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

Month: March 2012

Online lottery sales start in the US

Illinois is the first state in the US to offer online lottery sales and its causing a bit of a stir. It’s been interesting reading some of the comments online, concerns by retailers and the like … in the context of Australia having online lottery sales for quite a number of years.  For example, 7-Eleven is calling for government protection, citing concerns at the prospect of loss of jobs as a result of online competition.

The petroleum marketers have weighed in on the issue too:

“They say that with the Internet lottery, you will see a reduction in foot traffic and a reduction in ancillary sales, and because of the income loss, it may mean a loss of tax revenues and there will be a significant loss of business revenue,” Bill Fleischli, executive vice president of IPMA & IACS, told the newspaper, adding, “If that happens, you would see a reduction in the workforce.”

My recollection is that here in Australia the key argument was for retailers like newsagents to try and tap into revenue from online sales. This worked only in a limited way.

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Lotteries

Selling legal services in a newsagency

One of the WH Smith newsagencies I saw in London last week was promoting a legal firm at the front of the shop, in what otherwise would be a relatively dead part of the business. The promotion is about getting you to take literature and make your own contact with the solicitor.

This particular WH Smith business (on Oxford Street in London) is big with a large range of magazines, books, stationery and greeting cards and a bunch of other product in-between.

While this space to one side out the front of the store would be a challenge to fill with any product requiring customer service or which could be stolen, it felt odd to me that they were promoting a legal firm here.  That said, if it works, keep doing it.

I wonder what a lawyer would pay for this space?

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Newsagency management

Bridal glasses drive traffic

Check out the bridal wine and champagne glasses display crated by the team at one of my newsagencies.  This display faces into the mall, and pitches the glasses at a very competitive $4.95.

Our margin is 80% for one of the products and 90% for the other. Talk about the value of opportunistic buying.

What I like about the terrific display is that it promotes an excellent value product offer  with a visually exciting and fun display. The display is not your usual newsagency visual merchandising display.

Glassware is a strong product category for us, delivering excellent year on year growth. Some shoppers are attracted by these products while others visit for a magazine or a card and buy a glass on impulse.

The side benefit of the bridal display is that it helps to promote our range of bridal magazines.

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Gifts

Promoting Australian Move to Mac magazine

We are promoting Australian Move to Mac is a couple of locations as the gift which comes with the magazine alone costs far more than the cost of the title in some shops.

iPhone users would understand the value of the free cable with the magazine.

I’d encourage newsagents to get this title into a prominent position – with the gift on show.  We are seeing good sales of these product specific technology magazines.

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magazines

Inked Australia magazine uses Facebook to drive newsagency traffic

The publisher of Inked Australia and related tattoo magazines has excellent and successful social media engagement, connecting people interested in their titles through their terrific Facebook page.

I love that they actively promote newsagents as the place to purchase their titles: Inked Australia, Inked Girls and Inked Artists. This type of external promotion direct to a community of close to 30,000 people who have declared their interest in the titles can be more valuable for our retail channel than in-store marketing collateral.

Whereas posters and other retail collateral promotes a title once shoppers are in-store, this Facebook engagement around the Inked titles targets getting people into newsagencies where the titles are sold.

I would not have known this had the publisher not made contact with me.  Here is some of what the publisher had to say in as email to me recently:

As a very small publisher based in Sydney apart from walking into as many newsagents I can – it’s good to get a perspective on the frontline of newsagents. Your Blog is a good resource for this, the challenges you face – what works for you and what doesn’t. Like all publishing we are all battling to manage change and develop sustainable business models.

In regards to your latest posts regarding Social Media I thought I would make you aware of one of our magazines Inked Australia/NZ– we have 12 issues a year (6 of Inked Australia, 4 of Inked Girls and 2 of Inked Artists)

In the last 2 years we have managed to grow our Social Media page  https://www.facebook.com/InkedAustralia to:

  • 29,500 fans 90% of which are Australia and NZ based.
  • 55% women 45% Men.
  • It grows now between 500-1000 fans per month and has done since we started the page.
  • We have NOT spent any money with facebook this has been purely organic growth through interaction with our readers and fans.
  • Every time and issue is about to hit newsstands we publish a teaser campaign and then show the cover and push the fans to the local newsagent.
  • As you can see (attached screenshot) the main page always has driver to newsagents and we reinforce this on a weekly basis.
  • Put simply Time and effort to engage our readers have resulted in our community growing and we are seeing a result in sales (Slowly BUT its getting there)

I would encourage all businesses to engage with facebook – after all its free to use and its great to get one on one feedback with customers.

