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

Month: August 2007

Zoo boob boo boo

The Sydney Morning Herald reports that Zoo Weekly might be in trouble for offering cosmetic surgery (breast enhancement) as a prize in a competition.

Maybe this competition is a tipping point. I suspect that the folks at Emap knew what they were doing – especially that the prize would be controversial.

My feeling – based on no hard evidence – is that Zoo has plateaued. There are only so many people wanting to buy magazines featuring former big breasted reality TV contestants. The formula is, well, a formula and without significant change becomes stale.

So, the contest is a success because the SMH and others are writing about the title. I’ll see what happens sales wise.

Sorry about the headline for this post, the temptation was too great.

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magazines

Growing sales of niche magazines

Scott, commenting on my post about Jeff Webster’s Fitting Out for Bay & Coastal Fishing magazine included a link showing a “Jeff” selling copies of the magazine on eBay. It’s a fair shot to try and find customers for what is a niche title.

It made me wonder, however, how the publisher could better engage with newsagents. Being a niche publisher does present difficulties.

One option would be to get together with related titles which consumers could be expected to purchase with your title. Either create a double pack (which newsagents and consumers don’t like that much) or invest some money into point of purchase packaging to enable two or three titles to be displayed in a high traffic area. This is what the big publishers do with regularity to find new readers. Most newsagents receiving a display pack put it out as requested – the first step to compliance is providing the materials necessary to achieve this.

I bet that putting Bay and Coastal Fishing into a display unit with, three or four related titles would generate a good sales kick. By providing this material, Jeff Webster and other smaller publishers would make it easier for newsagents to drive sales – plus there would be the benefit of a consistent in store display message.

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magazines

West Australian Newspapers can pay newsagents more

Newsagents in Western Australia make less from newspapers (home delivery and retail) that their Eastern Seaboard counterparts. Given the 7.7% increase in circulation revenue to $77.7 million and 16.3% increase in ad revenue (source:MediaWeek) newsagents have some financial support to counter any argument that the fair yet small increase they have sought for years is resolved. Last I heard – a few weeks ago – some newsagents were talking about taking serious action in pursuit of more equitable arrangements.

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Newsagency challenges

In the news at Melbourne Airport

On the way to Sydney today, a few feet from security, the shutters come down and the Qantas terminal is evacuated. Thousands of people were herded out of the terminal while it was made secure.

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People were well behaved. the only incident was the escalator spewing people to the upper level which was full of people – causing a momentary crush.

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After waiting a while we logged on and booked a Virgin Blue flight.

Ah, the joys of travel.

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Uncategorized

Who makes money selling The Age at 57 cents a day?

age_aug07.JPGAt the station on top of the honour box from which commuters purchase The Age was a flyer promoting home delivery. At 57 cents a day it’s a questionable move for the newsagent promoting the offer – unless he/she is converting retail customers from another newsagency to their delivery business. To move a regular customer from retail to home delivery in the same newsagency does not make sense.

I understand the importance of home delivery subscription to the publishers.

For newsagents, the economics are quite different: there is no revenue from advertising. Indeed, from a home delivery perspective newsagents have no control over pricing, little control over costs and no real opportunity for upsell. Indeed, through some newspaper publishers, newsagents moving customers from retail to home delivery give up GP for the privilege of home delivery – yet their cost base is higher.

Given the restructuring and consolidation currently play in the home delivery space I’d expect more newsagents to resist promotions such as The Age 57 cents a day offer.

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Newspapers

Shopping centre challenges

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The shopping centre in which my newsagency is located has been undergoing a welcome major refurbishment since March this year. Regulars here may recall my posts about the flooding in my newsagency and the debilitating construction noise which was turning customers away- our request for compensation is close to resolution.

the photo above is the view of the mall three doors down from the front of our shop. But it is worse than the photo shows – the gap between open businesses is extraordinary, making our end of the centre a ghost town for the last six weeks. Our whole end of the mall currently have 10% of available space occupied.

Sales across all departments are affected except for partworks – figure that!

The traffic has been bad for so long that magazine supplies will be cut soon – just as the hoardings come down and the new look retailers open.

I am not angry as these changes and we are not the first newsagent to encounter such challenges. They are part of life in a shopping centre. It is appropriate that the landlord blends tenants to achieve the best return.

