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

Month: December 2008

Competing with the online lottery business

I was driving past another Tattersalls billboard promoting their online offering yesterday and was thinking about how we can compete against their lure of customers from retail  

Customer service is the best way we have of competing with the growing online lottery business. 

I can hear people yawning or reaching for the back button already.  Hear me out.

If you are like me, every time you are at the counter you have someone wanting to check a ticket or ask a lottery question.  No sale, just the service.  No website experience can match an exceptional retail experience.  However, it will come close if we provide poor customer service. We have an obligation to each other to provide these free services – ticket checks, answering questions and the like – for lottery products as if our future depends on the customer satisfaction.

The less we remind people of the benefits, through service, of face to face retail the less they will think of us next time they need to purchase.

I am not happy about the various lottery agencies pursuing growth online. I cannot change their decision.  I can, at my counter, stop giving customers a reason for looking elsewhere.

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Customer Service

Finding gifts for newsagencies

book_gifts.JPGThese books are an easy sale with card purchases.  The book captions tie in well with popular card giving occasions.  Plenty of suppliers offer books which fit with cards like this including Hallmark, Compendium and Care and Share.  We use all three suppliers in our newsagencies and gift shops.  The key is to keep moving stock so there are always fresh titles on offer.  Price is also important as customers are looking for something which feels valuable but without a high price tag.

There are many ways to approach gifts in newsagencies.  Our experience is that starting with existing suppliers is a good first step. Some existing newsagency suppliers have gifts which are not usually offered to newsagents.  Ask.

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Gifts

The cost of magazine theft

better_photoshop.JPGOutside of the challenges of oversupply and long shelf lives is the cost of shoplifting of magazines.  Take Better Photoshop Techniques.  At $24.95, all we need is to have one stolen and we lose the profit what we will sell across two issues.  This is another reason I would like magazine distributors and publishers to partner with newsagents in weathering the financial cost of shoplifting.  While they will say it is our retail space and our obligation to minimise theft, the slim margin on magazines limits the amount we can invest in this effort.  While this is not a new problem, it is more in focus today because of the need to look at every cent we can save within our businesses.  If we are not to be given easier guaranteed control over what we carry then those pushing product to us need to share the theft cost.

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magazines

The old hand attacking the young

In a country town a new newsagent, a year in the job, is facing a ferocious attack from a well established newsagent of decades standing. 

The old hand newsagent has opened a second shop a few doors away from the new newsagent’s business, a street away from his own main street store.  In this new shop, the old hand newsagent is placing products which specifically target categories being tried by the new newsagent. 

If the new newsagent was a poor operator I could understand – in the interest of customer service.  He is not.  This new newsagent is a good operator, someone committed to excellent customer service and doing the newsagency shingle proud.  He is the kind of person we want to attract to our channel. 

The gorilla of a competitor, the old hand newsagent, is relentless – he had has engaged in other underhand activity designed to gain an unfair advantage and take out the small rival.

Had he competed by improving his existing business I would not have a problem.  His shop could sure do with improvement – but business is not suffering because of his years in town and his excellent location. The town can easily support both.  The town would suffer if the gorilla won and the new guy was forced out of business. 

There is robust competition between many newsagents.  Rarely have I seen the underhand and questionable attack as I have written of here.  The actions of this old newsagent do not do our channel proud.

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Newsagency challenges

Missed Better Homes promotional opportunity

bhg_paper.JPGThe Christmas edition of Better Homes and Gardens which has been out for over a month and is still selling has free wrapping paper.  It was only when a customer pointed it out to me that I realised this was part of a Christina Re promotion.  We and many other newsagents sell Christina Re papers.  Had we knnown about the promotion, we would have been smarter in our counter display and linked the two offers. 

There may have been advice and we missed it.  If so, the fault is ours.  If there was no such advice from Christina Re and the folks at Better Homes and Gardens then this is an opportunity lost. 

Thankfully, the customer who educated me yesterday at Forest Hill bought three of the Christina Re paper packs as a result of Better Homes and Gardens.  I let our team know because this is the kind of  opportunity about which retail staff need to know.

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giftwrap

Investment allowance not enough

While the Federal Government announcement of an investment allowance is welcome, the 10% is too low to change business behavior and increase spending.  As I blogged in October and November, stimulus for small business has to be bold – as much as a 40% investment allowance.  A 40% investment allowance would change business infrastructure spending and this is what the government says it wants. 

This support is needed more because the Government and others have told businesses that they should be in the doldrums, not because they are actually in the doldrums.

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Newsagency challenges

Print is Dead. Long Live Print.

