Packaging issues affecting magazine distribution
Product packaging issues affecting print media (magazine) distribution in Victoria is a report written by Mark Thomas of Loadrunner transport. Mark worked with 1st Fleet and then with Zip Couriers handling magazine distribution. His report documents issues and challenges which demand attention, issues which were first raised a year ago.
I am grateful to Mark for his permission to publish his report here for people to read. The report eloquently covers challenges which frustrate newsagents and many others which I am sure are new to us, challenges which impact on the magazine product consumers are presented with in newsagencies. Mark’s passion for customer service is evident in his words.
In general there is still much that can be done to improve quality of service, delivery standards and to reduce the number of human related errors. A large number of parcels are still packaged with inadequate, insufficient or inappropriate strapping that directly contribute to product loss, damage to stock and numerous other problems.
I feel it is necessary to identify a number of problems that require urgent attention and strongly believe if the below issues are examined in a responsible and professional manner, that many of the current problems associated with magazine deliveries could be avoided entirely.
If magazine distributors are serious about improving the quality of service then may I suggest that there is a great deal that requires attention in their own backyard. The contractors and drivers responsible for delivering stock into stores are not always at fault, and there are far more productive measures that can (and should) be introduced apart from wrongly directing blame for any problem encountered.
Unfortunately, Mark’s complaints last year fell on deaf ears. Rather than listen to the message, those who should care shot the messenger.
The breakdown of issues by title ought to be of particular interest to the publishers of the titles listed. Remember, this is from a transport operator trying to do the best for publishers, to deliver their product in a merchantable form.
Newspaper prophecy
9. The death of newspapers
Newspapers as we know them are in decline. Are you reading this in hard copy or online? Around the world, newspapers are shutting down or moving to the web. Blogs are replacing the mainstream media.
The profession of journalism, and the way we consume media and get our news, is being transformed. I’m not sure whether this is a good or bad thing, but there’s no doubt it’s happening.
From Ten prophecies from the digital millennium in The Age today.
Jamie Oliver launches food magazine
Jamie Oliver has launched Jamie Magazine, a bi-monthly, in the UK exclusively through the WH Smith chain of newsagencies.
While I am sure Jamie Magazine will be successful, I do wonder whether the market needs another food title. For newsagents, space is an issue as well as capital. each new title requires shelf space which is not currently free. It also requires our cash to fund its release through the newsagent network.
I am disappointed that Oliver has gone with a big business chain and ignored small business newsagents.
How much sudoku is too much?
How many sudoku titles is too many? As the photo shows, we currently have eleven sudoku titles at our Forest Hill store. We often have more than that. Between 60% and 70% of our sales come from one title – Super Sudoku from Lovatts. We do not need most of all of these other titles. I am certain that if two thirds of the titles were cut, our total revenue from sudoku titles would not be affected.
The Australian magazine marketplace is flooded with UK and US imports. They are sent to us because there is no risk. We provide access to our space and our labour for free. We even pay for shrinkage, theft. We carry the risk. This flooding of an already well satisfied, saturated even, market is something the ACCC could look at. Especially given that small business enwsagents are the victims. This plays out to a consumer cost because it impacts on the services we can offer and on our very viability.
As comments here over the last few weeks show, it is difficult for newsagents to cut titles from their product mix. Many who have tried end up giving up and just accept the dumping as evidenced in the number of sudoku titles in my newsagency.
I’d like to see a small working party established between Australian publishers and several newsagents to formulate a joint strategy on this issue. Nothing fancy – meet online, gather data (which is easy to get) and develop a position paper which could form the basis of a submission on dumping to the ACCC. I’d start in the crosswords area because it is an easy target and rife with dumping.
Taking magazines to the customer
This display of Christmas themed special interest craft and cooking magazines which we have right at the front of our shop near other Christmas products is working well for us. I am certain that we are selling some of these titles to customers who would otherwise not browse the shop looking for them. We are refreshing the titles as new ones come in which match the Christmas theme. We have three times the titles showing in the photo including some of the more mainstream titles such as Notebook, Real Living and Better Homes and Gardens.
Anyone can create a display like this at the front of their shop. All it takes is a few minutes selecting the titles. For motivation, count how many people browse the whole magazine department compared to shopping the front few metres of your shop. If yours is a typical newsagency, more than 60% of traffic does not go deeper than the first few metres. This is why displays like this around themes and seasons are vital to the health of your magaizne department.
Content versus texture, the digital battle
Flexibility is trumpeted as another advantage of the digital newsagent over its corner shop rival. Regular readers of a particular publication can choose to buy a month’s subscription to their favoured title but for a generation that has grown up with the luxury of free content from a plethora of different providers, there is an opt-out from that rigidity.
Read more of what Amol Rajan has to say here in his column at The Independent.
“If you think that we’re totally eradicating the printing and distribution costs for these publications, as well as opening them up to a whole new market, I think in time we could argue that we ought to be able to offer a cheaper product than our rivals in normal newsagents. There are potentially enormous cost-savings to be made there.”
