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

Month: November 2008

Future of e-paper

Editors weblog has published an excellent two part report by Jan Bierhoff, Director for the European Centre For Digital Communications, on the future of e-readers and their possible impact on print media. Click here for part one and here for part two. Bierhoff’s conclusion will comfort some:

The conclusion is obvious, the adoption potential for mobile electronic reading is certainly high, but it is a medium in its own right, not just another print or online edition spin-off.

I agree, electronic devices for reading newspapers and magazines such as the iPhone, Kindle and the long awaited e-paper models are of a medium separate to print.  The question to which we will only discover an answer over quite some time is the number of print consumers who migrate.

From a newsagents perspective, my view is that we need to read widely on this issue of disruption.  It goes to the heart of how we design our shops for the future, how we stock them and the control we assert over our businesses.

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Media disruption

Amazing customer from Sam the Taxi driver

Sam, a Sydney taxi driver, delivered one of the most amazing customer service experiences I have ever had. Yes, a Sydney taxi driver!

Sam, I don’t know his surname, has been driving taxis for nine months. Prior to that he owned a couple of Italian restaurants and had worked in hospitality in Sydney for thirty years.

I met Sam at around 9:30pm Thursday night when I had to catch a cab from Sydney airport back to the city when I had left my laptop at my hotel. This caused me to miss my flight. While I will not bore you with the details, because of Sam I picked up the laptop and made it on a flight to Melbourne, overcoming airline and other obstacles along the way.

Sam made it happen. Just when had resolved to staying the night in Sydney and catching a 6am to Melbourne Friday, Sam made it work out.

I don’t usually talk to taxi drivers. Nothing against them it’s just that when I travel I stay in my own world. Sam made that difficult. The moment I slid into the passenger’s seat next to him he turned and with a big grin said help and introduced himself, “Hi, I’m Sam, welcome to my taxi”.

It was such a different experience to what I experience from the hundreds of taxi rides I take each year that it was a shock. With his greeting Sam set the mood and that was key to resolving the challenges of getting getting to the city, collecting my laptop, getting back to the airport and making a flight I had no booking for.

The experience with Sam was the kind of experience I am sure all newsagents crave to have delivered across the counter in their shops with every transaction. In our 40 minutes together Sam got to the heart of good customer service based on his years in hospitality:

  • Love the customers. If you don’t get out.
  • Enjoy yourself. If you don’t then get out.
  • Be good at what you do. If you can’t, get out.
  • Always do something extra, unexpected. If you don’t then you don’t love your job.

Sam made it clear that by living by these rules we was able to find for himself the life he wanted. I have Sam’s number and will call when I next need a taxi in Sydney.

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Customer Service

The compact magazine challenge

frank_cleo_double.JPGI am undecided about the increased number of compact size magazines we are receiving with their full size parents. Traditional newsagent magazine fixturing is not designed to cope with these yet I can understand that some customers would prefer the smaller size. Beyond the display challenge, which can be fixed with a block of wood, there is the stock issue. When a title introduces a compact version we are often supplier close to double the usual supply until the sales level for the store is reached. Newsagents fund this until the level is found.

I wold like to see us agree terms for new titles and title extensions such as is happening at the moment with Cleo and its compact edition. Bill us once you know what we have sold and not in advance. the technology can handle this easily. It places responsibility appropriately with the publisher for the launch.

Network Services, the distributor handling Cleo, aggressively chases payments on the 20th of each month from newsagents for everything supplied for the month prior. They pursue payment more aggressively than any other newsagent supplier. With some of this money due to titles still being tested in the marketplace, a fairer approach would be for more flexible terms around these titles. The current arrangement sees small business newsagents unfairly funding this testing.

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magazine distribution

Marketing the calendar range

nx_cal.JPGnewsXpress has provided its members with copies of this double sided A2 poster to promote the 2009 Calendar range. Click on the thumbnail for a larger image. The idea behind the poster is to promote range. With most newsagents only selling magazine distributor and card company calendars, the newsXpress approach allows us to promote a key point of difference in the calendar category. With a margin of 60% and more, such promotion is valuable.

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Calendars

Increasing unemployment

A newsagent in country Victoria has let a casual employee go last week following the replacement of their computer software.  The different approach to magazine returns and stock management in the business resulted in sufficient efficiencies to eliminate the role altogether.

While this sounds like an ad for Tower Systems, the software company I own, I have been thinking more about the focus of the newsagent to achieve genuine benefits from investments like in  software. Too often, I see newsagents do something which saves time only to not use the saved time to their personal or financial advantage.  There is no point pursuing efficiency if you are not going to make it count for your business.

