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

Month: April 2010

Ink sales spike on promotion

hotink-14.JPGWe are promoting our latest ink offer through a two-page catalogue in thousands of letterboxes as well as in the shopping centre and some other external marketing initiatives.  The result is a terrific sales spike.

You know you have a catalogue which works when customers bring it in with the items they want circled. In-store we connect with the promotion with flyers as well as shelf compelling price labels – as shown in the photo.  This whole of business approach to a category pays off as we are seeing at the moment.

Too often, newsagents will engage in one tactic – an external ad or a flyer or a display in-store – without using this as one of several tactics to form a campaign. As we are seeing with ink right now, we can convert shoppers visiting for something else into an ink customer while at the same time attracting new customers because of our external marketing.  Operating on multiple levels and attracting business from different customers makes it an efficient campaign.

Ink responds very well to marketing investment. There is plenty of market research around to indicate that consumers think newsagencies are expensive. We use it to promote that our newsagency is not expensive in this competitive category.  Once we win a new customer on price they are highly likely to stay with us.

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newsagency marketing

Sundays not what they used to be

Sundays used to be a power day in the retail week.  No longer it seems – not just based on data from my newsagencies but many I speak with, data from the last three months.  Sunday trade is down this year while other days are up (Thursday and Friday).

The problem with the drop in Sunday day trade is that it’s the most expensive day of the week to be open.  This is why most newsagents who have a choice, those not in major shopping centres, choose to not open.

We use the day to get work done which would otherwise be done during the week and make labour savings there.  We need to do more though to make the day work.  We’re contemplating Sunday offers and other tactics to make the day work better for us.  They will focus on the higher margin products as it’s these which will pay the high operating costs.

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Newsagency challenges

NSW State Government cares less about newsagents

SMH.COM.AU is reporting that some newsagents are refusing to sell the new MyZone transport tickets due to the poor commission.

State governments around Australia have presided over a considerable decline in commission paid to retailers selling tickets on their behalf over the last five years.

While the governments hide behind plenty of excuses, the reality is that they control the strategy which has seen retailers, many of whom are newsagents, lose considerable revenue.

I remember discussing the expected impact of transport ticket moves with the then NSW Minister for Small Business in 2004 and I walked away feeling that he didn’t get it.  He saw that the need for the State Government to cut costs awas more important than newsagents making a living wage.  He also said that his government supported small business.  Well, on this issue, no.

Newsagents are well placed to support transport tickets because of location and operating hours.  It is unreasonable to cut out commission while allowing private operators and other stakeholders to increase their earnings.  Our operating costs have gone up too.

Other newsagent suppliers need to take on board issues like this when considering their position. Over the last five years, newsagent margins have been trimmed across a variety of categories and while each trim may be relatively small, they add to a considerable impact in these small businesses.

We don’t have a track record of fighting back and this is why those who have trimmed margins know they can get away with it.

If I were in NSW, I’d be leveraging the traffic in my newsagency and publishing information on how the MyZone pricing hurts my business, my employees and the community nearby. I’d make a pitch for fairness from the state government in the hope that the local member notices and engages in something more than hot air.

I’d connect with other newsagents and take a stand to draw attention to the knock-on impact of the margin cut. It is important to show the comminity-wide effect of changes like this.  It is not just about how much money we make in our businesses.

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Newsagency challenges

Free MasterChef magazine

masterchef-magazine.JPGIt will be interesting to see the interest in the free MasterChef giveaway with the Sunday Herald Sun today.  While not the magazine with is due to launch shortly, it is a teaser for the magazine and thereby an indicator for the appetite for the new title.  I am curious because I fear we are close to saturation for regular food titles – from gourmet food down to every day food.  This new title will need a unique angle for it to work.  Today’s MasterChef  giveaway is heavy on the TV show connection.  I’ll be curious to see how this connection plays out in the magazine.

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magazines

Move to weekly magazine returns by NDD welcome

I am pleased that magazine distributor NDD moves to weekly magazine returns next week.  Besides the cash-flow benefits, there is the opportunity to better manage floor stock.  Some newsagents will take the opportunity to increase the range and try more titles.  I am looking at this for one of my newsagencies where I see an opportunity in several special interest areas.

