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

Month: August 2009

The plight of UK newsagents

birmingham.jpgClick here to listen to the edition of You and Yours, a program on BBC Radio 4, which covered the challenges facing newsagents in the UK – where ten stores reportedly close each week.

While the plight of UK newsagents makes for sobering listening, it left me wondering how much you can blame external factors on your current situation.  If we look at some of the external issues raised: new tobacco sales laws will not go away – all retailers are affected, supermarkets and other retailers will continue to change shopper habits and lure people from local shops and print media competition will reduce rather than increase – this helps competitors of newsagents.

The National Federation of Retail Newsagents covers their perspective of the program on their website.

We will not find a strong future through regulatory changes.  Governments do not have the appetite for this, despite their professed support for small businesses.

No amount of local connection will not save many small CTNs, as they call them in the UK.  Shoppers have shown that they want a more compelling reason to visit a small local shop other than that it is local.  This is the world in which we exist.

UK newsagents which survive and grow will do so because of the what they do inside their businesses and not because of a right.  What they do in the form of diversification, customer service and marketing is what will draw customers to their business.  To try and save the channel by reversing regulatory changes  will not work.  Newsagents need to fix themselves first.

And before anyone questions what I have written here compared to my views on Australia Post …  My issue with Australia Post is with the 865 government owned Post Shops which have diversified away from being post offices and converted into quasi-newsagencies over the last ten years.  The government has no business taking card, book, stationery and other sales from independent newsagents.

ABOUT THE PHOTO: I took this in Birmingham a in 2006.  Sandhu News is what we would call here in Australia a convenience store.  Magazines, newspapers, food and cheap greeting cards.  It is not what we would call a newsagency.  However, my understanding is that this type of business accounts are the bulk of UK newsagencies.  It was a good business, clean.  It had, to my eye, mixed messages for the consumer and the feeling of cheap product.

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Newsagency challenges

Moving the newspaper display stand

newspaper_stand.JPGEven though the old newspaper stand at our Forest Hill store is on castors, it has been in the same location for more than a year.  The team moved it earlier this week, just a few degrees.  The visual difference is considerable as papers more or less face customers as they enter the shop.  The move also opens up space behind the stand and strengthens our pitch in a couple of product categories.

This is not rocket science.  It is retail 101, ensuring that that our offer is fresh and pursues outcomes from customers.

The value of the move shows the importance of newspaper stands which can be moved easily – the old boat-anchor type stands don’t have a place in newsagencies any more.

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Newspapers

Stunning Better Homes display

picture-080.jpgWarrick Hosking from newsXpress Gympie sent through this photo of a very simple yet stunning display for Better Homes and Gardens.  I like it because of the visual impact. It looks like a flower.  It reminded be that sometimes the best, mose valuable, displays are the simplest.  I’m certain this display will drive sales and that is what matters most.

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magazines

Making the imposing column work

mag_column.JPGColumns are a challenge in shopping centre newsagencies. For a while at our Frankston newsagency we embraced the column at the front of the shop with magazine displays.  We changed this last week to the column in the middle of the store.  We moved gift bags to the front column.

These moves put the magazine displays in the magazine department and bags close to the counter where people can purchase them on impulse with a card and or a gift.  None of the changes are permanent.

It will be interesting to see the impact of the move on magazines.  Each side of the column features a different title and include a display unit from which the magazine can be purchased.  These are not billboard displays, we want an outcome.

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retail

When you sell your newsagency: the handover checklist

I have been working with several new newsagents in recent weeks to help resolve issues arising from poor handover from previous owners. In each case, the main issues could have been resolved with the outgoing newsagent providing a document at settlement which details information crucial to the running of the business.

Instead of a gracious and open hand over, I have seen situations recently where the outgoing newsagent actively sought to make life difficult to the incoming newsagent. People who have never owned or operated a newsagency before are particularly challenged in this situation.

One handover document I saw last week was appalling – from someone who ought to have known better.

A poor handover damages the reputation of the outgoing newsagent and the newsagency channel overall. It is in our interests to structure this process. I’d like to see a common handover document adopted. This could cover:

  • Suppliers. A list including for each supplier: business name, products purchased from them, contact name, contact number, contact email address, website address, current account number, website login details including password and new account application form.
  • Email. A list of each email address used by the business and associated passwords.
  • Merchandisers. The names of merchandisers who visit the store and their contact details.
  • Processes. Details of all daily, weekly and monthly processes including details of website logins and passwords necessary for this work plus copies of blank forms necessary for completing this work.
  • Staff. Details for all staff members: Name, contact phone number, contact email address, superannuation details and details of current responsibilities in the business.
  • Customers. A list of all current customers for the business including customer name, address, phone number and email address. (I was in a business recently where the outgoing newsagent did not provide anything more than a given name and address for a customer – no proper account details.)
  • Computer details. Details of the location of original CDs containing software sold with the business. Passwords for all computers. Passwords used for any software on the computers. Passwords used for the in-house network.
  • Operational details. This general list should include the combination to all safes in the business, the security code for any alarm system, the security code for any external monitoring service.

