Getting stationery into newsagencies
I am contacted at least once a week by a stationery supplier looking to get their product into the newsagency channel. Most have a story to tell about the challenges of dealing with the gatekeepers they encounter – stationery wholesalers, associations and marketing groups. The issues are either about refusal to carry a complete range, the cost of access, the challenges of 4,500 managing directors or other hurdles.
While some of the blocks are reasonable and do stop suppliers newsagents are better off without, there are some products which newsagents would like to stock and some complete ranges newsagents would like to stock.
For what it is worth, here are my suggestions for stationery suppliers looking to get gain access to the newsagency channel:
- Do your homework. Develop a sound commercial case showing how newsagents benefit.
- Back your claims with an investment in the channel – too many products seek to leech off the traffic already coming to newsagencies. If you don’t plan to invest in driving traffic to newsagents supporting your product why should they take the range?
- Use the road to newsagents which delivers the maximum return to them – including direct accounts with newsagents.
- Help newsagents compete. Too often suppliers use newsagents and with other retailers, retailers who get a better deal or receive compensation for displays and counter space.
- Price for newsagents as a complete channel and not as individual small businesses.
- Newsagents are starting to realise that sale or return is not always a good deal.
With fewer newsagents doing cash and carry shopping, suppliers need to be smarter in how they approach the channel. Newsagents are more discerning and want surety on the return on investment they can achieve. This is why more are buying outside the traditional newsagent supply chain.
Michael Buble, Andre Rieu double act
Andre Rieu and Michael Buble are a double act in this month’s Limelight magazine. In what is sure to be a popular issue, fans of both can read about Rieu’s Australian tour preparations and Buble’s longevity in Limelight. Both artists have amazing puling power in our Forest Hill demographic – featuring this title will drive good sales.
Last time blogged about a Limelight feature on Rieu I ended up sending copies overseas to fans.
Promoting Healthy Food magazine
The folks from Healthy Food wanted us to place the small footprint display on the counter. Unlike other publishers who ask, they offered a free gift – a nice cookbook. The gift worked and we have the display at one of our lottery counters.
This is a win win promotion from the publisher since the Healthy Food itself is a good impulse pitch to consumers. We’re certainly proud to promote the title.
Melbourne Formal magazine
We have Melbourne Formal magazine in our Forest Hill and Frankston stores. It’s a challenging title to locate. While it looks like it would be more at home in with wedding magazines, we have placed Melbourne Formal with the higher volume weeklies since we suspect this is closer to the market for the title. Mums and daughters frocking up for formals are probably not looking for such a specialist title.
The future of news
I am grateful to Mark Hamilton’s blog where I found the link to videos of sessions at the two-day The Future of News workshop hosted by Princeton University’s Center for Information Technology Policy last week.
While I have not watched all the content, what I have seen reinforces the need for Australian newsagents to listen to the conversation among news professionals about changes in how they do what they do.
These changes and the associated challenges affect us yet most newsagents continue to ignore them in their business plans. The shop designs I see are as traditional as ever and do not reflect the future of news.
Intralot training starts
Some Victorian newsagents start training on the new Intralot lottery offer next week. The considerable change this will bring to our businesses will be welcome. Beyond having new products backed by an advertising and marketing campaign, there is the change in mindset Intralot is bringing to the lottery space and newsagencies more generally.
Since newsagencies were created we have lived with a territorial mindset. Our discussions with suppliers and our views of our colleague newsagents have been through the prism of territories. In 1999 that was broken but not really since the new contracts from newspaper and magazine publishers and distributors maintained the territories – albeit with some changes.
Intralot changes that for Victorian newsagents. There is no territory. I see this as a good thing because it treats us like other business people. Whereas previously we could rely on geographic exclusivity to drive traffic to our Tattersalls counter, for the Intralot products our efforts as retailers will be more important. The smart operators will pick up this opportunity and run as fast as they can to beat other Intralot outlets.
While some newsagents (and others) are angry at the changes in the lotteries playing field, I suspect we will look back on the non-territorial position Intralot has adopted as being the wake-up call newsagents needed. We are business people after all and the best exclusivity or territory we can have for our businesses is the one we make and own for ourselves.
Magazines and retail space
While magazine publishers and distributors don’t like early returns, we are using them to manage the cost of fat titles. Take Two Wheels magazine. It has a sell through of 50% – less for some issues. The latest issue, with a free back issue, takes twice the retail space. In our case Two Wheels this month demands four pockets instead of two. Rather than keep stock in the back room until return time (as sone newsagents do) we return what we can’t fit early.
Magazine distributors know the usual size of a magazine pocket in a newsagency. They know the dimensions of titles. Their systems ought to cut allocation where it will use more than the usual number of retail pockets and where the sell through history shows sales will not be affected.
Growing bike / cycling magazine category
The bike magazine category is growing thanks to several new titles. We have allocated a full column to give the category an appropriate presence in the shop. This is in addition to space for BMX titles.
