Delicious magazine sells better from the location shown in the photo – from the food column mixed with our weeklies – than in the traditional food segment where all of our food titles are located. We track sales from this location by pocket count. This is vital in co-location situations. This latest issue of Delicious is selling 2 to 1 better from this weeklies area. While creating the space was a challenge, it is paying off.
Rupert Murdoch, CEO of News Corporation, appeared before the US Federal Trade Commission’s Workshop: From Town Crier to Bloggers: How Will Journalism Survive the Internet Age? on Tuesday. His speech contains information which could be of interest to newsagents facing a decision as to whether to accept the new News Limited contracts.
Here is some of what Rupert Murdoch had to say to the FTC:
First up, on the trust between consumer and a newspaper:
From the beginning, newspapers have prospered for one reason: the trust that comes from representing their readers’ interests and giving them the news that’s important to them. That means covering the communities where they live … exposing government or business corruption … and standing up to the rich and powerful.
And on the future of newspapers:
The same is true with newspapers. More and more, our readers are using different technologies to access our papers during different parts of the day. For example, they might read some of their Wall Street Journal on their blackberries while commuting into the office … read it on the computer when they arrive … and read it on a larger and clearer e-reader wherever they may be.
Later, he adds:
I have often made the point about newspapers this way: by reminding people that we are in the news business, not the dead tree business. In other words, what makes a newspaper is its content and brand – not necessarily the form in which it is delivered.
He outlines the principles for the new world:
- Let news organizations innovate to give their customers the news they want, when they want it, and how they want it.
- Ask consumers to pay for the products they consume. Let aggregators desist – and start employing their own journalists.
- And ask the government to use its powers to ensure the most innovative companies are free to reach new customers instead of looking for ways to prop up failures or intervene in a constitutionally sensitive business sector.
I’d make several observations on this. Newsagents are distressed at the challenge of their individual small businesses negotiating with a global corporation on a contract which many see as the reason for their existence. News Limited has denied newsagents the opportunity to charge consumers fairly for the services they provide. Successive Governments in Australia have ignored calls by newsagents to give them genuine freedom in structuring their businesses around newspaper distribution in ways which are appropriate to their communities.
Looking at Rupert Murdoch’s speech more broadly, News Corp. is rightly positioning itself for the next generation channel. This will not be print, certainly not to the extent that it has been in the past. It is therefore, in my view, open to newsagents to decide the timing of their move out of newspaper print distribution . The contract on offer today is two years (one year in South Australia) for a reason. Newsagents need to understand that and not expect anything beyond this period.
Australian Newsagents ought to study this and other speeches by Rupert Murdoch and add them into the mix when considering what to do about the contracts.
We don’t have room for a promotional display in support of the latest issue of Money magazine so instead we made room in its regular space and allocated a double waterfall.
While not ideal, I am confident that this will drive incremental sales and that’s the name of the game.
We will watch performance over the next few days and keep an eye out for promotional space – however, this is a challenge over this especially busy Christmas period.
We are using the latest issue of Australian Traveller to anchor and signpost the travel section. This is based on our assessment of Australian Traveller being a good product we are proud to carry and the support offered newsagents by the publisher – better commission and marketing support.
Travel magazines, while not the volume of other categories, are important in the mix for a magazine specialist. We have ours located at the entrance to our men’s magazines aisle. We are contemplating moving them because we have heard that women make more travel decisions than men. Finding space in the women’s aisle is a challenge but we’re working on it.
The second issue of TECHLIVING, the Dick Smith house magazine went on sale yesterday. While I am sure it serves a purpose for them, it sits in a crowded space in newsagencies and only serves the purpose of advertising Dick Smith in our stores. It’s weaker than other house titles we carry in newsagencies.
I am inclined to include a flyer with the magazine promoting our ink and toner since this is the one category where we compete head to head with Dick Smith – their ink customers would save money shopping with us.
I like the mini cookbook Christmas gift packs supplied this morning by ACP Magazines. The $9.95 price point is smart and the packaging good. I also like the collateral provided. We have put the books in a bin between our newspaper stand and our main counter – at the end of one of our diary tables. Our thinking in taking this approach is that we needed to promote it like any other Christmas offer rather than through a more traditional magazine display. the other benefit of using the bin is that we can move the display as needed.
This morning we received copies of TRADINGSPACE, a new title classifieds title trying to trade off the demise of the Trading Post. They offer free classifieds. I don’t recall receiving any pre launch announcement about the title. Our challenge with the title is where to locate it since the Trading Post space is gone. I’m sure other newsagents would have the same problem. This classifieds space is getting busy. It will be interesting to see how it plays out.
We achieved good sales in November with sales up in key traffic departments as well as in key good margin departments. The numbers are even better when you consider that some departments had a high base – calendars, diaries, cards and ink. Here is a summary of performance* across my own newsagencies:
Overall traffic is up 2%.
What is particularly appealing to me in the numbers is the adjustment to our mix. We continue to build a more efficient business by balancing low margin high traffic products with high margin lower traffic products. This is an on-going mission, one with which every newsagent ought to engage.
The growth is due to a combination of constant change in-store, a good retail experience, good external marketing and a strong commitment to a brand / price strategy. We are known in several key departments for these points of difference.
People who ponder the future of the channel need to look at their numbers. Every month we have an opportunity to gauge our progresson this long term mission.
