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

Month: May 2007

Suppliers keen to access the newsagency channel

Every few days I hear from a manufacturer, importer or some other supplier keen to access the newsagency channel. Some express frustration with existing supply chain access points while others are not aware of the various supply chains serving newsagents.

What is interesting to me is their keenness to connect with newsagents. They like our geographic spread and the traffic they see in our stores. Some of these potential newsagent suppliers have excellent products just waiting to connect with a strong national network of stores. The key is achieving that access at a low price so that everyone involves makes a fair return.

I have a standard approach which includes being transparent about the various channels to our stores: warehouses, distributors and the like.

The most exciting approaches come from people making products unlike any we have seen in newsagencies before yet which suit our customers and fit within existing categories. I appreciate that I am not being specific in detailing products – in many cases I agree to confidentiality so that appropriate arrangements can be negotiated.

It would be good for the industry to establish a supplier entry point and bring some structure to these approaches. While groups such as newsXpress can do it for its 110 members, there are some products which are more appropriate to mass roll out.

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Felicity Wishes goes gangbusters

We sold out of the 80 copies of issue #1 of Felicity Wishes which we received last week. Now we’re well into the extra 30 we received yesterday. Besides our window display we have this display at the counter:

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Partworks are efficient for us – we sign them up for putaways. The effort in making sure we have enough stock is paying off. We use them to reinforce that we have fresh product. That and the fact that they are advertised on TV as exclusuive to newsagents.

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partworks

Dialtime phone recharge drives Tower sales

Being first has its rewards. Newsagents are choosing Tower Systems software because of a commercial advantage exclusively delivered months ago.

Earlier this year, following extensive testing, we released a live link from within our newsagency point of sale software for the sale of Dialtime phone recharge vouchers. This means that our newsagent clients can sell Optus, Telstra, Vodafone, 3 Mobile and Virgin mobile phone top up from any register in their store. They can also sell many different calling cards from their POS registers.

What is clever about this is that at the sales counter a newsagent employee can hit a couple of touch screen buttons and in a second or two the voucher with the recharge serial number is printed. Our software links real-time to Dialtime, transacts the voucher and delivers it to the receipt printer in the newsagency. We’re saving between 30 and 90 seconds a transaction. With some newsagencies doing between 50 and 100 transactions a day the time saving is significant.

The benefits for newsagents are that they no longer have to queue at the one Dialtime terminal at their counter for these sales and there is less room of data re-keying error. By integrating within our POS software, newsagents save time, enjoy the process more and are happy to sell more mobile phone recharge and calling card product.

This is another Tower Advantage for newsagents.

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Magazine Week a good idea

I like the idea of Magazine Week, as planned for the UK in September this year, to promote magazines to consumers. This is something the Magazine Publishers of Australia could get behind. Newsagents ought to be at the heart of any campaign as they are the only magazine specialists in Australia.

Check out the planned in store activity:

1. Point of sale branding to create in-store theatre
2. Window dressing using Magazine Week branding
3. Shopping messages, each day a different message
4. Meet and greet with staff at the front of the store, e.g. staff wearing branded t-shirts
5. Rotation of magazines on a gondola daily
6. Till receipts to hold logo (contact PPA for logo)
7. Shopping message, each day a different one e.g. “Buy a magazine – and one for your mum!”; “If you like gardening, why not look at our great range of gardening magazines”; “It’s the weekend – buy a magazine and relax!”
8. Voucher incentives (included in regional press, local flyer campaigns etc.)
9. Using every communication vehicle (both staff and customer facing)
10. Targeted leaflets to consumers – using Magazine Week to fulfil individual store objectives (e.g. promoting shop save; highlighting expanded magazine range etc)
11. Out of Category PoS / Out of category positioning of magazines
12. Using clubcard/loyalty card promotion (or equivalent)
13. Any other ideas you might have!

Brilliant! I’d actively support this among the 1,400+ newsagents using Tower Systems software to manage magazines. From a marketing group perspective, many of the activities connect with existing in-store strategies in newsXpress stores.

