Australian Newsagency Blog

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

Is this latest magazine distributor idea all about reducing early returns?

Mark Fletcher
July 3rd, 2014 · 10 Comments

maglabelA magazine distributor has asked XchangeIT to research implementing virtual magazine labels. Their thought is that newsagents not label magazines and instead use a hand held device to manage titles.

In a practical sense, they want you to stand in front of a title, remove it from the shelf, scan the barcode, see on the screen the ‘label’ with supply and return data and then act. With the fastest App and or hand lend device the time cost of checking a title would be four to five times longer than right now plus you’d be relying on an extra bit of hardware .

Unless I am missing something, from a newsagent perspective this thought should have been killed off quickly after it was suggested.

To me, it seems the magazine distributor could be interested in making shop floor decisions harder to make. But they will deny this.

Magazine labels today contain excellent information that enable smart newsagents to make shop floor stock management decisions.

In my software company we considered this mobile approach to returns and shop-floor title management around ten years ago when mobile data devices became more affordable. Back then we decided against it for reasons that are valid today. It would be cumbersome, difficult, slow and forcing double handling. We looked at ti again a couple of years ago and decided nothing had changed.

Here is what I wrote to XchangeIT last week about this virtual label idea:

Gavin and Jonathan have just mentioned to me about the possibility of virtual magazine labels being pursued by XchangeIT. I see no benefit for this for newsagents. They’d need technology to check magazines on the shop floor. This and the time delay in checking would frustrate them and cost considerably.

The only benefit of this would be reduced early returns and that would be bad for the cash flow of newsagencies.

Newsagents today usually only print labels for non high-volume monthlies and one shots. They do not do them for weeklies and high volume monthlies. So, the cost of labels is not high. Also, the time taken to actually label is quite low.

The label guides in-store placement. It acts as an invaluable tool in making shop floor decisions.

Australia leads the world in this area. The idea of a virtual label would deny newsagency who use it from access to a tool that is vital to active shop floor magazine management. I think it would be a waste of money for newsagents and those who serve them.

I have made similar representations on behalf of newsagents to the distributor.

If the idea of a virtual magazine label does become a reality and make its way into the IT stands for the newsagency channel, I’ll support it as I do all standards. I won’t agree with it but out of respect for newsagents I will support it. By support, I mean I will end up spending my own money on it to help newsagents.

For those who think software companies will not like this because it will reduce label purchases – I’d say you’re mistaken. Label revenue is small. From my experience the products are offered as a service. The labels can be sourced from many places.

It frustrates me that people who do not run or own or understand retail newsagencies make decisions about IT standards retail newsagents need to adhere to. These people in control of the standards are out of touch. They are not serving newsagents well.  They complain that newsagents do not adhere to standards. My response is that this will continue to be the case as long as newsagents do not see any commercial benefit to them in terms of equitable magazine supply.

I wish this magazine distributor would spend more time in getting supply right. Currently, around 65% of what they supply is loss making – the stock is not even paying for the space and labour used to carry the stock. They should be investing in their end to fix this and not pursue this project of folly that has no upside for newsagents.

I wish XchangeIT would more actively represent newsagents ahead of distributors since newsagents provide the bulk of their revenue. Their ownership structure makes such a wish impossible to grant.

22 likes

Category: Newsagency management · Newsagent representation · newsagent software

10 responses so far ↓

  • 1 Wally // Jul 3, 2014 at 9:26 AM

    This could be another nail in the coffin of magazines. Whilst we are experiencing success in weeklies at the moment the “other” magazines are not paying their way in regards to space and labour. More of this stock requires mores space and more time to return with the resultant negative cashflo. Our space is limited and the labels are important to us to make decisions on what stays on sale. To have to see this information buy scanning just seems to me to be extra time wasted.

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  • 2 Dean // Jul 3, 2014 at 10:26 AM

    Not only that, but we use it as an easy way to double check shortages for the day. Any labels left over are stock that has not arrived.

    I could see a lot more magazines being missed for returns if they have to be scanned. Having the label makes it an easy check to see if we have missed any returns. Can be done while tidying.

    5 likes

  • 3 June // Jul 3, 2014 at 12:47 PM

    We also use the labels to get rid of stock which is oversupplied. The label on a mag tells us how many we got so we can make
    an informed decision about how many of the new mag will make it to our shelves. I find this invaluable and would not want to have anything to do with a virtual label

    2 likes

  • 4 David // Jul 3, 2014 at 12:51 PM

    I am glad you brought this to our attention Mark as I have heard nothing elsewhere about it. Another reason to visit this blog.

    1 likes

  • 5 Jim // Jul 3, 2014 at 3:47 PM

    This proposal is either 3 months too late or 9 months too early – surely this would have to be an April Fool’s joke!

    2 likes

  • 6 Glenn // Jul 3, 2014 at 6:28 PM

    This is just another in a long line of distractions from the real issue with magazine – responsible supply management. Incentive programs, extra rewards, extra commission on incremental sales etc pale into insignificance when compared to the benefits of a truly fair and equitable supply chain would bring to the channel.

    Being able to control our magazine stock based on our own individual business requirements and make decisions as business people, rather than treated like a flock of sheep, will see real benefits to the magazine channel as a whole. Many retailers, myself included, will again engage with the product rather than leave it to concentrate on high margin products over which we have total control.

    Low margin products with little/no control over supply is hardly attractive to any switched on retailer. This “initiative” is yet another backward step in magazine management.

    2 likes

  • 7 Mark Fletcher // Jul 3, 2014 at 7:01 PM

    Glenn, this issue is at the heart of the supply model and plays into a core challenge for all involved. It’s dreadful that time and money have already been spent on something of no apparent value to newsagents.

    On low margin products – if they can deliver good traffic which we can leverage into other sales they’re good. Right now, we need magazines.

    1 likes

  • 8 Cris // Jul 3, 2014 at 7:22 PM

    Given the fact that we as an industry are stupid enough to pay our major suppliers to harvest our sales data, anything is possible. Scan data is a commodity and we should be paid for it, not paying to give it via a “subscription”. What would happen if they went to Coles or Woolies and asked them to pay a subscription so they could have their sales data, fact is -supermarket suppliers pay through the nose for scan data or they just don’t get it.

    2 likes

  • 9 Bill W // Jul 4, 2014 at 4:43 PM

    Well said Cris. To top it off we queue to support their discounting/ giveaway.

    No wonder we get what we deserve.

    0 likes

  • 10 Keith // Jul 7, 2014 at 5:24 AM

    I am not surprised that Bauer would do something selfish.

    0 likes

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