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

Month: January 2008

The price of cardboard

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Cardboard is a staple stationery item for any newsagency. Everyone sells it and if you don’t you’re missing out on good sales every week. We sell the high end cardboard, it’s coloured to the pulp. This means the colour holds better and the board will not curl. Our price is currently $1.10 a sheet. I know of newsagents selling lesser quality cardboard for close to $2.00 a sheet and others selling the higher end product we sell for 95 cents a sheet.

This vast price difference surprises me. In an opportunistic sense, newsagents can charge more because we are almost the only source of a good range of such cardboard. From a business perspective, given the stock turn of some of the colour, the lower end price point, and I’d include our $1.10 price in that, is too low.

While newsagents, when they get together, talk about late newspapers and magazine oversupply, I don’t often hear discussion about the price they set for cardboards. Maybe I am wrong but I think it makes for a good business discussion. We have more control over this than the other things we complaint about.

As for our $1.10, we’ll move that up over the next few weeks.

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Stationery

A Packer and Murdoch partnership?

Consolidated Media Holdings has announced the receipt of an indicative acquisition proposal from companies controlled by James Packer and Lachlan Murdoch. Stephen Mayne at his excellent Mayne Report has a perspective worth reading. The question for newsagents has to be: what’s the likely impact?

While it’s a challenge to predict the likely impact for newsagents, what I do know is that the bigger the suppliers the less connected they are with the newsagency channel. Their focus is on sales and they see these coming from a range of retailers. Decades ago, when newsagents were the go to outlet for newspapers and magazines, we were more interesting to publishers and distributors. Now, with supermarkets, petrol, convenience and all manner of other outlets in the mix, our relevance is less.

Of concern flowing from any possible announcement is whether there are implications beyond Consolidated Media itself.

Like all newsagents, I await the Consolidated Media announcement with bated breath.

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Newsagency challenges

Perspective

I’ve been in Bali for the last 24 hours and have had an opportunity to see some retail.ÂThere is nothing like travel to provide some perspective of challenges and opportunities back home. It’s a privilege to get away sometimes…but always good to get back.,

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About us

Bold back to school

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Check out this impressive back to school display being run by Graeme Baker and the team at newsXpress Macarthur.  It’s a big outpost at Macarthur Shopping Centre. 

I like the way the tables are setup – very easy for shopping having everything within arms reach and at a shopper friendly height.

The outpost is the result of countless hours of back room work, analysing previous results, choosing the right products and determining layout.  It is a season which requires good local knowledge because what Graeme sells most of may not be popular elsewhere.

It is good to see such a strong presentation by a newsagent in back to school.  The newsXpress back to school marketing pitch of no stress could equally apply to the parents doing the shopping, the kids preparing for the year and the newsagent making the sale work.

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Stationery

A medium back to school presence

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At our Frankston newsagency, we are finding that Back to School is bigger.  We are running a more traditional newsagency sale – but on a small scale since we are new to this business and the sales history suggests such an approach.  It is working well for us – we have kicked the stationery pitch up with the book offer as well. The two work well hand in hand.

The book display is in our main entrance and our back to school offer right behind and down into the stationery aisle. While this is nowhere near as big as some back to school offers I have seen, it’s working in Frankston.

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Stationery

Back to school alternative

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Back to school is not big at Forest Hill so we are promoting a range of holiday and back to school related books and activity packs instead. This is working very well for us.

We have the books on the dance floor, you can’t miss them. We’re supporting the offer with an A5 school fever flyer. For years we pushed hard with back to school, both in-store and with an outpost and the investment never worked. Hence our decision to find an alternative sale generator for this season.

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Stationery

eziPass voucher solution uptake grows

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We are seeing a good uptake of eziPass by newsagents this year. While it is still currently only available to Tower Newsagents, that situation will change soon with the benefits of eziPass being available to all newsagents including those without any point of sale software.

People using eziPass tell us they like how easy and fast it is and the easier statements they receive weekly – there is no overnight sweep of your bank account.

Neither I nor my software company, Tower Systems, takes a clip of commission for phone recharge or other products sold through eziPass.

With rechrge business important to newsagents, I knew we had to deliver a product which reduced the opportunity for error at the counter, made reconciliation easier, respected newsagent cash-flow and, wherever possible, delivered better commission.

As commissions for phone recharge have fallen for newsagents, I suspect the amount others make from the efforts of newsagents has not. hence the importance of developing a fairer alternative for newsagents.

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Newsagency challenges

Corey, media disruption and newsagents

The Corey Worthington story which has dominated headlines here and overseas this past week demonstrates how the media has changed and how old media cannot keep up with a fast moving story.

