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

Month: August 2010

Fairfax contemplating online migration?

News Ltd is running the story about an analyst suggesting that competitor Fairfax would be better off shutting off the presses and moving to an online model.  Margaret Simons writing at Crikey provides a more balanced assessment of the story.

I expect that News, Fairfax and indeed all newspaper publishers are assessing the costs and benefits of moving to digital only delivery.  They cannot ignore the obligation to consider the alternative.

News and Fairfax have had time to experiment in recent years with their various plays in Adelaide, Peth and Brisbane.  They have also been able to assess how the transition has worked for the Seattle Post Intelligencier in the US.

The discussion about moving a newspaper online is often had in the context of what we know a newspaper to be today.  Smart publishers are re-envisioning what can be behind their masthead in an online offer.

Look at Monkey magazine in the UK.  Dennis Publishing created a new online only brand and quickly built a large and loyal following.  While creating a start up lad’s mag is different to creating a respected news source, the opportunities are the same.

News, for example, could repurpose content from The Australian and elsewhere and offer an online competitor to the Australian Financial Review, enticing people to migrate from print to a digital offering.  Given how AFR readers consume their news I would have thought that they were a logical low hanging fruit opportunity.

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Media disruption

Excellent Better Homes & Gardens sales

bhg-july2010.JPGOur counter display for Better Homes & Gardens continues to drive excellent sales for us – well into the on-sale period.  There are few magazines we could promote the same issue at the counter for two weeks and be happy with the sales the display achieves for us.  What makes the result even more amazing is that the impulse purchases are achieved without any free gifts.  It’s the magazine, that’s what sells Better Homes & Gardens.

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magazines

Promoting the cook’s garden from ACP

cooksgarden.JPGWe have placed the new cookbook from ACP, the cook’s garden, with our high volume weeklies to drive impulse business.  This is a very different cookbook from ACP.  I expect it to work well as an impulse item – hence the premium placement.  We also have stock in the ACP impulse unit at the counter as well as in our regular cookbook section.

I like the inclusion of apack of tomato seeds on the cover.  I also like that this cookbook is more of a garden to the table book than your usual cookbook.  The timing is good with Spring not far away.

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magazines

ACP announces Growth Rewards program

ACP magazines has this morning announced a new program for newsagents which offers additional margin for growth achievment.

The Growth Rewards program will be available to members of the ACP Connections program.  Bonus margin kicks in at 5% year on year growth with two steps in the program offering significantly more margin than provided today.

The ACP announcement breaks the 25% margin barrier for magazines.  It makes growth the core focus for newsagents.

For years in this place and elsewhere I have called on magazine and newspaper publishers to treat newsagents as business people.  This announcement from ACP does just that.

I was briefed on the program last week and was impressed with the work that ACP had put into it and the supporting materials to be provided to newsagents.  My understanding is that all Connections members will receive details off the program over the next couple of days.

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magazines

Newsagents need to act on magazine terms

Further to my blog post yesterday about supermarkets getting access to Cosmopolitan Health and other magazines on better trading terms than newsagents, this is an issue industry associations could consider engaging in – using collective bargaining rights.

Equally, now that we have proof of it happening, we could try and bargain for ourselves although I don’t hold out much hope.

I plan to put the question to several publishers.  I am keen to hear their response.

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magazine distribution

Dirt Action magazine sales fall due to bagging?

dirt-action.JPGSales of Dirt Action magazine fell with the latest issue and I wonder if this is because it was bagged with an old magazine and promoted as a premium product.  It could equally be sue to the magazine not being browser friendly.  Or, it could be a natural dip in the sales cycle.

Publishers often tell me that magazine sales increase when they bag the current issue with an old issue.  I struggle to believe this.  My observations of shoppers indicates that bagging magazines is a barrier to browsing and this must impact sales.

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magazines

Promoting marie claire 15th anniversary issue

marieclaire-aug2010.JPGWe are promoting the 15th anniversary issue of marie claire with this in-location double waterfall as well as a billboard display at the end of this aisle.  The premium free gift and the anniversary itself should drive good sales.

Kudos to Pacific Magazines for the way they packaged the gift with the magazine – not a single copy damaged.  The gift actually looks valuable and the magazine itself looks stunning.

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magazines

Promoting PC User magazine

pcuser-aug2010.JPGWe are promoting the latest issue of PC User magazine with an in-location display seen by everyone entering our men’s magazines aisle.  Regulars here will notice that we regularly flip this high traffic location between The Monthly, Money, APC and PC User.

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magazines

Supermarkets treated differently for magazines

I have just seen different treatment for supermarkets versus newsagents by ACP Magazines for their recent Cosmopolitan Health publication.  A newsagent was sent supermarket and newsagent stock.  While the publication is the same, the supermarket stock was provided with a 30 day shelf life and the newsagent stock had a 90 day shelf life.

