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

Month: May 2011

Newsagents can’t afford a wage rise

Newsagents may need to consider making their own case to authorities which consider award wage increases.  Given that the majority of what we sell is at a fixed price and on a slim margin, we have minimal capacity to respond to cost pressure such as wage rises.

Take newspapers.  The Daily Telegraph has not increased in price in twelve or thirteen years.  How much have wages risen in that time?  Plus rent?

Given the amount of priced price slim margin product we carry I do think we should make our own case.

What do other newsagents think?  Can you afford a wage rise?

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Newsagency management

How to promote your newsagency to retirees

The retiree (or seniors) marketplace is a lucrative for a newsagency.  We are a natural and comfortable place for retirees to visit and shop.

Retirees they tend to be loyal and engaged in word of mouth marketing about good retail experiences. They can also be flexible about when they shop and this is where a retail business can really leverage the opportunity.

Before you can market any retiree service or benefit you need to develop a plan for handling the opportunity. What products will be offered and at what special prices? The most common approach is to offer a flat discount to retirees, or seniors as they are called in some marketplaces. This discount is usually between 5% and 10%.

Price is important to the seniors marketplace since they either have a fixed income or are living off finite savings. They like businesses which help them save money.

You will also need to decide when the discount or other offer is available. Some businesses make the offer available only on certain days, usually the quietest days of the week. Others offer access to the benefits all the time. Think carefully about the needs of the business before deciding when you will provide access to the benefits – focus on the business outcome you want to achieve.

In terms of accessing the benefit, it is common and fair to ask for some form of proof of eligibility. This could be in the form of a drivers license or a seniors card as is available in some locations. This is a card usually issues by local government. Sometimes, it is issued by residences.

An alternative is to create your own retiree / seniors card for use in promoting the business. These should be professionally designed and produced. Ensure that such a card is respectful and something these customers would proudly carry. Design the card so that it promotes the benefits you offer – so that it is an extension of your marketing program.

Whatever method you use to identify your retiree customers, it has to be simple to use at the counter for processing the appropriate discount.

To market a business to retirees consider these options:

  1. Train employees to offer the discount or other benefits to someone who looks eligible. While this could cause embarrassment, it could also extend the word of mouth around the offer.
  2. Advise local government authorities that you offer a benefit to retirees.
  3. Contact local clubs and organisations likely to connect with retirees.
  4. Promote the benefits in-store and in your business newsletter. You want to spread your offer as far and wide as possible, so that retirees beat a path to your door.
  5. Visit local retirement residences and offer assistance.
  6. Advertise in trailer parks.
  7. Look up clubs, such as caravan and camping clubs, on the Internet – there are plenty of groups, clubs and forums for older folks traveling around. They share tips about places they like.

The value of the retiree market to your newsagency will depend on the value of the offer available to them and how widely you promote this. While some retailers see retirees as a chore others see a business opportunity.

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Newsagency management

Do you order more magazines when you sell out?

bhg-may2011.JPGI was talking with a newsagent this week who does not reorder an issue of a magazine when they sell out.  They took this position after receiving knock backs from both distributors to most extra stock requests.  They had become disillusioned given that 19 out of 20 requests were knocked back with the message that there was no stock available.

While I hear that too, if it is a popular title, part of a current ad campaign or a high profile title, I will go to the publisher to seek out stock.  Many times it can be found.  I do this because i want to see how far beyond the allocation we can drive sales.  The Justin Bieber one-shot is a great example from this year, Slow Cooker is a great example from last year.

Take the latest issue of Better Homes and Gardens.  We sold out in ten days.  Thankfully we were able to get extra stock and we are set to sell out of that … and in the process we will have stopped people finding stock elsewhere – maybe a supermarket.

While ordering extra stock can be disillusioning, I’d encourage newsagents to let publishers know as this will help with their planning and give them feedback they can use in discussions with their distributor.

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magazine distribution

Hello Kitty set to sell out

kitty2.JPGWe are set to sell out this weekend of the first part of the Hellp Kitty partwork.  We gave it a good crack at the front of the newsagency as well as behind the counter (see photo) – with the goal of selling out early.  We will wait to see how the weekend goes before deciding on ordering more stock.  It all depends on the impact of any advertising being done by the publisher supporting the title.