While TV crews and radio stations fought to get Corey into their studios to have a crack at the sixteen year old and newspapers had yesterday’s news, Corey and his friends were using new media to spin his new celebrity their way and online sites made the story their own and more immediate. They were on youtube and elsewhere with their take on the story as they saw it for their generation.

Online media outlets such as Monkey Magazine in the UK brought the Corey story to hundreds of thousands.

Slapcorey got to over 300,000 hits in a matter of hours as a viral bushfire was set off.

Blogs such as ilovecoreyworthington took the story and the opinion around it even further.

Crikey provided analysis of the media coverage of the Corey story and more up to date coverage than newspapers.

BustedTees and others got into the commercial opportunity with t-shirts and sunglasses.

News Ltd understood the importance of online and paid for a Google Ad to display if you searched for Corey using the search engine. Defamer joined them with a Google ad yesterday but their link resulted in an error.

While Australian newsagents could do no more than sell newspapers and magazines through this tsunami about Corey, it’s instructive to take a moment and look at how this story ran through the week and consider the role we, as newsagents, played compared to how it may have played out ten years ago.

I am not suggesting could have done anything differently than selling the products we have. However, we have to question our relevance in the context of these fast moving stories, the relevance of the products we sell.

Relevance is a big question for newsagents and goes to the heart of the question of what the newsagency of the future looks like.

The Corey story will be studied in universities this year as a media case study I’m sure. It is a story which demonstrates how people in the news can use Web 2.0 tools to have greater control over their message, how others online are adept at providing more current news and analysis of fast-moving stories and how out of date old media has become.

Newsagents ought to study the Corey story as carefully as media students at university. It shows his how people are consuming and interacting with news.

I don’t see the Corey Worthington story as as damaging newsagency relevance as much as being a reminder that the world has changed. We need to understand this and make capital investments in our our businesses accordingly. While some newsagents are, and finding success, many are not – they are waiting for publishers and other suppliers to unveil a new future for them.

On Corey himself, good luck to him. He is sixteen. I had a party at my place when I was sixteen and my parents were away for the weekend. While it didn’t attract as many as Corey’s party or any media coverage, I can understand his need. Yeah, good luck to him!

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magazines

People’s Friend grows and grows

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I continue to be amazed at the sales for People’s Friend. It’s been strong at our Forest Hill store for the twelve years I have owned the newsagency. Now, at Frankston, I see stronger sales – 55 putaways. People’s Friend customers are loyal and respond well to other (appropriate) titles placed nearby. It’s a title I am happy to have out of season – the Christmas edition has just arrived with a free Celtic Christmas CD.

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magazines

Free training for newsagents

Tower Systems has announced new (free) online training opportunities for newsagents. Newsagents can access these live training from their home or business through any computer with broadband access. Voice content is over the phone line via a toll free number. The new courses on offer are:

Magazine Management 9am Jan. 22 at 9pm and Jan. 29 at 10am. This session will cover all aspects of magazine management; from Arrivals, Returns, Putaway Management and over/under supply. There will be plenty of time for questions.

Re-Ordering 2pm Jan. 22 at 2pm. Learn how to make the most of Tower Systems’ Retailer software’s advanced reordering functions. Learn how to create an order electronically, send it to suppliers, then once the stock is in have Retailer arrive it automatically without the need to enter it manually.

Business Discussion with Mark Fletcher Jan. 23 at 11am. This will start with a quick review of benchmark data from December 2007 and be followed by an open discussion about how people are innovating in their business. Our goal is to get newsagents sharing challenges and ideas so that, collectively, we can help each other to build better businesses.

New Owner Training Jan. 29 at 2pm. This is for people who have bought their newsagency in the last six months. It will provide new owners an overview of the Tower Systems software and its capabilities. We will cover all the things that new owners find challenging, from balancing registers to arriving stock. This session will have plenty of time for your questions. (Tower Systems also offers all new owners a free ful day of one-on-one training prior to take over.)

Each session will run for between 60 an 90 minutes depending on questions and discussion. You will need access to a computer connected to broadband and a voice phone line (for a toll free call).

Bookings are by email: bookings@towersystems.com.au.

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newsagent software

Hit the road magazine promotion

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HIT THE ROAD is our latest at-the-counter magazine promotion. We have put together a selection of titles offering outdoor, getaway or travel information.

The border is copies of the map of Victoria – we try and create a border which provides a context for the display.

In this display, as we do each week with these themed displays, we bring to a high traffic area of the shop, titles which are only seen by browsers looking in the category.

While the displays always generate incremental sales for the titles we select, the display reinforces to all who see it that we are magazine specialists and offer more than just the popular weekly and monthly titles.

