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

Month: August 2011

Interesting Hallmark range and merchandising in Manila

wrap-manila.JPGI got to see a broad range of Hallmark products in my retail tour of Manila.  From trinkets to bags, the range of Hallmark products was excellent and interesting.  They did not have sheeted wrapping paper like we do.  Instead, there was a large range hung as shown in the photo.  The photo captures only a fraction of the Hallmark wrap range.  Can you see the range of gift cards above the wrap – very nice.

Walking the aisles of this stationery and bookshop I could see an excellent range of wrap, gift bags, gift cards, gift tags, bookmarks, gift items and greeting cards – all Hallmark branded.  It was kind of like a Hallmark store within a store. Fascinating.

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Gifts

Magazines in Manila (part 3)

mags-manila3.JPGI noticed several retail businesses in manila selling magazines including this large homewares store.  Yes, those three stands on the right of the entrance all contain magazines.  Each from a different distributor or publisher from what I can see.  I am guessing that they pay for this placement.

I was shocked to see magazines for sale in a homewares store.  Yes, some of the titles – homewares etc – made sense for this type of business.  But selling magazines in such a business, outside of a traditional magazine department was a surprise.

One of the stands was branded for the distributor or publisher while the other two promoted the title categories.

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magazines

Magazines in Manila (part 2)

mags-manila2.JPGThis photo shows a magazine kiosk I saw in one of the mega malls I visited during my retail tour of Manila this week.  The kiosk was the worst retail experience and situation I saw: poorly lit, lousy customer service, products sealed and not browser friendly and no sense of excitement.  Everywhere else in Manila there are happy employees offering help.  Stores are bright.  It was like this magazine stand was the poor cousin of the surrounding retail.  The magazines themselves were layered on top of each other and while the range was good, the overall experience and situation was not inspiring.

All that said, It was surprising to see magazine represented in a kiosk like this.

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Media regulation

Magazines in Manila (part 1)

mags-manila.JPGThis is a magazine display unit at the front of a large book and stationery business I visited yesterday in Pasig City Manila.  It was compact yet showing off the full cover of each title – one title per pocket in most pockets.  Very browser friendly and space efficient – but a visual barrier due to height.  I’d say they had around 300 magazine titles on display so not a big range by our standards.  This size of display was rare in Manila from the two major shopping malls I visited.

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magazines

MILF headline

milf-headline.JPGNot wanting to offend but check out the front page story in The Philippine Star newspaper today. Click on the image for the detail. Maybe the Micro Islamic Liberation front needs a name change to help the headline writers.

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Newspapers

$20 for a one year MasterChef subscription

Check out the $20 one year subscription deal to MasterChef magazine being offered by the publisher through livingsocial a deals website. 4,101 subscriptions purchased in less than twenty four hours.

masterchefdeal.jpg

While I understand the role subscriptions play in the overall magazine supply mix, a deal at this level can only hurt retail sales.  Here we are giving over valuable retail space without any premium return and the publisher trades off this promotion work to undercut our premium offer.

I’ll take this deal into account the next time News Magazines asks me to give them premium space without fair compensation and respect.

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magazines

Leveraging Unique Cars for other sales

magg-uniquecars.JPGWith Unique Cars being the top selling car magazine in Australia, it’s appropriate that newsagents leverage this with prime position and also use this title to drive other titles.  We are doing this with a mini waterfall display several columns into the men’s magazine aisle – as shown in the photo.

We are also making sure that all team members know that Unique Cars is the top selling card magazine and that this status requires it to be given feature treatment every new issue and right through the on-sale.

This extra attention to Unique Cars helps us leverage its top seller status not only for sales of this title but also the titles we place nearby.

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magazines

The second week promoting Feast magazine

feast-knox2.jpgCheck out the refreshed display promoting Feast magazine we have out this week. This kicks up the offer to a new level, connecting with the love of food reflected in the pages of Feast. I like the display because it goes beyond the traditional flat magazine display. It invites browsing, especially the open magazine in the bowl on the table.

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magazines

Promoting Australian Traveller magazine

mag-traveller-weekly.JPGWe have been promoting the latest issue of Australian Traveller magazine with our weekly women’s titles since last week.

With women making more travel decisions (between 88% and 92% of travel decisions according to some) than men this tactical placement of Australian Traveller makes commercial sense for us – and all newsagents I’d suggest.

The other reason for promoting Australian Traveller is that it’s an Australian magazine written primarily for the Australian consumer.  We don’t have that many Australian travel magazines.

