NSW newsagents have been granted an increase by News Ltd’s Nationwide News of 4 cents a day for delivering newspapers over two or more days a week. A delivery only on one day a week to an address does not attract any increase. A seven day delivery achieves a 25% increase in the delivery fee.
The new fees take effect from April 12 and are being announced to newsagents today.
Magazine departments in newsagencies are reducing in size based on what I hear from shop designers and newsagents building new stores. Whereas in the past, an average newsagency would have 1,300 or more magazine facings, today, they are more often at 1,000 and even less.
This structural change has been underway for the last two or three years yet suppliers appear to be unaware.
The reduction in space commitment to magazines is the newsagent response to the magazine supply model and a reflection of sales. It centres around low margin (25% for most titles), lack of control over supply and flat or falling (for most) sales.
The best way for publishers to address this shrinking space in newsagencies is to engage on the issues of margin and supply control. I say this from recent personal experience. I decided on 800 facings. I would have allocated more space if the money and control was available. At 800 I have reasonable range without the high floor-space cost of the usual side magazine department. This is an important factor when you are paying $1,000 per square metre a year plus outgoings.
The publishers who suffer the most from the space reduction are the small independents. While some are responding with better margin and are considering a direct (more control for the newsagent) supply model, others are missing the opportunity of embracing change.
There was a time when publishers, distributors and newsagents would say that the magazine supply model in Australia was the best in the world. Chipping away at the edges, putting magazines into other channels and lack of structural support for newsagents has meant that claim may no longer be accurate.
I would like to see more publishers engage commercially: better terms, more control over supply and more marketing driving shoppers to newsagents as the magazine specialists. Of the three, a united campaign promoting newsagents could help address the first two.
I wonder how many of us are missing an opportunity with Passover. While the Jewish holiday may not have strong interest for many newsagents, we are all bound to have customers with Jewish friends. Besides the cards, books for children appear to be a popular and well accepted gift.
I’d be interested to know if there are any newsagents embracing Passover in their shops.
We are about to sell out of our second supply of the ACP Magazines Slow Cooker cookbook in a couple of my stores. We are also close to selling out of another slow cooker cookbook we have in stock. All we have done to promote the titles is to place them in high traffic areas. While somtimes we need to appreciate a win and move on, we will be ordering more stock as our feeling is that interest in slow cooker titles has some way to run yet.
I’d encourage newsagents to check out their sales of the slow cooker title. If you have sold out, consider ordering more. It’s good money, especially if it is an impulse purchase.
boingboing published this image of what a comics will look like on the iPad using technology from Comic Zeal. The folks at Comic Zeal have published more details and plenty more images at their blog. Content will define the future for the iPad. Smart publishers embracing the technology will drive sales of the device and content purchases.
We have changed the main display of our book sale for the third time in just over two weeks and one of my shops. Experience has shown that regular refreshing of the display which faces into the mall is crucial to drawing new traffic. We have a plan and are cycling through popular categories: food, children’s, self help, fiction and men’s. The latest changes put children’s titles on display. As is often the case, while making the display passers-by are drawn in and make a purchase.
Our experience with books is that they are not a set and forget category. The more attention you provide the better they perform. In addition to regularly reconfiguring the display (by taking everything off and rebuilding), we tidy every couple of hours for the duration of the sale.
Book sales are up 15% on a year on year same store basis.
Our range of plush rabbits is selling well as Easter gifts. Besides a good display, sales are helped by regular promotion on our in-store radio and by marketing collateral – both of which are promoting healthy Easter gifts. What is interesting is that chocolate sales have not been affected by this – indeed, they are strong. The growth in plush sales is a bonus.
We are promoting House and Garden at the entrance to our women’s magazine aisle this week as part of the ACP Connections promotion. While not your usual billboard display, we have found this type of display to work well for us. Customers face it as they head to our busiest magazine aisle. It is also seen as people turn from our newspaper display and heads to the counter.
Since the unit is on castors, we can move it easily – we have done this before a couple of times in the week. Sometimes simple changes like this can do wonders for sales.
We are promoting Burke’s Backyard at the sales counter, between two registers, for the next couple of days. The refresh of the magazine and its popularity with our customers make it a good title to promote in this prime location. We may leave it up for longer depending of what we see on Wednesday.
This counter location continues to work extremely well for us – driving excellent impulse purchases.
With the Hey Dad story dominating news, we have placed New Idea next to our newspaper stand. We had planned to rest the New Idea stand from this week but we figured the cover photo of the Hey Dad cast would help drive sales. It pays to be opportunistic when it comes to selling magazines.
News Corporation’s The Times and Sunday Times newspapers in the UK will to turn on a paywall, permitting access to content only to those who have paid for the privilege.