The cash flow impact of the 90 day shelf life on newsagency businesses is significant, it disadvantages newsagents compared to supermarkets.

While there may be an argument around sales cycles in newsagencies compared to supermarkets, I don’t accept that. A title supplied to supermarkets with a 30 day shelf life should be supplied to newsagents under the same terms.

It is unfair on small business newsagents that they have a higher carrying cost for this or any title.

Magazine publishers ought to be transparent with newsagents about the terms they offer our competitors since we have less control over what we are supplied.  We are constantly told how important we are to publishers, transparency on the difference in terms would show if that is the case.

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magazines

Disappointment with iPad book offer

Every day which passes intensifies my disappointment with the book situation on the iPad in Australia.  The lack of an agreement between Apple and Australian publishers means that we miss out.  This is the dark side of the device, where it controls by geographic borders what we have access to.  The internet, the FREE internet, is far more useful and valuable in this regard.  Apple, publishers and others controlling who can access what and when are diluting the positive impact of the iPad and similar devices.

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Media disruption

Building the magazine cash flow story

I am looking to add to the pool of newsagents I am working with on researching the cash flow implications of the magazine supply model.  While I have good data from my benchmark participants, I want to extend the reach to ensure the best possible representation.  This next round of magazine performance data will be the most comprehensive ever gathered for newsagencies.  I plan to make good use of it on behalf of newsagents.

If you would like to participate, please email me privately at mark@towersystems…

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magazine distribution

First business buyers grant

State and federal governments have used first home owners grants to stimulate the building industry.  I am surprised they have not established first business buyers grants to encourage first time business buyers to enter the marketplace.  This could be the stimulus needed to increase the sale of businesses.

Newsagencies are excellent businesses for anyone buying their first business.  Talk to just about any broker around the country and you will discover that there are plenty of newsagencies for sale and not too many moving.  A first business buyers grant could be the encouragement prospective buyers need to get into the market.

I’d like to hear what the politicians seeking our votes think of this idea.

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Newsagency challenges

How many sudoku titles is a reasonable range?

sudoku-titles.JPGAt one of my newsagencies yesterday morning I counted thirteen different sudoku titles.  Thirteen! Obviously, the magazine distributors think that is not too many.  If I complained, I am sure they would claim to have sales data showing that this level of supply is justified.  In my view, this level of range of sudoku titles it is not justified in my newsagency.  If I carried half the range I bet my total sudoku title sales would not change.

Distributors say we can early return product.  Sure we can, but we pay the freight.  They say that we can control supply through their website and other processes.  Nonsense.

Australian magazine publishers often complain that newsagents don’t engage with their titles and miss opportunities to grow their businesses.  That is because we are drowning in junk, like some of the sudoku titles in this photo.  We need these Australian publishers to help us to get distributors from abusing newsagents.  If they can help reduce the overseas junk for a start we will have a publishing and retail businesses.

We also need to take firm action ourselves to exert more control over our assets.  We pay the rent and wages bills after all.  I hold no hope at all that newsagents will do this though.

Sure we complain.  But we don’t organise ourselves.  Too many industry leaders are seduced by a nice lunch, sponsorship for an event, a trip or some simple ego stroking to deliver the strong leadership newsagents need on this issue and to push back against this appalling behaviour.

In today’s marketplace, with magazine sales falling, newsagents must act on inefficient supply.  Too many newsagents are losing too much money for the current situation to continue.

We compete with supermarkets, convenience stores, petrol outlets and others for magazine sales and while the newsagency channel accounts for 50% of all magazines sold in Australia, I suspect we have the least control over supply.  That is how it feels at least.

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magazine distribution

Driving impulse sales for Prevention magazine

prevention-tactical.JPGWe are have tactically placed the latest issue of Prevention magazine (out yesterday) between New Idea and Australian Women’s Weekly for the next week to drive impulse purchases.  We also have Prevention in its usual area with women’s health related titles as well as on the dance floor of the store. Our obsession with basket size is working with growth achieved in July 2010 compared to July 2009.

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magazines

The other Zoo Weekly display

fhn-zoo-aug2010.JPGThis is the other Zoo Weekly display we have created in our newsagency at Forest Hill – the main display being at our newspaper stand.  This is on the back of the ACP basket builder stand and is seen by shoppers as they leave our (mainly) men’s magazine aisle.  As they walk past this display they can easily see the stand by our newspaper stand – that’s the plan at least.