Ouch! Here, Rajan is quoting Tony Pescott. Tony Prescott, director of new business development at Asda, the Wal-mart company which has launched a digital newsagent offering in the UK.
The issues here ought to be the main agenda item at newsagent meetings. Many of the issues we face today tie back to challenges facing print and our bricks and mortar businesses.
Chips with your magazines
I was surprised to receive the email today announcing that magazine distributor NDD is to distribute Sultry Sally potato chips. Magazines and potato chips are an odd mix. This brand launched in Safeway and Woolworths earlier this year. While some newsagents would be happy with a supermarket line, I am more included to hunt out chips not being sold in a supermarket.
Women’s Weekly Christmas issue selling well.
Following continuing stong sales, we have decided to leave Australian Women’s Weekly at our prime counter position until at least Wednesday. We usually turn titles in this position weekly or even more frequently. While I know this goes against what I write here about regular customers becoming store blind, given that it is selling from this location replacing the display because of some rule did not make sense.
Puzzles selling well for Christmas
The mix of puzzles we have at the counter – Hannah Montana, High School Musical, Disney and Dora the Explorer – is selling well. We’re finding the price point works in this lottery counter position – the purchase decision is easy. We have capped the front corner of our counter with Christmas offers, these puzzles and Darrel Lea Christmas items.
The Christmas gift items which are a more considered purchase are placed further into the store.
Bargain Shopper not selling
We have sold eight copies of Bargain Shopper from Universal Magazines since it arrived eight weeks ago. They sent us 73. several years of sales data shows that we will sell a fraction of the 73. The oversupply is from a company which says it cares about the environment and cares about newsagents. As regulars here will know we gave the title a crack and promoted it in a high traffic area. All we could sell in eight weeks in 8 copies. And the title still has months to stay on the shelf. The behaviour of Universal around Bargain Shopper is another reason I do not want their product in my newsagency any more. No amount of requesting has altered their behaviour, so I am better off without all of their titles. Universal would know from the data they have that I and many other newsagents will lose money on Bargain Shopper yet they did not alter their supply model or financial terms. Based on my experience I would say that this title is bad for the environment and bad for newsagent cash-flow.
Great retail wrapping paper
We buy paper from The Wrapping Paper Company for use in our stores. The paper in the photo is one of the designs we selected for our Christmas free wrap services. They have good product including wrap, ribbons, tape etc – all at good prices.
If you are getting into gifts, a free wrapping services, especially for major seasons, is essential.
UK debate on placement of lads magazines
There is an interesting debate in the UK about where lads magazines like Zoo should be placed in retail. These magazines are cheeky but not what I’d call harmlful. The last thing newsagents need is more regulation about what to display and where.
Promoting the ACP cookbook offer
We are promoting the ACP cookbooks offer at the counter, featuring a different cookbook every couple of days. This is in addition to a power end display. Promoting the right title makes this a good counter offer, an easy purchase. Our regular customers will understand the added benefit of our Magazine Club Card with this offer as we give a clip on the card for an ACP cookbook.
Magazine compliance roundtable discussion
Tower Systems has scheduled a free online roundtable discussion on magazine compliance for Tuesday December 9 at 11am. This discussion will review current standards and provide newsagents with steps to take to ensure their businesses are compliant and ready for the next phase of IT innovation in the magazine supply chain. This session is available for supported Tower Newsagents only. Bookings can be made by emailing bookings@towersystems.com.au.
The old pharmacy
Discount is the new “thing” in pharmacy retail in Australia. Stores screaming discount on their shingle and across the front windows have replaced traditional pharmacies on every secod street, or so it seems.
The pharmacy of yesterday, offering personal service and local knowledge is fading and being replaced by these impersonal barns which use a claim around price as their only point of difference.
In some of these discount pharmacies, the price pitch stops at the door for inside many items are priced the same as you would find in a more traditional pharmacy.
I wonder if this is a trend we will see in the newsagency channel, a group built around a price proposition. It would be challenging to achieve because so much of what a newsagency traditionally sells has a slim margin and is, somewhat, price controlled.
It is interesting to consider whether someone will boldly play the price card because some of the challenges pharmacies face we face too. Much of what they sell is sole elsewhere. There are too many retail outlets. Suppliers are frustrated with lack of discipline The overall shingle will support only so much divergence from the traditional offer.
While I have no interest in a price based offer in the newsagency channel as this would distract from our core unique propositions of community connection and customer service, the question is interesting to contemplate.
The future of newspapers
Click on the image below to see a TV report, The uncertain future of the newspaper industry. This ran an New England (US) TV NECN – New England Cable News – last night.
I am sure that other TV stations are running similar reports. Public reports like this become a self fulfilling prophecy.
From a newsagents perspective, the concern has to be howw we configure our businesses in terms of attracting customers and the shop fit itself for the changes coming whatever they are.