Beyond the support for newsagents by the publisher of the Inked titles, this blog post is a reminder to newsagents to engage with Facebook – in a clever way which reflects the uniqueness of your business … in a way which connects with your community.

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magazines

Newsagents miss an opportunity to try a new magazine distribution model

Not enough newsagents engaged with the publisher Vintage Caravan Magazine and their invitation to order the magazine for direct supply.  Newsagents ordered less than 10% of what would be sold through the channel.  It is no surprise therefore that the publisher has decided to use the traditional approach of magazine distributor drives scale out.

So, for all our bleating about problems with magazine distribution, we don’t appear to want to try an alternative.

I respect the publisher of Vintage Caravan Magazine and what they tried to do. I also understand their decision to go back to the traditional route to market as this is vital to the commercial success of the title.

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magazine distribution

Great cover for National Geographic

I’d urge newsagents to seek out the current issue of National Geographic magazine and ensure that the full cover is on show. The clover is one which could / should drive shopper browsing … and browsing leads to sales.

We know we have plenty of dog lovers shopping with us, based on sales of dog calendars and other dog items. Hopefully, by putting the full cover on show we can drive sales of this title.

Our sales of National Geographic are all over the place – I think because it is a title people do purchase based on the cover story.

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magazines

Promoting Women’s Health magazine

We are promoting the latest issue of Women’s Health magazine with with this double space allocation in the usual location for the title as well as an aisle end display capping our women’s aisle. The placement in the photo sits between the health section and the women’s fashion section, it can be easily seen by anyone in the aisle given the double space allocation.

This is another example of where the full cover display is important for driving sales of the issue – it shows off the book of fifteen minute workouts.

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magazines

Liking the different look for Zoo

I like the different look for the cover of Zoo magazine with the current issue.  When I first saw it I was tempted to place it next to our women’s weeklies – having Kim Kardashian at the top of the front cover would get the title browsed by people who usually would not consider it. In the end we left Zoo in its usual area but with the full cover on show.

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magazines

Gerry Harvey gets more airtime for his spin

I was disappointed to see Gerry Harvey on Lateline last  night continuing his doom and gloom pitch about retail in Australia and the threat of online.  While I agree with some of Gerry’s comments, especially around politicians being out of touch and not understanding business, his overall pitch of doom and gloom for retail and that small businesses in particular are struggling was not clear or pitched well.

Gerry Harvey does not speak for retailers. Sure he makes for good TV with his shrill voice and hand movements, but he does not serve our cause well.  Retail businesses, large and small, need to deliver clear and consistent messages around the core opportunities for maximising government return from small and independent retailers:

  • Labour costs. Penalty rates based on day or week and time of day for casual workers need review. These flexible hours suit many people and are therefore not a penalty. Most retailers don’t have an opportunity to pass on the penalty costs they for opening on weekends and late in the evening.
  • Rent. We need consistent retail tenancy laws in Australia. We need a consistent and low cost approach for handling tenancy disputes. Landlords need to be forced to publish real traffic numbers by door quarterly. Tenants need easy get out options if a centre fails to deliver reasonable traffic growth.
  • Capital. Funds from the Future Fund, or some other sovereign fund, should be allocated to small business development loans. The return would be better than what the Future Fund has achieved so far yet with a cost to business much lower than current bank rates.
  • Government purchasing. As I noted a couple of weeks ago, government purchasing of everyday items fro local businesses, ensuring that government offices are putting back into their local communities.

For more ideas go to my Small Business Minister TO DO list from March 5.

Profitable small and independent retailers are more valuable to government. We are more likely to invest in our businesses.

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Newsagency management

News Limited loses Circulation Director

I am told that News Limited Circulation Director Catherine Woodside has resigned from her role with the company. This will be a blow to newsagents who have been waiting for more than two years for an outcome from News’ review, led by Catherine, of newspaper home delivery arrangements.