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magazines

Chasing the Zoo Weekly $1.95 customer

zoo-tactical.JPGZoo Weekly is $1.95 this week and that means that driving impulse purchases of the title is easier than usual.  We have stock next to our main newspaper stand as well as the usual location for the title.  The stand has been deliberately set so that picking up the magazine is easy for customers reaching to purchase the Herald Sun.

While I am not a fan of these cover price discounts, I understand that they play in getting infrequent customers sampling the title.  I want to do everything possible to sell out as early as possible in the week.

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magazines

Using Schapelle Corby to sell magazines

new-idea-tactical.JPGWe have placed New Idea next to our main newspaper stand to attract impulse purchases over the next few days.  We know that a Schapelle Corby cover story works well for us so it makes sense to leverage this to the max.  We also have  New Idea in its usual location with our weeklies.  The floor stand makes it easy to move the title around.

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magazines

Latest MasterChef issue off to a great start

masterchef-aisleend.JPGSales for the latest issue of the MasterChef magazine are excellent if the data I have seen is anything to go by.  Achieving a sell through of 75% in the first three days for a monthly magazine is excellent.  In one of my stores, we have sold out.  In that location MasterChef was used to attract shoppers to the store by way of a display facing into the mall.  Hopefully we can get extra stock and really push sales figures for this issue.

Newsagents I have spoken with on the weekend have reported excellent results.

While some in publishing circles are wondering what will happen now that the TV show is off the air, my feeling is that clever promotion and the forthcoming Junior MasterChef TV show should see the magazine continue to do well.  Customers love it and they are happy to say so across the sales counter.

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magazines

Ripper book sale in July

book-sale-july2010.JPGRevenue from books in July was up 38% compared to July 2010 at our Forest Hill store.  This is a brilliant result since around 75% of books are purchased on impulse.  The remainder are purchased as a result of external marketing we do to drive new traffic based on the book offers. With an excellent margin, the value of the sales increase is considerable.

The success of the book sale is down to the work of our in-store management and team – constantly moving stock, refreshing displays and engaging in tactical placement in the store away from the book sale.

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Book retailing

Excellent day two at GNS Market Fair in Victoria

tower_gns_melbourne.JPGThe second day of the GNS Market Fair in Melbourne today was excellent.  Busy.  Plenty of newsagents through.  My feeling is that it was busier than last year.

Congratulations to GNS for such a good fair.

I split time between the Tower Systems stand and the newsXpress stand.  Both did well, coming away with new business and leads from newsagents keen to do business.  You know you are doing well when competitors spend time watching your stand.

I enjoyed the business discussions I had with many newsagents and many newsagent suppliers today and yesterday.  There is a developing conversation among many around the question of basket size and how newsagents can improve this.  This started off at the recent Newsagency of the Future sessions and is now developing more widely as more in the channel realise that this is a key issue and opportunity for us.

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Newsagency management

Employee theft a hot topic

Since my blog post yesterday about employee theft I have received more than fifty emails, twenty phone calls and plenty approaches at the Melbourne GNS Market Fair from newsagents wanting to know more and or wanting to share their stories.

Almost everyone I spoke with agrees that it appears more prevalent today than a year ago. There is no discrimination on business size, geographic location or any other factor.

Here are nine suggestions for cutting employee theft in your newsagency:

  1. Use your technology.  Smart Newsagency Point of Sale technology provides tools for uncovering theft.  Use these.  But ensure that employees do not have access.
  2. Background check. Ask prospective employees for permission to do a background check. Those with something to hide will quickly “find” work elsewhere.
  3. Zero tolerance. Lay out your policy on theft on a sign in the back room or other part of the business. Make it clear that you have a zero tolerance policy on theft and be clear on the consequences of being caught.
  4. Pay above award. One reason employees say they steal is that the business does not respect them. Paying above average, even a small amount, can show that do you respect them as better than average.
  5. Spot check. Do a spot check of cash during the day. Do a check of the counter for cash hidden or notes of an amount being recorded so an employee knows what is ‘theirs’ in the register.
  6. Be open about the business. Let your employees know how much money the business is making. This is usually less than they think you are making. Making them more informed may help them realise that the business is not a ‘fair’ target.
  7. Change: the roster; empty the bins. The regular pattern of a retail store makes it easy for employees who are stealing to get away with it. Chase the process without announcement every so often and be prepared for the change to uncover theft.
  8. Vigilance: check your computer system; check the counter; balance every day. If an employee thinks they can get away with even petty theft they may. It is vitally important to be vigilant about business process and cash management. Balance the cash register every night. Query discrepancies. Make the operators responsible.
  9. Don’t steal yourself. If employees see the business manager or owner taking cash for coffee or other small personal expenses they will see this as a right for them. If you need cash for these purposes do it out of employee sight.

Yes, I know, I was not following my own advice. That is a lesson in itself.

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Newsagency challenges
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