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magazines

Newspaper delivery in Bangkok

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I spent an hour walking around the hotel early this morning and while I could not find a newsstand, I did find evidence of home delivery. These paper delivery boxes were on the gate to an embassy nearby. I am not aware of current use of newspaper delivery boxes in Australia but they were certainly a feature in the 1980s.

The newspapers I found o the street were at ‘fast food’ street stalls where people were reading a well thumbed shared paper from the stall operator.

I visited three petrol outlets – no newspapers or magazines and two 7-Eleven outlets – no newspapers or magazines.

While none of this is hard research or even culturally relevant to Australia, it is interesting to me in the context of the moves to get newspapers and magazines into more outlets in Australia.

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Newspapers

Post Net – Post Office alternative in Bangkok

thai_post.JPGOut and about in Bangkok this morning in search of newsstands I found this postal service. It’s a simple offering: mail boxes, postal service, packaging, phone recharge and some other services. They are privately owned, not part of the Post Office network. There is local chatter about the premium you pay to use their service. My interest was how they were positioned against the government offering given my serial posting here about Australia Post.

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Australia Post

Find It online classifieds makes Top 60 Web 2.0 list

It’s cool that Find It, the online classifieds site we are building to provide newsagents with an online connection, has been listed in the top 60 Australian Web 2.0 applications. This blog post from Ross Dawson has the background. The Top 60 list is here.

Yeah, we’re proud as punch about this. It’s recognition from people who know their Web 2.0 stuff. It recognises the effort of an online start up and encourages is to push forward.

Now if only newsagents would understand the importance of this online stuff to their business.

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Online classifieds

Thai newsstands

I am in Bangkok on business and planned to get out tonight to take some photos of newsstands. Hotel security has been persuasive against it because of a high alert. It was odd getting searched checking into a hotel and the hotel’s own car being checked for bombs.

The newspaper and magazine marketplace over here is not as sophisticated as in Australia yet it is equally robust and sales driven. More later.

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UK Post Offices to close

Interesting to see the decision by the UK Government to close 2,500 Post Offices. Here in Australia, the Government has franchised, licenced or otherwise sold off the weak outlets and, in the view of some, retained the best 865 for themselves. One of those government owned post offices is opposite my shop and it’s looking more like a newsagency every day. It’s a constant reminder of the Federal Government’s concern for small business.

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Australia Post

Another Reader’s Digest complaint

Following up my complaints here about the gross and repeated oversupply of Reader’s Digest to my newsagency by distributor NDD comes an email overnight from an individual documenting poor treatment by Reader’s Digest:

I am not a newsagent myself but rather an individual who has received unsolicited subscriptions and bills for the magazine which I did not order. The latest being a letter saying that goods were returned to them being undeliverable despite me informing them I do not wish to receive any further correspondence.

Unhappy with the resolution of his complaint, my correspondent has made a formal complaint to the ACCC and a Principal Investigator has been appointed to handle the matter.

One reason systemic oversupply to newsagents remains unresolved in the lack of attention by newsagents to lodging formal complaints to bodies such as the ACCC.

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magazines

UK Sudoku mag trash

UK_su_doku.JPGHere’s an example of a magazine we don’t need. Newsagents are well served with Sudoku titles yet some bright spark thinks we need this UK title.

If I were the magazine czar controlling the titles which can access newsagencies I’d block this title. I might reconsider if newsagents are paid a handling fee to cover real-estate and labour.

Those responsible for newsagents receiving this title are abusing a system for their exclusive commercial gain.

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magazines

Change drives newspaper sales

A consequence of the flood two weeks ago was that we had to move things around in our shop including the newspaper stand. Sales picked up, customers found newspapers – even though it was moved only a metre and a half. There were no other changes.

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It certainly supports the case for shifting products around regularly.

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Newspapers

Promoting Felicity Wishes

We’re actively promoting the Felicity Wishes partworks launched last week with a bold window display.

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We like partworks because partworks customersr are among the most efficient in our newsagency – always buying multiple items.

