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

Month: June 2012

Rupert Murdoch clear on the future of newspapers – it’s digital

As more reports are published about the changes planned for News Corp. we are getting to see more quotes from News CEO Rupert Murdoch including this published by The New York Times Friday US time:

When asked by analysts about his papers’ future, Mr. Murdoch replied: “The answer is one word: digital.” He said the new company would double down on its digital efforts and that news was “the most valuable commodity in the world” even if “people are buying fewer papers printed on crushed wood.”

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Media disruption

Shocking customer service hurts all newsagents

I received a call yesterday from a newsagency shopper in regional Victoria wanting to complain about service from their local newsagent. The shopper called me thinking I was someone else connected with the brand the business trades under. I have no connection with the business at all.  But the customer and I talked.

The newsagents, a husband and wife team, provide poor customer service according to the caller – swearing at customers, refusing to hold a newspaper for collection later in the day and opening at different times in the day.

My caller, a long term newsagency shopper in their eighties, wanted to know what could be done. I explained that this was a locally owned independent business. Don’t you care about how they make you look I was asked. Of course I said. So call them and tell them to improve their service. I though this was a fair enough response but declined. It’s not my place to call a newsagent I have never spoken with and have no connection with to ask them to lift their game.

I gave the called the details of the people behind the brand so they could at least get the service complaint to someone commercially connected with the business.

Talking with the caller some more it turns out that they want the problems fixed so they don’t have to our newspapers, magazines and cards from the local supermarket – one of the big two. I was please to hear this yet sad to hear of such poor service from a newsagent.

While I appreciate that there are often two sides to a story, my caller sounded genuine.

We all in this channel have an obligation to each other.

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Customer Service

Preparing for some fun this school holidays

Yesterday, just in time for the start of the winter school holidays, we received boxes of new stock … funky toys and novelty items, like these dog grenades.  They are soft and chewy for dogs … they squeak when chewed.

We deliberately sought out a range of fun products, different to the type of products shoppers see in a newsagency, products we can make a statement with and which should sell through school holidays and transition us nicely to Father’s Day.

A couple of us selected the items carefully, chasing a specific look for the business, chasing easy impulse purchases – especially from weekend shoppers, the most lucrative shoppers we see in our centre.

It has been fun looking over the new stock items and trying some out – we have some seriously funky items.

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Fun

Tour de France magazine sells out again

We are loving the sales we are achieving with the Official Guide to the Tour de France 2012.  It is selling exceptionally well, especially from high traffic front of store locations. I like that we have been able to get extra stock to help us see this title reach its full potential.

In each of my stores we have the magazine either at the counter or at the front of the business facing into the shopping mall. Yes, we have stock with sports titles but it’s at the front where this title really works.

It’s terrific seeing people come in for a card, some other magazine or a newspaper and add this guide to their basket – nice margin dollars.

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magazines

Promoting The Australian Women’s Weekly

We are promoting the latest issue of The Australian Women’s Weekly with this column placement adjacent to the counter – seen by every shopper in-store. We also have a pocket with the title placed with newspapers as well as placement in the usual location for AWW.

In our newsagency activity in the first week of the on-sale is crucial for AWW sales to our success so we go out hard and then pull back after the first week. So far, so good.

We will place copies next to knitting titles in the second week – to tap into the opportunity of the free knitting book which comes with this issue of The Australian Women’s Weekly.

 

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magazines

Australia in a odd position in News Corp changes

The logic for splitting entertainment from publishing in News Corp. into two corporate entities does not apply to Australia given their decision to house entertainment and publishing in Australia in the publishing entity.

This is an odd decision (if we are to believe the state logic of the moves internationally) which needs explanation for it to make sense.

While News CEO Rupert Murdoch robustly defended newspapers in the statement made in the US overnight, his communication with News employees spoke to the commitment to publishing on digital platforms:

Today there are 30 million tablets in use in the U.S. and 75 million worldwide. In five years’ time, there will be at least 75 million tablets in the U.S. and 375 million in the world. Smartphones will get far smarter and grow rapidly over the next five years, from 120 million active phones to 225 million in the U.S., and from 835 million to 1.7 billion in the world. These technologies will permeate all parts of life — including education — and it is my firm belief that these two companies will be best positioned to compete in this rapidly evolving global economy and distribute our premium content on these platforms.

There is no doubt that with the splitting of News, the restructuring of News in Australia and the restructuring of fairfax in Australia that we are only seeing the be inning of changes to what has been a core category of our businesses. These are exciting times, change delivers to us opportunities. While I’ll watch the News and Fairfax changes, I am more excited by other changes in my newsagency businesses.

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Media disruption

At what point does a magazine publisher damage their brand with subscription discounts?

delicious magazine is the latest magazine title to be promoted nationally using the livingsocial deals service. The price offered, $32 for a year of issues mailed, is 50.7% lower than the retail cover price.