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magazine distribution

Top Gear magazine sells with newspapers

top-gear-apr2010.JPGWe are leveraging the synergy between the Top Gear magazine and the refreshed TV show by placing Top Gear magazines with newspapers for the weekend. This Friday through Sunday placement connects with our weekend shoppers – many of whom come in for a newspaper and leave having bought some other items. These are people we only see on weekends – hence the importance of driving efficiency as much as possible.

Top Gear is a great impulse purchase opportunity – newsagents should co-locate this title and fine the second location which works.

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magazines

Pitching Total Fanzine at the counter

fanzine-apr20101.JPGWe’re trying Total Fanzine at the counter this weekend. This is a change for us but I wanted to see if it (and fan magazines in general) works in a counter location. It’s a simple an inexpensive test. It’s important we know what titles we can push in this impulse location for future reference.  Sales efficiency is a critical metric for newsagencies and all these small moves – titles at the counter, with newspapers etc are all about small steps to a more efficient basket.

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magazines

promoting Weight Watchers magazine

weight-watchers-apr2010.JPGWe have been promoting the latest issue of Weight Watchers magazine at the front counter since Wednesday. It is responding well to this prime position promotion. We use three locations to promote this title – the counter for a week, with newspapers for a week and with women’s health titles where it sits for the entire on-sale period. This co-location approach works well for the title.

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magazines

Preselling the lady GaGa calendar

We will be pre-selling the 2011 Lady GaGa calendar given the success of her recent tour and the popualrity of magazines featuring her.  We know from our Micahel Jackson calendar success last year that pre-selling is an excellent (and profitable!) opportunity.  We will have the flyer out in the next few days.

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Calendars

Great Top Gear support products

topgear.jpgI was in a store recently and saw this excellent range of Top Gear branded products.  This display, on a power end, is certain to drive excellent sales for the magazine as well as the range of items on the display.  It’s an excellent way to tap into the gift market for Top Gear fans. The feedback I have is that price is not much of an issue in most situations.

Now that the Top Gear TV show is on the nine network and attracting such a good audience, newsagents ought to consider tapping into the broader Top Gear opportunity.

While there is a risk with licenced product the run of a Top Gear season as well as Father’s Day later this year means we have good opportunities to move the product.

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magazines

Slow Cooker sells out again

Our Frankston store has just placed their fourth reorder for the ACP Slow Cooker cookbook title.  The success is due to tactical placement in-store by the thoughtful team.  This has to be one of the best cookbook successes in years.

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magazines

Stationery opportunity for newsagents

newsagent-stationery.jpgWith over the counter sales of magazines and newspapers expected to be flat for the foreseeable future (with some exceptions but overall flat), newsagents need to turn their attention to product categories which are a less challenged fit for in-store sales as opposed to online sales.

One category which is an excellent opportunity, with upside, for newsagents is stationery.  Now the business stationery which has been a bit of a holy grail for newsagents, but convenience stationery.

I am talking here about the items you will sell because your shop is conveniently located and hour hours are convenient to the need.  Items needed for school and university projects, resumes, business reports, special occasions (sports finals) and home office needs.  The product mix opportunities vary by newsagency based on their customer mix.  A careful review of stationery sold, especially a review of stock-turn, will show the opportunity for growth in stationery sales.

Someone looking for work will not go online to buy what they need to put together a resume pack.  A uni student will not go online to get folders and other materials necessary for uni classes.

Beyond understanding the needs of our customers, pricing our stationery range competitively and carrying brands people recognise, newsagents need to market the opportunity.  A good marketing campaign could educate their customers about how their stationery offer is convenient, local and competitive.

A well configured and competitive stationery department should be growing.

Yes, the sales I am suggesting we chase are small.  However, over a year, from a single customer (if we serve their needs) the sales can be considerable.  The key is how we build that loyalty.

The extent of our success with stationery comes down to us.  For me, I see it as having tremendous upside.

The stationery opportunity was part of my presentation at the QNF State Conference earlier this week and part of a longer workshop around the topic of Transforming your newsagency.

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Newsagency opportunities

Hallmark recordable sound cards set for Mother’s Day

hallmark-mothers-day-2010.JPGThe Hallmark recordable sound cards are set to go off this Mother’s Day. They are part of the popular Hallmark sound card range which was launched last year and continues to lead card sales around the country.

The Hallmark sound card launch is the most successful new greeting card line launch I have ever seen in Australia.

