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

Month: May 2009

Google says no thanks to newspapers and makes news

The story of the week about the future of newspapers is that of an interview with Eric Schmidt, Chairman and CEO of Google published by the Financial Times.  It is referenced in more than 500 news entries listed at Google.  Schmidt explains that Google looked at investing in newspapers and decided against this.  While at FT.com you need to pay to read the interview, The Guardian provides free access to its report containing key quotes from Schmidt like:

“The reality is that news gathering and the profitability model was always an uncomfortable relationship because it’s very difficult to make money from a story about a tragedy or murder or so forth – and yet it’s enormously valuable. So the structure of newspapers that evolved, where the majority of the revenue came from classifieds and these big, untargeted print ads, the content was fascinating but they were not connected to… it was ultimately destined to be challenged by technology and that’s indeed what happened.”

It says something about the concern of the future of newspapers that this is such a story.

From a newsagent perspective, this story and its broad coverage overseas and even here in Australia provides further encouragement for us to look outside traditional categories for future growth and sales.

From the 1800s until the 1980s newsagents stood for being the go to retail and distribution businesses for newspapers and magazines.  Since the 1980s this point of difference has eroded.  What do we stand for today?  As a channel – nothing.  Individually – some of us have clear and exciting points of difference.

The Google story, like many I reference here, is a reminder that the clock is ticking – the time for us to engage proactively in our businesses is now.

0 likes
Newsagency opportunities

Bushfire relief assistance needed

The folks at the Kinglake Relief Centre had let us know that they are in need of warm blankets and good quality weather proof jackets. This is the centre to which we sent spare calendars, diaries and stationery items following a call from them for these.  Click here for the latest Murrindindi Shire Council Bushfire newsletter with contact details.

0 likes
Social responsibility

Don’t scrap the 5 cent coin

I am concerned at reports that the Royal Australian Mint is planning to scrap the 5 cent coin.  I don’t want the 5 cent coin scrapped.  I like that I can price items at 5 cents under a round dollar amount.  The 5 cent price break is a service to consumers.  The arguments put for scrapping this iconic coin are spurious.

0 likes
Customer Service

Newsagent forced to remain in business

A newsagent in rural Australia reached agreement with a newspaper publisher around six months ago to hand back their newspaper home delivery run.  The publisher was unable to find anyone prepared to take on the run and has demanded the newsagent continue with the financially unviable run.  The newsagent feels helpless in the face of legal threats by the publisher.

The newsagent does not control the margin on products sold nor the delivery charges to customers for the service.  They also have little control over the costs of the business – labour, fuel and other costs.  The only part of the business they can influence is the number of customers to which they deliver.  However, the geography of the area means that additional customers would increase their losses.

I am sure this newsagent I have spoken with is not the only one in this situation.  The problem lies in the contracts where the publisher controls both sides of the transaction and does not provide the small business newsagent with the ability to operate in a business like way.  This is why my post from yesterday is important for newsagents.

0 likes
Newsagency challenges

Swine flu and shopping

News the swine flu diagnosis for a student of a school located very close to a centre in which I have a shop spread through the centre like, well, an epidemic.  Fellow retailers are bracing for a very quiet weekend as people stay away from the area.

0 likes
retail

Online classified growth doubles

The Pew Center in the US released a report overnight which shows how the free online classified advertising opportunities such as Craigslist, are impacting paid claissified advertising in newspapers.

The number of online adults who have used online classified ads has more than doubled in the past four years. Almost half (49%) of internet users say they have ever used online classified sites, compared with 22% of online adults who had done so in 2005.

The age of those using Craigslist is important for us to note.  This shows where the generation we want to attract to newsagencies is going for classifieds.

Free online classifieds sites like Craigslist are tremendously popular with young adults moving to new cities, looking for jobs, or trying to find inexpensive goods or roommates. Internet users ages 25-44 are significantly more likely than any other age group — including 18-24 year-olds — to use online classified ads. Fully 62% of online 25-34 year olds and 57% of 35-44 year-olds use online classified ads, compared with 49% of online 18-24 year olds and 48% of online 45-54 year olds.

While yet to gain critical mass, Craigslist does have free online classifieds sites here in Australia for all capital cities.

We will look back and say that online classifieds were an opportunity missed by newsagents.

0 likes
Online classifieds

Promoting Men’s Health magazine in Frankston

frank_mens_health.jpgThe team at our Frankston store are promoting men’s lifestyle titles using aisle end display space.  We do not have the space here to create a separate more permanent area for multiple titles as I discussed yesterday.   The latest issue of Men’s Health is benefiting from this display focus as the photo shows.