The great Christmas CD sale
We have adjusted our merchandising for our ABC Christmas CD specials and the results were immediate. This display at the counter is driving excellent business. In one of our stores today a customer bought ten of the feature title on display and came back half an hour later and bought ten of a different title. She made the point “I only came in for a card!”. While we were achieving sales with our previous pitch, this new display, in the same location, works much better. The lesson we learned is that less is more – removing clutter from a display helps customers see what you want them to buy.
VANA’s mistake with the Futures project
VANA is making a mistake investing time and member funds in developing its new nesagency marketing and management group (the Futures Project). This project does not seek to serve all Victorian newsagents. Nor does it seek to address the operational issues of most concern to Victorian newsagents. If I were on the Board of VANA, I would push for the organisation to focus on:
- Pursuing, without fear or favour, a fairer and more equitable magazine supply model for all Victorian newsagents
- Private and public lobbying around achieving a fair return for home delivery of newspapers for all Victorian newsagents
- Lobbying the State and Federal Government for assistance to help all Victorian newsagents navigate the significant change ahead
- Establishing a register (benchmark) of supplier terms which VANA members could use to compare terms they have been offered
- Working with GNS, the industry owned stationery supplier to build a strong consistent statewide stationery business in all Victorian newsagencies
- Being more visible among all Victorian newsagents, listening to their concerns and discussing how VANA can better engage
- Getting out of all commercial activity
- Committing that the organsiation will not, in future, seek financial assistance from suppliers for conferences and the like because of the conflict such funding creates
Once sufficient progress has been made on these five key areas and if VANA had resources available, I would push for what I would call phase two of the reinvention of VANA. I’ll leave those thoughts for another time but they include practical help to fix troubled newsagencies. While some of us do this today, VANA could bring valuable statewide focus to such effort.
There is no sense in working on a futures project unless you have taken care of today.
Lovatts promotes newsagencies
Lovatts Publications is promoting newsagencies with the running of our newsagency ad in two of their current publications. The back pages of Super Sudoku and Clue Words have the ad. This coverage is being provided free by Lovatts in support of newsagents. I didn’t approaach Lovatts for this support. They heard about the TV ad and wanted to help support our channel.
Pitch to entice magazines online
UK digital publishing solutions providor Zmags claimed yesterday that it can help publishers cut costs by an average of 82%. The claim is another of many being pitched to magazine publishers to entice them to move a print to an online model.
While I cannot vouch for the savings claim by Zmags, evidence is mounting of success being achieved from online magazine models.
My concern is that newsagents will ask one day how this happened and why the channel did not see it coming. This is another reason we need to take control of our shop fits and not have builders create shop fits which cannot easily evolve as our business model evolves.
NSW catches up to online lottery sales
The NSW State Government has introduced legislation to permit the sale of lottery tickets online. The Sydney Morning Herald has the story.
In Victoria, Tattersalls has been successful in driving online lottery sales for several years. Click here to see my first post about this in April 2005. Tattersalls uses its retail network of newsagencies and other businesses cleverly to drive online sales. This is done without compensation to the retailers.
In Queensland, the Golden Casket pays a small trail commission to newsagents who sell a registration card which is used for online sales. This was negotiated by the Queensland Lottery Agents association. While the trail could be larger and run for longer, it at least respects the role the retail outlets play in facilitating growth in online sales.
The reality is that more over the counter business will move online. While it would be a waste of resources to try and stop the online businesses, we must not permit our retail businesses to be used to facilitate migration of our customers online as has happened in Victoria.
Major changes at Fairfax
“The old model of newspapers is dying. The newspaper industry is trying to innovate as much as possible and it just hasn’t struck gold yet and figured out what will work best. It’s a serious problem for them and they may not solve it at all because it may turn out that less and less people want to buy newspapers in the future.”
This is a quote from Ed Butler, a Senior Analyst with IBISWorld. He is quoted in an article published by ad industry journal B&T speaking about the turmoil at Fairfax following the ‘resignation’ today of CEO David Kirk and the sacking yesterday of Alan Oakley as editor of the Sydney Morning Herald – are evidence of the challenges of newspapers. These changes have been brought about on the back of a considerable drop in Fairfax share price, staff retrenchments earlier this year and other major changes.
Newsagents are experiencing changes in their dealings with Fairfax through trimmed margin on subscription offers, more complex and time consuming consumer offers and other changes. Fairfax sees newsagents as a cost rather than an opportunity. If they reversed this view and treated newsagents with economic respect they may have healthier sales than today. By this I mean that Fairfax should reward newsagents for growing sales. Instead, with some of their current offers, newsagents are effectively penalised for new subscription customers.
Money magazine supports newsagents
The latest issue of Money magazine from ACP Magazines has a the full page ad promoting newsagents on the inside back cover. ACP is providing the space for this newsagent marketing campaign free of charge. This is a terrific support from ACP. They offered the space without request. We have copies of the print ad in A3 and A4 size for newsagents to download from the Tower Systems website for newsagents who want to support this campaign.