N-Stock a con for newsagents
UPDATE: N-Stock has been reviewed by VANA and efforts are being made to work with traditional newsagent suppliers to develop online opportunities further. It is good to see it move from the offer of three years ago.
I have a few issues with N-Stock, the VANA initiative now endorsed by the ANF through which stationery and other items are offered. It is on my mind today because of another three pages fax from them – this time offering Global Star Diaries.
- VANA and the ANF failed to serve newsagents on the Bill Express matter. It is wrong for them to charge off into other areas when they continue to fail on basic association service.
- My VANA association member funds helped create N-Stock. That should be enough for me to gain full benefit.
- There is double commission for accredited newsagents. I am not about to give up two days to do training telling me to do things which I already do. While the accreditation training may teach me one or two things, using rebates as a carrot for me to pay for training is wrong. Their approach to accreditation is like the supplier approach to compliance – there is little basis in business performance.
- Associations have no business acting like a marketing group or a stationery wholesaler. If they do, maybe marketing groups should act like associations and offer HR and other services.
- The deals rarely have overall retail context – seasonal or whole of line.
I label N-Stock a con because it is not the straightforward off it makes out to be. We have no visibility of the commission being made by the ANF and VANA on the deals. Newsagents are required to spend money on accreditation training to access the best deal. They often promote products which compete with brand name suppliers we see at trade shows, in the national magazine and supported on TV (teaching us to be poor retailers) and there is no comparative pricing to justify the claims of incredible deals.
I am a director of newsXpress, a marketing group for newsagents. We offer deals like those offered through N-Stock. It is important readers know this and therefore my conflict in discussing my concerns. However, the association playing in this space conflicts them on many fronts and I am sure their Directors have not thought this through.
Given the relentless promotion of N-Stock, placing VANA and the ANF in the marketing group / supplier space, it would be appropriate for groups like Nextra, newsXpress and Newspower to consider offering association services which, if acted upon could bring the Associations to an end.
Dad’s Nuts, Father’s Day product of the year
Dad’s Nuts from Morish gets my vote for the best Father’s Day product for 2008. The name is brilliant, value fantastic, product quality excellent and the packaging stunning. Customers are loving Dad’s Nuts. I have spoken to several newsagencies and sales are good. When I first heard the name I thought people would react negatively. The opposite happens – people laugh, the love the name. While this is a newsXpress exclusive, I am yet to see a new Dad product so engaging.
Bagged magazines
We appear to be in the middle of bagged magazine season. Right now, more than any time I can recall, we have more bagged magazines in store. This is happening in the car, craft and homes categories.
These bags hinder browsing. Browsing is important to sales. I appreciate that the publishers see value in the free magazine to drive sales. I disagree.
Publishers need to find more clever ways to drive sales. For example, If I were publishing an Holden and Ford magazines I’d stage a state by state trivia competition around the brands, get people loyal to the brands competing in a fun atmosphere with the brands the focus. I reckon that a $50,000 spend nationally could result in a more valuable sales lift than bagging and hiding the magazines from browsers.
Newsagent sales benchmark report
We released our latest newsagent sales benchmark report this morning. This report is the result of thorough analysis of year on year same store sales data from 63 newsagencies with accurate, supplier compliant, data. The benchmark report and associated dataset provides the most current and comprehensive dataset against which newsagents can compare their businesses. Here are the headlines from the report:
- Overall retail sales in newsagencies up, on average, 2%.
- Newspaper sales fell 4.8% in the city and 2.3% in the country.
- Magazine sales fell 4.5% in the city and rose 2.2% in the country.
- Card sales increased 3.3% in the city and 2.3% in the country.
- Stationery sales fell by 7.8% in the city, and 2% in the country.
The benchmark study, the fourth over the last year and most comprehensive conducted by Tower Systems, provides more evidence of consumers migrating from the newsagency channel and migrating from traditional paper based news and information sources to online.
The study also grouped newsagencies by size of magazine sales. In this analysis of newsagencies with $200,000 a year in magazine sales and higher, the year on year results showed the top performing store achieving magazine unit sales growth of 5% and the bottom performing store achieving a decline of 7%.
In the group of newsagencies with less than $200,000 in sales, the range was between 12% growth and 8% decline.
Over the next week or so I will outline how I think we can react to some of these challenges. Knowing how we are performing is half the battle to navigating a better future.
Undertaking these benchmark studies is is a free service we have offered through Tower Systems for close to eight years.
Early with calendars
You know the year is rushing to the finish line when calendars arrive in-store. Being early with a good range of calendars is important for the overseas gift purchases. This why the early range out now includes plenty of Australiana product. Year on year, calendars are growing more than 10% is newsagencies which drive the category. Going early is key.