Bike riding enthusiasts spend big on their hobby – for equipment, apparel as well as riding trips locally and overseas. We know this from our software company – we have a software package for bike shops.
It stands to reason that magazines are popular given the growing popularity of the sport and the money invested. Increasing our space allocation makes commercial sense.
What surprises me is that this now has more space that we have for Tennis, Cricket, water sports … any of the sports. Seeing this trend is helping us maximise the opportunity.
Magazines and coffee
The photo is of Time magazine featured on the counter at a coffee concession at Singapore airport. I took the photo because I was taken with how strong the pitch was for Time. While the collateral was created for a specific issue, it could be developed to work across several issues of a title. We could also create something generic – magazine of the week or the like.
My point is that the stand caught my attention – and we have nothing like it on newsagency counters. However, with the visual noise in our shops maybe it would not work as well as it does at a coffee concession. I do want to find a way to make something lik this work.
The other aspect of this display which caught my attention was how easy it is for the coffee business to offer a magazine – a category in which they do not usually play. While I am sure they got the magazines for next to nothing – even though coffee is high margin and they could fund at least part of the deal.
Thinking along these lines, of add on deals to high margin sales of items which are not core, I wondered what newsagents could offer. Then I recalled that we don’t have any high margin products which we control like coffee. I wish we did. I wish we have coffee or bread or something else which we made in-store off of which we could leverage other deals.
I know this is one of my more rambling posts. These matters are on my mind because every retail business I see I look at from the view of what can I apply to the newsagency model for a healthier future. The coffee concession in Singapore took me down that road.
The Hot Ink hot wall
The new brochure for the latest Hot Ink sale has not yet been delivered yet sales continue to be strong – weeks after the last flyer expired. On most days we do more from the two metres of wall space you can see in the photo than from the entire rest of the stationery department. While that could mean our broader stationery sales are awful, the reality is that ink has grown enormously for us over the last two years. We have tough competition in our centre and nearby yet we grow. We put this down to consistent ranging, consistent low pricing and great customer service. Ink sales are efficient because these customers do buy other items.
Myanmar proves the value of Twitter
Twitter is proving itself to be a reliable news channel. See the report at Global Voices Online for more on this. Then read the report at Newspaper Death Watch for a publishing channel perspective. Also read Jeff Jarvis’ article on this. Newsagents ought to read these reports as they show how far removed from our old world channel news gathering and dissemination has come.
Green magazines
More magazines are touting environmental credentials, Madison from ACP magazines is the latest with their green issue this month. It is one thing to have a green issue and another entirely for a magazine to be green. While I appreciate that a green issue brings attention to environmental issues in the context of traditional content one sees in Madison, I’d prefer to see the the title lead by example in how it is produced beyond one issue.
Madison is not alone in glamorising green matters. In the UK last week Marie Claire and Vogue were playing in the space.
Moving into online stationery
We have started the process of establishing an online stationery business under separate branding to our newsagencies, along the lines of our three year old Inkfast business. We will be chasing customers who are unlikely to think of visiting a newsagency for their stationery purchase. This approach has served us well with Inkfast where revenue is many times that of total stationery department revenue in either of our newsagencies – with a fraction of the overheads.
I’ll blog more details once we have launched the new website.
Selling magazine subscriptions
Through eziPass, we can sell subscriptions for 4X4 Australia, Australian Gourmet Traveller WINE, Australian Gourmet Traveller, Australian Table, Australian House & Garden, Australian PC User, Australian Personal Computer, Burke’s Backyard, belle, BlueWater Boats & Sportsfishing, Bulletin, Cleo (Australia), Caravan World, Cosmopolitan (Australia),Disney Adventures, Disney Girl, Dolly, Good Medicine, HMG, Harper’s BAZAAR (Australia), Inside Cricket, Men’s Style, Money Magazine and Madison in our newsagency.
While we can sell these magazine subscriptions, we are yet to work out how and where we make the pitch to our customers. We don’t want to pull focus from the physical product yet we want to get the gift subscription sale – especially where the gift recipient is a long way from our business. So, we are creating some marketing collateral for use in-store to try and get these sales without losing our over the counter business. It’s a fine line.
Of course, we could just not sell these but that would be us putting our head in the sand – customers want magazine subscriptions for themselves and as gifts. They will buy them from us or somewhere else – I’d rather get the sale if I can.
Two newsagents close their doors
Two newsagents have advised their colleagues in a public forum in the past week that they are shutting up shop. Increased rents and operating expenses in a business with fixed prices and margins are among the reasons cited. While diversification can help address these challenges, for many newsagents it is not an option in their location.
I’d like to see newsagent suppliers, industry associations and others invest serious effort into this challenge of newsagents closing their doors and exiting the channel.
The shrinking of the newsagency channel was a predicted outcome of the decision by the Federal Government in 1999 to deregulate the distribution of newspapers and magazines. The government reduced the viability of newsagencies with their decision yet did not offer any financial support for families – to allow them to exit with dignity.
