
We can’t accept average performance in retail. This is why we have to work every opportunity, especially with traditional products like magazines.
I bought The Age yesterday from a 7-Eleven out of necessity. An ad for the ANZ bank was stuck on the masthead. I checked other copies and they were the same. Out at one of my newsagencies later in the day I noticed that none of the mastheads were covered by the ads. Maybe advertisers are targeting some areas with these pesky stuck on ads. I see the growth in use of these ads and other disruptors to the traditional newspaper experience as a commentary on the value of the medium.
We found ourselves with space at our prime counter display for a few days so our team at Forest Hill created a display of the excellent socially responsible range from the Noah’s Ark group in Northern India. Rather than go with the usual product focused display, our team put together details on the back story – why this product is important. Knowing this is as important as the items themselves. Indeed, the back story can drive the sale. Click on the photo for a larger version of the display.
The items are selling well. They make great Christmas gifts. Their work in local villages has been checked out and endorsed by Oxfam and Tear Fund. The credibility of this encouraged us to take on the product. I am thrilled the team at Forest Hill is supportig the product.
Mediaweek in the UK reports that newsagents are set to lose millions of pounds in revenue a year thanks to a decision by News International to revise its base cover price.
Rupert Murdoch’s News International is to hit retailers’ tills to the tune of more than £12m a year as it looks to clamp down on the cover-price margin of its market-leading brand, The Sun.
The cover price used to be 35p. It was lowered to 30p in a promotion but newsagents and other independent retailers were compensated at the base rate of 35p. This is about to change, making newsagents and other independent retailers a partner to the discounting by the publisher.
This means multiple and independent retailers’ margins will be hit by an extra 1.16p for every copy of the paper, which has a circulation of around three million, sold in England, Wales and Northern Ireland.
Since July 2008, retailers have received a retail margin of 8.12p on The Sun’s cover price of 35p, after News International introduced a price promotion on its cover price from 35p to 30p.
Steve denham, UK newsagent and blogger writes about this. he makes a lot of sense.
Newsagents are not isolated from the effects of the storm that is blowing through the newspaper industry. Shouting and screaming about how this is damaging our businesses will not effect the outcome.
I expect we will see plenty of moves in the future by publishers as they try and rein in costs related to print product. Yes, in Australia too. Advertising is not back to where it once was, circulation is flat – some growth, but flat in terms of single copy sales from what I see.
We can engage in skirmishes as these changes play out or we can invest our energy in focusing on our own future. This is what smart newsagents are doing – investing on new traffic and new money. It is one reason we are realigning space in my own newsagencies to maintain good newspaper and magazine sales while freeing space for higher margin better point of difference product.
The three biggest magazine publishers in the US, Hearst, Time Inc and Conde Nast, are reportedly investing in a separate company which some say will be iTunes for magazines. It will be interesting to see how they plan to monetise content which is currently freely available online.
As I have written here previously, my view is that it will not be magazines which make serious money online but stories. Set the stories free from their mastheads and make them available, individually, for micro payments and you turn the model on its ear. Leave the print product as the aggregated model and the online model is story / celebrity / issue based.
Britney Spears or Michael Jackson fans may pay a few cents to buy a story which has a fresh angle whereas they may not want to pay over $1.00 for a ‘magazine’ of which content they want is a small part.
While there will be some impact on print sales with these and other digital moves, I expect them to be minimal in most magazine categories for some years yet. Indeed, as we have seen this year, there are some segments delivering good growth.
The Independent Weekly has a report this morning of the moves by South Australian newsagents in relation to the new contracts fron News Limited and the migration program. The migration program is about moving management of customer accounst from newsagents to News.
It is interesting to read of the ANF involvement since the ANF was approached by News before they started the migration program and game the program a green light. This is what encouraged News to move forard as I understand it.
The owners of Borders in Australia are making it clear that they are not part of Borders in the UK which called in the administrators this week. Redgroup retail owns Borders Australia. They also own Angus and Robertson, Supanews and Whitcoulls in New Zealand.
Regardless of the lack of association between the businesses, the UK move is unfortunate timing if the talk of Redgroup floating here is accurate.
We have a selection of Christmas themed books mixed in with our boxed Christmas cards. from the fun to religious, these books are part of our Christmas book sale. As covered in the previous blog post, we have books in different locations in the store depending on the interest represented. We figured the Christmas books will go better in our Christmas department.
Books are great this time of the year, especially when customers bring in the catalogue with the books they want circled.
The team at my newsXpress Forest Hill store continues to move stock around to create a fresh shopping experience. While this is a challenge with the store full of Christmas stock, they find time and ways to achieve this. The tables around our copier no longer promote diaries. Now, they promote Children’s books which are part of our Christmas catalogue.
The books are very popular and have been sourced at a good margin and on good terms. Christmas is a great season for selling books, especially in our demographic where grandparents want to give a gift they like and which does not involve batteries.
Magazine publishers use gifts (tip-ons they are called) from time to time to drive sales. Unfortunately, there are two women’s health titles on the newsagent shelves at the moment with the same gift – Oxygen and Health & Fitness. In each case, however, the gift is not evident until the magazine is lifted from the shelf. They should have found a way for the gift to promote the title without it being picked up. Detail like this is important if you want to drive above average growth.
Network Services sent us these kids maths books this morning. We don’t want them because we already have kids maths books from which we achieve a 50%+ margin. The stock we already have is part of a bigger retail story. These two titles from Network are not part of a bigger story. They have no place in our newsagency and are therefore being returned. This is the second example of disrespect of the newsagency channel by Network. This is my money being sucked up on non magazine product by a magazine distributor. This must stop if we are to make the magazine department viable.
Network wonders why newsagents early return product. Sometimes, they early return a successful title in a knee-jerk reaction to receiving stock like we did today which has no place in our shop.