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partworks

Petrol outlets dudding magazine publishers

In 2004 ACP Magazines made the first move to cut newsagents out of long term supply arrangements with key petrol outlets. Just under 1,000 newsagents lost revenue as a result. Some other publishers subsequently followed ACP. Now, almost three years on, we see magazines getting moved in major petrol outlets and while top selling titles may still be doing okay, the magazine category overall has suffered. While no one will agree it would be good to access sales data to understand the impact beyond individual publishers. The previous newsagent supply arrangement was better for the category – maybe publishers will realise this when they discover how far from the traffic in some outlets their product is being moved.

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magazines

Newsagents taking on News Ltd?

It seems that some newsagents are protesting the arrangements News Ltd has put in place with IPG for delivering newspapers to hotels. I am told that at least one complaint has been lodged with the Small Business Commissioner of Victoria against local News Ltd subsidiary The Herald and Weekly Times. As I have discussed here previously, the arrangements shift vital from small business newsagents to the corporate mate of News Ltd.

News Ltd is a demanding and generally fair supplier. The ripping of revenue from newsagents as has happened as a result of the IPG arrangements is unfair as it cancels long term relationships which were often established by the newsagents themselves.

News Ltd makes plenty of noise about the Aussie Fair Go in its newspapers. Their action in relation to this hotel business is hardly representative of an Aussie Fair Go.

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Newsagency challenges

Magazine recycling

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Magazine publishers and distributors show their care about the environment by sending magazines which failed to sell the first time out to newsagents again and again. These old issues are used as fodder to fill double and triple packs, to add value to a title. The trouble is that punters committed to the title probably bought the old and very old issues when they first came out. Punters know the packs are a con – this why they are often ripped open in store to uncover issues not already purchased.

I don’t mind a an occasional double pack to reignite interest in a title. However, too often the double and triple pack strategy is used cynically by publishers to keep dead stock circulating. It’s cheap marketing.

While some will say why should I worry since if they don’t sell I can return them. True. But the freight costs for returns are high – I’m paying two and three times to freight a dead issue of a magazine back to the distributor.

Double and triple packs ought to, in my view, have a premium attached to them which respects the additional real-estate they need in a newsagency. If newsagents operate on a fee for service basis we would see far fewer double and triple packs.

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magazines

The newspaper transition to online

The New York Times offers an insight into its plans for online versus print in the announcements on Friday as analysed by Scott Karp. They are adjusting their quality focus to build online relevance and traffic. They are also shrinking the size of their print product – Fairfax here a couple of weeks ago announced that their Australian broadsheets would shrink and cited the (current) New York Times. Karp sources the NYT announcement to a post at Gawker which included this:

Then it was time for questions. Someone asked how the Times plans to make money off the web. “I heartily believe we will,” Keller said. “How, is a lot more complicated.” He talked about Wall Street, and doing PowerPoint presentations. “There’s a phrase they use in drug and alcohol rehab—’fake it til you make it.’ That’s basically what we’re doing.”

The new reality for publishers and indeed any business which relies on publishers – including newsagencies – is that faking it is an appropriate business model. There is no time to analyse the impact of the shift of revenue from print to online: when, how much and where. We, publishers, newsagents and others, have to start playing (faking) in a range of fields in pursuit of the revenue for our future.

Memo to newsagents: no one will deliver revenue of a new model on a platter. Now is the era of the entrepreneurial newsagent.

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Newsagency challenges

Melbourne Observer a hit

Melbourne Observer is a solid performing independent title in my newsagency. It’s customers are loyal, delivering good sales every week. This week there has been an excellent kick thanks to the 56 page tribute to radio man Keith McGowan. Take a look at sales in my newsagency over the first three on-sale days compared to the average for the last month:

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While the Melbourne Observer would not be on the radar of many newspaper and magazine publishers, in my newsagency it is an important title because of the loyalty of its readers and the efficiency of the baskets in which it is purchased – rarely do people come in and purchase the Melbourne Observer and nothing else. It’s an example of an independent local title doing well.

Ash Long and the folks at Local Media, the publisher of Melbourne Observer, actively support and promote newsagencies and this is another reason I am happy to support the title.