This country Victorian newsagent is now a couple of hundred dollars a week better off because they wanted what the sales pitch said could be achieved.  They did this themselves.  Sure they were trained, but the achievement is theirs and kudos to them for that.  They have done more than many newsagents who don’t make computer systems and other infrastructure investments in their businesses pay off what they promise.

I can arrange contact details or anyone who wants to verify the story about the time saved by the switch and the decision to let the employee go.

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newsagent software

Please support Movember

mo-1.jpgTrent Shields, National Marketing Manager at newsXpress, and Leighton Dougall, Software Developer at Tower Systems are supporting Movember and raising awareness for men’s health issues including prostate cancer and depression by raising funds and growing a goatee (see photo of Trent). I am sure others in the newsagency channel are supporting Movember too. If you know of anyone please post a comment. We have two days to raise more awareness and cash for Beyond Blue and the prostate Cancer Foundation. Go to Trent’s page or to Leighton’s page on the Movember website to support the cause.

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Social responsibility

Magazine loyalty program update from the UK

nx_magclub.JPGSteven Denham reports at his Village Counter Talk Blog about presenting to suppliers his learnings from the launch in September of the Magazine Club Card loyalty program in his shop in the UK.

The success for Steve and his team since September is excellent:

We have given out nearly 400 cards up to now with a good number of customers on to their second or third. We have one customer who has claimed 6 free magazine so has bought more than 66 in the past 12 weeks. We need to reward this type of customer as they are the backbone of our business.

It is good to see from Steve’s blog that suppliers engaging on this initiative. Given the win for them such engagement is important. This is a newsagent initiative which they could drive for the success of the most important channel to magazine sales in the UK and here in Australia.

Rewarding consumer loyalty around magazine purchases through the Magazine Club Card is all about enticing increasing sales. The keys are genuine and attainable reward and the promotion of the offer only by word of mouth across the counter.

In our own experience over the four and a half years we have run this program, the increase in magazine sales comes at a cost to other magazine retailers as well as from genuinely new business.

It is rare that we see this marketing initiative fail.

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magazines

Trimming the store for Christmas

sr_christmas08_instore.JPGThe photo is of the 60cm free standing Christmas sign we have created to take the Christmas pitch onto product shelves in our Sophie Randall business. At Sophie, the retail experience is different to a newsagency, shopping is more relaxed. It is a bit of a treasure hunt experience. While our windows are professionally dressed, into the shops the products themselves promote the season. We found with Father’s Day that signs this size successfully promoted the season deep into the store. We feel that the more traditional A2 posters hanging from the ceiling are not right for us.  Our free standing Christmas signs have cost us $12.00 each.

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marketing

Making licenced product work

frank_hsmontannt.JPGThe Hannah Montana and High School Musical stationery and calendars from Hallmark have hit at a good time. They fit nicely into the Christmas and trade on the back of excellent recent publicity. The products also serve a demographic for our traditional shoppers shop. While taking offers such as these from Hallmark and other suppliers can be financially challenging, they are important since they sow the business moving outside of traditional seasonal offers. Not all licenced product works this well – you have to weigh the market carefully.

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Gifts

Marketing magazines as Christmas gifts

Below is the poster artwork I have had created for newsagents to use to promote magazines as a Christmas gift. You can download the artwork – A4 or A3 size – from the front page of Tower website.   I have kept away from all newsagency branding – so that any newsagent could use the poster.

magazine-christmas-3.jpg

I selected the titles to represent range and typical gift giving opportunities. The challenge is space since it was important to represent enough of the cover. Newsagents are welcome share this with colleagues if they feel it would be useful in driving magazine sales as Christmas gifts.

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magazines

What to do with Chess Life Magazine

oct08clmcover.jpgWe received Chess Life Magazine today for the first time from NDD, two copies.  The price is $9.95.  The US price is $3.95.  This title has a sixty day on sale.  We don’t sell any chess magazines.  We don’t have any titles with which this could be placed except for, maybe, poker or hobbies.  Had I been given the opportunity to decide for myself about this title I wold have considered what else I could get to create a story – but not right now, I would have given the title as crack in the new year when there is more time, space and cash.  Not giving newsagents such a choice means that this title will be treated respectfully – it’s fuel for the magazine distribution machine.