I don’t care if network has data showing I will sell these titles. I have this niche well covered with better margin product which I choose to stock.
Newsagents need more product in their stores which they choose to stock.
Network Services this morning sent our stock of the Pirates Travel Pad and the Princess Travel Pad. I don’t want these products. I have similar products which I choose to stock and from which I earn 50% margin. Why would I want copycat product for a 25% margin – and with a three months onsale? This product should never have made it to newsagencies. I am early returning mine but still have to waste time and money on this. And magazine distributors wonder why newsagents get angry. While I am sure there will be reasons (excuses) for newsagents being supplied this product they will not wash. These are not magazines. They should not have got through any reasonable assessment for access to our channel.
The question independent small publishers most often ask is what alternative do they have to the current magazine distribution model in Australia. The reasons they give for wanting an alternative are:
It is interesting comparing their concerns with concerns often voiced by newsagents. Newsagents and independent publishers could work more closely together. There are some titles which would work well outside the traditional sale or return model as long as we establish appropriate processes between publishers and newsagents for their respective businesses to work. This is why I have been meeting with independent publishers recently.
Publishers and newsagents make money from retail sales. Magazine distributors do not make money from retail sales. there are some titles where a direct publisher / newsagent relationship would benefit both sides far more than the tri-way relationship we have today.
We are moving closer to a publisher offering to supply newsagents direct. I am all for this and would gladly participate in a well organised and managed trial.
Tower Systems has published its XchangeIT compliance video at yahoo to make it more widely available. With more than 100 downloads, the video by EDI expert gavin Williams is popular.
While this training video was developed for the 1,600 newsagents using software from Tower, the content will be useful to other newsagents.
The photo shows our use of the back of the ACP Magazines basket builder stand to promote Australian Women’s Weekly to shoppers as they leave the women’s magazine aisle. This is the third location promoting AWW – the others are at the front of the shop and the with our weekly magazines. In many newsagencies, the back of the basket builder stand is dead space. We have found it to be a most useful merchandising position even when we move the stand around.
All of this effort around AWW is paying off with good sales which, of course, is why we put in the effort and give up prime space. The first week is when most sales are made. Next week, we will pull back but still keep the title in the spotlight.
I was fortunate to be in the audience at Fox Television Studios in Sydney last night for the taping of Chelsea Lately, a hit US late night talk show. Star Chelsea Handler, and a team of comedians, writers and producers have been in Sydney for a week taping shows. Last night’s was the last for this Australian trip.
Watching the show being produced was a hoot, an absolute guilty pleasure. Yes, I am a fan, my photo with her is a trophy I’ll keep.
After the show I shared a cab back to the city with someone who had just been interviewed on a Sky Business Channel program and we got talking about newsagents, the challenges of print media – especially newspapers, competition, Australia Post and the economy. It was a fascinating discussion with a business analyst who can look at the channel without the emotional and other overheads we often bring to a discussion about our future. It reinforced the importance of us reinventing ourselves.
On the flight back to Melbourne I found myself thinking about Chelsea Lately taping and the discussion in the cab afterwards.
Chelsea Handler and her team have created a new and very successful genre of TV show out of the decades old tonight show format. Their reinvention has found a new audience while also bringing along some of the older audience for the ride. We need to do the same thing. We need to reinvent our model to find new customers while bringing older customers with us. We need to create a retail experience which is relevant to today’s audience.
While some newsagents and marketing groups are doing this, not enough of our channel is engaged. Newsagents who do the same in 2010 that has been done in their businesses for decades will miss opportunities. There is a new audience out there and we need to evolve our offer to find them. We start this by being business people and not acting as superannuation guardians.
Chelsea Handler takes risks with her show. We should do the same with our newsagencies. In among these risks lie ideas which will bring great success.
The Chelsea Lately show is on E! Network on Foxtel at 10:30pm weeknights.
I have heard from several sources over the last few weeks that the ANF is close to announcing a partnership relationship with Corporate Express – the company now owned by Staples, the US stationery retailer with 1,500 outlets. While I am certain that the ANF has been in negotiation with Corporate Express, I am not aware of how far they have got.
Newsagents own Group Newsagency Supplies (GNS) and the majority of Australian newsagents purchase their stationery from GNS. I would have thought that a closer relationship between the ANF and GNS would be good for the newsagency channel rather than working with a competitor.
While nothing has been announced, I’d expect to see Staples stores in Australia soon. The model and brand is too strong in the US for it not to be tried here. This would put Staples (Corporate Express) in direct shopfront competition with newsagents. Maybe this is where the ANF discussions have got to. I hope not. If non marketing group newsagents are to sub-brand stationery they should do this working with GNS.
It will be interesting to see if an ANF / Corporate Express deal is announced and, if so, what form it takes.
I’d note that I am not in the ANF communications loop so they may have announced something in the last 24 hours of which I am not aware.
The two kitchen and bathroom magazines in the photo look similar. Price is a key differentiator. Melbourne Kitchen & Bathroom Design at $6.95 is a better price deal than Kitchens & Bathrooms Annual (Victorian Edition) at $9.95. The other differentiator is that Melbourne Kitchen & Bathroom Design is published by a Victorian publisher. Our hope is that customers will buy both titles – this is why we have them next to each other.
We have given the Australian Women’s Weekly a double facing for the first week of the on-sale. This gives the free bag with the magazine a better opportunity of driving sales from this regular location for the title.It also allows us to fit two titles per pocket.
We do this for magazine issues with a free gift which folds out in the same way. It works better than hiding the gift.
We have AWW is three locations: in its usual spot (as per the photo), at the front of the shop and on a display for shoppers to see as the leave our women’s aisle.
early indications are that this issue of AWW will sell well for us.
