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

Month: April 2009

Confectionery strong in convenience

Further to my blog post Friday about gum sales falling in newsagencies, the latest issue of Convenience World magazine reports that confectionery sales were up 2.6% in c-stores in the March quarter.  While this does not break gum out, even for the overall category, c-stores are reporting better numbers than newsagents.

While I am no expert in this area, I suspect we need to change the way we merchandise gum – smaller, more modern, display units at each register rather than a single, older style, unit on the counter as many newsagents have today.

The same issue of Convenience World reports that magazine sales in c-stores fell by 11% in the March quarter and that on a moving annual total basis (to February 15) they are down 9.1% for the year to March 31, 2009.  They also report a 5.6% decline in newspaper sales for the quarter and 7.9% MAT to February 15.  These are interesting numbers to compare to the benchmark study results released earlier this month.

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confectionary

Respecting Anzac Day

anzac_photo.jpgMichael from Crestwood News is honouring his Great Grandfather and acknowledging Anzac Day with this photo on display at the counter this morning.  While publishers require newsagents to be open today, some customers see this as being disrespectful.  By placing the photo at the counter, Michael is identifying with the day and providing an opportunity for sharing his family story.

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Newsagency opportunities

Selling magazine freebies as stock

magazine_freebies.JPGSome newsagents sell the free items removed from unsold magazines before they return them. A colleague recently saw a stack of magazine branded notepads for sale in a newsagency. Another saw a selection of tote bags. I have seen dump bins at the front of the shop with a selection of these gifts for $1 each. I even saw sets of cards from FHM magazine on the shelf next to other cards for sale.

I have been told by a newsagent that selling the magazine freebies is a way of rebalancing the magazine distributor “rip off”. I have also been told that it is better to make a buck from the junk than to throw it away. One newsagent was shocked that I would even ask why they sold the freebies.

Personally, I think selling the freebies disrespects a newsagency, its suppliers and the entire newsagency channel. It makes the shop look cheap. It trains the employees that it is okay to break rules and cheat suppliers – this could encourage them to cheat you.  It shows the owner sweating the small stuff.

We do not sell the freebies from unsold magazines in my newsagencies. We return the gift with full returns. For topped returns , we toss most of the freebies. Pens, pads and anything genuinely useful is given away to staff or used in the business – they are kept in an open box for all to access.

I would be interested in what others have to say on this topic.

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Ethics

Moving the last of the diaries

fhn_diarysale_2.JPGWe are getting to the end of our diary sale and have now moved from a percentage off offer to a fixed price offer.  Each diary has the orginal price and a discount price.  We figured this is easier especially since we have moved beyond a half price offer.  We will keep a small range for the remainder of the year but hope to quit what is left in the next two weeks.  Since we moved to this new pricing approach wehave been selling 25 to 50 diaries a day.

We went into diaries in September last year with our discount strategy mapped out.  Diaries are part of our overall value for money offer – that is the theory at least.

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Diaries

Marketing outside our four walls

sr_mothersday_diana_book.jpgWe are finding some shopping centre landlords to be more flexible than usual in providing promotional opportunities in this marketplace.  Access to poster units and other places for displaying marketing collateral is free.  While some landlords continue to charge for everything possible, smarter landlords are working with retailers for mutual benefit.

We are talking with the marketing departments and hunting down out-of-store marketing opportunities in our shopping centres.  The photo is a poster we have put together to promote our Mother’s Day special for Sophie Randall. This is the type of collateral we will create in-house for these marketing opportunities – promoting offers exclusive to us.  We don’t see any value on a generic promotion which does not play to our unique offer.

We will have a similar campaign running for at least one of our newsagencies.

This type of external marketing is essential, especially if we can access the space for free. While there is a cost in creating the collateral, a compelling offer should generate the return to justify the investment.

If we do nothing then we rely passing trade and in today’s circumstances that is not enough.

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marketing

Promoting Delicious with lottery products

delicious_mag.jpgWe use the cavity below the Tattersalls screen to feature product – more recently a carefully selected magazine.  This is important because it can add to the basket and increase the overall percentage margin from a sale.  While the placement may cause concern for Tattersalls, I can show them where we are promoting their product elsewhere in the business to balance out.  Food titles seem to work very well in this location – hence our pitch for Delicious this week.