I am often asked why we give over premium space for display like this when supermarkets charge.  My view is that the time to fight that fight was many years ago.  Today, magazine range is one of the few points of difference newsagents have.  Displays like this make us valuable to publishers.  I am happy to invest the space and time with a view to this facilitating publisher interest in other projects.

I also like great in-store displays because they can bring a fresh feel to the business without spending any money.

The key is to drive sales.  This is why every display has a shelf or stand off of which the product being promoted can be purchased.  Otherwise, they are merely a billboard.

0 likes
magazines

Using every inch of space in retail

good_health_frankston.jpgClick on the image to see how our brilliant team at Frankston is using the back of the ACP Basket Builder stand to promote Good Health and Medicine magazine this month.  This placement gets Good Health and Medicine seen by customers in the aisle in the middle of our shop, an aisle away from where the title is usually situated.  Using the back of the stand in this way extends its value to us.  Sales results tell us that this space works – with the right title it drives sales.  This is great because it is found space, space which many newsagents do not use.

0 likes
magazines

Chocolate makes Delicious taste good

fhn_delicious.JPGWe are promoting Delicious at the counter for the weekend at Forest Hill.  While our display of Harpers Bazaar did okay, it was not enough to justify the space allocation for the weekend.  I suspect we will do much better out of Delicious as the title is a strong performer for us and the free block of Lindt chocolate makes it even more appealing.

Our experience with Delicious is that it responds well in an impulse situation- such as at the counter or placed with weekly magazines outside its usual category. Our focus on promoting it in several places in the on-sale week works for us and achieves an excellent sell-through for this title.

As a follow-up to a previous post, I note that the chocolate itself has come through the distribution system in surprisingly good shape.

0 likes
magazines

Improvising in a newsagency

who_weekly.JPGNewsagencies across the country improvise every day when things don’t go as planned.  Such improvisations range from the major to right down to the small – like this morning when The Age arrived in one of our stores without posters again.  We used this as an opportunity to pitch Who magazine with a poster in The Age poster slot and copies of Who above The Age and the Herald Sun.  While these seem like small moves, they illustrate the flexibility many of us demonstrate every day.  A challenge here becomes an opportunity elsewhere.

0 likes
magazines

Repositioning Top Gear and men’s lifestyle magazines

fhn_top_gear.JPGWe currently have Top Gear in print position in the cars segment of our magazine department.  Top Gear is pitched to advertisers more as a men’s lifestyle magazine from what I read than a car lovers magazine.

This is why we will experiment with a new Men’s Lifestyle area where we bring together a collection of titles which speak to the same target consumer – Top Gear, Popular Science, Ralph, FHM, Men’s Health, Men’s Fitness, GQ, Esquire, Inside Sport and a few others.

I’d try and leave them where they currently are and co-locating to a new feature area clearly branded as the Men’s Lifestyle area.  The goal of the change would be to get more than one of the titles purchased in each sale. leaving Top gear displayed only with car magazines hinders its sales as well as its ability to drive sales of other titles to many who purchase it.

There are bound to be some mistakes in creating this new area – we will learn from them.

There was a time when the Magazine Publishers of Australia organisation was involved in these layout discussions.  Unfortunately, we are more on our own today.  I’d be interested in how others group these cross traditional category men’s lifestyle titles.

0 likes
magazines

Draft unfair contract provisions of interest to newsagents

The Federal Government last week released for public consultation a consultation paper entitled The Australian Consumer Law: Consultation on draft provisions on unfair contract terms. The paper and submissions can be found here.  I urge every newsagent to download and read these and take an active interest in their passage through parliament.  As the consultation paper indicates, the changes include business to business contracts.

The draft provisions on unfair contract terms will apply to business-to-business transactions in the same way as other key provisions in the TPA do, such as those dealing with unconscionable conduct and misleading and deceptive conduct.

The draft national unfair contract terms provision includes that a term is deemed to be ‘unfair’ when it causes a significant imbalance in the parties’ rights and obligations arising under the contract and it is not reasonably necessary to protect the legitimate interests of the supplier – as noted in the press release issued by Chris Bowen, Minister for Competition Policy and Consumer Affairs.

The ramifications of the changes for newsagents could be considerable given the size of each of our businesses compared to the size of suppliers with which we find ourselves in contract disputes from time to time.

The timing of the changes will also be of interest to newsagents given the approaching new contracts for the distribution of newspapers and magazines.

While the deadline for submissions is tomorrow, there will be further opportunity through local members of parliament as the changes are debated.

