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

Month: October 2007

Vic. newsagents stirring over lottery decision

Newsagents in Victoria are starting to ask questions about the probable loss of scratch lottery products. It’s a bit late, the time to ask questions and take action was February this year. Inaction by newsagents is part of the reason the Government has got away with this anti small business decision. Here is what the petition said:

We, the undersigned, are concerned citizens who urge the State Government of Victoria to ensure that lottery ticket and scratchie games are sold only in independent small businesses in Victoria to protect jobs and to ensure these tickets are sold by well trained staff committed to ensuring responsible gambling and, specifically, not in big supermarkets such as Coles and Safeway / Woolworths.

To sign this petition, click here.

In a more practical sense, my software company, Tower Systems, is offering free help to newsagents to quantify the potential knock-on impact of the loss of scratchies on their business.

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Lotteries

Walking customer’s shoes

Roy Peter Clark has written an excellent essay published at Poynter exhorting journalists to read newspapers – for the future of newspapers. Clark says journalists are probably out of touch by not engaging with the product they help create.

I wonder if this is true with newsagencies. How much do we engage with our channel as a customer? With the hours newsagents work it can be difficult but it is essential. This experience of shopping other newsagencies might be what we need to navigate our own future.

Clark writes about spending 15 minutes a in the morning reading newspapers and more time in the afternoon on feature articles. If we are to engage with our channel, as a customer, it needs to be as structured.

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Newsagency challenges

Misfiring the Women’s Health launch

womens_health.JPG

We received plenty of stock of the launch issue of Women’s Health today but no promotional material. Our plan was to put up an aisle end display in a high traffic areas but we have used that for another title due to lack of material to support Women’s Health. What we did get was a red counter unit but that’s hardly enough to make a display.

I’m not impressed with this launch. Publishers need to understand that proactive newsagents plan their displays and need material when a title arrives – not days later.

So, without publisher support, we have engaged in a co-location strategy. We have Women’s Health inn our weeklies area (see photo), in the health area and as the feature magazine on our busiest lottery counter.

UPDATE: I was at another newsagency today and they received free standing stand on which to display Women’s Health – so, I am not sure what happened to his for Forest Hill.

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magazines

Magazine City

The Sunday Age ran an interesting article for magazine lovers yesterday. Magazine City is about Melbourne’s independent magazine boom, covering titles you’re unlikely to see in newsagencies. It’s interesting to see Sahil Merchant, founder of Mag Nation quoted – this respects Mag Nation’s unique offering in the magazine space and demonstrates their business as the category leader it is.

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magazines

BP promotes Women’s Health

I was at my local BP petrol outlet last night and noticed a promotion for Women’s Health, the new magazine from Pacific Magazines which launches today. The deal was a free sampler of a couple of articles from the magazine if I buy a bottle of water.

The lack of knowledge by the employee behind the counter about the new magazine and the co-promotion with water meant the campaign was a dud where I live. I was surprised to see the new title being promoted in the BP outlet given their poor commitment to magazines.

I am not aware of the sampler offer being put through newsagents. If it ran in petrol outlets I’d be most disappointed. Newsagents are well placed to talk up magazine launches. We are the ones who will invest plenty of real-estate promoting the title today and for this week.

Publishers suck up to newsagents telling them how great they are and that Australia needs the magazine specialist retailers. Sometimes, their marketing decisions tell us otherwise.

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magazines

Helping measure the loss of instant lottery sales

We have established assistance for newsagents using the Tower software who would like forecast the impact on their businesses of losing instant scratch ticket sales – in the light of the Victorian Government’s announcement two days ago.

We will confidentially analyse basket data from participating newsagencies for the last six months in a way which can be used to project the impact sales on other departments. This information will help these newsagents better plan for the future – maybe a future without scratch ticket sales.

If you would like to access this free service please email our support team.

We will review basket data for the participating newsagencies against basket data we have for our broader community.

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Lotteries

Samsung printer giveaway

free_printer.JPGOur printer giveaway is going well – two Samsung laser printers have been won and have four to go.

We have moved the display to the top of one of our stationery aisles, wrapping and labeling boxes to represent the printers given away already – to make winning real and achievable.

Having branded free stock like this to support local in-store promotions is important in our newsagency competing with Big-W, Australia Post and other national retailers nearby.

From a sales perspective, stationery is tracking good growth – this is probably more due to our major overhaul of the range around national brands than the printer giveaway itself.