The Federal Government put around $65,000 on the table for each pharmacy which closed as a result of their competition based decisions in the 1990s. Nothing for newsagents. They stump up cash for auto workers, farmers and others when circumstances make life tough. Nothing for newsagents.
There are newsagent families doing it tough because of the circumstances created and permitted by the government in 1999. While they deregulated the newsagent side of the channel, they did not address the supplier side. Newsagents continue to be treated as if in a regulated environment. The compliance costs are high with no genuine reward for above and beyond effort. In other competitive markets there is reward for effort, not here. This is one example of how deregulation has not served newsagents fairly. There are plenty of others.
I am not against deregulation. I accept that it was necessary. However, I would like to see it implemented fairly. I would like to see newsagents be given greater competitive opportunities. I’d like to see them permitted to use their collective assets to cut operating costs as their suppliers have done.
Newsagencies face rental increases of 5% a year, labour increases of around the same. Unless we can negotiate terms which provide business like flexibility and have mechanisms through which we can cut costs from the supply chain of core products like magazines and newspapers, more will reduce their commitment or exit altogether.
Suppliers ought to take notice of the stories of those exiting the channel. There are lessons to learn, for the future. An open debate about these issues is essential to our collective viability.
Barnes & Noble to sell digital mags
The giant US Barnes & Noble retail chain has teamed with Zinio to sell digital magazines alongside print editions of the same titles – from its corporate website. The company press release claims:
BN.com will sell subscriptions to over 1,000 magazine titles, available in both digital and print formats, at prices up to ninety percent off newsstand cover prices. Digital subscriptions will be available within minutes of purchase for viewing on desktops and laptops. In addition, more than 12,000 back issues of hundreds of magazine titles will be available digitally for purchase as single copies.
This move makes sense for any business calling itself a magazine specialist.
More music cards from Hallmark
It’s great to have access to these new large music cards from Hallmark. Music cards represent a rapidly expanding segment of the greeting card market and these large cards will help develop that expansion. I wish we had them sooner.
While we are getting offered plenty of music cards from suppliers outside the mainstream, I’d prefer to build this segment within our existing brands.
The cards add to the theatre of retail because they play when people open them to have a look. I reckon this acts as a theft deterrent too – so I’m happy to hear people opening cards all through the day.
The Powerball target
We have set a Powerball sales target of a 50% increase on last week. If we reach this there is a bonus for each team member working more than a couple of shifts in the week.
While Tattersalls wants us to increase our sales as much as possible, without a specific target the goal is vague. By declaring the 50% target, we know specifically what we are working toward – with every sale.
Goal setting is important in retail, especially in the lottery category where a small but consistent investment of personal effort can easily achieve incremental sales.
Promoting Money magazine
Money magazine is the title we are featuring at our counter this week. With the free Taxstar on the cover and given that money as a topic is in the news (fuel costs, interest rates etc) the timing for a display is right. That and the fact that Money appeals to a broad demographic and nt just those who actually browse the business and finance category.
While a display like this has a cost beyond space of the colour cover copies it’s worth the investment. I do wish there was an easy way for us to advise a publisher that we were going to do a display like this and could order a dozen colour cover run ons or delivery is a few days. This would help make the display look more professional.
Our last display, Good Health, led to a sell out in less than a week.
Advance for Top Gear
We are giving prominence to the BBC Top Gear magazine in advance of the launch of the Australian edition by ACP Magazines in a month or so. This week, the imported edition of Top Gear has been featured above the Herald Sun. Next week, it will be another high profile location. Our goal is that when the local title launches, consumers in our area will think of us ahead of other outlets because they will have seen the title in our shop previously.
Bill Express fall out continues
I have been told that a company called Loyalty Direct Pty Ltd terminated the services of 35 employees on Friday of last week without redundancy or accrued benefits paid. I have also been told that another group of Loyalty Direct employees were terminated and immediately offered contracts with a business called Payroll Express which provides the same services as Loyalty Direct.
Loyalty Direct is registered at the Eaglemont address of Bill Express’ Head Office. An ASIC search shows that Loyalty Direct is under “external administration and/or controller appointed. My understanding is that Loyalty Direct is a private company delivering some services to On Q and or Bill Express. I am not able to verify the location and ownership of Payroll Express.
I note the irony of the Loyalty Direct name.
Party goods
We decided to have another crack at party goods brought in the range from Alpen just over a month ago. We’ve placed this display behind our main newspaper stand, next to our card department. Sales are good, generating a good return on the space and sock investment.
The only downside about the move is Alpen themselves. They have refused a direct account saying they want newsagents to go through a wholesaler. This is after we agreed to their minimum order value and we explained that we wanted more of their range than we could easily get through a wholesaler. Their refusal to grant a direct relationship hs us looking elsewhere for party goods.
Retail is tough. We need to cut costs out of the supply chain. This is why direct relationships are important to newsagents – they provide us the best opportunity of reward for effort.