0 likes
Newsagency challenges

Prepaid Visa business growing

visa_prepaid.JPGThe small display supporting prepaid Visa at the edge of our lottery counter is generating good sales of prepaid Visa cards and attracting good top-up business.  For a bit of passive marketing it is doing very well.  The growth over the last few months has been excellent. We are finding former BOPO customers happy with the offer and others who might otherwise not get a bank backed credit card.  One of the products is an alternative to Western Union money transfers.

I am told that originating business like this is important for us because customers are more likely to recharge where they purchase their card.  Building return business is important for for the future health of the newsagency channel.

Disclosure:  The prepaid Visa product is sold through the Tower Systems software.

0 likes
Bill Express

On newsagencies and post offices

BUYING a paper’s getting tough. It’s not the cost or walk to the newsagent that’s the problem, it’s the waiting that kills; having to line up behind all those Lotto jockeys snaking to the counter in front of you to lodge their mortgage-busting dreams, the Powerball, Pools and Motza Megapick numbers.

If they’re not lodging, they’re handing over fistfuls of crumpled tickets to be scanned by the GamblerTron. They then stuff about studying the forest of instant scratchies displayed under the counter.

From the Heckler column in today’s Sydney Morning Herald.  Read the whole thing as he turns his attention to the post office.

0 likes
Ugh!

Supporting Red Nose Day

sids_fund_raising.JPGWe are proudly supporting sids and their Red Nose Day – Friday June 26, 2009 – campaign at our counter through the sale of a range of merchandise.  Red Nose Day is a popular charity which is supported by a good mix of national retailers including newsXpress.  It is good to be part of something which has been managed in terms of locations involved and which our customers easily recognise.

We spread our charity support between national campaigns such as sids and local organisations.  Like many newsagents, we are often asked for donations for charity auctions and for goods to use in schools and community groups.  We gladly participate in these – the local community connection is very important.

0 likes
Social responsibility

The cost of launching Australian Ink

australian_ink_projection.jpgNewsagents are collectively investing a considerable sum on money in the launch of Australian Ink, a new tattoo magazine which features Pink on the front cover.

The table to the left shows the projected impact (if my assumptions are right) on the cash-flow in one of my newsagencies based on what I expect to sell of Australian Ink, the cost of retail real-estate, the cost of labour and the timing of paying for stock and receiving a credit for returns.

I’d appreciate feedback from others on whether they think my calculations areb right.

While I am using Australian Ink as an example (as I did Cosmos magazine in my March 16, 2006 post), I could easily present numbers for other new titles launched through the newsagency channel. Like other independent publishers before them, I would expect the publishers of Australian Ink to say that they cannot afford to offer delayed billing, payment based on scanned sales or bonus margin for the launch issue.

I appreciate that it takes considerable financial resources to launch a new title.

Newsagencies are slim margin businesses. Every launch has costs as detailed in the table. Collectively, we invest millions of dollars of our money each year in supporting publishers and their title launches. We do this usually without control over new titles sent nor the volume sent.

I’d note that the payment by newsagents for the title in August as shows in the table is not, as I understand it, paid to the publisher until after the issue goes off sale.  Certainly this is the case for some titles according to publishers I have spoken with.

I like magazine launches – if the launch is backed by an advertising campaign which drives traffic to my business. I am not so keen on launches which rely on newsagency foot traffic to find sales.

Popular Science was launched in more of a partnership approach last year – better margin, excellent out of store marketing support and excellent collateral for in-store promotion. The campaign has been on-going, beyond issue one.

Here is a list of what I would like to see offered by publishers for magazines launched through the newsagency channel:

  • A minimum agreed level of external marketing.
  • Better margin for initial issues.
  • Opt in process for taking on a title and the quantity.
  • Payment for any premium activity – our space costs money.
  • Delayed billing until after the first issue is off sale.
  • Promotion of newsagencies on the magazine website.

This is an topic which should have been on the table during the discussions around a magazine distribution code of conduct. I suspect those representing newsagents missed the opportunity.

As for Australian Ink, we are promoting it boldly with good location and excellent merchandising.

For more information, see my cashflow report from a few years ago.  This was presented to newsagents, magazine publishers and magazine distributors.

0 likes
magazine distribution

Expanding ink

fhn_ink_expand.JPGWe have expanded our ink range at Forest Hill on the back of good growth for the category.  Regulars here will know that our sales were knocked out a bit when the new Dick Smith store opened opposite us.  Regular promotions, keen pricing (supported by professional shelf talkers) and excellent customer service helped quickly recover and get us back on track for growth.  The expansion of range has been driven by the growth we are seeing.  We often make more each week from this small space and stock commitment than we do from our entire stationery department.  This is interesting because we have more competitors with exactly the same range of ink in our centre than we have competitors offering stationery.

