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

Month: July 2008

The problem with overseas crossword titles

os_crosswords.JPGNewsagents must take action on overseas crossword titles.  All three magazine distributors, Gotch, Network and NDD are supplying us with these titles.  Collectively, overseas crossword titles perform appallingly.   This performance is driven by having too many titles on offer.

Given that the distributors seem unable to resolve this problem, the only option is to tell one or two of them I no longer want overseas crossword product from them.  This will leave me with selection from one distributor and, hopefully, better sell through rates from a smaller range.  Based on performance, I am likely to drop NDD and Network (except for Puzzler titles which perform well).

The only alternative is for distributors to agree to a pay for performance model.  If a crossword title has a sell through of lower than 50% they pay me a service fee. This has been put before and rejected.

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crosswords

Intralot scratchie sales strong

intralot_scratch.JPGThree days in and our Intralot scratchie sales at Forest Hill are better than where they were under the old brand. At Frankston and Watergardens where the category is new for us sales are good but with room to grow. Still little comment about Intralot vs. Tattersalls.

The Intralot launch has been a bit rocky but nothing more than I would expect for a new business. Given some of the hurdles they have had placed before them I’d say they’re doing okay.

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Lotteries

Promoting wedding magazines

weddingmags.JPGWe have created a column of wedding magazines next to Australian Women’s Weekly, a column of crossword titles and our top selling weeklies. This is in addition to our usual wedding display further into the magazine department.

The display has been up for two days and has resulted some sales. We will leave it in place for two weeks before we replace it with another category we want to feature in the high traffic area.

Since it is wedding season the time is right to co-locate wedding titles in this way. There is no shortage of stock to display.

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magazines

The newspaper honey pot

newspaper_honeypot.JPGNewspapers generate a tremendous amount of traffic for newsagents. The photo, taken yesterday at Forest Hill, shows how we try and leverage add-on sales from this traffic. We have more items around papers than usual because all other display spaces are being used. Usually, we would have only two stands next to newspapers. That said, what may appear to be a cluttered look is working well without hurting newspaper sales. We will leave the display setup like this for several more days, a week in total. Anything longer and customers don;t notice.

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newsagency marketing

Maghound magazine subscriptions

Maghound is an online subscription website developed by Time Inc. in the US for selling magazine subscriptions. They have close to 300 titles already. What is interesting is the ability to subscribe to multiple titles and have one charge.

Maghound subscribers will also be able to switch between titles mid subscription – that’s weird. I am surprised publishers accept it. I can’t see a subscriber switching from one title to another happily given that when they sign up they committing to a title long term. It has always been this way. I’ve not heard people talk about wanting to switch so why create the proposition. Okay, there is the point of difference but it’s not that good for a point of difference.

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magazines

Top Gear launch of the year

fhntopgear.JPGEven though the year is barely half over it will be a challenge to beat the launch of Top Gear. This is the best launch I have seen in a long time.

The marketing collateral is excellent, supplies good and the word of mouth around the new title fantastic. These elements make it easy for newsagents to support the launch. Kudos to ACP Magazines for their support.

The reward for all the effort around the launch of Top Gear is excellent sales.

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magazines

Petrol prices challenge magazine sales

Mediaweek has a report Australian newsagents should read about the impact of high fuel prices in the US on over the counter magazine sales.

One major distribution executive said that his company’s unit sales were down 6.5 percent in the first quarter versus the year-earlier quarter. And at major wholesaler The News Group, unit sales declined 7.4 percent for the first four months of the year compared with the year-ago period. Particularly hard hit were men’s titles, down 26.2 percent, and news magazines, down 17.6 percent, per the wholesaler. Celebrity magazines were down 6.4 percent, although dollar sales were up as a result of cover price increases.

The report claims some publishers are considering cover price discounting based on coupons to drive sales. I don’t like that idea at all. I would rather publishers work with retailers so that we can more easily fund sales and marketing levers in our businesses to drive sales.

I’ll have some more to say about this in a few days but I’d note that newsagents can take action right now to shore up magazine sales in a tougher economic climate. Yes it means more work – but it is what one does in the face of competition, work harder. In today’s market the competition is for the dollar because of higher fuel prices and people spending less of luxury items.

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magazines

Trashing magazines

trashmags.JPGIt is my experience that bagged children’s magazines are less likely to be opened and trashed in-store than car, craft, women’s, surfing and computer magazines. Every day we pick up product trashed by adults. Bags ripped open, freebies missing or on the ground. The example set for children is appalling. The adults ought to be ashamed.

