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

Month: March 2008

The Easter book sale

frank_book_eas.JPGI am told that Easter is one of the best times of the year to sell books. Judging by the first two days of our book sale I’m inclined to agree.  Even before the brochures have been distributed sales are strong – over $300 for the first half day.

Our plan is to run the sale for up to three weeks in the middle of the dance floor and the photo shows. These things work best there is nothing else too close pulling visual focus.

Books are a good fit for newsagencies.  Some do them well all the time with new releases and top selling titles.  Others, like us, do well in the remainder space.  Most newsagents, however, don;t play in the space.  For them, it’s a missed opportunity because the the right range, targeted with your demographic can be very profitable.

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Book retailing

Twitter

I was talking with a tech savvy newsagent yesterday and he’d never heard of Twitter. I’d be interested to know if anyone reading here is playing with it – I only established my Twitter account a couple of months ago.  It’s fascinating.

Twitter helps people keep in touch. It’s also a mini blogging (news) platform for some – a good source of keeping up to date with sports scores or news as it happens if you’re following this right people.

The Blog Herald has a good report on Twitter and news habits.  Most major news sites overseas offer Twitter feeds.

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Blogging

Newsagents circling Bill Express

Not much good news for Bill Express today. Their share price has fallen to 10.5 cents, from 12.5 cents yesterday. There is a growing volume of dissent among newsagents about the unilateral removal by a $250 per store per month marketing subsidy by Bill Express last month.

While I am no lawyer, the documents I have seen now from several newsagents suggest that Bill Express has breached the agreement it had with these newsagent. In one case, Bill Express wrote:

In a nutshell, this guarantees that, combined with the other rebates we pay now, you won;t be out of pocket.

Thanks to the Bill Express action last month, this newsagent is out of pocket.

In another Bill Express document provided to a newsagent as part of their representations, Bill Express said:

Express Shop has formed a Marketing Support/Incentive program to offset costs to your business. This incentive is equivalent to making up the shortfall of up to 200 bill payment transactions and in recognition of your efforts in meeting the criteria outlined below and will effectively ensure that you are at a break even or better position.

Thanks to the Bill Express action last month, this newsagent is no longer at a break even or better position – even though they have done everything required of them by Bill Express.

It appears that Bill Express is prepared to breach its agreements and commitments with newsagents, both written and oral, in order to preserve cash. given the action individual newsagents are talking of, this may well prove to be false economy by the company.

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Bill Express

Driving magazine sales at the counter

instyle_fhn.JPGNewsagents wanting to drive magazine sales ought to try this idea. We have been using it for a few months now and it works every time.

We have allocated space at the counter, between our two busiest serving stations, to promote magazines being sold a free gift we consider worthy of premium space promotion.

The space we are using works. It’s great to watch customers at the counter with their purchases – many notice the display, some pick up the magazine and enough of those purchase to make the space valuable and part of our regular activity for magazines.

Last week we sold out of Home Beautiful in days. Yesterday we setup the InStyle display in the photo. Prior to that we sold five times our usual allocation of Good Taste.

We change the display every Monday and only promote titles with a free gift people can easily see and are likely to know the value of and / or want. This is not a place for the magazines which come with a free gift every month, there’s nothing special in that. No, the real value of this specific issue has to be obvious.

It’s a simple display and takes a few minutes to setup. Nothing fancy here. It helps to have posters and cover run-ons to build into the display. While the display is not the prettiest, it works and that’s what matters.

It seems we’re in the middle of free gift season at the moment – there are some excellent gifts on offer and some excellent titles from which to choose.

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magazines

Crikey! It’s a kids magazine!

crikey_mar08.JPGI’m surprised by the Terri Irwin cover on the Crikey! children’s magazine.

While not offensive, it’s crossed a line from what I’d expect to see on the cover of a children’s magazine.

Maybe it’s that I’m not used to seeing Terri in this way.

I suspect parents won’t see this as a children’s magazine. It certainly looks odd on the shelf in its usual spot.

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magazines

Embracing St Patricks Day

frank_stpats.JPGSimon and the team at Frankston donned their hats, strung up some four leaf clover and dressed the store to recognise St Patricks Day today.  The photo does not do their efforts justice.  The gold hats are the talking point and make for a happy retail space and that’s what the day is about – having fun.  It’s a challenge as to how far you go this week with easter just a few days away – so no painting faces green this year!