If we agree with this business model for charging a fair price for access to products and services then we need to take newspapers out of the public area of our newsagencies and provide access only when we have been paid. Distribution newsagents would also need to start charging a fair price for the newspaper home delivery service provided.
Publishers, newspaper and magazine, like the newsagency channel because of the ease of browsing. They know that free sampling, of a headline, part of an article or the whole newspaper, is key to sales. It appears that some publishers don’t agree that free sampling is key to generating sales online.
Newspaper publishers like distribution newsagents because they are prepared to provide a service for barely the cost, and often less, that the service costs to provide. Publishers are not prepared to be as generous with their own money when they are funding the distribution channel.
Newspaper publishers go to extraordinary lengths to facilitate free or at a steep discount full copy sampling of their print products – at sporting events, shopping malls, through sporting clubs, to students and through other affiliations where you can take a year-long subscription for 10%, and sometimes less, of the usual price.
The newspaper cover price itself, $1.00 in Sydney for the Daily Telegraph for example, does not reflect the cost of the product. The 25 cents (or less) a newsagent makes selling it certainly does not reflect their cost. Yet, the publisher and newsagent subsidise this because it is seen as important to maintaining sales. The few cents a day a newsagent is permitted by the publisher to charge for home delivery is often just a token of the real cost.
If the paywall approach is about building a sustainable revenue model from online because of a belief that migration from print to online will continue then there must be smarter revenue solutions than hiding the product behind a paywall.
The only people I can see paying to get through the paywall are those who know the product. New customers, the holy grail of any business, are not likely to pay to sample the product.
Back in the print world, the only people not happy with newsagents charging a fair price for newspaper home delivery and a fair price for each copy purchased at retail are the publishers themselves. Surveys by newsagents show that consumers are happy to pay a fair price.
While the real discussion topic here is the introduction of the paywall at The Times, I see this through the context of how newsagents have been treated by publishers when it comes to charging for our services.
Jeff Jarvis (of BuzzMachine) has written an excellent piece for The Guardian, a competitor of The Times, about their move.
An early look at benchmark sales data for the soon to end first quarter of 2010 shows that foreign language newspapers continue to perform better than their mass market counterparts. Across Australia, foreign language newspapers are showing strong year on year same store growth based on the data I am seeing.
Foreign language newspapers are more efficient too with around half sales including at leats one other item in the basket. Mass market newspapers are purchased with something else on average 40% of the time.
Foreign language newspapers are an excellent opportunity for newsagents wanting to tap into a loyal and growing customer base.
We are rewarding another Lucky Shopper if we can find out who they are. We’re placing a poster at the door inviting them to contact us for their reward. For the three months we have run this campaign it has worked well – until last week that is. Hopefully, we will have success again with a new lucky shopper as the target of our affection. Yes, I know there are questions about this. The police advice we have is that a poster like the one we are using doe snot break any laws.
How does your newsagency stand out in the crowd? Whether you are in a small country town or a large capital-city shopping mall, you are in a crowd. Now more than ever, given that everything we sell (except for magazine range), is available in many other places including online.
So, how does your newsagency stand out?
National retail chains spend vast sums of money and time advertising their buying power, convenient locations and friendly service. Their slick ads get into the heads of customers and lead them to think service is good. Newsagents don’t have the funds to promote on the same scale outside our businesses.
We rely on what we do to show off our point of difference and for this to drive word of mouth.
The best competitive strategy for retail I know is to make the shopping experience truly remarkable.
As I travel around the country speaking with newsagents at conferences, workshops and individually, the most common point of difference I am told newsagents have over national retailers is customer service. This is what most newsagents think. They share horror stories they have heard about experiences with national chains – as if these horrow stories make newsagencies look good. I don’t think it works that way.
If customer service is the differentiating factor for newsagencies, we have to ask ourselves: is our customer service truly remarkable? Is this what your customers really think? Is what you think of as your point of difference what your customers actually experience?
In newsagencies, customer expectations are higher than those buying a magazine, a pen or a card in a supermarket or department store. Because customers expect us to be more personal and friendly we have to be better – plus more.
The higher expectations customers have of their experience in a newsagency means that our own goals for remarkable customer service have to be higher.
So, how does your newsagency stand out in the crowd in terms of customer service? We need to challenge each other on this, to lift our game across the country. Whether we like it or not, we are connected by business type and, in most cases, shingle.
The money people at The Age put their needs ahead of editorial with today’s newspaper carrying a subscription ad stuck over content above the masthead pointing to an AFL article. If they are going to cover it up why have the pointer to the AFL article on the front page in the first place? It is frustrating enough that they are using the ad to take customers away from retail newsagents.