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magazines

Australian Model Engineer magazine publisher disses newsagents

I like Australian Model Engineer magazine and its place among special interest titles I carrry, especially Australian special interest titles.  That said, I was disappointed to have the following text from a recent issue rawn to my attention:

And talking about getting your magazine … if you normally get yours from your newsagent, have you been having troubles lately? Over the last 3 or 4 months I have been contacted by an increasing number of people saying that their newsagent does not have the current issue. In fact yesterday one chap rang to see if we were still in business as his newsagent has not had the last 3 issues.  What happens is that several pallets of magazines are shipped directly from the printers to Gordon & Gotch who then distribute to the newsagents around the country.  The distribution by G&G is totally beyond our control and we have no input at all.  It seems to becoming increasingly erratic where they send the magazines and I have noticed a decline of our newsagency sales over the last 3 issues.  Fortunately this is offset by an increase in subscriptions. What I am suggesting is that if you find you have trouble getting it at your newsagent you should consider subscribing. Subscribers usually get the magazine a week earlier and pay about $1.00 per issue less for it. And they are guaranteed that they will get their magazine.  Think about it.

Rather than hurting the businesses which have supported and carried Australian Model Engineer magazine for many years, the publisher could invest time in resolving any distribution problems.  They could also engage with newsagents in a marketing campaign and invest in growth.  Many readers of Australian Model Engineer first discovered the title when browsing in a newsagency.  Telling readers to ignore our channel will see fewer of us carry the title and this will have a negative impact on the magazine.

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magazine distribution

Co-location of crosswords helps drive 25% growth

cwords.JPGWe have a selection of titles from well known crossword brands (Lovatts, Woman’s Day, That’s Life, Mr Wisdom and Puzzler) in a stand which is facing shoppers as they leave our newsagency.  This is in addition to our crossword section toward the read of the store, next to women’s magazines.

This co-location is part of what is helping is generate a 25% increase in units of crossword titles sold.  Seriously, 25% year on year growth.

Thanks to our pocket counting we are certain that more than half the growth is coming from this display unit.

The success of this unit in driving incremental crossword sales for us goes to show that there are other locations in newsagencies which can work for products besides the best location facing shoppers as they enter the store.

Publishers who push newsagents for billboard displays and the very best locations could be losing sales by not taking a more tactical approach.

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crosswords

UFC magazine struggling

ufc-slow.JPGWe are struggling to sell UFC magazine at anything near the volume achieved for the near sell-out issue 1.  We are featuring the title with an in-location display and have given it a co-location run as well.  The interest isn’t there.  It may be that UFC magazine is less of a newsagency channel title and maybe more of a convenience or other channel title.  Only audit numbers will ultimately tell.  In the meantime we are looking to scale back our stock exposure as there is no point in unopened bundles sitting in the back room.

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magazines

Promoting Women’s Health magazine

mag-whealth-may11.JPGWe are promoting the latest issue of Women’s Health magazine with this mall-facing display.  It’s the other end of the Men’s Health display which I wrote about yesterday.

This feature placement is in addition to location of the title in the women’s fashion category, next to marie claire.  Research indicates that sells well Women’s Health from this location.

This front of store location will remain up for a week, hopefully attracting shopper traffic from out in the mall.

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magazines

Coles makes phone recharge about price

colestelstra.JPGCheck out the ad which ran on the back page of mx newspaper in Brisbane yesterday.  Coles is making mobile recharge about price, showing that they can’t win on service and other differentiation points with other retailers offering recharge, like newsagents.

I am surprised that Telstra is connected with this campaign with Coles.  Newsagents do more to support Telstra and drive sales of handsets and new Telstra than Coles.  I bet we sell more recharge than Coles too.

The implied 20% discount offered by Coles of smacks of desperation.

To counter this latest push from Coles, newsagents in the recharge space,, and that is most of us, we should look at handset and other opportunities to leverage off their campaign.  We should also remind our team members to offer recharge over the counter.  So many times just asking for the business can win it for you.