The photo shows the expanded space.  The next step is to dress it corporately.

0 likes
newsagency marketing

See, books are popular

bookseat_table.JPGThe Book Seat is selling well for us again this year – demonstrating that there is good business in book related sales.  We are promoting it along with our book sale – our demographic is ideal.  The book seat is a mini bean-bag on which books rest while you tead them.

0 likes
Book retailing

Pay per article discussion hots up

The big discussion overseas among publishers (newspaper and magazine) this month is around micropayments – payment by consumers for individual articles.  This topic was put on the radar earlier this year when raised by the publisher of Time magazine.  Editors weblog has a good wrap up of the story as does Mediaweek.  Eric Auchard writing at The Guardian weighs in with good points too.

This discussion is of interest to newsagents because it is about a more direct publisher consumer relationship, one based on a new, digital, supply chain and one where consumers pay for what they read (articles) rather than a package (whole newspapers and magazines).

0 likes
Media disruption

NDD lawyers pursue this blog

I received further correspondence from NDD’s lawyers today.  They are say that my blog post yesterday compounds damage against NDD. They also say that NDD did not lose the Best Bets and Winning Post distribution accounts.  My answer to this is that they don’t have the accounts any more so they are ‘lost’ to the business.

They claim that through this blog I demonstrate malice toward NDD.  What I want from NDD is what I want from all magazine distributors – fair and equitable magazine supply arrangements for all newsagents.  I publish more examples of NDD oversupply because I see more from them than other distributors.  If NDD and their lawyers had their way I would not publish examples of repeated gross over supply.

The lawyers have also claim that NDD closed 68 accounts and not the 600 I reported.  I have heard from several sources that it was 600 but since NDD through their lawyers say it was 68 I have to accept that.

Rather than using lawyers to pursue this blog, NDD would be better advised to host meetings of newsagents and seek their views on the matters canvassed here.  They would soon see that examples I document reflect experiences of others.

0 likes
magazine distribution

Promoting Delicious and chocolate

delicious_magazine_june.JPGDelicious magazine sells well for us.  The block of chocolate should help sales of the issue out today.  Given display space pressures elsewhere, we have placed some of our Delicious stock in among our weekly magazines.  We have been experimenting with one or two pockets with our weeklies this year and sales from this location are good.  This is why we expect the flat stack and three pocket display to work well for us.

For the benefit of NDD and their lawyers I’d note that our supplies of Delicious are good – certainly not oversupplied.

0 likes
magazines

Promoting crosswords with lottery products

crosswords_tattersalls.JPGWe are promoting a range of crossword titles next to our main lottery counter this week.  We are featuring top selling crossword titles from Lovatts, Puzzler, Woman’s Day, That’s Life and Mr Wisdom.

As the photo shows, we have been careful to display most of the cover – this is important since we are chasing sales to people who may not be regular crossword purchasers and the covers are more appealing than mastheads.

We track quantities in each pocket so as to determine sales from this location compared to others.  We also use our software to track sales with lottery products this week compared to past weeks.

Like all good promotions, if it works it is repeated and if it does not work we focus on other opportunities.  Past experience shows that crosswords should see a lift as result of this promotion.

0 likes
magazines

We don’t need more copies of Kitchen Trends

kitchen_trends.JPGWe received more stock of Kitchen Trends from NDD today.  This is a reissue of the issue of Kitchen Trends which we still have on the shelves from two months ago.  NDD has our sales data and would know that we still have stock, limited but stock nevertheless, and that the reissue is not needed.  While I am sure that representatives of NDD will have reasons for sending additional stock, I would prefer to have not received additional stock.

0 likes
magazine distribution

Racetrack magazine oversupplied

racetrack_magazine.JPGRacetrack magazine does not sell in our shop. We are lucky to sell one copy yet we receive three and four times this.  It is as if NDD does not take into account our sales numbers when allocating stock.  We feature Racetrack around important race occasions without success.  I’d like to cancel the title but have had trouble with that aaction in the past.

0 likes
magazine distribution

More Oprah than I can sell

o_oprah_magazine.JPGO, The Oprah Magazine does not sell well in our shop.  Its sell-through is below 50%, often as low as 20%.  The low sell-through rate is not reflecting on supply numbers determined by NDD.  As the current supply numbers stand for O, this is a cash-flow negative title for us – I am funding Oprah in my shop.

0 likes
magazine distribution