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newsagency marketing

Blending gifts and stationery

We continue to play with the blending of gifts, social stationery and stationery at our Watergardens concept store.  The ‘playing’ is part of our contstant movement streategy – we’ve leaned this from gifts that every day or two products need to move to present a fresh view.  The resulting sales tell us the labour investment is worth it.

water_stat.JPG

The table in the foreground has been built especially for the job of displaying gists and social stationery well.

People who visit newsXpress Watergardens say it’s not a newsagency.  I agree with that.  others say it is.  I agree with that.  We see it as what some newsagencies in the future may be like. Browsers stay longer and provide a bigger average spend.  Magazines and newspapers are important but it’s other categories which drive overall margin.

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Gifts

Pads beat candy at the counter

counter_stat.JPGWe have a new range of small pads at the counter and, as with the last range they are selling well. They work better for us than major brand candy – because they are unique to us in our centre whereas many others sell the major brand candy around us.

At my Frankston newsagency, where we have a confectionery story at the counter, we are reconsidering purely on a return on shelf space basis.

It doesn’t make sense to me that we think of ourselves as a convenience store or supermarket when it comes to this candy at the checkout.

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confectionary

A successful ink campaign

hink_mar12.JPGToday is the last day of the current newsXpress Hot Ink promotion we are running. It’s also the last day of the TV campaign. This promotion and the print and TV advertising has been a tremendous success, driving new customers and bringing back regulars. It’s put individual stores as well as the group on the map.

I love the efficiency of ink customers, the majority purchase at least one more item. Also, once they buy, most come back. So the TV and print campaigns which bring new traffic will deliver benefits long into the future.

At our Forest Hill store we have two metres of slat wall dedicated to ink. No generic product here, only known original printer brands. We make around twelve times more out of the two metres of that a if the same space had regular stationery. While this could be because we don’t promote regular stationery with the same intensity outside the business, it could also be because of the pricing of the ink. It could also be because we are tightly focused on our ink range whereas in the general stationery space our offer is quite broad.

The numbers are what they are for whatever reason and when it comes to ink we’ll do more of the same and drive this category as far as we can.

On the TV campaign, it’s great to hear from people who say they saw the ad on TV. The flow on from this will be felt for months at the store level and nationally. I felt proud to see it on TV myself – that’s us up there on the screen! TV does things to people.

Newsagents, regardless of the banner under which they trade, have to actively promote their businesses outside their four walls. Whether it is print or electronic advertising, online or letterbox flyers – we have to compete for eyeballs to attract new traffic. This is what I like about ink, it’s proving easy to attract new eyeballs.

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newsagency marketing

Flight Centre trashes SMH

smh_mar15.JPG Flight Centre has paid enough money to the advertising department to allow them to remind the editorial professionals at the Sydney Morning Herald who controls the masthead.  The photo to the left has been sent by a friend who reads this blog – thank you.  This pollution of the front page ought to be unacceptable to any newspaper professional who cares about the medium and its brands.

It is ironic that I’m writing about pollution today with the squeals from the Formula 1 Grand Prix track in Melbourne drifting through the open doors in my home.  So much for quiet enjoyment.   The sooner we lose this audio trash from our city the better.  I feel the same about the newspapers.  Ads stuck on newspaper mastheads are trash, they interrupt my enjoyment of the product.  They demean the newspaper and give me a reason to dislike the advertiser.

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newspaper masthead desecration

Poor supplier respect for newsagents

art_cart_art.JPGLast year we reached agreement with the folks at Art Cart to put their unique range into the three of our newsagencies. We felt the products, pencil cases, would work with young kids and take us away from traditional stationery and into a more socially connected product. We spent considerable on the range in the stores and talked about a broader relationship. We provided excellent high-traffic real-estate to promote the range and the brand.

While sales were slow, we continued to support the brand believing that the consumer interest would grow. Imagine our surprise therefore to read in the feature on Art Cart in the Herald Sun last month – no mention of newsagencies in the stockist listing.

This was a product promotion and the folks at Art Cart would have submitted the material. I am disappointed that they did not return support.