While I will defend the right of any magazine publisher to offer and promote subscriptions as part of their marketing and supply mix, promoting such a steep discount and in a mass market way can only harm sales through the retail channel.

Maybe I am missing something.  Maybe the people behind this title inside News Limited have a plan which will result in more subscriptions for them and no impact on sales in newsagencies and other retail outlets. Ah, if only this were so.

Magazine publishers need to work harder at engaging with newsagents to drive incremental business. By engaging I mean being creative to today’s marketplace.  There are titles delivering growth by doing this. yes, it’s hard work and sometimes it does not pay off. But when it does you can bank on better margin dollars than a drop-your-pants subscription offer.

I am not going to retaliate against delicious. There is no point. If the actions of the publisher result in fewer retail sales this will ultimately hurt them.

Steep discounting at places such as livingsocial damage a brand in my view. They show the lengths a supplier will go to in order to shift stock. It says to me that the product manufacturer does not think the ticket price for an item is justified. Maybe my view is too narrow.  Time will tell how it plays out for companies using this type of service.

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magazine subscriptions

Smart Better Homes and Gardens packaging

The production folks at Pacific Magazines have been smart in packaging the latest issue of Better Homes and Gardens magazine. They had to bag this issue to deliver the magazine with the FREE Mills and Boon book. To ensure that shoppers understood the vale of the free gift, they printed promotional information about the book on the back of the bag and pointed to this on the front of the bag.  This is a great way to ensure that the free gift does its work and helps drive sales of the magazine. Well done to those attending to this detail.

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magazines

Promoting One Direction and Hot Young & Famous

We are doing our best to promote the considerable volume of stock we received of Hot Young & Famous. Our massive sales of a One Direction title recently appears to have got us this extra stock. We are responding to the volume of stock by placing it in the front of the shop, showing off that there is a One Direction poster in the title. We will leave this up through school holidays when fans of this type of magazine will hit the centre in big numbers during their winter break.

As the photo shows, we have the title in our impulse floor unit, a display unit which enables us to place stock tactically without interrupting the shopper traffic flow too much.

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magazines

Promoting the Agatha Christie partwork

We are promoting The Agatha Christie Book Collection, the first of four partworks coming out over the next month or two, in each of my newsagencies.

Regulars here would know the I love new partwork series. I love that newsagents have these products exclusively. I love the traffic generated by the TV campaigns. I also love that artwork customers are more likely to purchase other items in-store than, say, newspaper shoppers.

For these reasons we give prime space to the promotion of new partwork series in the first couple of weeks. That’s what we are doing with the launch issue of The Agatha Christie Book Collection.

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partworks

News Corp. decides to split growing and declining operations

News Corp. news outlets are reporting that the News Corp. board has decided to split the entertainment and newspaper businesses into separate entities. There is no indication yet on what will happen to the Australian assets and whether they will be subject to the split. B&T asks questions on what may happen for the Australian business and hones in on the opinions of media analyst Peter Cox.

Paul Barry writing at The Power Index says the newsroom staff at The Australian have been called to a meeting at tomorrow at 4:15pm when more will be revealed.

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Newspapers

NSW / ACT distribution newsagents get a small newspaper home delivery rise

News Limited yesterday announced to NSW / ACT newsagents that it is permitting a small rise in newspaper delivery fees. NANA called it a CPI rise and rightly noted that it was insufficient:

Naturally, for most Newsagents, the current fees including this new increase do not compensate for the true cost of distributing newspapers.

While News Limited is very publicly exerting control over its own commercial situation with major announcements last week and this, it continues to refuse small business newsagents the right to charge a fair commercial fee for the valued and lovers newspaper home delivery service.

A company committed to the free market system would support newsagents charging a fair fee. News Limited has its own reasons for forcing newsagents to accept lower fees in real terms for delivering newspapers in 2012 than a few years ago. I think their position is selfish and unfair. Yesterday’s announcement, while better than nothing, maintains the insult to newsagents for the fine home delivery service they provide.

What I wrote almost a year ago today in response to a similarly small rise for Victorian newsagents holds true today:

News Limited businesses The Herald and Weekly Times and The Geelong Advertiser this week announced agreement to permit a 5% increase in newspaper home delivery fees for their products.

While any increase is better than none, this paltry increase is socially irresponsible in my view.

How this situation can exist is appalling. This massive multi-billion dollar corporation which derives the bulk of its revenue from advertising controls the entire income stream newsagents earn from newspapers (cover price and delivery fee).

Newsagency distribution businesses, as commercial enterprises, ought to be able to set their own fees and through this control business performance levers. The current situation, where there is no control over revenue and only limited control over costs leaves newsagents to continue to perform as indentured slaves.

