Month: May 2006

We usually sell 4 or 5 copies of Digtal Camera World. Despite flat net sales, our distributor, Newsagents’ Direct Distribution, has increased supply four times in the last five months. Now we are getting 10 copies. There is no justification in our sales data for the increase. This extra stock costs more labour, takes up more real-estate and uses more cash. NDD has an obligation to scale magazines out to newsagents on an equitable basis. Increasing supply, as in the example I have given, is, in my view, unconscionable.

An interesting blog post read: Why most men’s magazines are crap!.

Top 10 magazine and daily newspaper sales fluctuate considerably more than the industry average in my newsagency and it’s been bothering me. My location is not that unusual and the centre not that remarkable in creating traffic fluctuations. The fluctuation was happening only among top selling products and in the same weeks for most titles. I have put in many hours pouring over data to find an answer. While I have only looked at data for the last three monthsfrom my store, the theory I am developing is that the fluctuation is caused by lottery jackpots. My sales climb commensurate with the size of the jackpot and then fall with a thud in the week when there are no jackpots. This means that the jackpot punters are either buying their magazines and newspapers elsewhere or not at all. Regardless, it means that we’re not doing enough to build the non jackpot purchase habit.

Once I have looked at data from last year for my store I’ll look at data from some other newsagencies to see if I am onto something. If my theory is right, newsagents need to act now given the lottery changes due within the next two years.

Great to see The Bulletin running hard with the Beaconsfield mine story this week and that they have scaled out extra copies to retailers. Should sell well.

Compact format magazines are gaining popularity. Originally only found in children’s titles, they are popular with publishers in the hair and fashion categories. Small format magazines are a challenge to display in that most existing retail fixturing is designed around fill size magazines. These small titles barely peek up from the magazine pockets. Another challenge is when publishers try and try and grow beyond their own new small border. Take this issue of Glamour. It’s a compact title but demanding, this month, more space because of the giveaway included.

Anecdotal customer feedback is that the compact titles are frustrating except in the shopping guide space. Most seem to prefer the regular size titles.

Magazine publishers seem to be addicted to giveaways. Just about every day newsagents receive a new issue with some promotional product attached to the cover or in a sealed bag with the magazine. The marketplace is so cluttered that these giveaways no longer represent special value. They are the norm. In fact, in many cases they get in the way of a purchase since sealing the magazine in a bag either stops it being browsed or leads to the bag being opened and damage done. Take a look at Who this week and OK! Australia this month. Both have the same coffee sachet. A rip on the sachet and you lost four or five magazines with damage.

New Woman has upped the ante this month with its umbrella giveaway. It’s walking out the door. The challenge was stacking the product when it arrived – another problem for retailers with chunky giveaway product on magazine covers.

GQ is a problem this month with the American Crew grooming products. Newsagents can only fit one copy in a pocket and when you stack them flat they fall everywhere. The problem is compounded when you have fifty or more titles on sale at any one time with giveaway product attached.

Magazine publishers chasing a point of difference might consider breaking their addiction to giveaways and focusing on their product. I know retailers would be happier.

Further to my April 28 post of Reader’s Digest oversupply, it’s been pointed out to me that a major supermarket group has cut Reader’s Digest from its shelves. Thus must leave thousands of copies to be placed elsewhere. Newsagents, being the least place of resistance in the magazine supply chain, are the victims. Of the fifty newsagents I have had contact with on this matter, only one is being supplied with an economically viable quantity of Reader’s Digest . Most have been hit with unnecessary supply increases which drain cash from cash-strapped newsagents. The only reason a newsagent should be supplied more stock of any title is when the sell through rate of the title passes an industry agreed threshold. I’d suggest that a sell-through threshold of 90% for titles outside the top 200 is reasonable. To increase supply when the historic sell-through is 30% is a breach of trust and, I suspect, the Trade Practices Act.

Newsagents are the only retailers carrying titles outside the top 200. They have little or no control over the titles they receive and the volume. They rely on magazine distributors to scale out based on current sales data. The Reader’s Digest experience suggests that sales data is not being used to determine scale out.

My software company’s newsagency management software warns newsagents about oversupply. Unfortunately, many newsagents do not act on this because they have given up trying to rectify oversupply issues. It was only after I bought a newsagency ten years ago that I started to understand how de-motivating some aspects of the magazine supply model can be – especially for titles outside the top 200.

A fascinating blog post by Arianna Huffington on Magazines and the Internet. It’s worth reading as are some of the many comments – some excellent views for those interested in the impact of the Internet on publishing. As Huffington says and I have written here many times, content is king – now more so than even thanks to the many publishing platforms available.

The Internet provides an alternative publishing platform for the titles which do not justify printing, distributing and displaying in retail stores. The challenge is getting publishers of these poor performing titles to take the step and stop costing the industry millions in efficiency.

Huffington has made a name for herself for in citizen journalism circles. She was in the news a few months back for some “issues” with something claimed to have been written by George Clooney and published at her Huffington Post.

I’ve had my TV Week supply cut by 22% this week. This is because I have not been selling out. The cut to supply takes be below my net sales. However, magazine sales being what they are we will not sell out of the lower quantity because customers tend not to want to buy if there are only one or two left on the shelf. So, the 22% cut becomes a self fulfilling prophecy. In the meantime, the supermarkets in my centre return more TV Week product that I get supplied at the start of the week. It’s a supply model which I don’t understand at all.

Footnote (11/5): ACP Magazines has responded to our request and lifted our supply of TV Week to a better level. This is a good outcome as it allows me to better promote the title rightt throguh to week end. This will encourage us to further push the title.