Beyond the role displays like this play in underscoring our point of difference is the benefit is structuring the ashop floor to upsell. I often find this more effective than the traditional over the counter, in-your-face, upsell.

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magazines

Magazines must adapt or die

MediaPost reports that John Griffin, president of the National Geographic Group and the new Chairman of the Magazine Publishers of America believes magazines must adapt quickly or face losing ground to new types of content publishers–be it the Internet or elsewhere.

There is a conversation here I wish magazine publishers would have with newsagents – not in closed rooms with representatives but at the grass roots. Publishers have an excellent insight into trends for print and their plans for print. Newsagents are not as well resourced. Hence my suggestion of information sharing.

The headline on another article could easily be newsagents must adapt or die.

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magazines

The Age puts money ahead of plane crash

The National Australia Bank has paid to get its post-it type ad stuck over editorial content on today’s edition of The Age. Beyond the desecration of page 1 of the newspaper and the frustration expressed by customers when the paper rips upon removal of the ad is the confusing message from NAB. How can a bank which has just hiked its interest rates now promote 0% interest for some customers.

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I was contacted by a journalist from the US last week wanting to know more about these post-it type ads on the front of Fairfax newspapers. He was shocked at some of the photos he has seen at this blog and wanted to know if it was a big deal in Australia. He told me there would be industrial action among his colleagues if the publisher he worked for desecrated page one in this way.

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newspaper masthead desecration

Fat wedding mag

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Melbourne Wedding & Bride is bigger than ten magazines, fatter than several books. This makes it a huge challenge to display in traditional newsagent fixturing.

We’re co-locating the title – in the wedding category as well as with our women’s weekly titles. This co-location approach has worked the last two times with this title. It also helps us get around the space problem.

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magazines

Magazine digital initiatives increase 33% in 2007

The Magazine Publishers of America has announced that their research has found that 207 digital magazine initiatives were announced by publishers in 2007.  This is an increase of 33.5% over 2006.

Dismissing this by saying that initiatives by US publishers will not impact Australia, would be ignorant.  Online and digital initiatives know nothing of the physical borders which challenge print.

Of particular interest to me was the news of publishers branching out beyond print into in-house video:

Also of note, Hearst, Meredith Corporation and Time Inc. announced the creation of their very own in-house video production companies dedicated to the creation of video and web applications for their online brand.

The MPA is hosting Magazines 24/7 in February, a conference dedicated to digital initiatives for consumer magazines.

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magazines

Kudos to That’s Life and Take 5

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That’s Life and Take 5 are important magazines for newsagencies. They generate excellent traffic on a Wednesday, always have premiums on offer and respond well to in-store promotion. The competition between them results in better product which rarely misses a beat.

Even though the some of the promotions can present display challenges, it’s nothing compared to the lift in sales.

To support both titles and get every extra sale we can, we co-locate both on Wednesday and Thursday in each of our stores. We place them at the front of the store as well as their usual location. We also, every couple of weeks, put one or the other at the main lottery counter.

The sales decay data proves the value of this on these two days – we’re far more likely to get an uplift on Wednesday and Thursday than an even stronger promotion later in the week.

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magazines

Chinese New Year red packets

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It’s good to see Hallmark embrace Chinese New Year with a full range of cards as well as red packets. This range and the accompanying point of sale material helps participating newsagents have an offer relevant to Chinese New Year. My friends who celebrate Chinese New Year tell me that Hallmark have got the offer right in terms of look and feel of the cards.

These smaller seasons are important for newsagents who want to establish their businesses as the go to places for all seasons and not just the majors.

The Hallmark cards, red packets and lottery offers should work well over the next two weeks in thelead up to Chinese New Year.

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Greeting Cards

What’s happening with comics?

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Our comic display is looking sad with fewer titles than ever being supplied.

With sales not supporting more titles, it was only a matter of time before we faced reducing space allocation for this segment of the magazine market. That’s a job for later this month – unless we decide to have a crack at growing the category – but based on data we’re seeing elsewhere, I suspect not.

A key attraction of comics is the kids who some in and browse. I see them as the next generation learning to enjoy browsing in a newsagency and while their half an hour reading may not lead to sales, it makes them comfortable in our space and it is that comfort which helps in other categories such as cards.

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magazines

Holidays cookies, so last year

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Every year it is the same. magazines published in the US with a Christmas theme arrive in our shelves mid January, making our newsagencies look so last year. It’s frustrating.

While distributions may say these titles sell, I reckon that once we account for shrinkage, the sales do not warrant the shelf space some receive.

Christmas ended here three weeks ago.

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magazines

Why stock fax rolls

I think it’s time newsagents stopped stocking fax rolls.  The return on investment I see from fax roll stock in newsagencies carrying them is less than half of one percent.  They are not paying their way in most stores.