The introduction of the Modern Award has significantly increased costs for newsagents. Fuel prices have risen yet News Limited knowingly agreed to a newspaper home delivery fee increase which does not permit newsagents to pass on even these basic operating cost increases.

This right wing organisation which invests thousands of gallons of ink in deriding Julie Gillard and pretty much all Labor politicians as harming Australia and the Australian economy is killing the newsagent operated newspaper home delivery business with this tight-arse decision.

If the company was true to its right wing core it would not approach newspaper home delivery in the socialist way it does today. It would agree to a genuinely free market approach: a fair fee for a good service. Newsagents know that customers would pay. They also know that the market itself would set the price.

News Limited is hurting small business newsagents and their families and employees. They are reducing newsagents to working for less than a basic wage.

But you won’t read about this socially irresponsible behaviour in the News Limited press.

How dare they sit in their high-rise offices and decide what is fair for the newsagent in the trenches managing the delivery of newspapers?

Maybe that is harsh. Probably so. I hope it has got attention.

I sold my newspaper distribution business years ago because I saw no upside in newspaper home delivery for a business my size.

The number of newsagents giving away or walking away from their home delivery businesses has increased. This is a message publishers are yet to grasp. But maybe they have and maybe that is why the percentage fee increase is less than necessary to keep ahead with costs.

I’d love the people in News Limited who were responsible for this decision to front an open forum where they can present the merits of the decision and submit themselves to debate. I would be there for sure!

Newsagents need to put food on the table for their families and the families of employees. The decision by News Limited leaves newsagents financially worse off than a year ago. This is not just. It is socially irresponsible.

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newspaper home delivery

Wine with your greeting cards

Earlier this year I got to see several drugstores in the US in a couple of states, taking in what they sold and, in particular, product adjacencies. One product placement which interested me was wine with greeting cards. I saw this in a couple of big drugstores in Miami.  One of the employees I spoke with said it worked well.

If you look carefully at the photo you can see three wine rack placements in this one aisle.

Of course, licensing regulations are quite different here. But if I could sell wine in my newsagency would it? Yes … a limited range of wine in-store would be a nice extension of the gift range.

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Greeting Cards

Leveraging running season and promoting Runner’s World

We have just abut sold out of this issue of Runner’s World magazine and have ordered more stock. We have supported this half-marathon special issue of the magazine with prime placement in our sports and fitness section. This was a considered decision because of the popularity of half-marathon events in Melbourne. The placement has worked with excellent early sales for us. I’d encourage other newsagents in areas where half-marathons are popular to give this title some time in the spotlight.

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magazines

Decision on splitting News Corp to come tomorrow

News Corp. will announce its decision tomorrow on whether to split publishing and entertainment into two companies according to The Australian. The Wall Street Journal also has more on this.

Paul Barry has written ann interesting piece on the potential split for The Power Index. Barry speculates on whether Australian management knew of the plans to split the business:

So did Williams know this split was coming? It seems not. The word in Holt Street is he was summoned to New York over the weekend by Rupert. And the hacks are speculating that he was called there to be given the news.

We’d love to be a fly on the wall in that conversation. How disappointed would Williams be, having crafted his big restructure, to be told he’ll have to go back to the drawing board.

On the other hand, if Williams knew this was in the wind, it might explain why he was so reluctant to put a number on the jobs that could go when News Ltd, like Fairfax, moves to an 18 hour-a-day newsroom, digital-first newsroom.

But either way, those numbers are likely to look a lot larger than they did a week ago.

This matters to newsagents because of Williams’ involvement in changes to distribution arrangements for newspapers.

The turmoil is a timely reminder to newsagents to build businesses which do not rely on a single supplier for a significant portion of your revenue base.

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Newspaper distribution

New Newsagency of the Future workshops

I am hosting NEWSAGENCY OF THE FUTURE: START HERE, a completely new workshop for newsagents only (no suppliers) with new content specifically targeting options for newsagents who want to restructure their businesses for the future (and today).

The workshop will run for two hours with plenty of Q&A time. It will cover specific traffic generating and basket building ideas for newsagents in shopping centre, high street and rural situations. I’ll look at strategy and tactics.

This is not a sales session. All newsagents are welcome. Attendance is free.

One of the workshops will be video taped and an edited version made available for download.

The dates I am planning so far are:

  • Sydney – July 17 @10am venue TBA
  • Brisbane – July 18 @10am venue TBA
  • Adelaide – July 19 @10am venue TBA
  • Melbourne – July 20 @10am venue TBA

Later this morning you will be able to book online by clicking here.

Our future is up to us. No supplier is going to deliver a future for us. We have to back ourselves, in our own businesses. This starts with us being aware of an accountable for our situation.

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newsagency of the future

A tiny & efficient magazine store (part 2)

Here is a photo from the inside of the tine magazine store on the upper west side of Manhattan covered in my previous post.