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Stationery

Second magazine management workshop

The magazine management workshop held at Tower Systems‘ head office in Melbourne a week ago went well. It took a new approach to helping newsagents better manage magazine arrivals, returns and everything in between. The content was tested in our own newsagency and in close consultation with magazine distributors – to help drive more commercially viable supply to newsagents.

We are repeating this workshop this coming Thursday (Oct. 18) starting at 10am – in Melbourne. This free training is helping newsagents save time in magazine management as well as achieve better business outcomes. We’re planning dates for other locations so watch this space. Anyone is welcome to participate. Email us to book.

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magazines

Kristin Hersh, middlemen and newsagents

hirsch.JPGI was fortunate to see Kristin Hersh perform last night at The Palais in Daylesford last night.

Beyond her songwriting and wonderful performance ability, Kristin Hersh is experimenting with a new model for sharing her music with the world.

Gone is the big record company, middlemen and fees for music. She has handed her future to the people by establishing the Coalition of Artists & Stake Holders, or the “CASH Music Project”.

As her website declares:

We’re committed to not holding music hostage, the music will be free. We’ll be asking for donations and offer you the opportunity to subscribe to Kristin’s career – past, present and future.

It struck me on the drive home from Daylesford last night that the challenge faced by Hirsch and the entire music industry is not dissimilar to one of the challenges faced by newsagents. The traditional model has become so disrupted so as to compromise its viability in its current form. Rather than react, Hirsch and her team are evolving a new model – in consultation with old and new fans.

Newsagents need to act as boldly if they (we) are to enjoy a bright future. This means breaking with tradition and listening to ourselves and our customers more than our suppliers. If we do not do this, our future will be dictated by others whose long-term needs most likely do not match our own. Our channel is riddled with middlemen and processes which make money for others and not for us. While they cut costs our of their supply chain, we are burdened with more costs. As Kristin Hirsch has done with her music, we need to seize control, for ourselves.

If you get a chance to see Kristin Hersh on her remaining Australian tour dates, it’s well worth it.

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Newsagency challenges

Vic. newsagents face multi-million dollar lottery loss

“Victorians who buy a weekly lotto ticket probably won’t notice much change – lotto tickets will still be available from a wide range of outlets throughout metropolitan and regional Victoria.

“But they will start to notice a more comprehensive and diverse mix of products and changes in retail networks from next year.

This is John Brumby, from in his press release Thursday this week. Then this from the Intralot press release oin the same day:

INTRALOT is looking forward to establishing a successful operation and contributing to new product ideas and distribution methods that will provide greater convenience and choice for Victorians.

There you have it. The retail network will change. Intralot clarifies further with:

The company will establish an expanded and modern distribution network, based on a state-of-the-art online system that will exceed 1.000 points of sale.

Around 10% of lottery product traffic is generated by scratch ticket customers. More than half scratch ticket sales include other items. Some of those customers will not visit a newsagency if scratch tickets are sold elsewhere. This will impact the sale of magazines, newspapers and confectionery – the items most often sold with instant scratch tickets.

VANA, the Victorian newsagents association and the Lottery Agents Association of Victoria ought to have lobbied harder and sooner on this issue. They were asleep at the wheel. My concerns published in this place were well founded.

So, how much will Victorian newsagents lose if they lose scratch lottery tickets? I’d suggest the annual losses will be in the order of $5 million and $10 million in sales across several categories. Some will reduce employees if the impact is too much … the knock on effect of this decision by the State Government of Victoria will take more than a full year to unfold, maybe longer.

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Lotteries

The profitable competition

Tattersalls started a promotion this week around the Cox Plate. People who buy a 50 line lottery ticket get what appears to be a free entry. They open this and then send a text message with the code word printed on the ‘free’ entry to see if they have won. The text message costs 55 cents. One customer threw the scratch ticket away, angry at being asked to pay for what they felt ought to be a free entry. I agree with them. This kind of competition which costs money to enter can do more harm than good to a brand.

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Lotteries

Expensive displays

good_health.JPGHere is an example of where rules can work against newsagents.

The excellent Good Health is a feature magazine in the ACP magazines Connections program. This means we are to do an aisle end display. If we do that we will not have enough stock for the co-location strategy which works well for this title.

So, we have decided to not do the Connections display. Instead, we have Good Health in three locations including between Australian Women’s Weekly and Woman’s Day. We have sold six copies in four and a half days – that’s 37.5% of supplied stock. I’d expect to have sold 60% by Sunday – demonstrating that our strategy is appropriate for the 16 copies we have received.

I understand that the Connections display is also about promoting the brand. The reality is that I need a better return than I can get from 16 copies if I am to provide an a valuable aisle end for as display.

