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

Month: April 2008

Free oven mit with Country Collections

country_collections.JPGThe free oven mit with the latest issue of Australian Country Collections magazine is why we are featuring it in the premium display at our counter this week.

Even though the title has a (long) shelf life of two months, our goal is to sell out in two weeks or less.

We have Madison and another title ready to follow in this counter location which we use exclusively for titles with free gifts.

While the publisher would argue that I should order extra stock if I sell out, the reality is that an early sell out works out much better for me than a top up order which leaves me with stock to return.

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magazines

April customer newsletter

nl_apr.JPGGirlfriend is featured as Magazine of the Month in our April customer newsletter. We also promote our refreshed card and wrap offer, Annette Sym’s Symply Too Good 5 and other products we’re glad to get behind.

This newsletter is simple to put together. We use Microsoft Word. Some of it is corporate but most is local to our newsagency. It is an passive, effective (and free) marketing tool for our business, customers ask about items we promote.

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Customer Service

Newspaper publishers talk future

It’s been interesting to read news from the Newspaper Association of America conference held in Washington over the last couple of days.  While some publishers are innovating and riding the wave of change others are taking a steady as she goes approach.  What is encouraging is that the discussi0on (debate) is happening.  Too many newsagents in Australia aren’t participating in similar conversations here.

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Media disruption

Bill Express king hits newsagents

I write to advise of a variation to the merchant agreement between your business and Bill Express. All income and sales margins are now provided on a performance based business model that provides greater incentives for our retail partners. Performance opportunities will be supported by a significant marketing and industry management fund allocation of a minimum of $500,000 per month.

This is the opening paragraph of a five page letter sent to newsagents today in which Bill Express announces that the remaining subsidies paid to newsagents are being removed.

The spin in the letter is breathtaking, it has to be since Bill Express is reneging on commitments made to newsagents years ago.

In my case Bill Express promised a bunch of direct and indirect benefits. This commitment got me to sign a contract. Today, the benefits have been unilaterally removed by Bill Express.

To be fair, I’d note that Bill Express will say I am better off with an incentive program. I am not better off.

This latest move by Bill Express against newsagents leaves me feeling that they are in trouble and have struck out against newsagents in order to preserve cash. I will be interested to see whether they make an announcement to the ASX – I would have thought that such a whack against your prime retail network is reportable.

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Bill Express

Digital vs. print magazines

To balance some of my posts here about the future of print magazines, year why Rex Hammock says Why magazines won’t be digital in ten years.   Here’s the guts of his view:

the roles of print magazines and so-called “digital magazines” are not the same — and that digital magazines may grow in importance and acceptance, but they will not replace print magazines as a medium, even if certain titles “convert” some or all of their circulation to digital products.

I agree, print magazines are not about to disappear.  However, at the fringes, they are fading and this is where Australian newsagents will feel the impact.  We sell between 1,000 and 2,000 titles and that range will diminish with time.  We need a business response to this shift while maintaining focus on growth of top selling print titles.

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magazines

The Age price rise

While it’s good to see The Age price increase to $1.50 – coming in May – I wish they would reward loyal over the counter customers as much as they reward home delivery customers.  The difference in price between the two is drawing people out of retail.

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Newspapers

Mags, newspapers grow in Woolworths

I am grateful to have been given scanned sales data for newspapers and magazines in Woolworths supermarkets for the year to December 2007:

  • Magazines $330,252,000, 2.2% growth on prior year.
  • Newspapers $116,585,000, 7.6% growth on prior year.

For the December quarter:

  • Magazines $83,400,000, or 3.2% growth on same quarter.
  • Newspapers $29,100,000 pr 8.4% growth on same quarter.

This data could include new stores. They opened 19 in the second half of last year and have 774 supermarkets nationally.

