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

Month: March 2012

Tapping into Cadbury national advertising

We have on display as part of our Easter offer. I was therefore thrilled to see the full page advertising being undertaken by cadbury promoting this product. It was in Who a week back.  They have also setup a Facebook page which has attracted 4,000 followers.

One reason I love supporting nation brands is for their advertising spend which can drive traffic and or impulse purchases. People who have seen the advertising more quickly ‘get’ a product when they see it in-store.

This is our first completely Cadbury easter and we’re thrilled with how it is playing for us so far. I love the mix of products and that they have tapped into fun and are supporting this advertising and social media engagement.

By the way, we have kept eggs to a minimum … Easter for us is about plush, collectibles (Beanie Kids), cards and fun Cadbury items.

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confectionary

Meat and newspapers?

Check out the promotion being run by Woolworths and the Adelaide Advertiser. To get the $10 discount off meat you have to purchase the newspaper. An interesting deal which at first glance seems an odd fit.

It feels like News Limited newspapers and supermarkets are been running more of these promotions – buy the newspaper and get a ‘deal’ at the supermarket.

After yesterday’s story in The Age about Coke and supermarkets I wonder why any supplier would want to deal with Coles or Woolworths. They’re like a spider, luring you into their web and they slowly kill you.

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Newspapers

Free gift with Harpers Bazaar damages the look of a quality magazine

The folks at ACP magazines would be disappointed to see the damage to our stock of Harper’s Bazaar today. file the magazine itself is in tact, the card holding the free gift is crumpled and ripped in many cases. This damages the product in the eyes of the shopper.

I like the gift with but not the way it has been packaged with Harper’s Bazaar. A quality magazine does not look so good on our shelves.  I have seen in the past that such damage can be a turn off to shoppers and dilute the sales bump the publisher is seeking by providing the free gift.

After I took the photo we adjusted the stock to place the less damaged copies at the front of the display.

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magazines

Tapping into Modern Family interest

The latest issue of Mad magazine has a cover story (well, not so much a story but a spoof in Mad tradition) on the popular Modern family TV show. We are tapping into the opportunity by placing the full cover on display. This makes sense since we’re serving an area where we suspect the show would be quite popular.

Mad is picked up by people interested in the target of a cover story, I’ve seen this happen several times. The key is to get the magazine in front of those people. Hence the need to consider where the title will work best.

For this issue of Mad I am thinking with TV Week for some copies at least. Sometimes a tactical placement can work better than a flashy display. Eyeballs is all you need and it’s what you place a magazine or a product next to which can work a treat.

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magazines

Good to see Minister for Small Business in Cabinet

It is good to see the federal government elevate the position of Minister for Small Business to Cabinet. This move is long overdue. Hopefully Brendan O’Connor, the new Minister for Small Business, uses the higher profile for the benefit for the small business constituency.

Start up smart has good coverage of the appointment.

I would prefer the Minister for Small Business to have had small business experience. O’Connor’s website indicates he is a lawyer with a trade union background. I think there should be a cap on the number of lawyers who can be parliamentarians. I’d set the cap at 10% for each major party.

Time will tell what kind of Minister for Small Business Brendan O’Connor will be.  Here is what I would like to see him push on behalf of small businesses:

  1. An urgent review of Fair Work with a view to eliminating casual employee penalty rates in roles sought out by people not looking for full time work. This could cut labour costs for newsagents on Sundays in half.
  2. A genuine reduction in government red tape. Successive governments have promised this. None has delivered.
  3. Strengthening laws and processes for ACCC in dealing with unconscionable conduct and unfair treatment of a big business over a small business.
  4. A government wide campaign to purchase everyday office items from local businesses. Yes, selfish but we should try! We should match with a national pricing offer.
  5. The introduction of an annual pool of funding for small business start ups with generous tax concessions. They fund films to attract spending here why not businesses?
  6. Establishment of fixed interest working capital funding for small businesses.
  7. Development of portable bank accounts and capping loan exit fees – to make switching banks easier.
  8. Ensuring genuine small business representation at government events, discussions and roundtables – too often politicians of all sides suck up only to the big end of town.
  9. Focussing on IT by way of tax concessions for 100% Australian owned companies under $10M in annual revenue creating intellectual property in Australia which aids business productivity. Yes this is a selfish idea (I own and IT company) but it is also smart. A stronger IT industry will bring money to our shores, reduce the brain drain and boost business productivity. Get this right and we could deliver more benefits for the economy than mining.
  10. And to kick start small business and businesses which provide them with equipment and services: a once-off investment allowance in any productivity improving investment such as plant and equipment, knowledge or people.