This display unit for Australian Geographic Little Kids and Australian Geographic Explorers seems like a waste to me. I don’t know of many newsagencies which would have the space necessary in either their children’s section or their science section. The children’s section is especially challenged already with unusually shaped packages taking any available flat space. The unit itself looks half made with one of the titles not even properly fitting the unit.
Despite the complaints noted above, we have put this unit our, in our since section, for the next week or two to see how it goes.
Publishers need to think carefully about how they want display units used and the space available in newsagencies for what they have planned. Too much money is wasted sending fixtures which may be put out for a photo and the trashed.
We try and use everything sent and even then if we do not use it for the long term we store it and often bring it out for a second and third go.
I was surprised to see that our postcard supplier has included this Mary MacKillop postcard in the range. However, thinking about it, the postcard will appeal to our customers – if we place it in an appropriately prominent position. I am considering looking at other Mary MacKillop products to at least establish ourselves in this space. We have had success with a range of religious items so we anticipate good interest.
We are seeing a stronger and or earlier Easter than last year. It is hard to say whether the season overall will beat last year right now because the only time to properly assess the season is at the end. Card, gift and egg sales are all performing well – gifts especially. Eggs kicked in this week, it was like someone said that it’s okay to buy Easter eggs now and shoppers came from everywhere. In a couple of our stores the sales kick was so strong that made arrangements for more stock.
We went out early with Easter, right after Valentine’s Day. Going early works well for us – we already have a good range of Mother’s Day stock out and it’s selling.
Our view on seasons is that the sooner we position ourselves as being strong in a season the better.
I have heard of more newsagents being visited by Fair Work Australia representatives and guided to adjust employment arrangements for newspaper delivery drivers. The changes have led to annual cost increases of between $15,000 and $35,000. To add this level of cost to an already marginal operation will kill some businesses and hurt the working families the government says it is so concerned about.
Despite words by the federal government that there are mechanisms for dealing with some of the issues, I don’t see the government proactively working with newsagents on this. Instead, they are sending inspectors to visit newsagents and other businesses to enforce the regulations.
The silence from newsagents about the challenges around the employment changes is concerning. My blog post of March 15 on this topic has generated plenty of behind the scenes discussion but little public comment.
Newsagents are scared. I know that some in some newsagents associations are scared too. I have heard that some representing newsagents believe that this issue should not be discussed publicly. The trouble is, lack of discussion is leaving newsagents to break the law.
While newsagents need to ensure that they operate within the law, they also need to engage on a co-ordinated campaign to lobby the federal government on the personal and economic impact of the legislation of working families – a term they love to use. This legislation is leaving many working families worse off – newsagents and employees.
Newsagents can use their geographic footprint to lobby on this. But for that to happen they need a strong national plan and they need to work together.
With food magazines so popular at the moment, showing double digit growth over last year, it stands to reason that mini cookbooks are popular with publishers as a premium gift to try and drive sales of titles. Publishers need to be careful to not chase too much of a good thing.
I suspect that the frequency with which mini cookbooks are being stuck on the cover of magazines as a gift is diluting their value as a premium. I wonder, too, whether the frequency is diluting interest in mini cookbook sales.
What was once special is no longer all that special – to my mind at least.
If a premium is to be used to drive sales of a magazine, I’d like to see greater creativity from publishers, particularly between titles. I don’t mind mini books being used as a premium, I’d just like to see more creativity in subject matter. Make them truly premium again.
Engadget is reporting that the iPad edition of The Wall Street Journal is set to be priced at US$19.99 a month and that some magazines are set to have weekly and monthly ‘subscriptions’ – not annual.
While the ground is sure to move quickly over the next few months, it is interesting to see so much publisher activity around this new device.
We are promoting Men’s Health on the power end leading into our men’s magazines aisle. The display has been up since Wednesday and is generating good business for us. The free gift of Nivea deodorant is helping with this. If you look carefully at the photo you can see a flat stack unit with Women’s Health next to the Men’s Health display. We also have the magazine in its usual location with men’s fitness titles.
I received a copy the annual report from the liquidator of On Q (a Bill Express related party) this week. It details a situation as messy as that being investigated by the Bill Express liquidator. The report documents some suspected voidable transactions, what look like questionable loans, a question about possible insolvent trading and a raft of poor practices. They are pushing for a public examination.
While there is nothing in the report for newsagents, it is interesting to see the On Q mess through to the end.
I was fortunate to be at the NANA Newsagent of the Year awards last night in Sydney. It was a terrific evening with good newsagents and employees being recognised for their tremendous service to our channel. Plenty of suppliers were also represented and recognition was given to them for their support of the newsagency channel.
I was taken with the upbeat mood of newsagents and suppliers, it was most encouraging. It was not long ago that these events were more negative.
Well done NANA for a good evening.