I am sure there is more which could be added to this list. This is something I would like to see Associations work on. It would be a valuable resource they provide to incoming newsagents and practically demonstrate the value of association membership.

If the new newsagents I have been working with recently were provided the information I have listed, their past few weeks would have been a more enjoyable introduction to the newsagency channel.

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buying a newsagency

Changing the newsagency newsletter

instore_offers.jpgWe have revamped our in-store customer newsletter following a review of how customers engage with the publication. Our new style newsletter focuses more on value propositions and encourages engagement. Hence the name: INSTORE OFFERS.

You can see that we are pitching a mix of impulse and traffic generating offers.  The phonecard pitch is about educating customers about the popular cards we offer.  The Clint Eastwood DVD partwork series pitch is about connecting us with the offer on TV.

We place the newsletter in a stand at the front of the shop and send it out with customer accounts.

Click here for a copy of the new style newsletter.

We are fortunate to have access to our own in-house design and marketing team. Newsagents can easily create their own newsletter using Microsoft Word or Microsoft Publisher – both offer templates which make this process easy.

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newsagency marketing

Pink is the magazine cover choice

pink_magazines.JPGCheck out these four magazines and their pink covers.   Donna Hay for kids was the first title of this bunch from this similar looking group.  It stood out on the shelves.  Now, with four titles in the food segment with pink covers, the visual cut through is not as strong.  Indeed if we placed them next to each other, I suspeect that shoppers would not notice the different titles.    I am not sure that it is a deliberate move to pull focus from another title – it is curious that it happens in waves, not just with food titles but also with other segments.

We have a co-location strategy for food titles – a column mixed with our weeklies.  We are careful to only include one similar looking title in that premium space at any time.

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magazines

Promoting That’s Life and scratchies

fhn_thats_life_aug19.JPGWe are giving That’s Life a good push again this week.  The scratchie promotion is popular with our customers and promotion of this last week at our counter worked well for us.

We have placed That’s Life with our main newspaper stand (and its usual location).  It will stay here for three days.  We get 95% of our That’s Life sales between Wednesday and Friday.

The display recycles an old Alpha magazine stand and steals a newspaper poster unit – temporary moves which work for us.

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magazines

Not enough Handyman magazine stock

fhn_handyman_sep09.JPGOur supplies of Handyman magazine have been cut in half yet sales of the last two issues indicate that we could have supported an increase.  I don’t understand magazine allocations on some days.  If it is not over-supply it is under-supply.  I am sure the publisher of Handyman would want to ensure that suffficient stock is being sent to where they are certain of sales.

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magazine distribution

A fat 4WD Action magazine too big

4wd_action_magazine.JPGThe latest issue of 4WD Action magazine from Express Publications out today is fat.  We have to allocate an additional pocket (not justified), keep stock out the back (time consuming) or jam it into the available space as shown in the photo (not a good look).  Express Publications are the masters at sending bags stuffed which take up space and which often contain old issues which are perennially reissued to make the pack feel more valuable.

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magazines

A reason to not blog

A merchandiser handling one of my newsagencies was sent in by her boss, representing a magazine publisher, with an instruction that we need to take down one of the posters we have placed vertically when the it was designed for horizontal placement.  I am told that her boss also did not like that the poster was covering stock.

Here are the facts.  The display works.  The last four displays done in this way have generated good sales for us.   As for covering stock – yes, guilty.  However, the hidden stock is extra from what is on display in the appropriate location for the titles.

Any supplier taking issue with any display I publish here should contact me.  My number is 0418 321 338.  My email address is mark@towersystems….  Unless I note otherwise, the displays I publish here are done by me.  I am happy to be directly accountable and not have one of my staff cautioned by an intermediary.

I am a good retailer.  Leave me to do my job.  I want what all suppliers should want – the best sales possible.

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magazines

Video library competitors

I happened to stumble on trade display connected with a national video/dvd chain yesterday and discovered that one of their most popular product categories is mobile phone recharge.  They earn premium commission from the recharge sale by selling handsets – telcos reward retailers for this as it grows their customer base.