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magazines

Starbucks to close under performers

Starbucks has announced that it is to close 600 underperforming stores in the US market.  The closures are part of a commitment by the company to transform its business.  Starbucks is doing what Kleins in Australia did not, they are re-energising their retail offer, ensuring relevance.

The question we have to ask ourselves is how many newsagencies would be closed if a review similar to that undertaken by Starbucks was done in our channel. How current is our model?  How relevant are we to today’s consumer?  Would a Starbucks review lead to our closure?

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Newsagency challenges

What lottery loyalty?

I watched a as a customer asking for a ticket in the now defunct Wednesday Tattslotto for tonight was easily sold an alternative product.  As I noted in my post earlier today, customers don’t care about the brand, some don;t even care about the actual game.  It is the dream for tonight that matters – hence the ease of selling an alternative ticket.

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Lotteries

Promoting Harper’s Bazaar

bazaar_jul08.JPGOur latest counter offer at Forest Hill is for Harper’s Bazaar magazine.

The free Florence Broadhurst notebook worth $39.95 which comes free with the magazine makes this an ideal counter offer.

Promoting this at the counter solves a problem of trying to make this item work in traditional magazine fixturing – where the notebook offer is lost.  Displaying the offer opened out as we have respects the magazine and the gift.

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magazines

Bill Express related entity in liquidation

Bill Express related entity Technology Business International Pty Ltd (TBI) has appointed a liquidator. TBI is the company newsagents signed leases with for the Bill Express equipment. The only resolution put to the extraordinary general meeting of TBI was:

That as the company is unable to pay its debts as and when they call due, the company be wound up voluntarily and that Geoffrey Neils Handberg be appointed Liquidator for the purpose of such winding up.

The meeting was attended by Sandro DiDonato as proxy for Technology Business Holdings Pty Ltd (TBH), the sole shareholder in TBI. TBH has four shareholders with 96.5% of the business being owned by Equip Rentals Pty Ltd (ER). ER has one shareholder – Sandro DiDonato and was deregistered in December 2007.

Bill Express accounts for June 20, 2007 listed TBI and Technology Business Systems Pty Ltd (TBS) as owing $22.8 million to Bill Express. The imminent liquidation of TBI would appear to reduce the assets of Bill Express by $22.8 million – unless it has been part or full repaid between June 3, 2007 and June 30, 2008.

The minutes for the extraordinary general meeting of TBI were originally dated June 26, 2008. This was amended by hand to June 30, 2008. While I am not sure about the significance of such a change, I wonder in the minutes were prepared in advance of the meeting and if so, how far in advance.

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Bill Express

Scratchies back in town

intralot.JPGThe drought is over! Scratchies are back in town – instant scratch tickets that is. We received Intralot scratch tickets yesterday, put them out and achieved good sales – including in two outlets which had never sold this category of product before.

Most customers don’t care about the brand, they care about the game or the price of the dream or entertainment they are buying – many yesterday would not know they were among the first to buy Intralot product.

Instant scratch tickets are an important part of the product mix and having them available again after a two week absence reminds us of this. A bonus is that Intralot are flexible about location.

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Lotteries

Lip magazine re-launches

Canberra-based lip magazine re-launches with its 15th issue as a print-on-demand product. The press release has a strong pitch as to why print on demand is a compelling proposition for magazines:

While a few magazines may be going green — using recycled paper, soy based inks and implementing greener business practices — traditional magazine publishing still produces a huge amount of print waste.

Did you know that the average sell-through rate of print magazines is around 70% of magazines are pulped at the end of their shelf life. High print runs may be attractive to advertisers, but at what cost to the environment?

While I cannot dispute the average stated, the number is skewed by the 1,500+ special interest low print run titles. In the top 200 the sell through rate is 80% or above. The print on demand model is something we will read about more often for special interest and fringe titles.

Lip is run by volunteers and carries no advertisements. The website is very cool.

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magazines

Bill Express questions answered

Not all newsagents are being informed equally about matters relating to Bill Express. For example, the QNF published the following questions and answers to their members last week – following a meeting they organised on the Bill Express matter. I reproduce the QNF questions/comments here with permission of the QNF:

  1. If it (legal action) is unsuccessful will we still have to pay the rental charge? If the legal case is not successful you will then have to start paying your $495 for the life of the contract, just like any other contract that you enter into.
  2. Bill Express recently promised relief to Regional Newsagents . This appears to be a sales pitch which may have been genuine at the time. Perhaps it was to delay newsagents’ taking action.
  3. Some newsagents were told by Bill Express representatives that BXP never intended to keep the subsidies……. Hank Spier (Barrister who attended the QNF meeting and former General Manager of the ACCC) stated that if there is any evidence out there that can prove this then this would be very valuable. This may only be known once the court case commences and records are subpoenaed. Did any other involved parties know about this?
  4. The rebates were the integral reason why newsagents first entered into the contract. Newsagents were mislead.
  5. Once you have suspended/cancelled direct debit that should be it. You are the Bank’s customer and they should honor what you require them to do. Be mindful not to cancel your ‘dial time’ direct debit until the end of month you last used it.  The ANZ Bank will still have to charge you merchant fees if you have used your machine during that month.  Approximately 2 weeks before you are finished with your Dial Time machine you must write and request that Bill Express send a “Request for Closure Form” to the ANZ bank to make sure they stop charging you, as at a certain date, for use of their machine. (Keep a copy) 
  6. You can terminate your BXP contract by giving 180 days notice but you cannot terminate your Finance contract prematurely.  This may change with the result of court proceedings. If you are close to the end of your BXP contract and are not intending to renew it you must write to BXP and TBI to give 180 days notice.   (Renewal of your BXP contract does not mean you will enter into another finance contract.  Once you have paid off your finance contract it is finished.  BXP will give you a new contract to sign with new terms and conditions but no finance contract.)
  7. A newsagent at the meeting stated that once a direct debit goes through your account you have 48 hours to request the money back. Your own bank should be able to do this on request.
  8. Who is responsible if customer pays a Bill Express account and it does not reach its destination? For example an Origin Energy payment. Your customer will have a receipt to prove payment was made. You should have a corresponding debit from your account. If they pay by cheque then in our example Origin, the account that it was deposited into would be known by the Bank. These payments are also underwritten.
  9. If you cancel your contract all equipment belongs to BXP. You are only renting. Newsagents must return all equipment back to BXP. It is up to you to keep the equipment in a safe place until/if BXP come to collect it.
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Bill Express

Swobbles on display

swobbles.JPGThe new Swobbles range from Skansen in our window at Forest Hill is working a treat. The bright coloured fun looking animals are drawing attention to the shop and driving some good sales. It helps that school holidays has started. Since the window is in front of our card department there is a nice flow on there too.

Gifts can be a challenge for newsagents since consumers when thinking about gifts do not think of us. Some newsagents do an amazing job with gifts while others flounder. It is a category which requires constant attention from buying through to display. Regular product movement is key, so shoppers always find something new.

The real challenge for newsagents is that the gift departments requires you to be a retailer whereas magazine, papers, lotteries and even cards, to a lesser extent, can work without you being a retailer.

The display looks much better than my photo (taken outside the shop) shows.

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Gifts

Top Gear launches

Top Gear Australia recorded strong sales on its first on-sale day yesterday from the data I have seen.  We opted to promote the title in three locations: in the car section of our traditional magazine display, above the Herald Sun newspaper and in a power end display.

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magazines

What is our private label strategy?

Private label strategy has been around for decades. Smart retailers use private labels to build loyalty and achieve better margin. Look at Woolworths, Australia Post and Officeworks – they all have well established and successful private label strategies. Newsagents do not. Our newsagent owned private label brand, Sovereign, is used on inferior product which does not deliver better margin and which is not restricted to our channel. All the tenets of private label are broken and we, the newsagent shareholders in the brand, miss an opportunity.

If we want to be considered serious competition to Australia Post, Big W, KMart, Officeworks and Ofis in the stationery stakes, we need a national private label strategy.  This could range from no private label products (and focused 100% on brands) through to a fully integrated and researched private label offer.

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Newsagency challenges

Shrek’s Quests partwork

shrek.JPGThe Shrek’s Quests partwork has been launched just in time for school holidays. We are leveraging the opportunity with displays at the front of our newsagencies. With advertising driving consumer traffic exclusively to newsagencies it is smart to make the most of it.

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partworks

Promoting the OzLotto $25 million

gamble.JPGWe have been promoting tonight’s OzLotto $25 million on one end of our newspaper stand (facing out to the mall), next to sports and racing newspapers.

This is part of our standard approach to promoting jackpots above $20 million. It makes sense given that half the people entering our shop will not pass the lottery counter – we have a very wide opening to our shop.

This kind of promotional activity for lottery products is outside is required of Tattersalls and as such is not part of their compliance assessment.

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Lotteries
Trending Articles

Fairfax changes approach to TV Guide, disrespects newsagents

Published on April 20, 2011

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IPS releases new magazine contracts

Published on June 21, 2011