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

Month: November 2010

Beware the iTunes turf war

giftcards-xmas.JPGePay is apparently delivering iTunes cards to newsagents unannounced.  I have received calls from several newsagents who claim this has happened to them.  They have been confused by the unexpected delivery.  Newsagents can sell these iTunes cards but they will need a magnetic card reader for activation based on what I have been told.  The alternative, which I recommend, is that newsagents sign with Blackhawk gift cards.  Blackhawk (delivered through Touch) provides a nice stand and a range of national brand gift cards including iTunes gift cards.  You don’t need a magnetic swipe reader to sell these cards.  Indeed, you most newsagents will be able to use their existing system.

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Newsagency challenges

Small business opportunity for new Victorian Government

Successive state Labor governments around the country have presided over deep cuts to the margin made by newsagents and other small businesses on the sale of transport (Myki) tickets.  This started in 2004 in New South Wales.

In Victoria, the Labor State Government presided over what I would label as preferential treatment given to 7-Eleven to lower their operating costs in selling and recharging transport tickets.  What they facilitated for 7-Eleven they denied for newsagents.

The election of a Liberal National Party coalition government in Victoria is an opportunity them to demonstrate their often claimed support for small business.  They could do this by ensuring that small business newsagents receive fair compensation for the sale of transport tickets.  By fair compensation I mean an increase in real terms to the retailer margin on the sale of transport tickets instead of the decrease presided over by the Labor government.

While there are many other moves the new Coalition government in Victoria could make in support of newsagents, ensuring fair compensation for the sale and recharge of transport tickets would be a good start.

For what it is worth, fair compensation is my mind is 7% of ticket price.

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Newsagency challenges

Promoting on the floor

new-idea-floor.jpegIn our cramped temporary location, finding space for displays is most challenging.  So, we have decided to use the floor to promote the excellent Pictionary giveaway with this week’s New Idea.  We have taped around the edges to protect against scuffing. I’m very happy with the result – it certainly draws attention to the offer and the overall women’s weekly magazine section. Yeah, well pleased with this.

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marketing

Sex slave book from Gotch

sex-slave.JPGGordon and Gotch sent out this book, Sex Slave, to some newsagents with their magazines.  I bet magazine publishers would not be happy with it being treated like a magazine.  Newsagents are certainly not happy – a book at magazine margin, an odd size for newsagency fixturing and delivered late in the month putting newsagents out of pocket for at least a month.

While I am no lawyer, I consider the supply of books to newsagents without giving us the opportunity to say no is an abuse of the magazine distribution model.

I didn’t receive this title so I cannot protest.  If I did, I would certainly protest to Gotch and use any other low cost regulatory avenue available.

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Book retailing

Promoting Quarterly Essay

qe-dec10.JPGWe are promoting the latest issue of Quarterly Essay in a prominent location near our newspapers – to leverage the good media coverage for this issue which went on sale last week.

We have found that Quarterly Essay responds well to media coverage so it makes sense to be tactical about placement.

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magazines

Using (abusing) newsagents to sell books

supersize-book.jpgSome newsagents received this book with their magazines this morning.  Did you?

Magazine distributors should not be sending this type of product through the magazine distribution channel without gaining permission from newsagents first.  Beyond the margin problem there is also the issue of where and how to display the product.  Sure newsagents could put it with other books but they are often remainder books.

As with the John Tickell book last year, supply of this book through newsagents is ridiculous.  It sucks out cash on the last day of the month.  It is an abuse of newsagents.

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Book retailing

Putaway supply: inept management by magazine distributors or a conspiracy?

partworks-ugh.JPGMagazine distributors receive information about pre-sales, putaways.  They know from this data, which is provided as part of the IT standards they established, what a newsagent needs to satisfy putaway requirements.  Why, therefore, do they ignore this and undersupply many newsagents when it comes to putaways?  Are they inept or is there a conspiracy here?  It has to be one or the other since they know the supply requirements of newsagents in advance. Ottherwise, why make it part of the IT standards years ago?

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magazine distribution

Did The Sunday Age sell out yesterday?

In one of my newsagencies yesterday we sold out of The Sunday Age at noon.  The distributing newsagent will not even take our call if we call after noon on any day of the week.  Even though we are only a couple of minutes away they would rather miss the sale than make stock available for us.

Newspaper publishers need to look more carefully at sell out situations in retail only newsagencies.  Our software lists sell outs and the trading time lost.  This is an easy report for area managers to access.  In our case, the report contains bad news, especially on weekends for The Age.

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Newspapers

Profitable angels build a better basket

mag-angels.JPGThese magnetic angels sold well last year so we decided to give them another shot.  We are on track to sell out.  Customers are buying three and four at a time, on impulse.

While the angels make an excellent counter offer, we move them around.  This past week we have been promoting them near boxed cards – with terrific success.

Items like this are about building a deeper basket first and driving margin dollars second.

Okay, so we won’t retire on the profits from this one line.  However, they are an excellent way of driving greater value from the existing excellent traffic we see in our stores, especially at this time off the year.