What is interesting about the success is that all retailers accepted a small reduction in margin to take on the range. We also gave up some retail space for promotional use. The space investment paid off as it promoted the point of difference well.

I expect the Mother’s Day cards to perform particularly well because of the TV commercial planned which will support the Hallmark brand and the point of difference offered in the sound card range.

We have our Hallmark Mother’s Day sound cards in a prime position at the front of our shops – the point of sale makes this position work well (already) for us.

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Greeting Cards

Winter Favourites continues to sell well

winterfav.jpegWe are continuing to achieve good results from our counter display of Winter Favourites from ACP. There is no doubt that this title works better for us at the counter than with food or with the Australian Women’s Weekly – the brand under which it is published. As I keep noting here, I am happy to keep a display up if the sales results are being achieved and I have stock. The display we have is quite small yet highly effective – this is due to its location at the counter. There is little clutter and the full cover can be easily seen.

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magazines

Experimenting with the iPad

I am gaining some personal experience with the iPad as a novella I wrote was among the first batch of thousands of titles to be launched through Apple’s iBookstore in the US almost two weeks ago.

The iPad and other devices ovver a new and exciting channel for authors and publishers as the cost to market is lower than print.

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Media disruption

The changing newsagency shopping basket

newsagent-gross-profit.jpgSpeaking at the QNF State Conference yesterday, I presented a comparison of the GP contribution by product categories in 2010 compared to 2005 – from a cross section of newsagencies in the benchmark pool I work with.

The two pie charts (click on the image for a larger version) show the shift in the products newsagents sell. Newspapers, magazines, lottery products and greeting cards are in fewer shopping baskets. Not necessarily because we sell less (we do in some categories but not all) but because newsagents have expanded the product range.

More newsagencies today offer gifts, books, calendars and ink than five years ago. This broader range is seeing a more efficient GP contribution. Indeed, deriving GP from more product categories brings welcome balance to our businesses. It also makes us more appealing to the older categories like newspaper and magazines.

This shift is not happening in all newsagencies however. There remain many who rely in newspapers, magazines, lotteries and cards for the majority of their revenue and in many of these newsagencies, these items are bought alone – i.e. without products from other categories. Such single category sales are inefficient and unhealthy for the future of the newsagency.

Balance is crucial to our collective and individual future.  Balance in traffic, revenue and profit contribution.

Is used the slide to encourage newsagents to transform their businesses from relying on a few categories and pursuing more, higher margin, categories.

I am building a half day workshop on this theme, digging deep into sales benchmark and basket data to build the case for change and to show how some newsagents are building more profitable businesses by embracing change. What I covered yesterday at the QNF Conference was part of that bigger presentation.

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Newsagency challenges

Newsagents selling The Guide to Ethical Supermarket Shopping

ethical-shopping.JPGI am glad we have the 2010 edition of The Guide to Ethical Supermarket Shopping. This title was very popular last year. We have it at the counter – the best place for it based on past experience. While some people will look for the title, most copies will be sold on impulse – hence the counter placement. I was impressed to discover that the publisher, the Ethical Consumer Group, has a list of stockists for the title on their website.  This very practical support for the retail channel shows a respect I like.

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magazines

The pitch at the core of every transaction

magclubcard.jpgWe see each sale as the most important opportunity to pitch our value proposition in an effort to bring the customer back to us. Whether we like it or not, today’s shopper expects something more than a warm smile or good customer service. In August 2004 we launched the first magazine loyalty program in Australia. Today, it remains a crucial point of difference for us. It was embraced by newsXpress in mid 2005 and has since been copied by others – I have happily shared details of the program.

The Magazine Club Card gives us structure through which we can make our pitch – from the card itself, the back office mechanics and pitch to our customers.

I’ll give you one of our Magazine Club Cards. We clip this for each magazine bought and your twelfth magazine is free up to $10.00.

This pitch is gratefully received. It is rare we get a knock back. Every day we see examples of how it drives changed shopper behavior.

We use a similar pitch in our Sophie Randall card and gift shops for a greeting card offer:

Here is one of our loyalty cards. Be sure to bring this back. Once you have bought seven greeting cards your eighth card is free.

Whether it is a loyalty card pitch or some other offer, it is vitally important that newsagencies have a structured process through which a unique pitch is made to drive return business. It is equally important that the performance of the process can be measured.