I wish Brendan O’Connor well. I hope he goes into the portfolio with a small business focused agenda and that he is a man of action. The sector certainly needs this.

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Newsagency management

Why the increase in Your Trading Edge magazine?

Check out our sales and return data for Your Trading Edge magazine.  Click on the image for the details.

We should be getting four copies of Your Trading Edge based on sales data. The geniuses at Gordon and Gotch disagree.  They or their systems increased us from form to eight and then to nine. There is no justification for this.  I looked through the latest issue to see if it was special in any way, if it could generate extra sales. I found nothing out of the usual.

So why the increase in supply?  All I can put it down to is Gotch having extra stock and needing to put it somewhere. Gotch people will deny they di this. They have denied such behavior to me in the past. I don’t believe them. The only alternative is that their allocations system is stuffed and I think that is more unlikely than them deliberately sending stock they know I have no hope of selling.

Magazine publishers should look at this data. Newsagents have this detail available at their fingertips at their sales counters.

Click on the image and see the detail for our newsagency. You will see why newsagents make irrational early return decisions. They will see oversupply like this situation and strike back without thinking. They will strike back for cash flow reasons and to punish Gotch – they will often not care which publisher they hit.

This is why there are so many irrational early returns.

If you publish titles distributed through Gotch you need to ask them how they respond to irrefutable evidence like this.  Publishers tell me that early returns are killing the newsagency channel for them. I agreed with that.  However, I do not agree that all early returns are the fault of the newsagent. There are many titles oversupplied like this example of Your Trading Edge. A newsagent with 50 or 100 of these unjustified oversupply situations a month is sure to strike back. It wears you down. Especially when you get spin and lack of concern from the distributor.

If you wonder why newsagents are angry, the answer is here.

If you wonder why newsagents early return any title without thinking, the answer is here.

If you wonder why newsagents are reducing magazine space, the answer is here.

If you wonder why newsagents leave the channel, the answer is here.

Fix this problem and you strengthen the newsagency and channel and, maybe, sell more magazines. Seriously!

There are people at Gotch who think I have an obsession about their business and criticize it unfairly. I’d welcome an opportunity to engage in a public fact-based debate on any Gotch related issue I raise here.

Footnote: based on the latest issue of the title I’d accept a supply increase to five. However, Gotch would not have used that data for the latest issue’s allocations.

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magazine distribution

Are they rationing The Monthly?

We received way too many copies of The Monthly summer edition and returned almost all. The latest issue with a Kevin Rudd cover we received a quarter of the summer allocation and will sell out. We are chasing more stock and hopefully will get this. It is frustrating to be oversupplied for the long on-sale issue and cut back too far for the regular monthly issue.

The Monthly is one of those magazines where our sales very much depend on the cover story. If we had had enough stock from day one we could have sold four times the allocation.

To those in publishing businesses who throw their arms up at this – a newsagent saying they don’t get enough of this an too much of that – it happens. Walk in our shoes for a month and you will soon see the craziness of the magazine distribution model which causes us such frustration.

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magazine distribution

Tapping into David Bowie fans

We have plenty of baby boomers shopping with us so it makes sense to promote the latest issue of Rolling Stone magazine with a double pocket display. The David Bowie cover is stunning – it has excellent visual cut through.