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retail

Disappointing move by Darrell Lea into Woolworths

dl-woolworths.JPGI have been thinking through the move by Darrell Lea to place their liquorice in Woolworths supermarkets.  It does not make sense to me.  Darrell Lea has been demanding of their licencees for many years, requiring that their product be displayed in Darrell Lea fixtures to respect the brand and requiring that we take a minimum range of product and not just top sellers.

There are many rules, rules which most newsagents have embraced because they want the point of difference that carrying the Darrell Lea brand brings.

Given that liquorice is the stand our top seller for Darrell Lea, newsagents and other Darrell Lea stockists have lost the point of difference.

While we will still sell Darrell Lea to our shoppers, there will be some who stop buying.  These are the regular (pun intended) customers who stop by each week for their bag of Darrell Lea liquorice and nothing else.

This move by Darrell Lea is like the move by newspaper publishers and magazine publishers into supermarkets and other retail channels.  They still require us to adhere to rules which they ignore for their new retail buddies.  We are restricted in what we can do while the new channels have more control – with magazines especially.  The rules for us versus them make us less competitive.

Darrell Lea are doing what they think is right for their business.  Good luck to them.  As a Darrell Lea stockist I am left wondering about all of their preaching for many years about the respect they want from retailers for their brand.  Going into a mass network like Woolworths throws all that preaching out the window.

I saw their liquorice in two Woolworths supermarkets yesterday.  It was lost in a sea of candy and treated the same as the cheap liquorice next to it.  Back at my newsagency, Darrell Lea continues to be treated as a hero product, situated on the Darrell Lea required wood stand and located in just about the best position in-store.

It feels like Darrell Lea does not respect its long standing retail partners.

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confectionary

Promoting to customers as they leave

knox-leaving.JPGThe photo shows the display facing customers as they leave one of my stores.  Our team invests as much time in displays facing customers as they enter as they do in displays facing customers as they leave.

Throughout the store there are displays designed specifically to engage customers as they leave an area of the store.

We watch customer interaction and adjust accordingly.  The displays are significantly changed weekly.

Displays facing out from the front of the store are designed to attract traffic from across the mall.  Displays facing customers as they leave are designed to grab attention up close for easily understood season specific impulse items.

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Newsagency opportunities

The value-add point of difference

book-reindeer.jpgWe have the Hallmark The Night Before Christmas recordable storybook and have been good, until the Target Christmas catalogue came out a week ago.  Target gutted the price of this and a bunch of stock to kick start what I understand has been an awful Christmas for them so far.  Rather than be seen as a direct competitor and lose on price, we have the Hallmark reindeer plush on offer for just $5 extra with the storybook.  These reindeer retail at close to $15.00 so the combined deal is $10.00.  On top of this we have the storybook priced at $5.00 off RRP.  So, the total saving is $15.00.  This takes us away from being a competitor of Target.  Target does not have the reindeer.

The recordable storybooks are wonderful products. They provide a level of emotional connection between giver and recipient which goes far deeper than a regular gook gift.  Kudos to Hallmark for this innovation and their backing of this with a national TV campaign starting tonight on Hey Hey It’s Saturday.

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Newsagency opportunities

Social media trumps real news

I and some colleagues were stuck on a plane on the tarmac at Tullamarine airport in Melbourne last night for more than two hours.  Our flight from the Gold Coast landed just about on time at 8:15pm.  It was 10:30pm when we deplaned.

I checked in with the websites for the Herald Sun and The Age but could not get much information.  Twitter was more helpful.

On the way home in the car I expected to head details of the story on the radio – next to nothing was reported.  Again, Twitter had more accurate information.  I knew this would be the case because of the number of people in the two thousand or so in the terminal waiting for flights who were active on their phones.

This is the era in which we live.  Sometimes, old model news services take too long to get an immediate story out.

Our plane was one of twenty or so which had landed and which were stuck on the tarmac.  Inside the terminal there were thousands affected by Melbourne’s wild weather.  Twitter connected us through this shared experience in a way which old media could not.

It was interesting experiencing this first hand.

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Media disruption

Shame for The Age

age-nov25.JPGThe front page of The Age newspaper on Thursday brought shame on the publisher – Fairfax.  Covering half the story reporting on the tragic loss of life in New Zealand was an ad announcing Here’s a Good News story.  The folks at Fairfax have no one to blame but themselves.  I hope that the editorial team uses this to fight harder against the advertising and finance teams within Fairfax to illustrate the damage their focus on money covering up news is doing to the brand.

Note: I have been on the road for the last two days and did not post this sooner as I did not have the image.  I took this photo from a copy at a Virgin Blue lounge.

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newspaper masthead desecration

Promoting body + soul

body-soul.JPGWe are promoting the launch issue of body + soul with strong displays in my stores.  This is a new title which has grown out of the popular supplement in News Limited newspapers.

body + soul enters the already successful women’s health segment – a somewhat crowded segment in my view.

In addition to a high profile display, we have the title well represented with women’s health titles.  We also have a pocket in with women;s weeklies for this first week of the on sale.

