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

Month: September 2007

The value of Family Tree / genealogy magazines

family_history.jpgPractical Family History, Family Tree Magazine and Family History Monthly are three of a large range of family tree / genealogy type magazines found in many newsagencies. The range of titles is broad and appeals to a very select group of people who browse my newsagency. What is interesting is that customers interested in the family tree / genealogy category tend to buy two and sometimes three titles in the category at the one time. This makes them efficient customers and helps justify the retail space we give the category. I see categories like this as essential to the newsagency pitch of being the magazine specialists.

Being a specialist means doing more than putting the product out, it means understanding the dynamics of the category, what else is in the shopping basket and what can be done to drive the efficiency of such a special interest customers.

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magazines

Find It online classifieds

Our Find It online classifieds site has passed 19,000 ads including 11,500 car ads. Find It has been created to provide an online revenue stream for newsagents. Access for newsagents is free. Commission on sales is 100%. There are few commercial opportunities given to newsagents as generous as the Find It model. One day, some newsagents will look back and wonder why they missed out on the online classified opportunity.

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Online classifieds

Managing by text message

For several years I have been receiving text messages on my mobile phone each night when my newsagency closes with the sales numbers for the day – broken down by departments – sent by my software. The text message also lets me know how close the cash balance is.

What is good about this that I know when we close and how we did every night without fail. Getting this data and using some of the other text message features make it easier to be away from the business yet still actively participate in management. This may seem like a small point but I see it as crucial to being able to be away from the newsagency. I see too many newsagents handcuffed to their businesses because of insufficient resources or poor use of technology to ensure consistency.

The best use of text messages by far is our advice to customers that their special orders or putaways are in. We have done this for years and customer still rave about the service.

I can see some exciting developments coming down the line in the use of text messages – enabling newsagents to be more interactive in their processing through text messages. In today’s market being fast and efficient can be the difference between winning or losing. Hence the imperative to embrace technology wholeheartedly – including text messages.

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Newsagency challenges

Herald Sun NatGeo DVD promo a hit

herald_sun_dvd.jpgThe National geographic DVD series offered through the Herald Sun over the last two weeks has been a huge success in driving newspaper sales.

Execution has been excellent – plenty of stock, easy to manage … all driving retail sales. This is one of the best newspaper promotions we have seen in years.

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Newspapers

Australian Women’s Health Diary at newsagents

health_diary.JPGWe are giving the The Australian Women’s Health Diary prominent display at the front of the shop – on the stand we used last week for our Spring gardening display – it works because of the spring theme on the cover of the diary.

The Australian Women’s Health Diary is very popular. Thankfully we have plenty of stock to support a prominent display

We like the diary because sales raises funds for the Breast Cancer Institute of Australia – something we are promoting with the material we have produced. More marketing collateral wouold have been helpful.

We also like the diary because it provides accurate health information for women – a different health topic each month.

My only complaint is that the National Breast Cancer Institute does not promote newsagents as retail partners on their website.

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Calendars

Gloria Jeans and newspapers

I hate these newspapers. That’s what I heard a Gloria Jeans store manager say earlier this week. I told her I was a newsagent and was curious about her comment. It appears that no amount of signs and other devices used to stop customers picking up a newspaper and browsing works. The comment I heard was being made when she picked up a couple of papers and put them back in the for sale rack. When I suggested she push her feeling back through the company she said they would not listen.

By making newspapers available for easy browsing in these coffee shops I suspect that some sales are being lost. At the very least they should be put into units which stop customers easily taking a paper to their table to read.

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Newspapers

Ink and toner site grows and grows

Our Inkfast online ink and toner business is two years old. It continues to outperform ink and toner sales in our newsagency by a factor of four to one – even allowing for the good growth we have achieved in our newsagency over the last six months.

Inkfast serves a very different demographic to our newsagency – most Inkfast customers would not buy their ink and toner from a newsagency. Being purely online and with all customers paying in advance, the margin model is different to retail. I am certain that branding Inkfast in a way which connected it with a newsagency would have seen it fail. The newsagent shingle has baggage (good and bad) attached.