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magazines

Promoting Diabetic Living

fhn_diabetic_living.JPGWe are promoting Diabetic Living at the counter over the weekend.  While we prefer to promote products with a valuable giveaway in this location, a lack of such product this morning sent us looking for something we felt would work as an impulse.  We selected Diabetic Living because it has responded well to other co-location promotions we have run.

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magazines

Using the stimulus package poster

stimulate_newsagency.jpgI received calls yesterday from people seeking permission to use the stimulus poster I blogged about.  Two asked if they could give copies to other businesses for them to use, another was from a newspaper wanting to run it as a full page ad to support local businesses and another was asking for permission to reproduce it in their newsletter. The answer to each request was Yes!

We are happy for the stimulus package poster to be used anywhere it is likely to encourage support for independently owned retail businesses.

The idea I like the most is from the newsagents printing copies for other retailers in their street to put in their windows.  This is an excellent example of what being part of a local community is about.

Thank you to everyone who encouraged us to develop an alternative poster.

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newsagency marketing

Newsagency: jack of all trades, master of none

In reviewing online content as part of research on the newsagency of the future, I discovered an excellent review of a WH Smith store by Steve Haywood.

I used to love going to WH Smiths as a child – I lived in a small town that wasn’t big enough to have a Smiths, so it was always a real treat. I could browse through the magazines look at all the books, see exciting new board games and much more. Now though, I realise that although it sells many things, with the exception of magazines you can find somewhere better with bigger stock selling those products elsewhere on the high street.

The Lancaster store is no exception. The front third of the ground floor is dedicted to magazines and newspapers, and there’s no better range in Lancaster. The middle third sells stationary and cards – the cards are often good quality and there is an adequate range of stationary. The last third of the shop sells music, dvd and games but the choice is very poor particularly for games. Most things are a lot cheaper elsewhere too, unless you find a cheap box set, which they often have offers on.

Upstairs they sell books and a small selection of board games. I rarely go up there these days as there is much bigger choice of books and Waterstones, which is just behind WH Smiths. I’m a board game fan and am always disappointed with the games they have on sale. Bigger stores have a slightly better selection, but Lancaster is too small to sell much other than the usual monopoly, trivial pursuit, scrabble etc.

So overall good for magazines and newspapers, but not a lot else. Oh and the Lancaster store (crazily for a newsagent) is closed on Sundays, except occasionally in the run upto Christmas.

This review is a reminded that as retailers we must stand for something for if we don’t we are not memorable and not talked about in positive terms.

We need to take control of our newsagencies and turn them into memorable retail businesses which are unique and profitable.  Some newsagents play in this space today.  Many do not.  It is hard work.  The reward is a future.

WH Smith released their latest results yesterday.   Magazines down 8%.

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newsagency of the future

Perth marketing seminar for newsagents

nx_perth.jpgnewsXpress is hosting an introductory briefing in Perth for prospective newsXpress members on April 30 – between 10am and 12 noon with a light lunch to follow. Any newsagent interested in achieving more from their business is welcome to attend.  Practical marketing ideas will be outlined along with details of benefits of joining newsXpress.

I will be there along with others representing newsXpress. Click here to download a copy of the brochure.

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newsagency marketing

Take5 tips book gets lost

take5_tips.JPGThe Take 5 tips book sent with our magazines a week back is lost in traditional newsagency magazine fixturing.  Since we do not have a regular book department there is nowhere else to put this one-off publication.  We ought to be asked about specialist publications like this because sending them to many newsagents is a waste of money – I took it off the shelf after I took the photo.

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magazine distribution

The high cost of a cover price decline

Newsagents in the UK are understandably unhappy at the cut in cover price for Full House magazine as evidenced by this item from the NFRN website:

With magazine sales in serious decline, some might think it a bold move by Full House Magazine to be investing in a new look and re-launch from issue 18 (on sale April 23). That is until one looks at the new price of 50p, versus the existing price of 68p. This means that, at a retail margin of 25 per cent, gross profit on sale is reduced from 17p to just 12.5p per copy.

The retail flyer also suggests that retailers display “Full House” next to Real People (Cover price 70p and retail margin of 17.5p) and Chat (Retail Price 78p and retail margin of 19.5p). Why would retailers want to sell a title that offers them a lower profit?

Of course, whilst overall profit is derived from a combination of margin and volume, “Full House” must think that retailers are idiots and will not see the real purpose behind this move, which, of course is all about driving advertising revenue. Not only do retailers not see a penny of that advertising revenue but “Full House” is expecting retailers to pay for their “investment in volume sales” through a lower price and lower margin.