Check out how the magazine titles are displayed. No full covers on show. There is a greater cover overlap where they have more titles in a category segment.

On the top shelf, not shown in the photo, barely an inch of a cover is on display.

If newsagents displayed special interest titles like this we would free up 75% of more of our magazine space. The question is whether we would back that we are a destination location for these special interest titles. The other question for many would be – what to do with the freed space.

I have looked at a range of magazine display formats here in the US in the last week in advance of creating a magazine department in a new newsagency I am involved in back in Australia. Having a blank canvas with which to play, I am planning on taking a different approach … but not like this one metre wide store in New York.

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magazines

A tiny & efficient magazine store (part 1)

Check out the tiny magazine store I spent time in yesterday on the upper west side of Manhattan.  Just over a metre wide, the walls, left and right, are lined with acrylic pockets holding magazines.  Most have only part of the cover displayed.

This shop holds close to 400 magazine titles. Seriously. Plus a reasonable range of tobacco products, bongs (!!), convenience items and allied lines. Every square inch of retail space is used and more.

The owner was happy to talk so we compared notes. I asked about the display and the challenge of not displaying the full customer. he said it did not hurt sales as most of his customers came in seeking out specific titles. While he carried high volume titles, he did not carry them in great numbers … just as supermarkets and convenience stores do not have the range this guy has.

He runs the business as a destination business and is doing okay.  Some purchase each issue of a title whole others shop based on available time for reading magazines on topics of their interest.

He stocks the business to meet his cost base and situation.  This is interesting as most newsagents do not reverse engineer their cost base to drive inventory range. In shopping centre situations this is more vital than ever.

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magazines

Wall of plush

I have seen plenty of retailers this last week displaying plush products on the wall, on shelves high enough to make the plush sit straight and nicely fill the space with colour. In a couple of stores they did this in dead areas and brought them to life, in others they did it at the front of the shop and told a bright and appealing story.

In each case, placing plush on the wall was impressive and appealing. It’s something I want to try.

While there is a place for selling plush off spinners, wall placement makes it an actor product and this in itself may generate more destination traffic.

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retail

Promoting Wedding magazines at the sales counter

The team at one of my stores created this simple and bright display featuring current wedding magazines at the sales counter.

I love the use of the small blackboard capping the display and the placement of flowers as a border.

We continue to enjoy good sales success with carefully selected titles in this location. Indeed, it’s sometimes surprising what we can get people to add to their shopping basket on impulse.

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magazines

News Corp. to split into two companies?

A report from The Wall Street Journal today that News Corp. was considering splitting into two companies – entertainment and publishing could be more of a reason to delay announcing plans for their distribution model changes that the Fairfax announcement last week. If the split did occur then it would be a whole different company – the Australian newspapers could be in Australian ownership again.

Twitter has gone into meltdown on the news.

While a split would make sense given the quite different needs today of both businesses, Rupert Murdoch has often talked about the value of an integrated multi-platform media organisation.

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Newspapers

Game changing services attract customers

I am sitting on board QF94 flying from Los Angeles to Melbourne as I publish this blog post. I’m using the on air WiFi service being trialled by Qantas. It’s terrific. No, not because I am obsessive about being online but because I have spent most of the day today travelling and having internet access has helped be take care of a day’s worth of emails and therefore make life a bit easier when I land Wednesday morning.

The need to be connected grows every day, especially for those in business. Customers expect us to respond to tweets and Facebook comments.

An airline offering WiFi on board will get my patronage ahead of one which does not. It’s a bit like retail businesses. I have chosen coffee shops and cafes with free WiFi over those without the service.

Accessibility is key in business today – both outbound from premises where customers gather through to inbound where customers want / need to contact you.

Businesses, especially cafes and coffee shops, calling for shoppers to like them on Facebook and not offering free WiFi are less likely to be liked. The photo is from a store I saw in New York – their promotion of their Facebook presence is more visually prominent than their business logo. I’d expect them to offer WiFi when they open for business.

It makes me wonder what my ‘WiFi’ service could be, the thing I could do to get more shoppers choosing my business over other businesses selling what we sell.

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retail

US Postal Service does not hurt small business like Australia Post

I have been able to get into several US Postal Service outlets in New York today and none has the range of retail products there government owned Australia Post has in their corporate stores.

The US Postal service focuses on being, well, a postal service. They are not trading off their government protection and public service reputation to take revenue from independent retailers. Nice.

I took the photo in one USPS location on the Upper West Side of Manhattan. What you is is it. I think this is reasonable for a postal service to offer.

Corporate Australia Post outlets should get out of competing with independent retailers like newsagents. Successive governments have allowed them to harm newsagencies and other businesses … making a mockery of any claim of support for small business.

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Australia Post
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