Hopefully it will be business as usual soon.

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Retail tenancy

Gay magazines, the niche challenge

gay_magazines.JPGSome magazine categories are a real challenge to locate and so get pushed from pillar to post. Gay related magazines fall into this category. They are often, unfairly, placed in the adult section. I had a customer ask today – because he could not find them in the adult section. When I showed him our small range he congratulated us by not putting them in the adult area. he has just moved from Sydney and has a story about a fight with his local newsagent when he asked that the gay magazines get moved from being mixed in with Picture, People and Zoo.

It amazes me what some people share when looking for they products they want.

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magazines

Working on your newsagency

In the few days since we announced the three business round table discussions we have almost filled the sessions. We are thrilled to have Tower Newsagents and non Tower Newsagents participating.

Our goal is to help newsagents make better business decisions. Session details are: Melbourne (Elsternwick) – Tuesday Aug. 28 at 10am, Brisbane – Wednesday Aug. 29 at 10am and Sydney (Miranda) – Thursday Aug. 30 at 10am. Book only by email: bookings@towersystems.com.au. We will confirm all bookings.

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Customer Service

The Art of Knitting continued…

knitting_aug13.JPGMy posts here about The Art of Knitting partwork have generated plenty of queries – all from people wanting to purchase the publication and saying that their local newsagent cannot get stock. The queries demonstrate the challenges of partwork distribution. Gordon and Gotch, the distributor, has confirmed today that additional stock is available for newsagents. If the call centre says no, ask for a supervisor – remember, the noisy wheel…

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magazines

Super Food Ideas sells with lotteries

super_food.JPGWe have been experimenting with different titles in this tiny space next to one of our lottery registers. The best performing title in this impulse space so far is Super Food Ideas. We sold five copies on the weekend from this location alone. Not bad considering that each was an impulse purchase. We achieved usual sales from the regular location of this magazine.

Other titles which have done well here include That’s Life, Take 5 and People’s Friend – think demographic and the anchor product of the space, being lotteries.

Passive up selling using space like this is hard work because it is another task to check daily. However, it is essential in this competitive marketplace.

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magazines

The Monday magazine pitch

In response to people who have asked to track how we promote magazines at the front of the shop, here is today’s pitch.

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I will try and remember to post a photo of the changes we make on Wednesday.

While there is a risk in grabbing sales without driving people into the shop, we decided there is more to be made from impulse purchases from people leaving the centre (we are at an exit) who would otherwise not have purchased.

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magazines

Last season for street directories? Tom Tom, Navman take over?

navway.JPGThe inevitable has happened with the folks behind Melway, Sydway, Brisway street directories promoting their Satnav offer, predictably called Navway, in a flyer (see photo) inserted in their directories. This move coupled with the falling prices for Navman, Tom Tom and other Satnav devices means the old street directory is, well, old.

While some newsagents will be angry that they are being used to promote a product to be purchased elsewhere and even remove the Navway flyers in the street directories, it is more important we focus our attention on what we replace street directories with next Father’s Day and Christmas. Right now I cannot think of a killer single product. Instead, I’d look at creating a more complete male gift package – a bit like you see at Myer and David Jones around Father’s Day time. But something which can be prepackaged, brought in just for the season and works as an impulse purchase.

It is equally important we are careful with order quantities since it will take longer to sell stock and larger retailers are likely to discount more heavily.

Street Directories have been good to newsagents. The have provided a good male gift. Unless we get into the Satnav space, the directory business is downhill from here.

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Newsagency challenges

Bennelong poll in newsagencies

bulletin_aug14.JPGSales of The Bulletin this week may offer an indication of the popularity of Maxine McKew, the Labor candidate for the Prime Minister’s seat of Bennelong. In my newsagency we will sell out. This is rare for The Bulletin.

While our base is low, selling out is a surprise – it demonstrates that there is interest in the Bennelong contest. The news coverage of the Bennelong battle would be helping too.

Covers are critical to sales of The Bulletin. It is not a destination purchase in many newsagencies. We certainly take the opportunity to display the full cover and not just the masthead.

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magazines

Australia Post chases Officeworks, Harvey Norman and Dick Smith

ap_aug07.JPGOfficeworks, Harvey Norman and Dick Smith are the go to businesses when it comes to home / small business technology such as printers.