But back to the numbers for Chess Life.  I need to sell the two copies in 30 days to break even.  To do this I have to invest more time to manage the title.  For a single title it is not worth it – which brings me back to wanting to manage the broader opportunity for other titles which could fit with this.

If NDD wants to cut a deal to bring in Chess Life they need to carry the risk.  The current magazine supply model makes ittoo easy for fringe titles like this to be placed with us.

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magazines

Women’s Weekly sales strong for us

fhn_aww.JPGWe started promoting the Australian Women’s Weekly at the counter on Wednesday.  The free movie with each copy and that it is a bumper Christmas edition make for a compelling offer.  Sales have been excellent over the last two and a half days – sales for AWW in both my stores have been good the last few months with a sell through of close to 90%.  We are achieving this by consistently promoting the title in additional locations including this premium counter position.  This counter location will work better for us with AWW than a power end as it is seen by more customers who are already committed to spending money with us.

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magazines

No form here

noform.JPGWe do not have The Form for customers of The Age because our supplier refused to fair terms. He is paid ten cents by Fairfax. Given that we would supply his home delivery customers as well as our retail customers and provide premium space for the product we considered that the ten cents should be fully passed on. Rather than any negotiation, we have no stock. This is a challenge for newspaper publishers who want a retail presence but rely on distribution businesses to negotiate on their behalf.

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Newspapers

NDD refuses to cancel Universal supply

NDD has advised that they refuse to cancel the supply of Universal Magazines titles to my businesses.  I know from my own sales that these titles are loss making my business once I account for the retail space and labour – even at a sell-though of greater than 60%.  For titles of greater than 30 days on-sale I, and other newsagents in shopping centres, need between 80% and 100% sell through to break even.  The only way to address this is with commercially fair terms which respect the long on sale and high cost of returns.

My original blog post on this can be found here.

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magazine distribution

The cost of magazine returns

I spoke with three newsagents yesterday about how much they spend per bundle to freight returns back to the magazine distributors. One pays $1.30 per bundle, another $3.00 and another $8.00. This is for product off of which the newsagent made no money.

UPDATE (1/12): I have now been told of newsagents paying as much as $15 per bundle and as little as $1.20.  While distance plays a role, in some cases it does not.  I would have thought that at the very least getting consistency on returns prices was a worthwhile project for associations.

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magazine distribution

Tracking magazines by week

supp_arr.JPGTalk to any newsagent this morning and they will tell you that they will be glad when the week is over.  Being the last week of the month, magazine volume has been high.  Magazines delivered today have to be paid for in three weeks.  A few years ago I had a report developed for Tower Systems to track the value of magazines by distributor by week.  Click on the image for a larger copy of a small part of this report for one newsagency for August this year.  

If a newsagent says to me they are overloaded at the end of the month, this report is the first thing I ask for as evidence is vital.  Sometimes it shows that the problem does not exit.  Other times it shows a serious problem.  The key is that newsagents can get evidence if they want.  Any challenge around overloading magazines in the last week of the month will require hard evidence.

The key to reports like this is that the newsagent only handles magazines for which invoices are received electronically, all sales are scanned and all returns are scanned.  This level of data compliance is crucial if newsagents are to build the evidence necessary to drive change in magazine supply arrangements.

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magazine distribution

Humor is in for Christmas cards

funcard.JPGThe feedback from our Sophie Randall card and gift shops is that consumers are looking for humorous cards this Christmas – but smart or quirky humor as opposed to what some might call rude jokes.  This card in the photo is a good example of the kind of card our customers are enjoying.  A couple on a bike, riding across the snow, naked.

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Greeting Cards

NSW newsagents ignore the ANF

I am told that only 12 NSW newsagents voted in the election of their director to represent the state on the ANF Board. If this number or something close to it is right then to relevance of the association has been judged by newsagents. Marking a vote on a ballot and posting this is the most passive engagement one could have with an association. It challenges the ANF claim to represent newsagents.

The ANF Board could further challenge newsagent perception of its relevance if it does not immediately hold another election given that the result is a draw. To leave the choice of NSW Director to the Board would alienate NSW newsagents and key ANF staff who are shell-shocked at the performance of the organisation over the last few months. However, it does not matter since the organisation is of little relevance and does not represent newsagents despite what it may think.

UPDATE (28/11): Common sense has prevailed and the ANF has advised that the election will be recalled with a result expected prior to Christmas.