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Stationery

Tatts kiosks closed

Further to my post on Monday about the Tattersalls kiosk outside my newsagency in Frankston being closed on the public holiday, the problem is bigger than I actually wrote.  Not just this kiosk in Frankston but many others, it would seem from what I am told, close all public holidays as well as Sundays.

I am surprised Tattersalls permits this.  Of course, I’m selfish and would like the kiosk to be open so it pulls more traffic to near my newsagency.  I am sure they like it that I pull traffic for them through the week.  There ought to be more mutual support.

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Lotteries

The what Morning Herald?

Some companies can’t help themselves and tell the world when they have lost respect for their brand.  Here’s today’s The Sydney Morning Herald.

smh_march14.JPG

Sportodds.com has paid to cover up Sydney in the mashead with their stuck on ad.  The Advertising team has, again, demonstrated they are more powerful than editorial at Fairfax, publishers of the SMH.

As one who loves newspapers, what has happened to the SMH today is dreadful.  Customers will vent because of the ad, others will rip the ad off and throw it on the ground.

In 2005 there was a minor scandal when a Las Vegas casino paid a woman to tattoo their brand on her forehead.  Not long after, a website started offering human body real-estate for temporary and permanent tattoos.  The reports and opinion pieces in newspapers at the time were how could someone sell themselves in this way.  This is what the folks at the Sydney Morning Herald have done today – they have put dollars ahead of the brand.  They have demonstrated a lack of respect for their brand.

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newspaper masthead desecration

News Corp demonstrates faith in paper

Rupert Murdoch has faith in newspapers if a report in The Independent is anything to go off. Stephen Glover writes that the News is investing £650m in state-of-the-art presses to print the Sunday Times, Sun, Times and News of the World. This is good news around a business model which has been the subject of plenty of doom.

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Media disruption

The retail experience

One of the most important lessons applicable to newsagencies from our opening of the Sophie Randall stores is the importance of the retail experience. Even today, in our our first store which opened thirteen months ago, around half the customers who visit comment on how much theny enjoy shopping in the store. This is not something I hear often in our newsagencies – probably because newsagencies are built for speed and function more than for feelings. Yet most of our customers are women and I’d guess that half of what we sell is around feelings cards, gift lines and even some magazines.

We are experimenting with the Sophie learnings. They guided our concept store at Watergardens – many newsagents tell me it’s not a newsagency, I like it when they say that. The easiest category to play with in our two more traditional newsagencies has been the plush. Not in the full on way of a Sophie Randall store though…

sr_epp_feb10_2.JPG

No, more in the form of trying several lines and creating zones of warmth amid the hustle and bustle of the newsagencies. It’s working, sales are growing – so much so that we are encouraged to incorporate more ideas into the fit itself. Look at the Peter Rabbit in the photo – he is a magnet, drawing people over. Once there, they pick up other items. The challenge is to find enough space in a newsagency to bring this level of display in.

Playing with plush is not for everyone. The key is to play – way outside the square we know as a newsagency.

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newsagency of the future

The old newspaper stand

w_health_paper.JPGWe had to get special permission when we had this newspaper stand built in 1999 as it did not meet publisher requirements. Even thoug it is close to the end of its life it still works a treat holding all our newspapers – front, back and on the side.

What I like about the photo from earlier this week is that it shows how we leech off paper traffic and promote, with the newspapers, Better Homes and Gardens, The Monthly, Women’s Health, Zoo Weekly, the Underbelly book and Western Union. We choose the companion products carefully.

To be fair to the major dailies, we promote these from a second location near the lottery counter.

Once we bring in the new newspaper stand won’t be able to clutter around the newspaper core. Instead, the stand itself will have the pockets and shelves to bring structure to this honey pot approach.

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magazines

Enjoying Easter in retail

easter_disp.JPGOutside of the religious themes and traditions, Easter is a happy season in retail. I see people crack a smile when they see the egg display and many walk across to stroke the soft chick or other plush on display. While there is a commercail element it’s more restrained than, say, Valentine’s Day. Lots more smiles too thanks to chocolate and soft toys.  yeah, I like Easter in retail

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retail

Bill Express spin and the ASX

Bill Express took its dispute with newsagents and their representative body, the Australian Newsagents’ Federation, public yesterday in a communication designed to paint the ANF as the bad guy. This comes on the back of the removal of a marketing subsidy of $250.00 a month from each of its 3,500 newsagents – an action which has incensed newsagents.