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magazines

Bill Express behaving badly

It seems that every day I receive a call or email from a newsagent with another story about frustration at the behaviour of Bill Express. The latest is from a newsagent who advised Bill Express / Dialtime that they had sold their business and that the incoming newsagent did not want the Bill Express service. Here’s the rest of the story the newsagent in his own words:

The very next day our system was turned of by Dialtime and was not able to be used for the next 3 weeks of trading. I called about the system being turned off and Dialtime stated that we requested the removal of the equipment and we owed $12,000 on our rental agreement and this put our account into overdue so Dialtime shutdown your system till your dept is paid. All the equipment was removed and new owners took over and installed a new system. Now Bill Express is saying I need to payout there rental agreement of approx 12,000 for equipment I don’t have anymore and the fact that I lost approx 25,000 worth of sales over the 3 weeks I was without Dialtime and eftpos.

The newsagent did not request that the equipment be removed. Based on what I have been told, Dailtime’s action was unwarranted and denied the newsagent the opportunity to earn an income. A smarter move by Dialtime would have been to discuss the situation of the change of ownership with the newsagent.

Now, the equipment has been taken and the newsagent is being chase for $12,000.

On the back of everything else newsagents are experiencing at the hands of Bill Express, this reinforces the view of a company stumbling badly.

Sure, I am involved in a product which competes with part of the Bill Express offering. Since it’s free, it’s not competing in the true sense of the word. Also, no one is making Bill Express behave badly – they are mucking this up on their own.

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Bill Express

Gems in the book sale

world_war.JPGWe continue to find gems in the book sale we’re running, like The First World War by Hew Strachan. Heading toward Anzac Day it’s a popular gift – ten copies in a couple of days. We can’t claim all the credit since we don’t control the titles in the mix. However, we have been smart enough to feature display titles which are relevant.

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Book retailing

Hearst invests in electronic paper

Hearst, the US newspaper publisher, is an investor in FirstPaper, a flexible electronic paper reader according to PaidContent. It’s not Hearst’s only investment in e-paper nor are they the only publisher putting money in this space.

Newsagents need to watch this space as the development of e-paper is entering a very interesting phase. Those behind the technology say two years, I’d expect sooner. Dvice.com has a quick background.

If such a portable, flexible and always on device is commercially available, why is there a need for a distribution channel for newspapers?

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Media disruption

Loving eziPass

We sent an email asking newsagents using eziPass to sell phone recharge and other electronic voucher products to tell us what they think. The response was overwhelming. So, we created the iloveezipass blog. Here is a bit of the fax we sent Friday to newsagents including some of the quotes:

ep_fax.JPG

The reaction to the fax has been excellent. Newsagents want a simple platform from which to sell phone recharge and other electronic product.

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Bill Payment

Risk to instant lottery sales

I spent a couple of hours behind the counter today to help with superdraw sales.  I struck me how significantly the arrival of Intralot will impact my lottery business and, I am sure, most others if the introduction does not go smoothly.  Scratch tickets are a perfect up-sell, customers love the convenience of putting icing on their gambling purchase.  Muck that up in any way and sales will be affected.

Between 13% and 19% of lottery sales include scratch ticket sales.

While briefings have started, there is not enough clarity on how Tattersalls and Intralot will work in with each other here in Victoria.

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Lotteries

Finding display space

frank_feat.JPGIn the five months we have owned the newsagency in Frankston we have been experimenting with magazine displays in all sorts of places. We want to find the locations which work the best – outside of the traditional aisle end and other usual feature displays. Based on our experience elsewhere we expect to find two of three small locations of space from where we can really drive magazine impulse sales.

The photo shows our latest experiment above the waist height newspaper poster display at the front of the shop. This is not working for Burke’s Backyard so we will try another title next week before we we move onto another space.

We have found one new space which works well but we really need a second for the type of magazine promotions we like to run.

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magazines

WAN battle highlights newsagents

It is good to see the press coverage of the battle between Kerry Stokes and the Board of West Australian Newspapers. For the first time in years, the big sticks used by some newspaper publishers against small business newsagents are exposed. Today’s Age reports the court action by a newsagent and more planned by others about delivery fees which have not increased for “about a decade”.