Since a key point of difference for newsagents is our local community connection, supporting Australian titles above overseas titles ought to be an easy decision for us.

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magazines

Magazine app video goes viral

Check out the video made by an ad agency to promote the launch in New York of the new App Cosmo for Guys:

The YouTube video has gone viral – over 800,000 views in a few days. It’s pretty cool.

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magazines

Bill Shorten should get his facts right

The Australian Financial Review reported yesterday (page 7) that Assistant Treasurer said last week that shop assistants were paid between $15 and $16 an hour.

If that’s what Bill really thinks he should get the facts. Yes, there are shop assistants on that kind of money. But not adults. No, they are on $21 and more an hour and that is just for regular hours, not weekend or public holiday work.

Bill was probably not thinking about the 9% in superannuation, payroll tax and other on costs businesses carry for each employee.

I encountered the same ignorance from a Liberal politician a few years ago.

Our federal politicians need to spend more time in the real world. They make too many decisions from a position of ignorance.

I’d like to see a system of work experience for politicians, requiring every one of them to do at least two weeks work experience every year in a business drawn at random. The result would be more informed decisions and better representation.

Please don’t misunderstand this blog post. I am not calling for a reduction in wages. No, I am calling for more informed politicians and a more informed discussion about business costs, especially retail business costs.

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Newsagency challenges

Promoting crossword magazines in your newsagency

magcrosswordtitles.JPGWe have been promoting crossword titles with this display located on a impulse purchase unit facing onto the dance floor at one of my newsagencies.  Creating the display took a couple of minutes.  As the photo shows, we built this around the Lovatts titles – we spread their range across the top row and used colour copies of covers to draw attention to the display.

Our crossword title sales are up by more than 15% year on year in part due to our regular promotion of the category outside its usual location in our newsagency.  We have seen a further increase in sales as a result of this additional promotional activity.

I’d encourage all newsagents to do this.  growing crossword sales is easy.  Put well known brands like Lovatts, That’s Life, Woman’s Day and Women’s Weekly crossword titles in front of your shoppers and you will usually see an immediate lift in sales.

This is the type of activity you;d expect from a magazine specialist.

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crosswords

Leveraging interest in all things Egyptian

mag-natgeo.JPGGiven the massive interest in the Tutankhamen exhibition at the Museum of Victoria, we have placed the latest issue of National Geographic in a good location in the hope that it can ride off the coattails of this interest.  The Cleopatra cover story should appeal to those who liked the exhibit.  We don’t have enough stock to go overboard, just tactical placement to sell what we have faster than usual – we’d reorder if that happened.

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magazines

Promoting Murdoch cover story in The Monthly

mag-monthly.JPGGiven how much News Corp. and the Murdochs have been in the news lately we have been promoting the latest issue of The Monthly in a good location so that the full cover is seen.  While not a cover which will drive a large increase in sales, it is sure to appeal to those interested in the media and, in particular, the challenges currently facing News Corp. in the wake of the phone hacking scandal in the UK which is yet to fully play out.

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magazines

iPad use among newsagents growing

ipad-tradeshow.JPGI’ve noticed a considerable jump in newsagents talking about how they are using an iPad in their businesses when we caught up at the GNS Market Fair this past weekend in Sydney and the weekend before in Perth.  The numbers engaged with an iPad this year are up.

The conversation usually started when they saw the iPad on the Tower Systems stand running our newsagency software.  This was a live and practical demonstration of productivity gain opportunities for newsagents.

From in-car use for newspaper home delivery lists through to managing stock requirements when on a trade show floor, newsagents are embracing the iPad as a business tool.

Besides the productivity gains from broader use of technology, there is the benefit of being more aware of how the iPad and other tablet devices can be used in ways which could impact on core parts of the traditional newsagency business.

I have no doubt that playing with technology like the iPad in business will help these newsagents pursue change and be ahead of others who ignore how technology can and will change our businesses.

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Newsagency management

Newsagency sales benchmark results

Analysing the newsagency sales benchmark data for the April – June quarter has been difficult because of the greater than usual difference in numbers between newsagencies.

This difference indicates that it risky to present data to speak for the whole channel. For example, where many newsagents are tracking a decline in magazine sales of 8% and more for the quarter, there is an equal number tracking growth of 6% and more for the same period compared against their performance a year earlier.

The group of newsagents delivering the most challenged results are those in capital city shopping centres. Shopping malls appear to be feeling the pain of retail, just talk to fashion retailers and look at recent news reports.  Those experiencing the best numbers are newsagencies located in regional centres.