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magazines

Pen stand helps drive sales

pen_unit.JPGThis is the pen unit Ben Kay designed for the new newsXpress corporate store at Watergardens.

The unit is four sided and integrates pens from a range of suppliers – making selection very easy for customers.

We have located the stand near the counter for security reasons and to make it easier to help customers with queries about the right pen for them.

We have focused on pens because they are an important point of difference for newsagencies. Our stationery competitors are Big-W and Safeway a good range of individual pens well demonstrates our product knowledge and point of difference.

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Stationery

Yahoo!7 promotes lotteries

Jumbo Corporation and Yahoo!7 have announced an alliance to bring lottery products to the Yahoo platform. Yahoo!7 Lotto, as it is called, is a very interesting move – especially in the light of the report two weeks ago that the Yahoo!7 partnership is planning to get into the free classifieds space.

Lottery products are important traffic generators for newsagents. Our bricks and mortar network has no connect with the expanding online offerings – except in Queensland where the agents association negotiated a small trail commission for online customers who purchase their card in a retail outlet.

Newsagents need to watch for a migration of lottery sales online and make capital investment decisions accordingly.

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Lotteries

Differences in magazine supply

wg_mags_oct10.JPGI am fascinated by differences I am seeing in magazine titles supplied to the two newsagencies with which I am currently involved.

The differences in titles supplied to Forest Hill, in the east, compared to Watergardens, in the west, are considerable – more than expected.

While the Watergardens store is only a couple of weeks old it surprises me how prejudiced the magazine supply is. We have not requested any particular categories, leaving it to the magazine companies. They have gone with what I would call a typical western suburb mix and I suspect sales will become a self fulfilling prophecy as a result.

I am sure that the mix of titles is based on what the magazine companies sees as selling in our area – but I wonder if they have played outside the square to see what is possible. I think that demographics are less geographic today than, say, ten years ago. In eastern suburbs as in the west there is considerable social, economic and cultural diversity. Hence my concern about possible prejudiced or skewed data driving magazine supply to the new business.

In the card department we have gone for a broad range, covering every conceivable caption and grouping. This diversity shows a breadth of interest from our customers which the magazine companies would be well to research. In a month or two we will have better to share with our magazine partners to help them adjust their scale out to what is possible rather than what is average.

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magazines

Irish digital newsagent

MyMagOnline is an Irish website offering digital editions of Irish magazines. One reason they pitch consumers ought to go with them is: Eco friendly – low carbon footprint – all the magazine content and more without the inks, paper, other raw materials and all the distribution miles required to get your print copy to a shop near you, you just use electricity to power your machine! I like the sound of that!

Beyond iSubscribe and MagShop in Australia, I know of several others developing online newsagency type sites specifically to serve magazine consumers.

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magazines

Tattersalls monopoly ends

So, the Tattersalls monopoly in Victoria comes to an end. See the ABC news report here. The press release from the Government and reports in local media are thin on details – none identifies where instant scratch tickets will be sold. Intralot has previously identified supermarkets as a retail network they favor.

Regulars here may recall the petition I started and blogged about on this matter – newsagents who did not complain at the time will have no excuse if they lose scratch ticket sales. Here is part of what the Geelong Advertiser said at the time of my petition:

The Lottery Agents Association of Victoria said the State Government was unlikely to approve Intralot’s opportunistic application.

Association CEO Peter Judkins CEO said Mr Fletcher’s petition meant well but even if the unlikely approval was made, changes would not come before mid next year.

I’d like to catch up with Peter Judkins and see what he has to say now.

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Lotteries

Stationery promotion

stationery_oct.JPGIt’s great to have another stationery promotion in play to reinforce our price competitiveness and our commitment to branded product.

Newsagents would not usually have another marketing pitch until Christmas and / or Back to School.

This two page flyer is important if we are to compete with the Australia Post government stores which produce a flyer every month.

We know from market research from several companies that newsagencies are considered to be expensive. This is why it is imperative that we pitch deals like those on this stationery flyer.

The biggest challenge for us is space – what with calendars, diaries, Halloween and even some Christmas out, space is at a premium – so we’ve created the promotion around a table on the dance floor as well as in the body of the shop.

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Stationery

What small business policy Mr Howard?

Attached to the Order Form listing a range of products available exclusively through the Government owned Australia Post retail outlet is a flyer promoting a one day stationery sale – 10% off all stationery.