It was Catherine who responded to the newsagent associations following my News Limited in crisis on newspaper home delivery post of last month. Besides denying there was a crisis she established yet another round of discussions to talk through home delivery plans for the future.

Catherine’s reported departure is on the back of series of leadership changes within News Limited since Kim Williams took over as Managing Director. Crikey yesterday carried a report from an anonymous writer from within News Limited about the staffing changes going inn in the organisation. It starts with:

“In the continuing saga of executive management cuts at News Ltd (Macourt, Baxter, Howard, Klose, Bulmer, Sligo, Eilert … and you haven’t yet reported on Evan Hannah or Michael Prain) there’s another indicator of the big changes in management approach and culture. The long-stated and cherished policy of honouring loyalty is out the door. It was a hallmark of former CEO John Hartigan’s reign, which he stated time and again that loyalty was to be acknowledged and rewarded.

And ends some paragraphs later with:

“These ‘redundancies’ have made many of us middle and senior managers very, very nervous. Doing your job well, and having years of solid service behind you, count for nothing in the new News. And what about the Boston Consulting boys now embedded in Macourt’s old office.”

I don’t know the story behind the departure of Catherine Woodside from News Limited.  The concern for newsagents will be that their point person within News through the more than two years of consultation and analysis in pursuit of the newspaper distribution model of the future is no longer at the company.

While it is only speculation I do wonder if Catherine’s departure is in any way related to the apparent decision by News over a month ago to delay moving on the newspaper distribution model, thereby extending the period of uncertainty for distribution newsagents.

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newspaper home delivery

Homespun magazine selling very well

We have achieved a 71% sell through of the latest issue of Homespun magazine from Universal Magazines and we are only twelve daysd into the on-sale.

This sales success for Homespun reflects the success we have been enjoying for many of our quilting and craft related titles since we completed our full magazine relay in September last year. This relay project included creating a new location and better space allocation for quilting and craft magazine titles.

What is interesting is the basket analysis – we are getting quilting and craft titles into more baskets. We have increased customer traffic as well. This gives us a bonus … more traffic PLUS more sales to each customer.

There are newsagents who comment here about margin, saying they prefer to focus on better margin product.  While I want better margin as much as the next person, I also embrace opportunities to grow the margin dollars I bank, this is what driving sales efficiency is all about. It’s what we have done with quilting and craft magazines and indeed all magazines since our complete relay last year.

Given that our magazine range is the only point of difference we have as a retail channel, I urge more newsagents to take more interest in magazines. Growth is achievable as we are seeing here.

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magazines

Promoting TV Week and One Direction tickets

We have giving the latest issue of TV Week and the One Direction ticket promotion prime positioning this week. Since we know the interest of shoppers in our area in One Direction this prime space allocation makes sense.

We have punched the collateral up a bit with something of our own to make the ticket offer clear … and hopefully drive sales of this issue of TV Week.

This is a smart promotion by TV Week as it taps into obvious interest in the group from the UK and connects this with the Logies marketing campaign for the magazine.

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magazines

Promoting Cleo eligible bachelors issue

We are promoting the Cleo 50 Most Eligible Bachelors issue with this tall column based display which faces shoppers as they enter the business.

You can’t miss this display, it grabs your attention from outside the newsagency which is terrific since we are not giving up and window or other space – this display draws them in.

With the booklet attached to the front cover, this is the type of magazine issue where the entire cover needs to be on show – this protects the booklet and it shows the bonus content with this issue.

 

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magazines

Tweeting cancelling the newspaper subscription

It’s the kind of Tweet you don’t want to see but it reflects the challenge faced by newspaper publishers the world over … a Courier Mail home delivery customer cancelling their subscription having migrated to the digital offer.

Newspaper publishers spent too much of the last seven years in denial about this migration. This kept the challenge off the radar of many newsagents.

The challenge for the newsagency channel today is that many newsagents remain in denial.

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Media disruption

Gotch increases supply of Hair magazine without justification

For no reason at all the ‘magazine experts’ at Gordon and Gotch have increased our supply of Hair magazine. Barely a week ago I noted here that the sale of hair magazines was declining. Instead of the four copies of Hair we should receive – based on our sales – the Gotch experts increased our supply from four copies four issues ago to seven copies of the latest issue. Click on the image to see the evidence.