* I have used revenue as the measure for all departments except for magazines and newspapers where I use unit sales as the measure.
In addition to mailing to homes and businesses around our centre, we have our December newsletter – IN STORE OFFERS – in a stand at the front of the shop. We will also distribute this to businesses in the centre.
This newsletter promotes several of our Christmas offers from a range of departments. It also connects with marketing distributed to thousands of homes around the centre in recent weeks. It respects core departments – magazines (suggesting a Christmas gift pack) and cards (the very successful Hallmark sound cards) – while promoting calendars (great margin and range point of difference), the new moon board game (competing with the big guys and winning!), Scotch gift wrap cutter (everyone needs one!) and our digital photo key rings (also competing with the big guys and winning!).
Regulars here will notice that we have evolved the newsletter considerably over the last four years. This latest incarnation reflects our research on how shoppers engage with the newsletter. Items are less wordy and more outcome focused.
The newsletter focuses on brands and value – we see these as a key point of difference for us. The pitch is the same in our catalogue marketing as well as our advertising.
Oz Lotto jackpotting last night to $40 million is a nice assist as we get closer to Christmas. While there are retailers who think that big jackpots draw sales from other products we sell, I don’t see that in my newsagency. We will benefit from a traffic boost and add-on sales in non-lottery categories.
I have heard from several newsagents this week who are distressed about the News Limited contracts. It is the all or nothing approach which is causing the most stress.
In two situations put to me the newsagents would like to keep the retail business but discard the small loss making home delivery business. They say that no amount of representation has been able to achieve an outcome which suits. This means they either take everything and lose money or take nothing and hope to negotiate sub agent terms which would mean a break even situation on newspapers.
One understands that emotions are heightened when you consider that for many long term newsagents this is the most fundamental change they have faced in decades. For the first time they are wondering whether to walk away from a core offer which for years has defined their business and their place in the town.
Further to my blog post a few days ago about kids activity books from Network Services, the photo shows a couple of books we have in-store at the moment from which we achieve more than 50% margin. Whereas the Network supplied books seek to leverage existing traffic, the book campaign I choose to participate in drives new traffic.
These books are more valuable to us than the Network books because of the margin and because they are part of a catalogue marketing campaign to thousands of homes around our newsagency. The book campaign drives traffic – I can tell because customers come in with the books they want circled in the catalogue.
Few newsagents would benefit from Network using its magazine relationship with newsagents to send out books. We need to negotiate rules with Network which would see this behaviour stop.
There was considerable discussion here on the weekend about the future of newsagencies and the need for a so called cure. We will find our own future by making smart business decisions – such a choosing to engage in traffic generating campaigns, like books, and to carry better margin products, like books.
I have seen newsagencies take book sales from $10,000 a year of $75,000 a year (and even more) on the back of the kind of new traffic generating marketing campaign I have written about here. Steps like this are crucial to each of us finding our own future.
We are promoting the latest issue of Top Gear Australia at the entrance men’s magazine aisle but within eyeline of those leaving our women’s magazine aisle. December is a great month for achieving sales of magazines to shoppers who would not usually buy them. Top Gear is one of the titles we target as a good Christmas gift and this has guided our placement for promotion of this issue.
We plan to use signage to guide shopping of magazines for Christmas gifts with some in-store marketing collateral – different to the poster we did last year. This year, we are experimenting with bookmarks.
Amazon says that sales of its Kindle e-reader hit a record in November. Information Week reports that Forrester Research predicts 3 million e-readers will be sold in the US this year.
We are yet to experience the e-reader phenomenon here and this is why some in Australia say it is a fad which will pass us by. I doubt this. Our uptake will be faster than the US because we enter the market with more advanced devices.
Newsagents need to watch this market and consider what is happening in the US in the context of what we will sell and deliver in years ahead. We don’t sell e-readers nor do we sell account top-up services.
I was interviewed by Sally Jackson last Friday about the sales of adult magazines in newsagencies for a story which appeared in The Australian yesterday. It is good to see a newsagent perspective included in the analysis of what is happening with porn magazines. The latest newsagent sales benchmark study included results for adult titles – showing a decline year on year in over the counter sales.
I’d note that when I quote sales numbers for magazines and newspapers I use unit sales. Price changes impact revenue too much to be used as a measure. Also, other factors such as promotional products can also skew the figures. So, assessing unit sales year on year, porn magazines are down in newsagencies.
While I am happy to carry a selection of ‘regular’ adult product, I think the sunset is here for porn. It’s not paying its way in my newsagencies. It will be working for some but for most newsagents the space and cash saving can be put to better use.
On a side note, I am surprised at how far this story has travelled. Thaindian News picked it up along with fifteen or so other sites. I only realised when I received an email from someone overseas seeking information on other magazines categories in newsagencies.
The photo shows how our team at Frankston is making the most of card and wrap sales with the easy-to-shop-dispenser from Scotch offering Christmas wrap tape. This is a no-brainer upsell. The majors do it but many newsagents do not. We have used this and similar approaches for a few years with great success at Christmas time.
By siezing every possible opportunity to upsell we build a more efficient basket. We improve our return on floorspace, customer visit and just about any other metric you want to look at.
While newsagents get caught up in the big issues like newspaper contracts and magazine supply challenges, we too often neglect small step opportunities like the tape upsell.