Newsagents should read Pitnt is dead.  Long Live Print by Dan Costa and published at pcmag.com, the online home of the PC Magazine which killed off its print edition recently.  Dan makes a lot of sense, especially his environmental pitch about magazines.  This issue of wasted paper is going to get more and more coverage.  I expect this environmental pressure will have mroe impaact on magazine oversupply here in Australia than decades of complaints of newsagents.

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magazine distribution

Cross promotion with wrap

fhn_wrapcutter.JPGThe paper cutter we have placed next to roll wrap is selling well.  Supermarkets and other retailers place a product from one department in another department regularly.  It is smart retail.  The paper cutter is a perfect fit with wrap.  As is tape and wrist band tape dispensers – which we also have nearby.  Making the most of every opportunity is crucial in an economy like we have today.

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giftwrap

Cupcakes and lotteries

fhn_cupcake.JPGIn the three days since Wednesday this week we have sold five of the new ACP Cupcake cookbooks at our Forest Hill store.  I know from our refills that most have sold from the small stand we have placed next to one of our Tattersalls counters.  While Tattersalls will complain, the customer uptake shows that they like the service of this product being available within easy access.

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magazines

Purging Bill Express

It seems that some newsagents do not know that Bill Express is dead.  I have seen several newsagencies this week with stickers and posters displaying Bill Express brands.  Newsagents should check:

  1. Remove Bill Express light boxes or use them to promote current services.
  2. Remove BOPO stickers – usually placed near the entrance to the shop, on the door or window.
  3. Remove Bill Express and BOPO brochures, usually in a stand at the counter.
  4. Paint over Bill Express signs.

Out of date promotional material like this lets the whole newsagency channel down.  It makes us look second rate, out of touch.

In fact, while removing this, take a look at the door, window and counter and remove any other out of date promotional messages.  Less is more as they say.

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Bill Express

Melbourne Bride sucks newsagent cash

fhn_bride.JPGMelbourne Bride is another title being used to play with newsagent cash. 

The new issue came in today and the old issue is not to be returned until the first week of January – meaning that the return credit would not be reflected until the statement due for payment on February 20. 

If we return Melbourne Bride today, as should happen, the credit would be reflected in the statement to be paid on January 20. 

Maybe I am being cynical but this appears to be a grab by the distributor, Network Services, or the publisher for newsagent cash.  There is no reason for the return to be delayed to next month other than to delay refunding newsagents for unsold stock.

Newsagents cannot afford to have a thirty day delay to accessing credits due them for product which has failed to sell.  Network Services would know this from their own accounts people.  This practice must stop for the financial health of the channel.

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magazine distribution

Good counter offer

fhn_boards.JPGI did not think that emery boards, no matter how funky they look, would work at the counter of a newsagency.  I was wrong.  In a couple of weeks we have sold half the stock at our newsXpress Forest Hill store.  These have been bought by customers who came in to buy traditional newsagency product and walked out buying that plus an emery board.  Thankfully our team did not listen to me about carrying this item.

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retail

Exclusive digital music offer for newsagents

cardplaiad.jpgTower Systems has announced Cardplai, a greeting card with the gift of digital music offer to be available exclusively through newsagents on the Tower Systems point of sale and eziPass platforms.Cardplai allows customers to purchase a greeting card with a gift for $19.95. Each Cardplai greeting card comes with a unique code that is activated at the point of purchase using Tower Systems POS and eziPass software.

When someone receives a Cardplai card, they go online to the Cardplai redemption site and download 10 high quality digital music tracks from a catalogue of over 500 000.

Newsagents receive a kit of 100 cards pre-packed into a counter display unit (with a footprint of only 40cm by 25 cm) plus point of sale. Newsagents earn $5 per card plus bonus loyalty points (that are redeemable in cash or prizes) for every card sold. Every participating newsagent will also be listed on the Cardplai store locator on the Cardplai redemption site.

For more details please click here.

Cardplai telemarketers will begin contacting individual newsagents from the week of the 15th of December. Remember, this product is exclusive to newsagents.  The eziPass website will have a sign up link early next week.

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retail

Promoting magazines as Christmas gifts

fhn_promomagazines.JPGWe have placed A3 posters promoting magazines as Christmas gifts at intervals down one of our magazine units in our Forest Hill store.  The posters look attractive, not visually overwhelming.  We figured the best place to pitch magazines as a Christmas gift was in the magazine department.  The A3 art in PDF form for the posters is available for anyone to use free from this link on the Tower Systems website.  It is something else we have created to help newsagents professionally promote the magazine range available in their store.  An A4 version of the art is also available.