I am upbeat about the future as this benchmark study and other indicators are that newsagents who take an entrepreneurial approach to their businesses will reap rewards in sales.   Being average is a mugs game.  Working the conveyor belt will not lift your business.

Here are the headline benchmark numbers:

  • Magazines. Magazine sales fell, on average, 2% (in unit sales) in the April through June 2011 quarter over the same period last year. Just on half newsagents reported a decline in magazine sales. Looking just at April and May, just about all newsagents reported sales growth. June was a very tough month, wiping out many of the gains of the previous two months.  The newsagencies delivering growth are more engaged with the category.
  • Greeting cards. Greeting card sales grew, on average, 2% (unit sales) in the quarter. 70% of newsagents reported growth. I’d say that such of this growth is due to product innovation. Sound cards continue to do well.  Lifestyle appears quite challenged in some areas.
  • Stationery. 60% of newsagents reported a decline in stationery revenue (not including ink) with the average decline 1%.  While I’d need to research this more, I’d say that most newsagents could turn stationery around by getting serious about managing the category. Average does not cut it in this markeplace.
  • Ink. 45% of stores participating in the study have a separate ink department. 90% of these stores reported growth in ink revenue of 3%.
  • Gifts. 55% of the stores in this study have a gift department. 60% of these reported an average sales increase of 3% in gift revenue. Those with a gift department almost the same value as stationery (8% of stores in the benchmark study) reported growth of 10% and more.
  • Newspapers. 80% of participants report an average newspaper sales growth of 2%. This could be due to promotions as they are often bundled in the newspaper dept.
  • Basket size. Basket size did not measurably change.
  • Traffic. 30% of newsagents served 2% more customers than in the 2010 period.

Parallel to this study I have looked at magazine sell through rates. In the first six months of this year they have declined yet newsagent invoices from magazine distributors have not declined. This is a core problem for newsagents and magazine publishers. In the face of evidence of sales challenges, Gotch and Network are not acting responding responsibly.

The performance data is from the Tower Systems Sales Benchmark Study. With 1,752 newsagents currently using the Tower newsagency software, Tower Systems is well positioned to undertake these studies on behalf of newsagents. This three month study is based on sales data from 103 newsagencies, trading under four different banners plus independents, businesses in capital city regional and rural situations.

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Newsagency benchmark

Cheapskate newsagency suppliers

I am disappointed in the number of newsagent suppliers who walk the floors of the GNS Market Fairs touting for business yet who have not stumped up the cash to pay for a stand. These cheapskate suppliers are not investing in the channel like those suppliers who have paid for a stand. Shame on them.

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Ethics

Several magazine promotions working

We have had success with several of the magazine promotions I have written about here:

  • Total Girl with Justin Bieber on the cover.  Sold out.  Ordered more stock.
  • Real Bugs part 1. Just about sold out.  ordered more.
  • Who featuring Amy Winehouse sold out and we couldn’t get more.
  • Girlfriend is close to selling out.

I guess my point is that we can drive incremental business from magazines and then use this new traffic to drive sales in other departments.

Overall, our magazine sales (in unit sales) are up 24% year on year.  This is due to a combination of our energy and focus, beating other magazine retailers nearby with a more compelling offer.  Once the closure of Borders is felt we should see this growth continue.

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magazines

Tasty looking Donna Hay magazine

mag-donnahayaug11.JPGWe are promoting the latest Donna Hay magazine with this front of store display designed to leverage the tasty cover shot.

Donna Hay is in an interesting position in the food title space.  It’s not as packed with recipes as other titles. Donna Hay is offering a more complete experience, beyond recipes, and this is one of the reasons we like to break it out from food titles from time to time.

We newsagents need to do this, break feature titles out and get them in front of customers away from their usual locations.  It separates us from other magazine retailers like supermarkets, petrol and convenience who only do this when they are paid.

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magazines

Promoting Feast to foot traffic

feast-stand.JPGWe have been using the Feast display stand to promote the new title to shoppers passing by our newsagency in the mall.  We have certainly sold inventory off this stand.  We keep the display professional by not over stocking the pockets – we are happy to check it a couple of times a day and top up as needed.  I was in a supermarket yesterday and their Feast stand was overflowing – it looked quite unprofessional.  I guessed they did that as they did not want to manage the stock for a better display.  Some supermarket managers and employees just don;t invest time on magazines.

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magazines

Promoting Top Gear

magtopgear.JPGWe are promoting the latest issue of Top Gear with this in-location display at one of my newsagencies.  It’s eye catching and certainly driving interest in the title.