This is a good example of when showing the whole cover is vital to achieving the sales potential of a magazine. Sure you get a feel for the Bowie theme if you can only see the top third but the whole cover … now that’s a different story.

We will be giving this issue of Rolling Stone some time with newspapers – to get it in front of Bowie fans who may not browse our music titles.

I’d urge all newsagents with a good baby boomer population to give this issue of Rolling Stone time in the spotlight.

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magazines

News Limited columnist talks down retail

The Sunday Herald Sun today carries a column by Terry McCrann, Bleakest of views from the shopfronts, in which talks down retail off the back of some poor numbers from Woolworths and JB HiFi. McCrann’s column is ignorant.  It lacks attributable facts.

Okay, some sectors of retail are doing it tough. Some geographic areas too. Plus there are differences between high street and regional.  But there are plenty of retailers growing. McCrann ignore this. Maybe because it does not fit his style.

McCrann also makes them mistake of politicians and many media outlets – despite knowing that small business retail is the backbone of retail in this country he relies on big business experiences to support his opinions.

A smarter column from McCrann would have sought to understand the differences between the business which are growing and those which are not. It could be that there are decisions retailers can make to trade more successfully in the circumstances in which we find ourselves today. That’s what I think … that there are decisions we can take to improve our own situation.

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retail

Steady rain drives sales

Here in suburban Melbourne we have not had the floods of some parts of the country. The steady rain we have had has been a boon to shopping centre traffic. yesterday, for sample, sales jumped 25% on the back of a packed shopping mall. Most departments benefited from the traffic increase. It was a retailers delight!

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Newsagency management

Sunday Retail Marketing Tip: loving habits

Shoppers who shop based on habit are tremendously valuable to retail businesses. Likewise, shoppers who shop to satisfy habits (obsessions, hobbies and the like)  are tremendously valuable.

A habit based shopper to a newsagency would / could include any of the following:

  • The magazine shopper who visits for every issue of their favourite magazine(s).
  • The magazine shopper who browses the shop to satisfy interest in specialist topics like model railways.
  • A partworks collector.
  • The lottery customer who puts tickets on at least weekly.
  • The card shopper who gets cards for all (or most) card-giving occasions.
  • The tobacco product shopper.
  • The customer who purchases replacement ink cartridges and or printer paper.
  • The daily newspaper shopper.

Customers who shop with you out of habit are, as I have noted, tremendously valuable. They need to be encouraged, respected and loved.

Here is the marketing tip, or question, what are you doing to attract, keep and love your habit based shoppers? What is unique about your offer that gets them back and more of them back? Is it that good that they talk about it to their friends?

A good place to start in considering habit based retail is to make a list of the products and service you offer which fall into the habit based category. Get your team involved in this, listing every item which could meet habit based criteria.  Hopefully, as you create this list you will think of ways to better connect with and serve these valuable habit based shoppers.

While this idea may seem simple and almost of questionable value, I am certain that you will unlock ways to making more money from habit based shoppers – by looking at a type of shopper you may previously not have look at in this way before.

Love your habit based shoppers and they will love you back. You can bank on it!

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marketing tip

Beware the Magazine Vending

Magazine Vending (Vending Locations Australia Pty Ltd) is offering magazine businesses for sale based around selling magazines through a vending machine.  Their franchise opportunity marketing indicates a supply arrangement through ACP Magazines.   While their ad at Trading Post does not name ACP, they certainly hint a relationship.  However, I have been told that the supply contract associated with ACP titles has been terminated.

The ACCC has started asking questions about Magazine Vending.

I understand that at least one legal challenge against the business has been launched.

Anyone considering taking on a magazine vending franchise should undertake thorough due diligence into the business, their purported suppliers and their principals. The due diligence will get you further information including accessing a blog post with plenty of comments about magazine vending.

Anyone who has a complaint in relation to Magazine Vending should raise the matter immediately with the ACCC. The Enforcement Operations office out of Western Australia is handling the matter. Fax: 08 9325 5796.