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magazines

2009 calendar sales strong

fhn_cal.JPGOur calendar sales in November were up 6% on November 2007 at our Forest Hill store.  December to last night is nicely ahead as well.  With no discounting I would note. This is a solid result given the excellent numbers for last year and that we had a Card and Diary outpost out the front of our shop last year pulling customers in.

Magazines generated 7.8 times the revenue of calendars and only 3.2 times the GP.  Once I account for space and labour, calendars are more profitable and the best weeks are ahead of us.

I’d note, however, that the comparison with magazines is somewhat unfair in that many calendars are sold to customers who shop with us because of our range of magazines.  This is the challenge with the department.  The key is to build better GP departments around the magazine traffic.  This is where calendars fit well.

It surprises me that many newsagents still only sell calendars from magazine distributors.  Why you would do this for less than half the margin is beyond me.

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Calendars

Flooded with Kitchen yearbook

fhn_kitchen_yearbook.JPGNewsagents may want to check how many copies of Kitchen Yearbook they have received from NDD.  This is another long shelf life Universal Magazines title oversupplied to newsagents.  The sales performance, its size and long shelf life combine to make this title loss-making for us and, I bet, most newsagents.  Our average sell-through is less than 50% yet NDD has increased supply with each of the last three issues.  NDD says I can early return.  The weight means that for each four copies I will have to pay $3.00 in returns costs – I am funding the failure of their supply model.

Almost a month after I asked NDD and Network to stop supplying Universal titles they are yet to act.  This is my business and my money, no supplier can force me to take product which will cause me to lose money.  To force that I will have to take the matter to the ACCC.  I should not have had to but it now seems likely.

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magazine distribution

Returning old magazines

fhn_golf.JPGHave I missed something?  I thought that the old issue of a title was returned when the new issue came in, in most cases at least.  We received the January issue of Australian Gold Digest yesterday.  The December issue is not due to be returned until next month.  Of course, we have sent it back early.  Many newsagents would not.  I have checked out the December issue of Australian Golf Digest.  There is no reason I can see inside the magazine for it to have an extra month on the sehlves.

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magazine distribution

Are you using Photo Express?

photo_express.JPGI was in a newsagency yesterday with a Photo Express kiosk and was surprised to find out the terms under which this has been provided.  The costs seem extraordinary for little or no return.  Knowing a bit about computer equipment, it seems to me that the kiosk was priced at the very high end. 

I’d be interested in hearing from other newsagents with a Photo Express kiosk and whether it is profitable.

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Newsagency challenges

Costco is coming soon

costco.JPGThe sign at Waterfront City in Melbourne heralds the imminent arrival of the giant US retailer Costco on Australian shores.  Costco is bringing a style of retailing new to Australia in this 14,000 sq metre warehouse and other stores it says it will open.  While not playing too much with newsagent core circulation products, their arrival will have other retailers respond, especially in the areas of stationery, ink, cards and gifts.  This is another reason we each need to continue to evolve our model to be fresh and relevant.

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Newsagency challenges

Magazine oversupply and long shelf lives

I visited a newsagency today to review their magazine situation.  We pulled off titles supplied between July and the first week of November for which most of the original supply remained on the shelves.  We filled two very large trolleys with early returns.  And magazine distributors complain that newsagents are not good business people and do not pay their bills on time! 

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magazine distribution

Not so Groovy Grandmas

fhn_groovy_not.JPGWe have had Groovy Grandmas, a new magazine, on the shelf for three weeks.  We allocated four pockets in a good location near high volume titles speaking to the same demographic.  We have not sold a single copy.  Given the lack of sales, the real-estate the stock is taking and the four month on-sale, we are returning half the supplied stock today.  I am all for supporting new titles but without a single copy sold in three weeks something had to give.  If the result next month is no better the remaining copies will be returned.

I would feel differently is there was a well funded campaign supporting the title or if we were only billed for sales.  The magazine distribution model is such that we need to look carefully at new titles like Groovy Grandmas and act to mitigate our losses.

I would also feel differently if I have been consulted about receiving this title in the first place.  This is what I do with another distributor and it allows me to buy-in to launches.

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magazines

The season for Cupcakes

frank_easycupcakes.JPGWe have sourced a good cupcake making kit to display with the new AWW Cupcake Cookbook at our newsagency in Frankston. Both are displayed next to high volume women’s weekly magazines.  Once we sell out of the cupcake making kits, which will be in the next few days, we have other Christmas gift products to display with magazines.  I am confident that this display will result in good business for the AWW cookbook too.  We are using space which usually displays smaller special interest magazine titles.  As we have to do at Christmas, we shuffle and find new display spaces.

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magazines
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