Top Gear remains an important title in the auto space because it helps attract those who would not usually venture into the car section to look for magazines – hence our regular promotion of the title across nine pockets.  We’ll maintain this space investment for the rest off the first week of the on-sale.

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magazines

Marketing tip: Upgrading your customers as a reward

I was on a cheap red eDeal Qantas flight from Perth to Melbourne last weekend and was thrilled to discover on check in that they had upgraded me to business class. I had been away for a couple of days and was pleased to have the extra leg room and edible food of business class to ease the journey home.

The upgrade experience will give me a warm feeling about Qantas for a small while. They had empty seats on the flight so the cost was minimal. I could reasonably argue that their small investment delivered a good return on investment given the amount I fly.

The experience made me wonder about upgrades we could give our customers, what unexpected benefits we could provide to have them leave our shops with a spring in their step and even kinder words to say about shopping with us when they are next talking to friends.

The following suggestions are about having bonus gifts at the counter to give customers. There are ways we could get these. I am sure some suppliers would help out.

  1. We could offer something we have paid for like a free $1 scratch ticket to customers who spend over a certain amount. Unadvertised or promoted, just given as a simple thank you as part of closing the sale.
  2. We could give a free stamp with greeting cards if they buy three or more cards. Again, unadvertised or promoted.
  3. How about a free shopping list notepad with every stationery purchase for a couple of weeks – with the pad branded to your business?
  4. A free reusable carry bag with any purchase over a certain value.
  5. A free pen with every crossword purchase.
  6. Free gift wrapping with every gift purchase.
  7. A free gold seal for sealing greeting card envelopes.

Key to extracting value from the upgrade is that it is unexpected by the shopper. This makes it more memorable and more worthy of word of mouth promotion by them.

Whatever free upgrade offers you try, don’t promote them, just deliver them during the customer contact.  Make sure that what you provide is genuinely useful.  Remember, you are going for an experience which is unexpected and appreciated.

I have used most of the upgrade offers listed above at one time or another.  They have worked a treat.  The gold seals with greeting cards, for example, worked especially well with older female customers it made them return to use more frequently for the added value which then became part of what they gave the recipient of the card.

So, what upgrade opportunities do you think newsagents could offer?

Footnote: On my Qantas experience, while I appreciated the upgrade and lapped up the business class experience, I’ll bag them the next time they let me down. Every business is only as good as the last contact you have with them. Yes, it’s a harsh world.

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marketing tip

Cosmo for Guys for the iPad

Hearst, the US publisher of Cosmopolitan magazine have launched Cosmo for Guys for the iPad.  They say this is response to guys who read Cosmo and the one third of visitors to their website who are guys.

The CFG app is now available US$1.99 per issue, US$3.99 per month or US$19.99 per year from iTunes.

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magazines

News Limited hurts small business newsagents with free newspapers

I like the coffee from Cibo Espresso. I don’t like the deal they have reportedly done with News Limited which, if what I am told is true, will see News Limited daily newspapers available free from Cibo Espresso outlets.

This deal of free newspapers will apparently run for three weeks starting Monday.

In one instance of which I am aware, a Cibo Espresso outlet has cancelled their order for five newspapers sourced from the nearby retail newsagency to take one hundred free newspapers supplied through the distribution newsagent.  The newsagent in the shopping centre loses a customer.  And while the distribution newsagent wins a customer, at what cost and for what margin?

Every time a newspaper publisher gives away a free newspaper they devalue their product in the hands of the consumer.  They also devalue the newspaper distribution and retail networks established to support their product.

I have seen how free unused newspapers thrown away at a third party location.  I have my doubts about how ‘sales’ are counted.  Are these audited sales?

Advertisers are sold advertising space on the basis that the paid for newspaper is a premium product, readers commit to the product by purchasing it.  Well, thanks to deals like this one at the Cibo outlet, more and more readers are not paying for their newspapers, making it less of a premium product.  Maybe this means they treat it differently … read it less.

I understand the need for publishers to experiment with deals to support circulation.  I am frustrated that they focus on these giveaways while ignoring engaging with retail newsagents on building paid for sales.

The retail newsagent network is an excellent front line for driving sales yet outside of promotions like the recent Harry Potter campaign, they do not engage, certainly not in a smart, fair and business like way.

The next time a News Limited editor thinks about having a crack about the lack of support for small business from government, they ought to take a look at their support, or lack thereof, of small business newsagents. 

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Newspapers
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