For newsagents there is the other issue of why put magazines into a vending machine. Magazines are available more widely in Australia than any other country. Why dilute sales for retailers supporting the product?

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Ethics

Merchandisers acting as spies

Is it just me or are magazine publishers sending more merchandisers into our newsagencies to take photos of displays of competitor products? This is poor form in my view. If a supplier is paying for a resource to visit my shop it should be to add value too my business. Further, they should ask before they photograph something other than what they have done.

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Ugh!

Driving Better Homes and Gardens sales

We are promoting the latest issue of Better Homes and Gardens magazine with this display on a column facing shoppers as they enter the newsagency. This is one of three promotional initiatives for this issue of the top selling title. We have a stack of copies with newspapers.  We also have a bold in-location display.

We’re confident that our three initiatives will help us drive incremental sales for the title, especially over this first weekend.  Indeed, sales of the issue are already good and this will only get better over the weekend.

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magazines

Promoting The People’s Friend brand

We have all three current titles under The People’s Friend brand stripped across at the front of a chest-level magazine display. Of course, we are chasing purchases of all three. This is one time I don’t mind that a Christmas title arrives in-store so late as I expect it to sell well. Australian lovers of The People’s Friend brand are used to season shifting in my experience.

One newsagent asked my why I’d give up prime space to a low price point title … the price of a single copy of The People’s Friend is not the issue for me, it is that they are habit based shoppers and their value over the course of the year is vitally important to the health of my newsagency.

I think some newsagents neglect to see customers through the the prism of value over a year.

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magazines

US print advertising collapse

The Atlantic published a report, The Collapse of Print Advertising in 1 Graph, on Wednesday which included this graph. Talk about a picture telling the story. The report has been widely reported online. It pulls no punches:

You sometimes hear it said that newspapers are dead. Now, $20 billion is the kind of “dead” most people would trade their lives for. You never hear anybody say “bars and nightclubs are dead!” when in fact that industry’s current revenue amounts to an identical $20 billion.

Pile the figures from the US on top of the figures released last week for local newspaper publisher Fairfax and you start to get a sense that it’s game on for the future of newspapers as we know them.

Regulars here will know that I have had doubts about the viability of newspapers for some years, certainly the viability in the context of mass distribution through newsagents. Publishers have addressed the viability question by holding the cover price down and causing newsagents to be fa4 worse off today in real terms than ten years ago. They have also addressed viability in terms of home delivery by not allowing newsagents to charge a delivery fee which addresses the real costs of landing a newspaper in a subscribers yard.

The share price of newspaper publishers, especially those earning the majority of their revenue from print, reflects the challenges of print.

All of this is important for newsagents to consider as they wait for News Limited to talk with them abut their plans for the future in terms of newspaper distribution.

I liked this paragraph from a report at Business Insider about The Atlantic report:

The good news is, contrary to the fears of some doomsayers (also generally people who worked for newspapers), the world has never been better informed. Thanks to blogs, Twitter, Facebook, Google, two billion online fact-checkers, and some amazing online news sites—including some run by newspapers—we now know more faster than at any time in history, by a mile.

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newspaper home delivery

Where do you place your Country magazines?

I place Country titles with Home and Living titles – in fact, at the start of this section and next to our popular UK and TV magazines section. This prime placement makes sense to me. That said, I know of plenty of newsagents who think they are better situated with Craft magazines.

Our own sales of Country titles are up by more than 10%. This tells me our placement strategy is right.

I was talking with Mark Darton, Circulation Director of Universal Magazines about this recently and this is some of what he had to say:

The Country genre sits in the” home” category and the latest ABC  audit figures highlight the year on year growth of the other competitor titles in the category. Below is an excerpt from Network Services Audit analysis as always it’s important to look at the numbers as well as the % change by title. By way of comparison we have seen a similar growth but aligned to the issues under the new editor.

The message to newsagents is the Country titles should be displayed in the home category and not Craft. Grouped together and they can compete from there. This sub category is in growth and worth some attention to capitalise on that growth.