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Newsagency challenges

Monster moves on CareerOne

US online ad giant is taking over half of the News Ltd Career One online employment business.  This is interesting.  I suspect the deal has been struck to strengthen the Career One brand against the market dominator Seek.  Paid Content has more details on the deal.  Newsagent interest in this has to be around the migration of print ads online.

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Media disruption

Economic stimulus bypasses the engine

The Federal Government’s focus at the top and bottom ends of the economy in the face of the current economic challenges misses an opportunity to work on small business efficiency and sustainability.

While giving pensioners and others in need $10 billion cash to spend will help is important, I would like to see money invested in businesses.  Just as farmers need to invest in drought-proofing their properties, we need to invest in recession proofing our businesses.   The burst from the $10 billion will not focus business owner attention on sustained change in their businesses.

Big project infrastructure spending is good too but it does not focus in more important infrastructure – business efficiency, particularly small business where the majority of Australians work.

I would prefer to see the Federal Government introduce an investment allowance for and rapid depreciation of appropriate capital expenditure – expenditure which improves business efficiency.  This would be far more useful for the Australian economy than yet another multi billion dollar handout to the auto industry.

I would also prefer to see the government make real and immediate progress on cutting business paperwork so that we can cut real operational costs, fixing the broadband mess once and for all so that we can become competitive in online based business and in communication,

At the newsagency level, I would like to see the government fund research into the impact of deregulation on newsagents and their families.  I suspect that such research will show that contracts which newsagents signed at the time of deregulation have made their businesses worse off today than in 1999.  This is a government matter because the government drove the deregulation agenda.  Newsagents need to be able to charge a fair fee for the service they offer.

Finally, I would like to see the Government stop competing with the private sector – get out of retail, sell off the 860 government owned post offices or get the post office out of looking more and more like a newsagency.

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Newsagency challenges

Christmas display sells magazines

fhn_christmas.JPGThis very basic looking retired card unit filled with Christmas themed magazines and placed at front of our shop next to the main lottery counter requires topping up daily.  It is working a treat!  As new Christmas-themed magazines arrive, we add them to the mix.  I like that we have popular titles such as Better Homes and Gardens, Real Living, Notebook and Family Circle covered as well as a range of niche imported titles covering paper craft, card making, cooking and home decorating.  The stand, basic as it is, speaks volumes about the depth of our magazine range.

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magazines

Responding to growth in DIY magazines

handymanmag.JPGI read recently (cannot recall where) that DIY and handyman magazines are travelling well right now. I checked our numbers and saw that this is a healthy segment for us. Handyman from Reader’s Digest is one of those magazines selling particularly well. We are promoting it at one of our counters this week as our Magazine of the Week. A good tip for product placement back in the magazine fixturing is to have all handyman / DIY titles in a column, blocked together. Too often this not the case and sales are lost as a result.

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magazine distribution

Check phonecard terms

Some phonecard companies recently changed their terms, effectively increasing costs for customers.  One introduced a surcharge of 69 cents once a call passes three minutes, another introduced an 80 cent disconnection fee and another introduced a daily service fee.  There are other changes beyond these.  The per minute cost is just part of the equation.  My point is that newsagents are relied upon to have up to date product knowledge.  Unless we get out and research all phone card companies we cannot know.

I am aware of the changes because of my commercial involvement with the people behind the Aussie Phonecard.

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Customer Service

The MX habit well established

I watched the distribution of MX, the free daily newspaper from News Ltd in Sydney late today.  Most people walk up to collect the paper – it is sought after.  It is fascinating watching this from a newsagents perspective.  I bet that half the newsagents in Australia don’t know about the MX success on the Eastern Seaboard. Good on News Ltd, MX is an excellent success story.

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Newspapers

VANA spins its new marketing group

VANA has announced its Future Project to its members. This is the new marketing group I blogged about three days ago although VANA is at pains to point out that this is not a marketing group. The announcement reads differently to the pitch given to newsagents who have attended a briefing.

VANA’s announcement points to compliance as a key driver of the project. Newsagents who want to focus on compliance have options already available in the form of newsXpress, Nextra, Supanews and, to a lesser extent, Newspower. The first three have franchise agreements which act as the mechanism for compliance. What VANA is doing is going into competition with these groups using newsagent funds. If they were a good association I would not mind so much but they are not. They have failed their members on many fronts over the last year.

This project has less to do with compliance and more to do with VANA hatred of GNS. This motivation is one reason the project is likely to fail for all but a select group of newsagents. If the association was concerned about serving all members then their future project would have been structured in a way that it was relevant to all newsagents from the outset.

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Newsagency challenges