The next most popular after dvd rental and mobile phone recharge is confectionery.

Talking to a couple of attendees, I was impressed with the clarity and consistency of their pitch about turning the dvd rental into a considerably more valuable sale.  While some of us do this, too many newsagents take the newspaper sale and complain about the size of the transaction instead of making it count for more.

If we don;t watch out, these smart video library operators will show us what they can really do.

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Newsagency challenges

Reader’s Digest files for bankruptcy protection

Reader’s Digest in the US has filed for Chapter 11 bankruptcy protection.  The move has been taken as part of a plan agreed with lenders to try and reduce the debt burden – a burden which began back in 2006 when the company was purchased by a group of investors.  While this is a financial story, it gives oxygen to challenges for print. Stories like this can build momentum.

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magazines

Why we should shop at Costco

The opening of Australia’s first Costco store in Melbourne has been big news over the last few days.  It is the first time we have seen this US style of retailing here in Australia on this scale.

While our newsagencies are built on customer service and our local community connections, Costco is unashamedly about price.

For us to understand this new model in the context of what we try and do in our newsagencies we should make a field trip and see Costco for ourselves. This is essential if we claim that our prices are better than others in any major product category.

The arrival of Costco is good for retail in Australia.  It forces us to look at ourselves and to focus attention on our points of difference and ensure that consumers value these.  They certainly appear to value the Costco price pitch.

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Competition

Chasing early Father’s Day sales

fhn_fathersday.JPGWe have had Father’s Day cards up for a couple of weeks.  Sales are good.  This is being driven, in part, by the free Sat. Nav. (thanks Hallmark) we are giving away to one lucky customer.  While Father’s Day is one of the weaker card seasons, it is very strong in several gift categories.  Newsagents with a strong gift offer should be seeing good sales already.  We have our Father’s Day gift offers in front of the card display.

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Greeting Cards

Promoting House and Garden magazine

fhn_house_garden1.JPGWe are promoting House and Garden at the entrance to our women’s magazine aisle this week.  We continue to experiment with titles which work in this relatively new promotional location for us.  Sales are the only measure which matter to us.  Last week’s display of Good Health worked very well.

It is almost a year since we scaled back on big displays in favor of outcome focused displays  – like we have done for House and Garden.  This is a good for business move.

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magazines

Helping new newsagency owners

I met with a newsagent in Sydney tonight to talk about challenges faced by the business.  Answers for the key challenges are in their business data.  The biggest challenge is understanding that and then leveraging the data to guide a solution.

The newsagent is relatively new to our channel – less than a year.  They came to us with a background of success in another retail channel.  They made all the right moves including completing the required supplier specific training as well as the industry endorsed ANF training.  None of this training equipped them for the newsagency specific challenges they face.

We let new newsagents down.  Our training of new entrants is inadequate.  The business management support infrastructure outside one or two marketing groups is almost non existent.

The newsagent found me through this blog.  I have no other connection to their business.  I am glad to help where I can.  Indeed, each situation I encounter like the one I found tonight, is educational.

The key problem I saw tonight was a business making decisions on out of date data.  Their accountant provides a P&L six monthly.  The only guide as to how the business is travelling is their bank balance.

They buy stock based on what they see they need and based on what supplier reps order for them.  They process magazine returns using distributor websites.  No one is driving them to change their practices – suppliers have provided website work-arounds which bypass industry EDI standards.

We let ourselves down from the first new newsagent training session through to their early months.

An overhaul of how we bring new newsagents into our channel, how we educate them and how we support them through their early months is years overdue.  We have too many relatively new newsagents falling behind, hurting their businesses and the channel more broadly.

This is an issue crying out for national attention.

As for the newsagent I met with tonight, they will quickly address what needs to be addressed.  I am confident or a turnaround in the next three months – we are developing a plan which will improve the business and build their knowledge.  I am blogging about the meeting and the training issue at their suggestion – they feel let down by the introductory processes.

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buying a newsagency

Promoting Men’s Health and other titles

fhn_mens_health_sep09.JPGWe are using the latest issue of Men’s Health magazine to anchor a promotion of titles which appeal to men.  We are focusing on physical and mental fitness in the selection of titles.  We have deliberately resisted the urge for breast centric titles this time around.  Men’s Health is a good title for us but we know we can increase sales further – hence this display out the front of our newsagency.

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magazines

Promoting Cleo and gifts

fhn_cleo_sep09.JPGWe are promoting Cleo magazine at the counter this week.  The free nail polish and lip gloss make this an excellent impulse purchase opportunity.  I like the way the gifts are displayed – in the sleeve next to the magazine.