As much as I wish newsagents were in the mix they are not since we have ignored technology for the most part except for our recent focus on ink and toner – more fool us.

It seems that Australia Post is interested, again, in technology product, particularly printers – if the latest promotion is anything to go by.

The Government owned Post Office opposite my newsagency is promoting the High tech, low prices flyer. They are using the pulling power of the respected Australia Post brand built on the protection of a Government controlled monopoly to compete with commercial businesses.

Here is what the Australian Postal Corporation Act 1989 says about ‘incidental’ (non postal) services Australia Post may offer:

16 Functions—incidental businesses and activities
(1) The functions of Australia Post include the carrying on, within or outside Australia, of any business or activity that is incidental to:
(a) the supplying of postal services under section 14; or
(b) the carrying on of any business or activity under section 15.
(2) Without limiting subsection (1), the functions of Australia Post include the carrying on, within or outside Australia, of any business or activity that is capable of being conveniently carried
on:
(a) by the use of resources that are not immediately required in carrying out Australia Post’s principal or subsidiary function;
or
(b) in the course of:
(i) supplying postal services under section 14; or
(ii) carrying on any business or activity under section 15.

On the back page of the flyer is a range of consumable items which I sell. That my own Government is competing with me in this way demonstrates how out of touch it is with small business.

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Australia Post

Stationery brands in newsagencies (pt 2)

I have received considerable offline feedback following my post earlier this week about our new display around the Scotch brand. The month common questions is: where can I get the range since my warehouse does not have this? The question has come from various states and not just one warehouse.

We have done some more work on our Scotch story. Here is where we are at today:

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While there is plenty more work to do, already the broader offering is working for us.

Brands offer newsagents a wonderful point of difference opportunity. It is important that our suppliers – wholesalers – support brands and allow us to engage in this point of difference.

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Stationery

GNS Market Fair (Victoria)

GNS Market Fair (VIC) started today in Melbourne. Tower Systems has been exhibiting at this trade show it started in 1982 or 1983. Back then desiko ran the event for VANA and Victorian newsagents. This is the first year GNS has had complete control over the event. We’re at stand 1.

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These trade shows are a good opportunity to connect with existing customers and help others make the switch – this is why it is good we are away from other software companies. Already, by lunchtime, we’re generating excellent interest.

While I remain disappointed that GNS banned newsXpress from the event, it was good to see so many newsXpress members there this morning.

With my newsagent hat on I talked to a couple of suppliers displaying product which is not available through GNS. If we are to champion brands, our wholesalers need to carry the range.

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Stationery

Angus & Robertson losing spin battle

I feel for Angus & Robertson and the battle of spin being waged against their desire for a commercial relationship with publishers of books which do not pay their way. Regulars here would see the parallels between the A&R view and what I write about magazines which are cash-flow negative for newsagents. The difference between A&R and newsagents is that A&R has more control over the books they carry on their shelves.

With retail rent increasing at least 5% a year, it is natural that retailers are looking at how make every square metre of retail space perform to its optimum. Sure a good retail business has balance, light and shade, high traffic and browse space, high margin versus lower margin …

I do not see the A&R position as being anti literature or a move against Australian authors and publishers. It is about making sure their retail outlets are viable.

It is not up to A&R to prop up under performing titles just as it is not my job as a newsagent to prop under performing niche magazines. No one will prop up A&R or my newsagency.

I would like to see journalists delve deeper into this story and not just trot out spin as the story as has happened over the last two days. At least Crikey has provided balance in their coverage.

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Newsagency challenges

The Age defiles itself

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Stuck on top of the coat of arms on the masthead for The Age newspaper is this garish post it type ad. It defiles the newspaper brand. This ad also seeks to take sales away from retailers and shift them to home delivery. As a retail only newsagent I am not happy about this. Given the evolving financial model for home delivery it is not ideal either since newsagents are carrying more risk from these publisher deals. That aside, my main issue is with the desecration of the masthead.