Today, two years on, Inkfast is still growing – organically, without any marketing spend. We spent heard in our first year to attract customers but that stopped a year ago. Today, it’s natural search results and word of mouth.

Like any business, customer service is key – the value proposition is built into our name.

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Stationery

New daily routines and the newsagency business

I am grateful to a colleague for pointing out an interesting story in USA Today about how commute times, workplace changes and other factors impact on our daily routines. While written from a US perspective, this store equally applies to Australia. Newsagencies are well placed to connect with changes in commute traffic given the hours we are open. The key is that we engage with the opportunity nationally. Read what the article says about Starbucks and Wendys for example. Could newsagents respond nationally in a similar way? We should.

The other aspect of this story is that these peak hour traffic trends will drive our suppliers – publishers mainly – to place product elsewhere, outside our channel. This, too, is something newsagents need to develop a response to.

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Newsagency challenges

TAFE declares print dead

The New South Wales TAFE guide is no longer. Newsagents are only being told when they make some calls to chase supply of the usually annual publication. TAFE has moved the handbook content online which makes sense and is good for the environment. For newsagents, however, the move of the TAFE guide online will mean a significant revenue loss. Many would sell in excess of $2,000 worth of guides a year in direct sales and more in associated business.

It is surprising that there has been no transition. Last year the guide was in print and this year it is only online.

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magazines

Magazine distribution changes cost newsagents

The move of NDD titles to now be distributors by First Fleet, the company which also handles Network and Gotch magazines, is impacting newsagents as this report from one colleague explains:

This morning we received our mags at 5.45am. The driver blamed the fact that they now deliver NDD as well as Gordon & Gotch.

He claimed that the NDD product is not allowed into the G&G & NDC warehouse to be split up for distribution.

They are currently using this Transport Subcontractors own warehouse to split the orders. The product is also arriving late.

Net result, we have had to go out twice to deliver mags to our 22 Sub Agents.

This obviously increases our distribution costs and reduces sales. Wednesday Mags in particular have their highest sales on the first day.

If the Subagents do not get there Mags until mid morning their is a massive sales decrease.

This is the second week that this has happened.

While suppliers cut costs out of their supply chain, this demonstrates a lack of regard for newsagent costs.

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magazines

Beware lottery insurance offers

Aon has written to Victorian newsagents pitching their lottery agency insurance package. While that is their right, the wording of the letter is concerning and is likely to confuse some. They tie the requirement to purchase insurance such as that they offer to the recent NSW Lotteries case. The implication was that the NSW case led to insurance cover changes being required. Our existing policy was fine so we filed the Aon letter in the bin.

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Lotteries

Tuesdays and stationery

Tuesdays really are changing in newsagency retail – they are no longer the starved child of the retail week. In my newsagency, Tuesdays are delivering excellent stationery numbers and coming in as the third and even second best day of the week. Tuesdays have benefited the most since we started rebuilding our stationery department. Not only are sales strong but the mix of products sold is good too. We are using this information to look at Tuesday offers we can implement to leverage the obvious interest.

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Newsagency challenges

Magazines suffer from inserts

Note to magazine publishers – those premium inserts you use to add value too often detract. Take a look at the photo below of how inserts looked on Good Health and Notebook which we received today. Both premium, high quality, titles look damaged because of the promotional insert:

mag_trash.jpg

In both cases, the magazines appear to be damaged when it is the insert sticking out from the magazine which is damaged. While we put the damaged product to the back, often more than half total supply is damaged.

If publishers are going to use inserts such as these to promote their titles, they ought to invest in appropriate packaging to ensure the titles arrive in a merchantable form.

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magazines

A Government out of touch on small business

ap_sep07.jpgIn 865 Federal Government owned Australia Post shops right now you can see how serious the government is about small business. Leveraging the conflicted positions 100% ownership of Australia Post and controlling legislation which governs Australia Post, the Government has ensured its annual profit windfall. Over the last eleven years this windfall has come at a significant cost to small business including newsagents.