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magazines

Promoting high volume magazines with full face display

spacing-mags1.JPGWe are further trimming magazine range in several categories to enable us to full face display two pockets – as shown in the photo.

Looking at the magazine range carefully, we see an opportunity to target titles which deliver sales or one or two over a month.  We are better serviced by cutting these titles and increasing sales of the high volume titles.

I expect that the net effect of the move will be an increase in magazine revenue.

While the publishers of the lower volume titles will not be happy, I have to make decisions which are appropriate to my business ahead of theirs.

At this stage, we are making these moves in Home & Living, Gardening and Food.  All strong categories where I feel we can achieve good sales growth at the top end of titles.

My frustration is the road blocks at Network Services and Gordon & Gotch to newsagents who want to implement considered decisions like those I am discussing here.  Their automated increase in supply has me bucketing water out of the leaky boat when I can make more money for both of us if they stop the leak from happening in the first place.

I would not implement this across the store at this stage. I think it works best as a pocket of a point of difference – as the photo shows.  these titles stand out from those around them.

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magazines

High returns cost for double magazine pack

magazine-returns.JPGWe sold half of the double back of The Australian Women’s Weekly and Good Health.  A chuck of the margin we made from the sales was lost as we had to pay $8.00 to ship back the returns – yes, these double packs have to go back as full copy returns.  This is a problem with packs which are experimental in newsagencies.

I’m not given a choice on participation and therefore not given a choice on the costs associated with the promotion.  I am happy to consider participation if agreement can be reached on performance and the cost of a pack not meeting reasonable KPIs. I’d expect that supermarkets would have similar requirements.

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magazines

Books make an easy gift

fhn-bookscards.JPGWe are trying a range of books at the end of one of our card aisles.  We made the move as we figured that these particular books are an easy add-on to a card purchase and a valuable margin builder to the sale.  The titles were selected based on what we know to be the interests of many of our customers.

This most was one of a series of changes made in the last week to the store, embracing our mantra of perpetual change.

Indications are that the change is working for us.

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Book retailing

ACP launches more iPad apps

ACP Magazines has launched two more iPad apps, this time for cookbook titles including the runaway success of 2010 – Slow Cooker.

While some newsagents will be frustrated by this, I see it as ACP doing what they need to do for their business.

There is a fundamental shift of retail online and these iPad apps are part of that move.

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Media disruption

Beware of this mobile phone recharge scam

I heard from a newsagent yesterday about this scam.

Someone rings indicating that there is an e-pay issue re a $100 Optus (or any telco) recharge unpaid but issued and now used that they will have to charge to your account. They say that if you print another voucher and read out the numbers they can use that one to cancel our bill.

This is a scam.  Never print a voucher and give the number over the phone.

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theft

Promoting The Australian Women’s Weekly

aww-inlocation.JPGWe are promoting the Christmas edition of The Australian Women’s Weekly with the in-location display in the photo plus a flat stack between the Herald Sun and The Age as well as a four pocket full face display facing customers as they enter the store.

It is a busy issue with the Christmas theme, a cookbook stuck on the cover and a royal engagement souvenir stuck on the back. There’s a lot going on with this issue, maybe too much.  Time will tell.

This issue is too thick to fit two copies in our slim pockets.  So it is one copy per pocket.  We’ll live with that and top up several times a day.  We are contemplating a promotion showing off one or two things from the free cookbook. Retail theatre always works well.

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magazines

Update on banking margin dollars

pizza.jpgFurther to my post on the weekend about the importance of banking margin dollars compared to margin percentage.  We have now sold over $1,000 worth of Junior MasterChef product in less then a week.

The new customers this display has attracted will be valuable beyond the sale as some will come back.  Many bought more than the Junior MasterChef product once they got into the store. We have learnt plenty about attracting shoppers from the mall into the store.

The big lesson is the reinforcement of the importance of margin dollars banked.  You cannot bank a percentage.  Too many newsagents chase percentage without focussing on the alternative of faster movement of more competitively priced product.

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Newsagency opportunities

Customers love different Christmas crackers

crackers.JPGThe different range of Christmas crackers we have sourced this year are loved by our customers.  We have had several comments that they are different to what they are seeing elsewhere.  We’re seeing no push back on price which is a bonus as these are not your cheap and nasty crackers.  Having a point of difference in a shopping centre is a good feeling.

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Newsagency opportunities

Swamped by resumes

School is almost out for another year and we are almost drowning in resumes from high school students looking for Christmas work.  Twenty five resumes in the last week.

Since we are hiring we look at each carefully.  If it’s a no we email, call or write with this news.  I figure that we owe them a response even though their application was unsolicited.

We have a standard email we send to people who get to the next step, asking a few questions.  Their response determines if they get an interview.  We’re hard core.  Having an email address and a mobile phone is essential. Being able to answer questions in an email is an indication of communication skills – the questions are designed to weed out candidates we would not want to hire.

While the hiring process is about us finding a good candidate, it is also our opportunity to provide helpful feedback to candidates along the way – it’s business after all.

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Newsagency management