Universal is investing in this category as we expect it to be strong over the next 12 months.

In the latest circulation audit, home declined by -1% but this masks what was actually a good period for the category. Country Home Ideas (+13%) was the third fastest growing title in the Audit, whilst Belle (+6%), Aust Home Beautiful (+5%), Real Living (+5%), Aust House & Garden (+4%), and Country Style (+3%) also recorded gains.  Three titles recorded a loss in sales; Aust Handyman (-19%), Inside Out (-10%) and Vogue Living (-1%).  Better Homes & Gardens remains the category leader with total sales of 378,048 (a fall of 2% this Audit).

Click here to see a sales alert from Universal Magazines about Australian Country Collections.

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magazines

Luxury Travel oversupply by Gordon and Gotch fails

Two months ago I wrote about the unjustified increase in supply of Luxury Travel magazine by magazine distributor Gordon and Gotch. The title has failed to work, it did not sell. It has spent the two months on the shelf, taking up a pocket, not selling a single copy. And, yes, we gave it time in the best spot in travel titles.

While the magazine geniuses at Gordon and Gotch will no doubt say that there is a reason they increased my supply from 2 copies to 5 and that I am wrong to complain here, they will have no evidence to support their position. They made the wrong decision to increase my supply. Indeed, it looks to me like a cash grab – they had spare stock and had to place it somewhere since I suspect they make more money shipping magazines out than holding them in the warehouse.

Magazine publishers wondering why newsagents early return their stock need look no further than this blog post. It is this type of unjustified magazine oversupply which causes some newsagents to struck back, early returning product without looking at sales data.

Fix whatever caused the unjustified oversupply of Luxury Travel and you take a good step toward fixing magazine oversupply.

Let’s look at the consequences of the Gotch behaviour with this title. They increased my supply from 2 to 5. They supplied on the last trading day of December.  They got their distribution fee and they will get their return fee. They also got my cash for the extra 3 copies for a while. There are some newsagents who think this is the key game of magazine distributors – cash management.

All I know is that Gotch has failed yet again and no amount of spin from the top of the company can excuse this appalling and on-going behaviour. The evidence speaks for itself.

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magazine distribution

Promoting Google magazines

We are promoting these two Google related titles together and at the front of our technology section.  I expect they will sell well – especially positioned next to each other like this.

Sales of technology titles are up, especially titles about devices such as the iPad, iPhone and Android phones. Sales of traditional computer titles continue to fall. I am surprised that they some are still published given the low sell-though.

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magazines

Tap into media coverage for Australian Property Investor

Newsagents should take action tomorrow morning with Australian Property Investor.  Their metallic red flagship Hot 100 issue will be receiving extensive press coverage across national, metro and regional newspapers, radio and TV this month. The media coverage kicks off tonight with a story on Channel 7’s Today Tonight.  The Australian Property Investor Hot 100 suburbs list has become an institution among business and investor consumers. It’s an easy issue to sell to those who do not usually purchase this magazine

I urge newsagents to act on this title.  Place it in a high traffic location … make the most of the excellent media coverage.

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magazines

Setting the record straight

This is what Bernard Zimmermann, Director of POS Solutions published at his company blog today:

After what happened last week where many of my clients got cut off EFTpos. It is a concerning when now EFTpos is between 25% to 100% of a retailers’ income, there were two major outages once with Westpac last Tuesday and almost everyone down on Thursday. This week CBA went down on Monday morning. That is three major outages in less then a week.

I do not think it is fair. Many retailers are paying extra to do their EFTpos with the majors and they should be getting reliable service.

Anyway we got concerned so I decided to ask Tyro about their record.

This is their response.

Dear Bernard,

100% availability and PCI PA-DSS certified

I hope you are doing well. It is absolutely amazing to see the escalating numbers of EFTPOS outages, glitches and failures that major retail banks deliver and the disruptions it causes to businesses and consumers. It is not rocket science, but only requires an investment into innovation and infrastructure to make the payment system resilient.