Take the current twelve page Australia Post brochure: page after page of stationery items which, on my reading of the Act, fall outside activity permitted by the Act under which Australia Post operates. My newsagency, like any newsagency competing directly with a Government owned Australia Post retail outlet, fights every day for stationery business. Newsagents have been in stationery since the 1880s. Australia Post has beefed up in this category during the last eleven years.

That Australia Post government owned stores so aggressively and blatantly target independent small business newsagents is evidence of how the Government views small business.

Helen Coonan, the Minister in the government responsible for Australia Post will say that the legislation con trolls Australia Post – as if to wash her hands of the situation. Her Government controls the legislation and can prove its small business credentials by taking the Government owned stores out of this direct competition.

Australia Post has an unfair advantage in that it uses its protected monopoly of postage services to drag traffic to their retail outlets. Newsagents do not have this luxury, it costs us far more to land customers in our stores than Australia Post.

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Australia Post

Driving newspaper sales

sun_herald.jpgFairfax published a coupon in The Border Mail, The Illawarra Mercury and The Newcastle Herald last Saturday which, if redeemed at a newsagency the next day, gave the customer the Sun Herald for $1.00. This 44% discount is significant. It is interesting to see a promotion aimed at driving retail sales.

Most cover price discounting is around subscription offers. Maybe the Sun Herald on Sunday had a big home delivery push – I haven’t seen the newspaper. Given that newsagent commission on the discounted copies was maintained at a pre discount rate, Fairfax grossed 55 cents per copy. This is a 59.25% discount off their usual gross.

Given the inefficiency of newspaper sales in newsagencies – around 70% of all newspaper sold are sold alone – I’d prefer to see a newspaper publisher drive sales of their product by partnering on a deal which also drive sales of another product in my business. Ideally, the partner product would be a stationery item – at least something away from the convenience line. That said, if the only option I have is a deal like the one tried last week then I’d embrace it and try and build something myself around the pitch.

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Newspaper marketing

Promoting Bear magazines and Forever Friends bears

bear_mags.jpgWe are trying something completely different at the end of one of magazine aisles with this bear display: cross-promoting the Hallmark Forever Friends range as well as a selection of bear magazines. Both ranges are located some distance from this display and would not be seen by the high traffic passing this display.

Our feeling is that we need to come up with a bolder backdrop next time to draw attention to the display. We see this display as a start. It is along the same lines as our wedding card and magazine display which I blogged about tlat week – a display off which we have now sold three magazines. I don’t know if they are extra sales but I do know they have been bought from the small magazine display in our card department. Even one magazine sale from these cross-promotion displays has to be worth it.

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Greeting Cards

Annoying merchandisers

We were visited by a merchandiser yesterday who shifted three titles from impulse locations so they could better promote the titles they are paid to promote. I am annoyed because we select titles for these locations carefully. We are going to stop this and require the merchandisers to work with us.

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magazines

Model railroad magazines in your local newsagency

Rail Modeller, Model Rail and Model Railroader are three of the specialist model railroad titles we have in our newsagency. They are what one could call long tail titles. We sell small quantities of these and other model railroad titles yet having the range draws magazine browsers and, overall, browsers buy. The model rail category along with similar categories combines to demonstrate our point of difference and make newsagencies the destination we are.

rail_mags.JPG

We focus as much on these model railroad titles as we do our women’s weekly titles. Indeed, we obsess about their display, making sure that all the model railroad titles are in the space allocated and not mixed with radio control model titles or general railway titles. We make sure the titles are displayed full face and even featured on category displays from time to time. Our effort stems from pride in the range we carry.

In a strict cash-flow sense these model railroad titles rarely pay their way. However, once you take into account the overall basket from the visit the benefits of carrying the range is evident.

The model railroad titles are a good reason for newsagents to establish a Magazine Week promotion here – where we promote the depth of our range. We’re the best magazine retailers in the country after all.

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magazines

Spinning newsagent IT standards

Bernard Zimmermann, Director of POS Solutions Australia Pty Ltd, posted the following to his blog:

Xchangeit sales data is to us both positive and negative.

It is bad that a significant number of our clients are not sending sales data! There is no technical problem, it is just a high percentage are either not bothering or deciding not to send the sales data. I intend to check on everyone of my relevant clients this week to find out why they are not sending data.