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phone recharge

How some US newspapers are reaching more readers

According to the US Audit Bureau of Circulations, the average circulation of the 80 largest papers in the country dropped 2.6% in the latest audit.  Some newspapers, however, have significantly increased their audience. The Chicago Sun-Times, for example, increased its audience 48.41% in the latest audit.As the table published by the Audit Bureau of Circulations shows – it’s if the fourth table down on the website.

This growth in audience, driven by digital strategies, will be of interest to Australian newspaper publishers.  My sense (still) is that we are currently a couple of years behind US newspaper trends because of the different distribution model.  This gap benefits publishers and newsagents considering a model for the future.

I hope that newsagents read this and other data and factor it into their business plans.  I am.

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Media disruption

Promoting Men’s Health to attract customers

mag-mhealth-may11.JPGWe are promoting the latest issue of Men’s Health magazines with this display at the front of the store.  The display can be seen from out in the mall as well as from inside the shop.  We are primarily using this display to attract shoppers from the mall.

We feel that for us Men’s Health is a title people do not buy as a destination purchase and figured the best way to work on this was a front of store display.

I particularly like that the poster is headed ON SALE NOW!  This is a terrific headline for this type of display as it implies a call to action.

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magazines

Queensland is recovering

I was fortunate to spend today with a bunch of newsagents at a meeting in Brisbane.  They hailed from the suburbs as and way beyond.  Some traveled up to five hours.  Anyway, you could not have met a more happy, positive and pro-active group. While the floods interrupted their businesses and families five months ago, they are focused on the future.  Many had stories of how far they have moved on.  They were inspiring.

Reflecting on the day and how so many have got through the tough situations presented by the floods, I am left feeling good about the newsagency channel if this is what we are made of.

Taking each day as a challenge to move forward, for this group and many Queensland newsagents, and what they have achieved in a few months as a result is a lesson for all of us next time we stand still and complain.

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Newsagency management

The 5 cent coin is redundant

I agree with those talking up the need to kill off the five cent coin from our currency.  Doing so would benefit newsagents and other retailers.  We have the rounding principles in place already so process-wise it would be an easy move to implement.

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retail

Where are we headed with EFTPOS and other bank fees?

I am concerned at the lack of engagement on the issue of soon to increase EFTPOS fees.  Newsagents and other retailers, it would seem, just don’t care. When I try and talk with colleagues about the issue too often they switch off.  It is as if they do not feel connected to the issue.

Here is what we know … soon, in a matter of months, small businesses like newsagencies will face EFTPOS fees which are less competitive than the fees we have today.  We will either have to soak up increased fees or pass them on to our customers.  Either way, we lose. Our two big supermarket competitors will not have these fees.

The decision which led to this situation was made by EPAL, a company controlled by the big banks plus Coles and Woolworths – as I blogged a few weeks ago.  If you want to see where this EFTPOS fee issue could play out then read Swiped: Banks, Merchants And Why Washington Doesn’t Work For You which appeared at The Huffington Post last month.  In this excellent article, Scott Carter and Ryan Grim have outlined where EPAL, the big banks and their big retailer mates could be taking us – consumers and small and independent retailers. Check out this excerpt from page 2 of the article:

Banks began issuing cash cards in the 1970s as a tactic to automate services and cut labor costs — more ATMs meant fewer bank tellers and check processing costs. When swipe machines were first introduced in stores, banks actually paid some merchants to accept debit cards. Later, swipes became free, and once debit cards had become ingrained in consumer culture, banks began charging merchants, and the costs keep going up.

Click on the second link in the excerpt above to read The interchange fee rip off an article by Felix Salmon published by Reuters last year which goes to the heart of what we face.

Despite the spin which EPAL is brilliantly distributing to politicians and others who challenge their decision, we can expect that fees for small and independent retailers and other businesses will increase.  And while EPAL will say that is a matter for the banks, the genesis of the rise will be the EPAL decision.  It will not end there.  We will face more increases.

The deals and offers from banks to get us to put terminals in our businesses and to hook us on plastic are similar to the behaviour off the drug pusher keen to get a customer hooked.  The first step is so tempting that one does not think there can be any bad on the other side.  Yes, the deals were too good to be true.