This is not the first time that a publisher has pulled this stunt. Retailers are alert to the tactic and will see that “Full House” is seeking to gain an advantage over their competitors at their expense, by reducing their income, whilst at the same time devaluing the market and making it more difficult for other titles to increase prices.

Not only is this a very high risk strategy (and it will be interesting to see whether “Full House” has found a winning formula or whether this move back-fires and loses them the game), but, unless publishers adopt a more responsible attitude towards prices and retail margins, they need to understand that they are likely to be hastening the day when retailers say, “enough is enough” and take the control of pricing into their own hands.

Well said.  Retail costs rise significantly each year.  Rent increases for many newsagents by 5%, labour by between 3% and 5% and general business costs by 5% or more.

I am not sure of how a UK newsagent says enough is enough.  Here in Australia taking such action is a challenge with some magazine disributors.

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magazines

Second stimulus package poster

Here is a draft of a second stimulus package we are making available for us.  We have taken on board comments made to our earlier post and private comments sent to me.

stimulate_newsagency.jpg

Click here for a PDF copy of the poster.

The creative team at my newsagency software company, Tower Systems, is creating this collateral to provide newsagents with options for connecting with consumers around the stimulus payment.

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newsagency marketing

UK Craft magazines doing well

knit_sew.JPGThe Financial Times reports that knitting and related magazines are performing well in the UK – with 2008 showing growth on 2007.  While the craft segment did well here last year, the latest sales data I have seen for january through marhc 2009 suggests it has been affected in most newsagencies by economic conditions, as have all magazines.  That said, I know from past promotions that craft titles respond well to marketing effort – better than many other categories.  I suspect this is because they are not top of mind for some and an in-store promotion reminds this group.

As we do two or three times a year, we are featuring a range of knitting and sewing magazines right at the front of our newsagency this week – in a location where anyone passing-by can see them.

With school holidays over, we figured that shoppers may have time to purchase magazines for themselves.

Special interest magazines such as those covering knitting, sewing and crafts are the only point of difference many newsagents have so it makes sense we promote these outside our businesses.

The fixture we are using is an old card stand.  It works well for this type of dispay and is easily moved in and out of the shop.  We count the quantity we place in each pocket so we can track the success of this space over the regular location for titles we place here.

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magazines

Green Living launched

green_living.JPGThe launch issue of Universal Magazines’ Green Living went on sale yesterday. The product looks good. It strengthensour green magazine segment – an overdue move here in Australia. I’d expect several other titles to beenfit from this. I am frustrated that we were not provided marketing collateral with which to launch the new title in-store. While merchandisers are said to be on the road with this, it should have been provided when the stock arrived as that is when we allocate promotional space.

This long (two month) on-sale makes us a financial contributor to the launch. This happens all the time with new titles. It is part of what makes newsagents appealing to publishers – we fund them into our space.

One day, I hope, we will pay publishers only for what we sell at the end of the on-sale arrangement. Better still, we pay only for scanned sales – I’d be happy to pay weekly for this – publishers would get their cash for sales much faster than happens today.

I hope Green Living is a success. We need to build a stronger green magazine segment.

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magazine distribution

The chill of the Bill Express fridge

Australian Pure Fruits is pursuing a newsagent who took on a drinks fridge as part of their Bill Express arrangements.  I would be interested to hear from other newsagents being similarly pursued about the fridge.

Australian Pure Fruits is the company which originally floated Bill Express on the ASX.  They claim to have purchased the fridges from Capital Finance.   Capital provided lease finance to OnQ, the company through which the fridges were supplied to newsagents as part of Bill Express arrangements.  Yes, it all sounds very messy.

I’d want to see proof that they purchased rights associated with the fridge as well as the lease over the fridge before I agree to anything.  The rights were part of a relationship with Bill Express and OnQ and I am not aware of any rights in relation to those businesses being sold or transferred.

The Australian Pure Fruits correspondence I have seen aims to ensure that 80% of compliant product is displayed – that is, products supplied by Australian Pure Fruits.

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Bill Express

4WD magazine does not move

4wds.JPGThe Complete Aussie Guide to 4WDs has been a dud title for us – zero sales in eight weeks.  Rather than persevere in an over-serviced category, we are returning 100% of what we received early.  We have carried the cost of this stock, funded the real-estate and labour and now will cover the freight cost of shipping the failed stock back to the distributor.