Our plan is to move the magazine to a second location if we still have considerable stock by the weekend.  This is easy thanks to the good mix of collateral we received.

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magazines

National Newsagent Conference

newsXpress is hosting the National Newsagent Conference in Melbourne is October. Participation is open to all newsagents. This will be two days of great networking with newsagents and a conference agenda focused on growing stronger and more profitable newsagencies. Embracing change will be a theme of the world class speakers being brought in for the event. Click here for a registration of interest flyer.  Click here for a copy of the conference registration form. Registrations are open now.

Disclosure: I am a Director of newsXpress.

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newsagency marketing

Challenging year for Gordon and Gotch

PMP, the parent company of magazine distributor Gordon and Gotch, released their 2009 full year results to the ASX on Friday.  The announcement was accompanied by a presentation with details on their trading for the past year and plans for the next.  The key magazine distribution information in the presentation of relevance to newsagents is:

  • Magazine volume down 2.5% for the year and 3.4% for the second half.
  • The partworks business is slowing.
  • EBIT down 6.6% for the year.
  • 60 redundancies in the Gotch and Scribo (book) business.

As these numbers show, newsagencies aren’t the only businesses in the magazine space with challenges.

Six years ago, Gordon and Gotch was the least popular magazine distributor supplying newsagents.   Oversupply was rife, returns processing was problematic and internal policies around magazines were weak – meaning we would see unjustified reissues and other challenges.

Since 2004, Gordon and Gotch has transformed much of its magazine distribution business, lifting sell-through rates and introducing internal policies which see newsagents supplied on more equitable terms.

The operational changes cannot counter the impact of economic conditions nor the impact of disruption to the traditional print media model.  These are challenges which we share with Gotch and which will drive the redefinition of both our business models.

One impact of the economic and disruption challenges I expect to see is a rationalisation in magazine distribution.  While the magazine distributors are cutting costs internally, more significant savings would be achieved through maerging businesses.

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magazine distribution

Life beyond mail for Australia Post

Crikey.com.au has published two articles this week about Australia Post and the challenges they face in falling mail volumes as a result of increased online traffic.  The other challenge to Australia Post is the push for increased competition in mail – open competition is considered best practice in the EU.

Newsagents are experiencing increased competition from Australia Post in the retail front.  The government owned and protected 850 corporate stores use their mail services to pull traffic for a lower cost, extract better landlord deals.  These benefits of government protection are used to help fund loss leaders which target newsagents and some other retailers.

Australia Post senior management are on incentives (huge I am told) to drive these moves against private enterprise.   Government policy, from successive governments, permits Australia Post to pit this government business against small independent retailers, to use the protection to specifically target businesses like newsagencies.

Economists ought to look at the net cost to the economy of the government owned Australia Post taking business from the private sector in this way.  I suspect they would find the cost higher than if the post office was taken back to the past of offering only postal services.

Sure the government likes the hundreds of millions of dollars of dividends they receive.  Imaging what they could achieve in taxes from more efficient and profitable private enterprises.

Australia Post has no role in selling office stationery, printer ink refills, greeting cards, calendars, magazines, books, phone recharge, mobile phones, picnic sets, games and gifts.

Life beyond mail for Australia Post?  One thing is for certain, it will involve poor customer service and long queues.

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Australia Post

The newspaper publishers vs Google

Newspaper publisher Fairfax used the business pages of The Age and the Sydney Morning Herald yesterday to raise the profile of the challenge Google resents to newspaper publishers and other traditional (older) advertising mediums.  While the article starts out presenting a balanced view of the Google challenge, it occasionally takes a reds under the bed approach in making a case against Google – by fanning fear about its size and unknowns about its internal workings.

The article is relevant to newsagents in that it brings into focus the concerns of newspaper publishers with the expanding Google take of advertising revenue here in Australia.

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Media disruption

Ben Cousins GQ issue popular

Here is the proof of the popularity of the Ben Cousins cover story on GQ magazine this month.  At our newsXpress Forest Hill store we sold our initial allocation and quickly pulled extra stock from one of our other newsagencies until additional stock arrived from the distributor.  The Ben Cousins GQ blog post I published here achieved 80 hits in 24 hours.

The placement of GQ above the Herald Sun on our newspaper stand has been a smart move.  It is great to see a Herald Sun sale turn into a Herald Sun and GQ sale.

We need to seize opportunities like this, look at magazine covers and place according to what we know about our customers.  We can bank the results.

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magazines
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