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Newspapers

Spruiking the Tattslotto superdraw and magazines

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We brought in our spruiker (Brian) today to promote the $22 million superdraw and the discount social stationery in the photo. Brian also promoted New Woman and the free umbrella, New Idea and the free pedometer and Burke’s Backyard and the free tea lights. While the superdraw and stationery spruiking worked brilliantly, as I expected it would, promoting the magazine giveaways worked better than expected. Sales spiked thanks to connecting the three giveaways. Our feeling is that it worked well because of the quality of these specific giveaways.

We’ve used several spruikers over the years. Brian is the best. He is professional and robust without getting customers offside. He’s our preference every time. Part of the success to the magazine promotion today is due to the connection of his pitch with our customers.

In case you’re wondering about the $5 social stationery sale – part of the landlord make good for the upheaval caused by the construction is a free outpost. Rather than extend current product into the mall we brought in this social stationery range and have sold over 1,100 units in three weeks.

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marketing

We fail the copying challenge

copier.JPGWe are lousy at driving efficiency from our photocopying service. Close to 70% of sales involving copying are single purchase sales. That is, 70% of the time customers get copying and nothing else.

While the margin on copying is excellent, it is the lack of efficiency for the business which concerns me. Here is a service which 50% of the time involves us helping the customer yet we fail to achieve any up-sell. Worse is that surrounding our copier is no up-sell message. It’s an unbranded bland part of the store.

So, we’re on a mission to change this. We are going to dress our copier area, develop several up-sell strategies and measure the success or otherwise of our efforts. Our mission is to drive appropriate add on sales with our copying customers. We don’t do enough copying to create a whole new counter. Rather, we want to make the existing single copier contribute more valuably to the business.

We are not alone in failing to leverage our copier to its full potential. Most newsagencies I see sales data for show equally inefficient copier sales – 70% and more of sales are copying and nothing else. And in many of these newsagencies, copying is in the top ten sale items every day – so opportunities for growth abound.

Over the next few weeks we will make a series of changes. I’ll report back here on the results.

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Newsagency challenges

Building stationery around brand names

While their competitors switch to house brands for stationery, newsagents have an opportunity to develop a point of difference around established brands. At the same time, they could inform customers of how superior established brands are compared to house brands. Such a pitch, built around quality, would resonate with consumers.

Brands like Post-IT, Scotch, Spirax, Uniball and Collins are respected. It would be easier to build their stationery sales around these brands than to invest in newsagent house brand product.

Stationery customers are becoming wary of cheap imports from China. They understand that lower quality is a hallmark of lower priced house branded product. This is why smart newsagents are pursuing branded stationery items.

I was talking with Jim O’Toole, a regular commenter here, in Albury on Tuesday and he gave me the example of scissors and staplers. In his Rutherglen Newsagency in each of these two categories the well known branded product outsells the house brand by a long shot – to the point where the viability of the house brand has to be questioned.

This branded product issue is important for newsagents. What do we stand for? If it is quality then we ought to more robustly embrace brands which manufacturers spend millions developing and promoting.

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Stationery

The Form – no strings

I picked up a copy of The Form – the new free racing newspaper from Fairfax – this morning at Sydney airport. No requirement to pick a Sydney Morning Herald as well. While the airport is an unusual case with Qantas offering free newspapers at departure gates, some newsagents tell me they cop flack when they tell customers that to get the freebie they have to buy the ‘parent’ product. It was the same when News Ltd launched Alpha. Eventually newsagents allowed people to purchase Alpha without requiring a News Ltd tabloid purchase.

If Fairfax really wants The Form to reach its potential it needs to set it free to find its own audience.

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Newspaper marketing

Lottery jackpot burnout?

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Some newsagents have mentioned that sales in the $22 million lottery superdraw / megadraw are soft, citing too many jackpots in recent times. Certainly the $22 million is not as alluring as $30 million. Also, the Saturday winner usually has to share their prize with ten or so others whereas Powerball goes off to one winner.

We’re creating some excitement in our store through our Syndicate wall. This is what we have to do with these ‘scheduled’ superdraws – create syndicates and therefore some excitement. Our view is that it’s a matter of having a broad range of product which connects with the interest in luck among various ethnicities.

Our customers are voting with their wallets. Now all we need is to win!

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Lotteries