On the other hand, the good news is our sales data is extremely good. It has been described to me as the best. This is clearly an excellent result.

As I stated earlier according to my calculations we now have enough sites sending good sales data that magazine producers could send every day reliable estimated daily sales with just Pos Solutions clients.

That Xchangeit is not doing it now is hurting the entire industry. It should be a priority in the industry to send each one of these publishers free this data AS SOON AS POSSIBLE.

This is a misleading post.

Magazine distributors and newspaper publishers will tell you that what data they get from from newsagents using POS Solutions software has not been good for years. If POS has sorted this out for all of their customers then good. If not, suppliers ought to be public in declaring lack of compliance.

For years suppliers have been quiet about elephants in the room – the IT companies letting newsagents down on helping newsagents meet basic IT standards.

As the owner of Tower Systems there is no doubt I am conflicted in the issue of which software is better – Tower Systems or POS Solutions. Newsagents, voting with their cheque book, say Tower Systems.

But this is not about Tower versus POS. It is about a whole channel using best practice software and business processes to ensure that newsagents are, collectively, as strong in terms as IT as our major competitors in the circulation product space – supermarkets, convenience and petrol. For newsagents, such as happened in Victoria recently, to wait two years for a software company to play catch up on standards is appalling. It holds the whole channel back. If we – suppliers, software companies and associations – all agree on standards then surely we ought to ensure we support them in a timely manner. The two year delay for a group of Victorian newsagents holds the whole channel back.

Newsagents don’t have time for spin – they want their software to work and their compliance with supplier IT standards to be assured.

POS Solutions’ lack of compliance to industry standards has been the elephant in the room at many industry meetings. In November last year, at a two day News Limited meeting in Melbourne which involved, among others, myself, Bernard Zimmermann, News Limited executives, the ANF and other software providors, the lack of adherence to current standards by hundreds of POS clients was a hot topic. I asked it be parked for private discussion between POS and News because of the difficulties it presented for POS in the relatively open forum.

For years the newsagent channel has had IT standards. It is time for all stakeholders to enforce them – for the good of all newsagents.

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Newsagency challenges

Missing Jewish New Year

Rosh Hashanah, Jewish New Year, starts sundown, September 12. We usually have cards for sale but they were water damaged and Hallmark has no backup stock. It seems that for these small seasons the major card companies only import firm order requirements. Based on the questions we have had in my newsagency and other retail outlets I know of, these small seasons are an excellent opportunity. The card companies ought to have backup stock to enable a quick response.

My experience this year has me looking for another card company partner which can handle smaller seasons such as Jewish New Year and us builld our credentials as the card experts beyond the high volume seasons.

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Greeting Cards

Promoting the $20 million superdraw

lotto_wall.jpgDespite the whack from Tattersalls last week for using part of the lottery counter (which I pay for) to promote non Tattersalls we are heavily promoting syndicates in this weekend’s superdraw. In fact, we have been promoting syndicates in the superdraw for weeks. We promote our syndicates on the wall in the photo and elsewhere in the shop – certainly outside the space where lottery products are usually promoted. Our approach to superdraws is structured and consistent. But it’s not enough to protect us against the challenge of construction – 50 stores around us are closed. The centre is going through a major re-vamp. Given that magazine and stationery sales are up, this tells me lottery sales are affected by the construction. Around 50% of lottery sales in our shop are impulse and with traffic dramatically cut the sales dip stands to reason.

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Lotteries

The newsagency counter

I common question I get from newsagents reading this is: how do you lay your counter to drive impulse sales? While the counter changes several times during the week, the elements are the same and best shown in this photo I took Saturday:

counter_sat08.JPG

We have three key serving areas – one to the front and two to the right. At each point there are upsell opportunities. At the corner of the counter, the newspaper, magazine and Darrell Lea stands work well at attracting impulse purchases.

We obsess about this space – to the point where we are discussing with a designer to create a single stand to replace the four stands we use at present. A more corporate yet flexible feel will, we think, help us sell more from this space.

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marketing