This is the Howard Government’s small business policy at work. While in office they have facilitated Australia Post fending off competitors and maintained it as a protected monopoly in traffic generating areas such as postal products and services. They have actively encouraged Australia Post to use its protected brand to go after family run newsagencies in the stationery category.

Now, the government allows its wholly owned business to offer a 10% stationery discount tied to its monopoly products.

Yep, small business policy in action.

In 2004 I discussed this with Senator Coonan, the Minister responsible for Australia Post, and she pointed to the legislation – hid behind it might be a more appropriate way of putting it. The Howard Government has been in control of this legislation for over eleven years. They have done nothing. Indeed, they have encouraged the growth of Australia Post and its strategy of taking revenue from family run newsagencies for the benefit of Government coffers.

This Australia Post 10% off stationery flyer is proof that the Howard Government has no interest in small business. They know the financial and emotional hardship their wholly owned business is causing newsagents yet they sit back and watch.

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Australia Post

Halloween 2007

halloween_oct07.JPGHere is a photo of our Halloween display – it is right at the front of the shop.

We are running this promotion as part of the national newsXpress Halloween campaign. It’s a ton of fun, a great traffic puller and great for sales. It is some light relief before Christmas really kicks in.

Last year was our first Halloween and it was a screaming success. We even had customers asking if we could give them the newsXpress Xpress your Spooky Side posters.

This promotion is good in broadening the appeal of our business from that of a traditional newsagency.

While many newsagents have no major promotional pitch from Mid Year to Christmas, we have found Halloween, Care and Friendship, Rugby World Cup and several stationery offers to be excellent at driving sales in the run up to Christmas and avoiding the troughs which have traditionally followed mid year.

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newsagency marketing

Obscuring the masthead

Maybe I am too precious about mastheads. Take a look at this masthead from the latest issue of The Horse Magazine where they obscure a chunk of the title:

example from hors.JPG

Then there is Asian Geographic – obscuring the title.

asian_geo.JPG

While this may not matter to people who know the titles well, to new staff and new customers it is a problem.

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magazines

Respecting newsagent time limitations

cricket_mag.JPGThe packaging and distribution of this compact Cricket magazine from the ABC has been handled well. I opened the box and there it was, all setup and ready to go on display. This is how feature or promotional product ought to come – saving labour on a busy morning.

As the display unit will not fit in our sports section, we have placed this at the counter.

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magazines

Grumpy newsagents (part 2)

adoku_cross.JPGHere is another example of what can make newsagents grumpy – more titles which we are to have on the shelves for five months. This on sale period is ridiculous in a newsasgency where shelf space is short and where we often pay for titles, not always but most, a few weeks after receiving the stock. I would prefer either two drops of such a long shelf life title or billing on the basis of sales data. The current arrangement is unfair to newsagents and is another reason newsagents get grumpy. It’s our money being shelled our to support the long shelf life titles. As with my previous post, a magazine czar who controls access to our real-estate would stop this.

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magazines

What makes newsagents grumpy

holden_car.JPGNewsagent suppliers often complain about the grumpiness of newsagents. Maybe if these suppliers had their own money at stake in a newsagency they would begin to understand how a good day can turn bad and a good mood can become grumpy.

Take this magazine, Holden in Australia, from Universal magazines. It is to be on sale for five months. Based on sales of similar categories I know I am likely to sell one or two copies. This means, if I do what Universal wants, that will have a pocket allocated to the title for five months.That will cost $17.50. Even if I sell all four copies I received, my GP will be $8.95. See my point?

Labeling magazines in the morning is like writing a cheque for the privilege of gifting real-estate and labour to companies like Universal who love long shelf life product – no wonder newsagents get grumpy. Until the publishers own and operate a newsagency I do not expect them to understand the damage they are doing.

This is why we need a magazine czar.

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magazines

Online Sudoku and Crosswords at YouPlay

youplay.JPGYouplay.com is being advertised heavily on radio 3AW Melbourne and, I suspect, elsewhere around Australia. It’s a partnership between Lovatts and Southern Cross Broadcasting.

The website is easy to use and designed to suit its target visitor. I reckon it will be a huge success. The partnership with Southern Cross is excellent given their reach and the demographic of their radio stations.

While access to YouPlay is free, the good stuff it will cost punters $4.99 a month.

Newsagents are actively promoting YouPlay on every Lovatts magazine in store. That’s fair I guess – Lovatts are welcome to promote whatever they want on their product. However, it contradicts their view that YouPlay will attract an entirely different customer to the purchaser of Lovatts crossword and Sudoku magazines from newsagencies.

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magazines