Yesterday’s communication takes the Bill Express / newsagent relationship to its lowest point ever. While in the past the ANF has run defence for Bill Express, that appears unlikely now. This is what, in my view, has caused Bill Express to come out fighting against the ANF and to engage in what reads like breathtaking spin.

Bill Express says it has paid the ANF $600,000 over five years. So what? The ANF endorsed Bill Express in 2003 and over the next two years, through this endorsement, facilitated Bill Express bringing on 3,500 locations. That’s $171 a location over five years. Not much.

The 3,500 newsagents took on lease liabilities to the tune of $87 million – money which flowed to Bill Express. Nice work if you can get it.

Each year, I’d estimate that newsagents process, on average, $40,000 a year through their Bill Express provided eftpos machines. Even though the merchant fees for newsagents are low, I’m confident that Bill Express makes a clip of around .3 of a cent per transaction. If I am right (and I think the .3 of a cent estimate is low), this has been worth in excess of $2.1 million over five years.

Newsagents sell massive amounts of phone recharge a year through the Bill Express / Dialtime equipment. For many products, newsagents commissions are lower than through other platforms. This suggests to me that Bill Express is making an above average clip from recharge – maybe tens of millions. What a great tollway newsagents have provided.

So, is the $600,000 demonstrative of respect for the efforts of the ANF and suypport for newsagents? No! It’s crumbs, far less than the effort and access deserved.

At some point soon, Bill Express is going to need to disclose to the ASX that it has upset its network of newsagents to the point where the network will shrink and revenues will be impacted. It is only convoluted multiple contracts which stop this happening more rapidly. Thankfully, the contracts cannot force newsagents to process bill payment or sell phone recharge through the Bill Express terminals.

Is the sharemarket informed? I’d say not. You can’t have what you claim to be your most important retail network offside and seeking legal advice on how to terminate contracts and not let the market know.

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Bill Express

Mindfood magazine turns up

mindfood.JPGMichael McHugh, the creator of Notebook, is behind Mindfood, a new magazine which lobbed into newsagencies yesterday morning, unannounced. While it is good to have a new magazine I would have liked to receive some marketing collateral with which to promote the new arrival.

Mindfood will be a tough sell given its broad and innovative focus – News, Society, Health & Wellness, Environment, Culture, Food & Travel and Brain Teasers – it is more of a movement than a magazine. I like the magazine, it’s a quality title in terms of production and content – I still think it will be a tough sell.

As happens with all new titles, McHugh is relying on the charity, yes, charity, of newsagents to get his new baby off the ground. I received 20 copies and am supposed to leave these on the shelves for two months. My investment is $148.50 for stock and $35.00 for real-estate and labour over these eight weeks. Unless I achieve a sell through of 60% or above, I’ll lose money on this title for the next year.

Given the 28% discount offered for people who subscribe through the website, I would have thought that a higher commission, and not one-off, for newsagents would be good. It would certainly focus the minds of newsagents more on the title – 35% or above for the first two years. Let me make some money back.

It’s a catch-22 situation with new magazine titles. I want to be a magazine specialist. To earn that mantle I need to support new titles. However, the magazine distribution model leaves newsagents carrying more cost than the benefit warrants. We have no share in ad revenue nor do we charge for access to our real-estate and labour assets. The magazine distributors, journalists and just about everyone else except the investors get paid for their services. Newsagents carry more risk than all of them, except the investors. Ours is not a traditional risk/reward model. And publishers wonder why newsagents don;t always act like business people.

But this is the magazine distribution model and no one seems prepared to change it so we go on. We have co-located Mindfood next to our women’s weeklies section, in our front of the shop magazine feature display and also in the general women’s interests section. Hopefully it will find customers and we’ll get something close to the 60% sell-through we need.

UPDATE:  I missed the announcement sent by the distributor on this.   Marketing collateral is on the way.  A couple of newsasgents contacted me with good stories about the title – I am looking forward to driving sales.

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magazines

ACP gets Top Gear

I’m glad to see ACP pick up Top Gear in the 50/50 deal done with BBC magazines. This is a title which will go extremely well in newsagencies as the local version of the TV show comes on stream.  The launch should renew interest in the whole car category.

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magazines
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