In my newsagencies we stand for value. This is why we obsess about handing out our loyalty card. Executing this with a smile supports our second key focus of friendly customer service.

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magazines

Bagging magazines 101

bagged-magazines.JPGHere are two examples of how to bag (or not) a magazine. On the left is the latest of Good Food from ACP Magazines. On the right is, Scrapbook Creations (I think) from Universal Magazines. Both are photographed as they appeared as pulled out of their respective bundles.

ACP paid for what I think is a better quality bag which held the magazine in place. They used extra space for promotional material above the magazine itself. Universal Magazines went for what I think is a cheaper bag which left the magazine floating – risking covering the masthead with the promotional printing on the outside of the bag.

While we can shake the Scrapbook Creations bag so that the masthead can be seen from the magazine pocket, this would leave the top of the plastic bag unfairly covering the title in the next pocket above.

It should not be left to noewsagents to do shake a title so it looks better and to have to go back and do it again and again during the shelf life of the product.  If a bag is necessary, a snug fitting bag is best as it presents the title in the best light and saves newsagents from having to spend more time on some titles over others.

To the folks at Universal Magazines, before you go off and complain that I am having a go – I want what you should want … well presented product which respects newsagents and other publishers.

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magazines

Good Food in prime position

fhn_good_food_apr2010.JPGGood Food magazine caps the stand at the entrance to our Women’s magazine aisle this week. The photo only tells part of the story however. We are using three sides of the stand to promote this issue of Good Food.   Our shoppers see the title as they enter and leave the women’s magazine aisle.  Given the location of the stand, they also see the title as they move from our newspaper stand to the counter.  They can buy the magazine directly off the front and back of the stand.

We also have Good Food in our usual food section and in the single column of food titles adjascent to our women’s weeklies titles.

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magazines

Green issue of Home Beautiful has broad appeal

home-beautiful-apr2010.JPGWe are promoting the latest issue of Home Beautiful magazine on the aisle end between our two busiest magazine aisles. This issue should have broad appeal, beyond the traditional customer, because of the green content – it contains 90 pages of green themed content. We will leave Home Beautiful in this location for the next week.

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magazines

Lighting lets newsagents down

I was walking around Brisbane at dusk today and the brightest looking shops I saw were the 7-Eleven convenience stores. The newsagencies I saw looked dark in comparison.  It’s not just Brisbane where you see this, the difference is obvious across the country in capital city and many high-street situations.

Newsagents who complain about the business nearby convenience stores are taking from them should compare their lighting (and the rest of their street-front offer) with that of their competitors.

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Newsagency challenges

How is a sewing machine related to postal services?

australia-post.JPGThe poster in the window of the government owned Australia Post shop opposite my newsXpress Forest Hill store offers a set of saucepans, a digital photo frame, a notebook computer and a sewing machine.  Yes all from our government-owned Australia Post.  I don’t think they actually sell them from the shop floor since the poster lists the price as DELIVERED and I can’t see stock on the floor for purchase.  Click on the image for a larger version of the poster.

These products being available at the Post Office mocks the Postal Corporation Act 1989.

Section 14 of the Act requires Australia Post to provide a postal service first and foremost:

The principal function of Australia Post is to supply postal services within Australia and between Australia and places outside Australia.

Section 15 talks about permitted subsidiary functions:

A subsidiary function of Australia Post is to carry on, outside Australia, any business or activity relating to postal services.

Section 16 talks about other permitted functions:

Functions incidental businesses and activities

(1) The functions of Australia Post include the carrying on, within or outside Australia, of any business or activity that is incidental to: (a) the supplying of postal services under section 14; or (b) the carrying on of any business or activity under section 15.
(2) Without limiting subsection (1), the functions of Australia Post include the carrying on, within or outside Australia, of any business or activity that is capable of being conveniently carried on: (a) by the use of resources that are not immediately required in carrying out Australia Post’s principal or subsidiary function; or (b) in the course of: (i) supplying postal services under section 14; or (ii) carrying on any business or activity under section 15.

The last federal government and the current one have permitted Australia Post to take millions of dollars in revenue from small business. The situation is getting worse.

The federal government deregulated newspaper and magazine distribution saying that newsagents needed to get into the competitive world.  It is a pity that they have not applied the same competition rules to the business they own.

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Australia Post
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