We are hooked on plastic and the banks know this.  This is why they think they can get away with the rip off which we are about to experience and which will separate our small businesses from the likes of Coles and Woolworths.

So, newsagents and others here, do you feel like engaging now?  I hope so.

I am grateful to writer and broadcaster Paul Wallbank from for pointing me to the Huffington Post article.

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EFTPOS fees

Little Squares and Slices cookbook a surprise hit

sqslices.JPGLittle Squares and Slices, a new cookbook from ACP Magazines has been a surprise hit for us.  We have already achieved a sell-through of 83% of our initial shipment.  This is a surprise as I expected it to be a soft title, certainly not selling this well for us so soon. Once again I am reminded that I am not my customer.

While sales were helped by tactical placement with one of our displays of weekly titles (see photo), sales have surpassed our expectations.

What makes the performance of this cookbook more enjoyable is that most purchases have been made on impulse.  It is not a destination item … yes, a very nice basket builder.

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magazines

Promoting the Hello Kitty partwork

hellokitty.JPGWe are promoting the new Hello Kitty partwork series at the front of the newsagency in prime position facing into the mall.  We expect it to sell well and that we will sell out of the small allocation we have received for part 1.

Our team chose to promote in this prime location as ours will be the only store in the centre with this product being promoted facing into the mall.  It gives us an excellent opportunity to demonstrate a point of difference.

This practical support we are providing for the launch of a partwork series is far more than you would see if partworks were sold in outlets other than newsagencies – as is the case in the UK.

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partworks

Promoting the Style issue of In Style magazine

mag-instyle-may11.JPGWe are promoting the latest In Style magazine with this aisle end display.  It’s The Style Issue and our team have been careful to try and reflect the quality of the issue with this display.

This is an excellent issue of In Style to promote as it is more likely to be purchased by infrequent purchasers of the title.  I’d encourage enwsagents who have not done so to give this issue feature treatment.

In addition to this feature location we also have the title with our fashion titles elsewhere in the store.  We will run the co-location strategy for a week as space is in high demand.

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magazines

Audit confirms newsagent benchmark study results

The Audit Bureau of Circulations magazine numbers for the March quarter released late last week confirm the results I published here a month ago in the latest Newsagency Sales Benchmark Study,

While I’ll look at the audit results in more detail later this week, I mention it today to encourage newsagents to look at the latest benchmark as it provides information which newsagents can use in developing business plans.

The newspaper decline is also very similar.  We showed 2% in retail sales and the ABC reported a 2.8% decline for capital city newspapers.

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magazines

Have mass merchants broken the Easter Egg?

easter-discount.JPGWhile our Easter Egg sales were okay and card sales increased more than 10%, it was not until we discounted our Easter Egg range on the Tuesday before Easter that we started to move the volume of eggs we had hoped and planned for.

Our Easter Egg range was excellent.  We had it located in prime position for a month prior to Easter.  The display itself was compelling – colourful and pitched at various shoppers.  Our price policy was competitive, a tad under RRP.

What hurt us was the majors in the shopping centre discounting their Easter Eggs 20% and more … and considerably earlier than usual – one even three weeks before the season.  Another was discounting by 50% a full week before Easter.  These are discounts off a better buy price base -the negotiating power of a mass merchant is much better than any newsagent or newsagency group but I do not begrudge them that.

They were supporting their discounting with catalogues and, in some cases, ads in the local newspaper – probably paid for by their suppliers.  I do not begrudge them that either.

Given that it is just about impossible for us to carry Easter Eggs where the products themselves are the point of difference, we either accept that we will not sell the stock or we join in.  So, we joined in on the Tuesday afternoon prior to Easter.  It was like we flicked a switch.  Customers were spending $50 and even $100 at a time.

Talking with one customer who was in the centre daily, they knew that we would have to drop our price.  Their backup was to shop at a major.  While the major did not have exactly what they wanted, it would do … because all the kids are going to do is eat it in a day.