Bernard goes on to republish the full email from Jost Stollmann, CEO of broadband EFTPOS provider Tyro.

The correspondence Bernard quotes was sent by Tyro to all their software partners.  I confirmed this with Tyro.  I and several colleagues at Tower Systems received the email from Jost.  It was not sent in response to a request from POS Solutions.

I felt it important to share this and set the record straight.

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EFTPOS fees

Gerry Harvey needs to own his situation

Gerry Harvey’s business has a tough time and he’s like the school kid in trouble trying to get you to look at the other kids rather than focus on him.

You are now seeing more retailers go broke and out of business than I have ever seen in my life.

That’s a quote from Gerry Harvey published yesterday by the ABC. He’s more extensively quoted in The Age this morning.

Gerry Harvey needs to stop talking down retail and news outlets need to stop letting him get away with this.

Harvey Norman’s poor figures are theirs to own. They need to accept the situation and address it and not suck up space and air time talking about other retailers.

Okay, retail is tough. But there are plenty of good stories, stories of same store year on year growth. Especially in the small and independent retail area where the owner of the store runs the store and where there owner of the store lives and breathes essential customer service knowing that the buck stops with them.

The Harvey Norman stores are from an old retail model where customers were treated like mugs and they got away with it. His shrill advertisements made it sound like his prices were great when they really weren’t. He pitched interest free finance but was it really?

I don’t remember Gerry Harvey every spruiking a point of difference which he could own. Anyone can win on price. Anyone could negotiate with a finance company for ‘interest free’ financing. Today’s shopper armed with the ability to easily compare price can see that Harvey Norman is not as cheap as their ads make out.

Price is not a valuable differentiating factor for a retailer.

Had Gerry invested in genuinely good customer service and relationships which were embedded with the local community he might have had goodwill on which he could rely.  But, no, he thought it was about price (even though his prices were not that good).

The lesson from the Harvey Norman problems is that customer service is king in retail. It drives repeat traffic and with repeat traffic you drive cash flow and cash really is king.

Retail is in the middle of the most significant paradigm shift in decades. Gerry Harvey’s model is struggling to navigate this.

I see more newsagents and other independent small business retailers embracing more change every month than Gerry and his business achieve in a year. That’s because our livelihood in small businesses is on the line every day. With Gerry and probably the directors of his company the food on the table is covered by other investments and assets. They are not acting like they are fighting their their business. They have become lazy.

That’s why Gerry complains so much about online and GST on imports. He wants other people to own what is really his problem.

Many small and independent retailers have just the one core asset, their business. No wonder they are smarter.

I’ll delve more into this issue at the Newsagency of the Future Workshop series next month.

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Newsagency opportunities

One Direction set to take Friday

One Direction tickets go on sale this Friday and since we’re a Ticketek outlet we are set to have a shop full of girls for ,ugh of the morning. We have been selling tickets for quite a while and never have we had so many calls of visits about a ticket on-sale. And these girls are relentless in wanting to know stuff. The make AFL finals customers seem tame by comparison. We’ll make the most of the opportunity with up-sells targeting the One Direction demographic.

As an aside, tickets are $72 each. People have money for things they love.

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Newsagency opportunities

Promoting That’s Life and the Maggi Tender range

The latest issue of That’s Life needs nothing more than being placed in front of shoppers. We are fortunate enough to have the title bagged with a pack from the Maggi Tender range. We are making the most of the opportunity by placing the title at the counter and on an impulse display on the lease line facing into the shopping mall.  We want to sell out by the weekend and introduce (or re-introduce) more of our shoppers to That’s Life.  That’s Life is the kind of title which is not often browsed so I am not that concerned that it is bagged.

Now before some newsagents say they did not get this promotion. Yes, this happens from time to time. Publishers add value to divergent channels and parts of a channel from time to time – go check out the fantastic bag which comes with the latest AWW in Woolworths at the moment.

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magazines
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