Promoting Wine Collector
Wine Collector is a smaller volume title from ACP Magazines which often gets forgotten in retail merchandising. Rhonda at our Frankston store created this stunning display using colour photocopies of the front cover and the one poster which we were sent for the title. While I often complain about in-store billboard advertising, this time I like that we are promoting a title and category most other magazine retailers will ignore – this is where we get a flow-on benefit as we are promoting range.
ACP Connections Conference a success
I was fortunate to attend most the 8th Annual Connections Conference organised by ACP Magazines yesterday in Melbourne.
The sessions I attended were genuinely beneficial. In between there were excellent networking opportunities. The place was buzzing as you would expect with more than 200 proactive newsagents talking shop. The dinner last night was wonderful – great food and fantastic entertainment.
One graphic summed up the importance of Connections. On a year on year same store basis, Connections newsagents are more likely to show growth compared to non Connections newsagents. I know I make comments on here from tile to time about single title displays and the cost of this real-eestate. This graphic showing the channel wide value of the Connections program is proof that embracing the program has commercial benefits for participating newsagents.
Congratulations to newsXpress Gympie for taking out the Newsagent of the Year Award.
Newspaper circulation numbers released
Do a Google news search on newspaper circulation this morning and you will see that our major dailies have stories on the latest circulation and readership numbers. It is interesting the biases which show in the reporting on the same set of data. While the circulation figures show some falls and some gains, we continue to be insulated here in Australia from the considerable declines in newspaper circulation in the Unites States.
Our own sales benchmark data we are sending to newsagents today shows a decline in newspaper sales which is higher than the circulation data meaning probable migration to other retail channels.
Tips about truth and sales reps
Newsagents would be rich if they had a dollar for every time a sales rep told them that they should take a deal because another newsagent they name ordered plenty. Rarely do we challenge their claim. We should demand proof and nhold the rep accountable.
Some reps will lie in other ways. For example, a pen rep recently told one of our managers that they only had one left of a certain special stand and that he had oto order that day. He made the same pitch a few days later. He must have had a few of these last one available stands.
Here are some tips for handling reps:
- If a rep says someone has bought a certain quantity, get proof. If none is provided, walk away.
- If a rep says you have sold a certain quantity, verify this for yourself on your computer system. Trust your data ahead of theirs.
- If they say this is the last of an item, ask for proof from their manager.
- If you are promised merchandising support in the from of posters or cardboard cut-outs, get it in writing with some pre-agreed penalty if they are not delivered.
- If you are offered sale or return, get it in writing.
- If you are offered free stock with an offer, get it in writing.
- Get the delivery date in writing with an agreed penalty if they miss.
- Check every order a rep places – they are on a commission for what they sell and must work for their company more than they work for you.
There are some great reps in the newsagency channel. Their good works are undone by a few who are unscrupulous and dupe newsagents into bad deals.
Theatre around crosswords
The team at our Frankston newsagency took a basic looking crossword display which was not working that well and created a border and cap which beautifully frame the offer and draw customer attention.
This unit is in front of the photocopier, just at the end of the counter. It is using what used to be dead space.
The border is easy and cheap to make (but difficult to attach). Its purpose is to frame the offer and make the magazines more visible to shoppers. With so much colour in a newsagency it is easy for displays of magazines to get visually lost. Hence the value of a border to pull focus and generate sales – especially a monochrome border as we have used here.
Crosswords are a good category for counter promotion. At Frankston, they account for 7% of all magazine sales and appeal to a wide demographic. We know from our work over the last new months that we can achieve double-digit growth year on year from this category. They will be a semi-regular feature at the counter.
Vodafone coming to eziPass
The following Vodafone products and denominations are being added to the range available through eziPass:
- Vodafone $20, $29, $30, $49, $50, $70, $100, $149, $150, $200
- Vodafone Extras $5, $10, $25
This is a great move forward for the only newsagent point of sale software integrated electronic voucher platform. Newsagents love eziPass because they can sell from within their POS software, have better record keeping, sell faster and more easily upsell.
Breeze promotes Bill Express
Someone should let the folks at Breeze, the tag part of the new Eastlink tollway in Melbourne know that Bill Express is dead. Here is text from a letter they just sent to a new account holder promoting payment at Bill Express outlets:
Flight Centre caught in Bill Express mess
eTravel Blackboard reports that Flight Centre is caught in the Bill Express mess having apparently paid Technology Business International for terminals which were never delivered.
Fairfax WA online site surges
WA Today, the Western Australian news site from Fairfax is achieving excellent traffic and is close to beating the site for The West Australian according to a report in The Australian today.