For newsagents, Easter Eggs, like everything we sell, are about margin.  We need the margin because our our business model.  For mass merchants, Easter Eggs are about volume. They want the traffic generation.  Also, they make money outside of the actual margin from the sale at the register.

My view is that mass merchants have killed what was a golden egg at Easter for all retailers.  Their lust for low margin volume has hurt all retailers including themselves.  While shoppers will like this, invariably fewer retailers will carry Easter eggs and this is when margin will creep up and shoppers pay the price, once again.

My concern about Easter Eggs has a magazine connection.  Every bundle of current issue high volume titles priced at a discount educates shoppers to look for these deals. I hope that publishers pull back rather than increase their discounting commitment.  However, they appear to be ramping this up this year.

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Newsagency challenges

Book sale attracting shoppers

booksale.JPGAs part of our post Mother’s Day plans, we have been running a book sale facing out into the shopping mall.  This week our focus is cook books – the theme changes weekly.  While stock is thinning, we cover a reasonable range in the display.  Food titles perform well at attracting browsers to the store.

All titles on display are for sale at less than retail yet our margin integrity is maintained for all but the magazine cookbooks which we have in a couple of spots in the display.

Next week, we plan to flip the book display and replace it with a range of brand name toys facing into the mall.

Each of these displays is as much about attracting browsers as they are about driving sales of the products on display.  Getting someone passing in the mall to stop and approach the shop is vital.  Enough look beyond the display itself and enter our retail space to make the time commitment valuable for the business.

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Book retailing

Royal Wedding interest in steep decline for us

The difference in interest among shoppers in the Royal Wedding between last weekend and this is extraordinary.  We could see it in browsing behaviour and hear it in comments from shoppers.

We plan to pull back of the display space we have allocated to Royal Wedding titles – to two displays.  No point in promoting something shoppers make it clear they have moved on from.

I know from talking with other newsagents that they are not experiencing the same decline in interest.  It is something for newsagents to watch carefully.

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magazines

The new category delivering $900 a week

stickerfamily.JPGSome months ago newsXpress released the My Family sticker range from The Sticker Family.  Like all newsXpress offers, it was not mandatory – members can choose which offers they take up and which they do not.

Almost since the launch of the stickers, we have been selling $900 (ex GST) and often more a week worth of these stickers in one of my newsagencies.

newsXpress negotiated a group wide discounted price and backed the opportunity with a package of strategies and tactics designed to help newsXpress members make the most of the opportunity.  Embracing these strategies and tactics was optional for newsXpress members.

I know of some newsagents who heard about the Sticker Family range long before newsXpress got involved who did not think this range appropriate to a newsagency business.  The key was to delve into the product range, research consumer motivation, develop a pitch which works with the newsagency customer and back this with appropriate collateral.  It is the total package which has got me to the $900 a week which I am seeing.

Granted, I am getting this result in a major shopping centre situation.  Still, I am happy not only with the $900 a week revenue boost but am also loving the excellent margin, that customers attracted to buy the stickers buy other items and that some customers shopping for cards, magazines and newspapers buy stickers on impulse.  The range is a winner on many fronts.

My analysis suggests that the total boost in weekly revenue driven by the stickers is around $1,400 a week ex GST.

I like the stickers because they are a habit based product, they appeal to families and they generate good word of mouth.  Three key factors for newsagents in today’s market.

Any retailer can access this range.  Success will depend on the value you add as a retailer in terms of strategies and tactics to underpin the range … as is the case with so much of what we sell.

Just putting a product out is not enough in retail today.  We need to be fully engaged to attract shoppers and convert their presence into dollars.

I don’t make a point of talking about many of the  newsXpress success stories here as to do so would not be fair to the newsagents who pay newsXpress to access the point of difference the group delivers. I am making an exception this time as the product is so well established across the group.

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Newsagency management

140 magazines available through NOOK app

Nook Gets A Huge Update For Android Tablets With Access To Over 140 Magazines

This is the headline on a Business Insider story from a couple of days ago about a new Android app for tablet PCs. These 140 magazines were only available on colour NOOK devices. Not, they are available on all Android devices with the app.

With the use of tablet PCs growing exponentially, expect more announcements like this one.

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Media disruption
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