Te senior managers at Gotch can spin their behaviour all they like, this increase in supply of Hair is another example of appalling unfair behaviour. It is the type of behaviour which leads newsagents to early return other titles.

If you are a magazine publisher and have been told by Gotch that they treat newsagents fairly, click on the magazine oversupply link on the right to see more stories like this. Newsagents around the country see supply increased without justification. This appalling behaviour is, in my view, one of the biggest threats to the future of magazines in newsagencies.

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magazine distribution

Bad cover design for bathroom book

The cover design for the Australian House & Garden Bathroom Book is a missed opportunity. If you put the title into the type of filtering in most newsagencies you miss that it is the Bathroom Book.

We are lucky in that we can place the title at the front of our bathroom section and show the full cover. Many newsagents would not have this opportunity. Some probably didn’t even notice the specialist nature of this title … I wouldn’t blame them.

If sales do not meet expectations it could be due to this oversight.

While I am no design expert, there must be a way to show the bathroom connection in the top third of the cover.

Publishers need to get this stuff right if they maximise sales opportunities. It seems to me that some simple traditional newsagency like magazine fixturing in the design studio could help deliver better covers.

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magazines

Ah, chocolate, wine and newspapers

I was looking for some different magazines to promote with newspapers for a few days to change things up a bit. When I saw the cover of Food Network Magazine and Wine Companion the decision was easy. Chocolate and wine are favourites with many people … aren’t they?

I think it is important to give lower volume titles time in the spotlight. Besides being good for the titles, it is good for us as it shows products which customers may not know we carry and may not go looking for.

We make moves like this for one reason only – to drive sales.  We try and leverage key traffic drivers, like newspapers, to achieve sales of other products, like these two magazines this week.

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magazines

Sunday marketing tip: 10 free to implement ideas for driving retail sales

Here are ten free to implement ways newsagents can drive sales in their business:

  1. Stop looking at your counter as your customer service hub. By the time people reach your counter they have most of the items they wish to purchase. The shop floor is where you can do the most to drive sales.
  2. Include coupons (ads) on receipts.  These should be designed to drive incremental business and / or bring customers back sooner.
  3. Run a loyalty program, not a competition but a loyalty program.  Track what your customers and buying and reward them.  Also, target marketing based on sales.
  4. Make offers: buy two and get three.  Use the catalogue facilities in your software to make the offers.  This is where you can separate your business from others retailers with the same products – by creating packages.
  5. Consider installing a LCD customer display – run ads between sales and DURING sales.  Make sure that your ad slide show is consistent and focusing on a category.  We have had a lot of success with mobile recharge ads in my own stores.
  6. Run an employee rewards program.  Set sales targets and offer bonuses and rewards for over achievement.  This helps employees understand the role they play in driving your sales.
  7. Use your top selling items to sell other items. Your top selling items are a magnet – what do you have near them? What do you have facing sippers heading board and away from them?
  8. Track everything in the front third of your shop.  Change these items regularly.  Be ruthless – if something is not working, quit it.  For example, I look at the sales from spinners every week.  If they are not giving me a return I look at moving or quitting them.
  9. Include a sales pitch / marketing message on your statements.
  10. Email your customers once a month with news and offers.

This list is by no means complete. Hopefully, reading it will help you one up with your own ideas which are appropriate to your needs.

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marketing tip

Gerry Harvey misses the point on the retail paradigm shift

Gerry Harvey was a guest on Radio National’s Saturday Extra program this morning. You can listen to the interview and read feedback comments here. Harvey was preaching his usual message: that the $1,000 GST free threshold on imports is hurting retail in this country and that overseas retailers facilitate fraud by allowing Australians to purchase expensive items and get a receipt which is under the $1,000 threshold.

Host Geraldine Doogue did not challenge Harvey as she should have.

In London earlier this week, I heard some major retailers openly talk about Australia as being a hot and lucrative market for them. One fashion retailer talked about the $1,000 tax free threshold and the high Australian dollar as providing them with “extraordinary” sales.