At last we read that newsagents in Western Australia have not had a home delivery fee increase in ten years. Memo to the folks at The Age: check your own track record. While you have permitted an increase, it is less than CPI and does not even allow for the considerable increase in fuel.

Newspaper publishers choke newsagents. They control the price of what we sell and the price we can put on services related to that product. They do not control our costs. Indeed, they actively increase our costs by forcing us to use out of date practices.

While some publishers are better than others, the control they exert over newsagents as a block undermines delivery businesses. Their controls deny us the opportunity to be entrepreneurial. We’re treated like servants, and paid like it.

While I am pleased to see the appalling treatment of newsagents given coverage in the wash of Kerry Stokes’ battle with WAN, newsagents need to remember how their colleagues were treated in Canberra when he owned The Canberra Times. If my memory is correct, this is when contractors were appointed to replace newsagents, unilaterally removing the home delivery of the newspaper from newsagenrts who had faithfully served the newspaper for decades.

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Newsagency challenges

Relaying wrap

wrap_move.JPGIt was a real team effort Thursday, relaying the wrap category at Forest Hill.  We moved it from the front of the card area to the rear, next to flat wrap.  The change was part of our commitment to keep moving categories within the store.  What you see in the photo will change in the next few months.

The impact of the move has been immediate.  Up to last night, sales of wrap have increased by 50% – compared to the average of the last year of Fridays (out of seasons) and in comparison to the last four Fridays.  Ths increase is because regulars see it whereas before they had become ‘blind’ to it.  Sure, it is early days.  We are all certain the increase will be sustained.

As a consequence of moving wrap, we moved four other categories and they are enjoying increased sales as well.  This goes back to my comments here a couple of months ago about stationery – just by taking everything off, cleaning and putting it back in a different place sales will increase.  This work of moving stock is more valuable for a newsagent than much of the paperwork suppliers want us to complete.

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giftwrap

Who is Fern?

We have four magazines in-store at the moment with cover stories about a lady called Fern, her love life and weight issues. 

fern.JPG

Who is Fern? We had to find out because, well, four magazines and some questions.  The Mirror has the story.  We wanted to find out because of her success at dominating the covers.

I wonder about the relevance of these UK magazines here sometimes.

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magazines

Holden vs. Ford

holden_ford.JPGWe’re having some fun and promoting Holden and Ford branded magazines at the same time at our Frankston location.

On the stand in the photo we have a bunch of Ford magazines on the left and a bunch of Holden magazines on the right.

In the middle of the stand we’re inviting our customers to vote for the car maker they prefer – this is the bit I really like, customer interaction!

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magazines

Shopping trolley tokens a hit

shop_trolley.JPGWe’ve had shopping trolley tokens in our Frankston store for a just on a week and have all but sold out.  They are proving to be an excellent counter impulse item.  Small footprint.  Good margin.  An easy sell.  We have ordered more and will run them for another few weeks before resting them.  In terms of return on space and return on investment the first shipment of tokens easily beat everything else at the counter.

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retail

Newsagents walking from Bill Express

The Australian Newsagents’ Federation has announced today that it will not renew its relationship with Bill Express. While they announced this some weeks ago, Bill Express had another crack at a relationship. This was rejected. Newsagents will applaud them for this.

Here’s part of what the ANF said to member newsagents today:

Bill Express has recently approached the ANF with fresh proposals for our two organisations to continue working together past the termination date of the present channel agreement which ends on 31 May 2008. Over the last several weeks the ANF has been in discussions with Bill Express and has been evaluating those proposals. The ANF has concluded that those proposals do not merit a continuing relationship beyond the present arrangements.

Hundreds of newsagents are trying to quit their contracts with Bill Express – all because Bill Express removed a long standing financial subsidy paid to newsagents which, for most, was the difference between loss and break even.