When it comes to stationery, many newsagents are happy to be the retailer of last resort – the one place which will have an item others no longer carry.  It’s okay for us to do this as long as the return, from slim sales, justifies the stock and labour investment.

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Stationery

Who free slurpee

I love the campaign I have seen running at a 7-Eleven this week.  If you purchase Who magazine, which is conveniently located at the counter, you get a free slurpee.  What’s good about this is the combining of a mainstream product such as Who with a product only available at 7-Eleven.  Newsagents don’t have a slurpee, I wish we did – something with high margin which we own.

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magazines

How to beat Officeworks, Target, Big W and K Mart at back to school

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Back to school season, when parents buy books and stationery required for the school year ahead, used to be owned by newsagents. For decades newsagents served schools well, locking in booklist orders months before the end of the school year.

While some newsagents are successful in the back to school space, the majority are not, having given over the space to Officeworks, Target, Big W, K Mart and others. These national retailers have made the back to school season enjoyable – have you see Target’s funny at on TV at the moment? It’s excellent. They are clever at making shopping this them seem like fun and low-cost.

It does not matter whether it is not fun, or the products are not the same quality in a newsagency, the service not as good or the ultimate price no better. What matters is the perception created which draws people to the major retailers.

Newsagents have not done any significant positional advertising. I’m not about to go into why here – that’s more a political discussion for another time.

While marketing groups such as newsXpress and Newspower have good marketing around back to school and some of their members are among the best in the category, channel-wide, we are losing at back to school.

What we have is what we have right now: excellent back to school business for some newsagents, good business for others and poor and falling business (in terms of return) for the majority.

It’s my view that newsagents can build a stronger back to school business by leveraging our strengths rather than pandering to our weaknesses.

We can’t compete with Officeworks, Target, Big W or K Mart so why try? No one makes money out of 5 cent exercise books. We can’t cope with pallet loads of stock on the floor of our newsagencies to create the theatre of the deal.

We can compete on local knowledge, local contacts and local speed. This is where we start to rebuild our back to school stationery and school books business – by acting locally. Not just a few of us as happens now, but a sizeable chunk of the newsagent network.

By being business-like and making local connections at schools, clubs and other groups, we can built loyalty which transcends the major retailers. Local residents will want to support local businesses which support them. There is where our local knowledge and speed of response can play to our favour.

Our best opportunity for back to school 2009 is to start playing the local card now, at the start of 2008. Be unashamedly local in making contacts. Turn it into a valuable transaction. Show the parent groups, community service clubs, schools and any other local group that your local business is in business for the local community. Along the way, be clear in comparing your local business with the Officeworks, Target, Big W or K Mart which ships profits out of the community.

Most important is local speed, coupled with knowledge. What are the needs of teachers and students locally which are not being met by the majors. Ask the question – you may unlock an opportunity the major retailers are too big or too slow to discover for themselves.

The model of the national retailer does not respect local needs – this is your opportunity!

If your prices are within sight of the majors, it is your local connection and service which could be the difference.

Back to school is a season newsagents can reclaim by thinking and acting locally. All it takes is for us to be committed.

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Newsagency challenges

Competing with ourselves

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It’s been a year since we opened Sophie Randall Cards and Gifts at Forest Hill, the same centre as the newsagency we have owned for twelve years.

Sophie sells a range of cards and gifts including social stationery. Around 50% of sales are cards.

Over the course of the year Sophie has been compting with the newsasgency, card sales in the newsagency have increased by 12%.

Around 30% of the card range is duplicated in the stores.

That the newsagency has grown card sales while Sophie has had a very good first year underscores the difference between customers a newsagency attracts versus customers a specialist card and gift shop attracts. Various captions perform differently in the stores – this is a source of considerable fascination.

We now have three Sophie stores in Melbourne – all linked with a common technology platform, enabling group buying and management. We are learning every day and enjoying the experience of branching out immensely.

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Greeting Cards

Growing crossword sales

We have focused on the crossword category in our Frankston newsagency since purchasing the business ten weeks ago.  We did this to test whether our obsession with magazines at Forest Hill would deliver success at Frankston – without completely revamping magazines and in advance of a shop fit later this year.  The result, is a 10% increase in crossword sales tracking since we took over – off of an already good base.

All we have done is pay more attention to how crosswords are displayed and co-locate key titles in high traffic areas of the business.

Crosswords are a low hanging fruit magazine category for newsagencies.  A small management investment of time ought to see an increase in sales quickly – as long as smart decisions are made.

At Frankston, the experience gives us confidence on our broader plan for magazines in that store.

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magazines
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