While I think the federal government should address the $1,000 threshold on imported consumer purchases, I don’t see this as the cause of Gerry Harvey’s problems. Retail has changed, especially in the area of higher ticket price goods such as those sold in the Harvey Norman stores.  Consumers are better informed today, they have more options.  From a shop floor they can price compare and purchase from a competitor for next day delivery.

We are moving from retail model built on labour intensive distributed warehouses with high overheads to a model of fewer warehouses and lower overheads.  However, this is not a point A to point B shift. It is evolutionary. This is why retailers are talking about omni-channel retail today. This is a transition model because, frankly, they do not know where we will end up. This is not an end game – from the day the first retail business opened the model has been in play.

Gerry Harvey’s challenge is that he has built a business almost completely around a price perception. His route to market was relentless advertising. Advertising is working less today. People have smart mobile devices and other means through which they can discover price options.  Had Gerry built his business around a value proposition which it could genuinely own then they could have taken their loyal shoppers with them. Gerry is now learning that price does not drive loyalty. His millions of dollars in advertising has not been an investment in the future.

So, what does all this mean for newsagents? We will be as challenged as any other retailer. We have the opportunities of other retailers too … opportunities to adjust our business model. Many of us have customers who are loyal because of unique and appreciated customer service or because of a unique range of products. We need to develop business plans to evolve with our customers as their approach to shopping evolves.  The biggest mistake we could make right now would be to stand still.

We are confronted with more opportunities than ever before.  Now is the time for us to embrace these, leveraging our existing good and quite unique traffic from our core products and building our own businesses for the next generation.

I will explore these and related ideas in the Newsagency of the Future workshop which starts in Perth on March 26.

In the meantime, listen to Gerry Harvey because his message today will be a topic of analysis by retail experts in the future.

Footnote: Gerry Harvey sooked about how people react to what he says. He needs to understand that he has done nothing in his business to develop loyalty. Price is not a unique selling proposition.

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Newsagency challenges

Promoting Apple related magazines and funky app toys

One of my team members put together this effective display at one of our sales counters promoting Apple related magazine titles along with the appRacer, appCopter, appWheel and appBlaster – all fun toys which you operate through your iPhone or other Apple device.

The magazines sell the toys and the toys sell the magazines.  The two types of products together like this pitches us beyond a more traditional magazine outlet.

I like it a lot and was thrilled to see it in-store.

Okay so we are selling toys priced at close to $80, some of them at least. I am confident they will sell.  I know that right now we are the only retailer in Knox City with these … and we have the best display of the ASpple related magazines here too.

This display to me is also about embracing the magazine opportunity, seeing beyond the 25% and focussing on banking margin dollars from impulse purchases.

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magazines

Promoting Smith Journal magazine with Frankie

This is the main Frankie / Smith Journal display in one of my newsagencies. It faces shoppers as they walk through the store.  I say ‘main’ because we have more than one. Each title is located in two other places.

The photo does not do display justice as it looks more washed, faded, than in real life.

I like that we are educating shoppers here about the two titles being somehow related.

Elsewhere in the newsagency, Frankie and Smith Journal are not located together … we have them in the more usual locations for each title to catch sales to those who will regularly purchase them.  We’re tracking sales, chasing growth on the previous issue of each.

I know I go on about these magazines but I cannot stress their importance enough. Frankie and Smith Journal are loved by and connect with an age group which is vitally important to our businesses. The more we show these younger shoppers that they can rely on us for magazine entertainment the brighter our future.

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magazines

Collingwood Beanie Kid the most popular so far

I know there is a risk with this post in that it might attract a few natters (on both sides) but here goes… We sold out of the Collingwood Beanie Kid collectors item in a few days – way ahead of any other team. We;’re chasing more stock as we don’t want to turn away the collectors now that we are known for our range of Beanie kids at Knox City.

So, for me this is not so much about AFL allegiances. No, it’s about serving collectors and making sure that we provide them with the products and services they need to satisfy their desire to collect.  The repeat business is excellent – not only from the AFl range but the broader beanie Kid range we carry.

With the AFL collection, while there is the occasional AFL team nutter they’re usually fun … and that’s terrific in retail.

Footnote: seen my earlier post about Beanie Kids.

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Newsagency opportunities
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