This title is not alone in delivering such a poor result nor is my newsagency alone in experiencing this.  I suspect that at any point in time the newsagency channel has millions of dollars of magazine titles on our shelves for which a single copy will never be sold.

I want to control what I receive.  I can with Gordon and Gotch and it works well for me, for Gotch and for their magazine publishers.  The control gives us a stake in the outcome.  If they offer me a 4WD title I need to be sure since all of our available space is allocated and given that the category performs at a less than average rate.  I make decisions on the whole category and not just on what one distributor sends me.

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magazine distribution

Newsagency software and hardware offer

newsagency_software.jpgTower Systems, my software company (yes, this is a shameless plug), has put together a package offer for newsagents who are yet to install a computer system.  This offer ties in with the new magazine distributor IT standards.  By installing this package, newsagents will be able to replace manual processes with online magazine returns processing.  They will also have point of sale software and a bunch of other facilities which are detailed in the marketing material.

An average newsagency should save at least $10,000 a year in time saved, mistakes eliminated, better quality business decisions by partnering with Tower Systems.

The $7,995 price includes: current standard brand-new hardware, point of sale and magazine management software, training in your newsagency, starter stock files, updates and support for a year, free access to follow-up group training and free access to at least 60 online training workshops over the next year.  A chunk of the cost is eligible under the federal government’s 30% tax break – this expires June 30.

While I am biased, any comparison will show this to be a good-value package – especially given that it connects you with the Tower Newsagent community of 1,600 newsagents and given you access to the Tower Advantage TM.  There are about 1,000 newsagents using any of six other newsagency software packages.

We have tried to make introducing technology in a newsagency as simple and painless as possible – hence the extensive after sales training options available for no extra cost.  We have found it important that all staff are training including new staff.  This is where our online training works very well.

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newsagent software

Landlord calls in the legal team on opening early

What I thought was a cordial discussion with our landlord about their new tax on us opening at 7am three days a week got legal yesterday when their company solicitor wrote pointing to where in our lease they have the right to charge this fee and the basis on which they can levy it retrospectively.  Their claim for interest, if I do not pay this tax or delay payment, is a gem:

Please note that if you fail to pay these amounts in accordance with the lease, the landlord will have no other alternative but to charge you 2% interest on the outstanding amounts for every day, or part of every day that the amounts remain outstanding in accordance with clause 11.1.3 of your lease.

While the landlord may have a legal justification in the lease – I am no lawyer and cannot be sure – in today’s retail climate this tax is, in my view, an appalling imposition on a service business like a newsagency.  At 7am we are a service in our centre – for other businesses in the centre, for security staff and for customers.  Indeed, when I first took on this location in 1996 the landlord back then wanted to ensure that we would be open early.

While I know I could make a complaint to the Office of the Small Business Commissioner in Victoria, I have no faith in their ‘balls’ to robustly represent the interests of small business.

Since our ‘discussion’ with the landlord started, they have stopped opening the entrance doors to the centre – directly outside our shop – as they used to.  Now, they open them at 8am, greatly inconveniencing other tenants and early regular shoppers.  They are driving our customers away.

What I want is for commonsense to prevail.  Landlords and tenants need each other.  They rely on a successful newsagency to provide a service in the centre and do its fair share of lifting when it comes to attracting customers.  By chasing charges such as a penalty for opening at 7am when it does not add to their costs – they say it does but I disagree – disrespects the bigger picture in play here.

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Ethics

Are heavy newspapers a thing of the past?

oh&s.JPGI was talking with a distribution newsagent yesterday who said the problem of overweight newspapers was fading.  He reminded me of a blog post I published in November 2006 about a study into OH&S issues surrouning heavy newspapers.  The Nery Report, named after its author, David Nery, raised a range of concerns about the weight of newspapers and their handing by those involved in wrapping and delivering these to homes. My key concern at the time was that newsagents were not informed of the report recommendations and therefore did not have an opportunity to address what were clearly OH&S breaches in their businesses.

While there are still some editions of some newspapers which are ‘heavy’, the newsagent I was speaking with yesterday says that they are getting lighter with time.  This may be why the Nery Report was never widely circulated among distribution newsagents.

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newspaper home delivery