This is a very important story for newsagents. A major Australian publisher has launched into a new market and is close to beating the incumbent in just a few months. This is an extraordinary result.
In the past, when a newspaper publisher wanted to enter a market, they were up for millions of dollars. With WA Today, Fairfax has a pure online model. There is no supply chain. The role of newsagents is gone. This is the kind of move publishers need to make. Consumers want local news and from WA we can see they are happy to access this online.
Newsagents need to understand this move in the context of their own businesses. It is evidence of publishers attracting people online to access news and information. This has implications for our capital investment. It is a move we need to consider in every business decision we make. We need to be considering how we will deal with a shift in how consumers access news ane information given the number of sales every day in our newsagencies which include a newspaper.
Not tomorrow or next month will we see a dramatic fall in sales. But it is happening. I’ll have more to say on this when I publish the latest sales benchmark results in the next day or so.
Unfortunately, newsagent associations continue to remain silent on this challenge.
Budget family meals a winner
The budget family meals booklet which comes with That’s Life this week earns the magazine a place at our counter, especially at the lottery counter where we have placed it. Money is tight, we read about that everywhere. It stands to reason people will be interested in ways to cut costs – hence the relevance of the free booklet. The smart yet simple placement of a good value offer like this at a busy counter can mean more for us in incremental sales than a full-on aisle end display as some of the publishers want. This is why I would rather newsagents judged based on sales success and not compliance around pretty displays.
Australian 360 magazine not selling
Australian 360 magazine is a dud for us at Forest Hill. It has a sell through of considerably less than 50% yet the magazine experts at Network Services have increased our supply. This is the same company which cracked down on newsagents for returns fraud. I would argue that increasing supply without and basis in sales data is as bad as fraud. My frustration is that each time I try and engage with the Network about their broken supply model, promises are made but rarely kept. The health of the newsagent channel relies of a fair and just magazine supply model. One day, publishers will realise this.
Reporting a failure
Earlier this year I blogged about these newspaper themed mugs which I expected to sell well in our newsagencies. I was premature in declaring them a success. We now have them at half price in an effort to quit the range. We will drop the price ever further next week. We have moved them between stores and created dazzling displays. Nothing worked. We are pleased to have tried and had the experience though.
ANZ and Westpac dud newsagents on Bill Express
I received more calls today from newsagents dealing with banks which refuse to act on their instructions to cancel direct debit arrangements for Bill Express equipment. ANZ and Westpac are the banks letting newsagents down based on today’s calls. In each case, newsagents had put their direct debit cancellation in writing and in each case their respective banks had refused to act. Thankfully, one the Westpac branch relented after the newsagent went in with information about the Code of Banking Practice.
The behaviour of banks is appalling on this matter of the Bill Express equipment. The ASIC website is clear on bank obligations as is the website for the banking Industry Ombudsman. It is as if staff in local bank branches have not heard about their obligations. Newsagents are having to go back two and three times before getting reasonable attention.
Time is an issue here since the next round of debits are to be made less than a week from now.
Canadian magazine sales fall
ABC reported that Canadian newsstand sales at 27 of the 62 biggest selling magazines in Canada experienced double digit percentage declines between January 1st and July 30th of this year.
Digital Home published a report with this grim news overnight. This is another reason we need to obsess about magazines: we need understand the categories which are performing well; support these with local entrepreneurial energy; and, find ways to lift those which are falling.
I will release a sales benchmark report later this week which shows some Australian newsagents are successfully growing magazine sales.
The clever magazine stand
The stand sent out by ACP magazines to support the launch of the Australian edition of Top Gear six weeks ago is serving us well. Thanks to the removable cap, we have alternated it between supporting Top Gear and Grazia. Its small footprint enables us to use the stand in a variety of locations – this is importnt given the number of regulars newsagencies have. Customers become store blind too!
When you look at the photo you can see our newspaper stand promoting our three dailies – the Herald Sun, The Age, The Australian and the Australian Financial Review. You can also see us promoting Women’s Health, Famous and Grazia. I mention this in support of my up-sell comments recently. Newspapers are a honey-pot. Customers are drawn to them like bees. We need to have other products around the honey-pot to build its efficiency.
It’s Father’s Day folks!
Some suppliers just don;t get the importance of theatre in retail. While we have had our Father’s Day cards out for two weeks, and they are selling well, some suppliers are yet to get stock for this season to us. One supplier, Darrell Lea, tells us it will be another ten days before we get the stock. While they will say that most sales are in the last week, they have missed any opportunity to change that. They have also missed an opportunity to be part of the theatre of the season. We are playing with an alternative Father’s Day confectionery offer (Dad’s Nuts from Morish) and that stock arrived last week.