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newspaper masthead desecration

Trading Post masthead written down

In case newsagents needed clarity of the impact of online advertising on print read this about the Trading Post :

As at 30 June 2007 the carrying value of the Trading Post mastheads was tested for impairment based on value in use. This test resulted in an impairment charge of $110 million being recognised in the financial statements. The impairment arose as a result of increasing competition in the traditional print classifieds market, challenges in the highly competitive on-line classified market and the risks associated with new initiatives.

A note on page 3 of the preliminary financial report for Telstra for the year to June 30, 2007 published yesterday.

On page 82 of the 304 page document is this:

Mr Trujillo said Trading Post print classifieds disappointed due to the rapid changes in the market, while online classifieds continued to grow.

Newsagents need to change their businesses just as Telstra is changing focus at the Trading Post.

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Media disruption

Men and traffic directions

ubd.jpgIt fascinates me that UBD and Melways publish their new street directories at Father’s Day time each year. What does this say about the male refusal to ask directions? Hmmm.

While sales may guide the timing, I am certain some fathers would appreciate a less predictable gift. That aside, we have placed our UBD stack on the dance floor near the newspaper stand. Our Melways will be placed next to them when they arrive today. We know that if we do not move this stock in the next three weeks the next opportunity in Christmas.

The challenge, of course, is that every retailer under the sun will have the new editions of UBD and Melways. Newsasgents need to be corporate and bold in their approach to win the business.

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Uncategorized

Hiding the Vogue cover girl

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This month’s Vogue magazine is a good example of why newsagents need to look at the best approach tom magazine display. The photo above is how Vogue is represented in traditional magazine fixturing. The top third of the cover is shown. While you can see the masthead, there is no view of the beauty of the cover.

vogue_cover.JPGHere is the cover in all its glory. Now I can see that the cover girl is Alice Burdeu, winner of Australia’s Next Top Model. The whole cover will sell more copied of this magazine than the top third.

Newsagents carrying more than 500 titles and their retail designers need to look at their magazine fixtures. This has happened in Europe and now is the time for Australia.

We need to demonstrate that we are magazine specialists with best practice magazine fixturing.

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magazines

Draft Battle magazine fails QA test

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Drift Battle is sent to newsagents as a one-shot. That is, recycled product with no apparent history and no apparent future. A few weeks ago we received a stack of these, each looking different but sold as the one product. In the bags are old copies on the magazine. On these old copies are their old price labels. This confuses customer. Including our price label, we have four price points showing to customers!

These recycled Drift Battle packs take our magazine offering down market – many of the copies in my shop are not of merchantable quality.

This product ought to have failed a quality assurance inspection and therefore have never been sent to newsagents. I have decided to early return all stock because it does not meet our standards.

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magazines

Sales Based Replenishment trial

I have been fortunate to be involved in an exclusive sales based replenishment trial involving ACP products being supplied to a group of newsagents using Tower Systems software. This is the second such SBR trial involving newsagents. In the first trial my store was one of then trial sites. This time, they are located in NSW and QLD.

While I will not breach confidentiality with details of the trial, I would note that UK experience with SBR is such that newsagents can expect to see more of this model in the future – supply over the course of an on-sale period based on sales data. Overseas experience is that retailers and publishers are pleased with the outcomes.

Good data is crucial to SBR working. Good data comes from a commitment from the newsagent and software company to compliance. While compliance is a tough road, the rewards are good through more accurate supply and early access to trials such as SBR and other initiatives. Yeah, I am blowing the Tower Systems trumpet with this post – so I should, Network/ACP came to Tower because we have an excellent community of compliant newsagents.

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magazine distribution

NDD to move magazine distribution to First Fleet

My May 4 blog post suggesting that magazine distributor NDD is about to go with First Fleet for logistics in Victoria and New South Wales was accurate. The robust denials from NDD executives three months ago appear to have been hot air as they are expected to announce tomorrow that they are moving magazine packaging and distribution to First Fleet by the end of this month.

This decision has many implications for newsagents. It makes other parts of the distribution channel less viable, reduces delivery days – a possible 6 day a week distribution (important for extra supply, fixing mistakes and also if the titles run late from the printers) – to a 1 to 2 day a week distribution. The new people at NDD are behind this move from what I hear – although the spin will be that this is a good move for publishers and newsagents and that all of NDD is behind it.

With the announcement, NDD loses a key point of difference and this can only add to the challenges of their business model.

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magazines