Bill Express is so swamped by newsagents wanting to quit that they are not responding to newsagent request to terminate their agreements.

Today’s announcement by the ANF is a material change to Bill Express’ circumstances and I’d expect an ASX announcement to follow.

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Bill Express

A craft magazine found

make.JPGYesterday I asked whether the number of craft magazines being published was falling – based on thinning shelfs at my newsagencies.  Make is one of many digital (online)n only offerings in the craft space.  But Make is more than a digital magazine for as the tag line says, it’s the ultimate craft community.  They demonstrate a passion for their subject at the site equal to the passion I mentioned yesterday when writing about The Winding Road car lover site.

The folks behind Make can create an online offer without the costs of a distribution channel.  They save on warehousing, logistics, retail and shrinkage.

While it will take years for digital to significant hurt print in the magazine space, I expect that in the special interest area we will feel pain sooner.  Make is an excellent example of a more timely offer which leverages online technology to offer a significant (interactive) point of difference over print.

When I blog about things like this I always get a call or email from at least one newsagent telling me to pull my head in.  The theory put to me is that by writing about it I encourage publishers to pursue online over print.  This horse has bolted folks.  Online is the new game in town for magazine publishers.  We need to accept that and adjust our model accordingly.  Print will have a place in our businesses for a long time to come, but on a different basis to today. We can either get scared about the wave we can see or grab a surfboard and ride it in.

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magazines

Farewelling New Woman

new_woman_final.JPGWe are giving New Woman magazine a bit of a send off this week with a display in prime position at our counter for the issue just published.

New Woman is eligible for this gold star space because of the free stuff with the magazine this month – $39.95 worth of lip gloss and a mirror. The display has been up for a day and its working. Our only frustration is that the title was sent out without any marketing collateral.

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magazines

Managing Herald Sun footy cards

footy_cards.JPGWe have used the form in the photo to manage Herald Sun footy cards for a few years now. It provides our team and our customers with certainty for the full season of the cards. The structure and rules around the spreadsheet make the cards stress free for us. It also ensurfe we do not over commit.

Promotions like the footy cards are all about driving newspaper sales. By tight management of the process we’re able to control labour cost and ensure good customer outcomes.

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Newspaper marketing

Who needs a car magazine?

As their website says, The Winding Road is a monthly manifesto for the driving obsessed. It’s a free digital magazine. The content is excellent and their traffic substantial. Who needs to buy a car magazine if you can get more upto date and passionate content online. Their explanation of why it’s free is excellent (the highlighting below is mine):

The digital edition of Winding Road is free for several reasons. Primary among these is that it just plain costs substantially less to produce a digital magazine than it does a conventional print magazine. Second, as a free publication we can build up a group of loyal and devoted readers faster than we can if we charge for the magazine. This in turn allows us to attract advertisers who are ever so desirous of tempting our loyal and devoted readers with their products.

Those same advertisers are the reason there isn’t a catch. As with print magazines, advertisers are a main source of income. Provided that we do our part in attracting advertisers to Winding Road, the magazine should continue to be free in the long run. That’s why we offer you a three-year free subscription, not the ever-popular one- or two-issue “trial offer.”

The Winding Road is the kind of new media disruption magazine publishers, distributors and newsagents need to study and understand. It has a passion which resonates with

Josh Gordon, writing at Folio magazine says that The Winding Road gets over 180,000 unique readers viewing an average of 22 pages every month.

Car magazines are important to newsagents, they account for a high proportion of browsers. I’d hate to seem them stop visiting and get their pleasure online.

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magazines

Craft magazines disappearing

craft_titles.JPGAt first I thought it was just me and that for some reason we were not getting as many craft titles as usual. Checking around other, I soon found that newsagents are experiencing this too.

While my survey sample size is small, it makes me wonder if fewer titles are being published, whether they are being sold through other channels or it’s just a seasonal drop in range. Sales are still good, so maybe it’s supply efficiency at work.

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magazines
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