The latest issue of Mollie Makes took less than a week to reach a 75% sell-through. We’re increasing our standing order again. This title generates traffic as shoppers come to us seeking it out. These same shoppers purchase other items. It’s an excellent example of a magazine delivering margin dollars beyond the 25% of the cover price newsagents often would think of.
There is money to be made from magazines.
Further to my blog post this morning about News Limited’s T2020 newspaper distribution consolidation trial, News Limited published further information, in a letter today to newsagents. They have also published a Q&A document.
Tomorrow, a new website, www.news4newsagents.com.au, will be launched. It will be a forum for News to communicate with newsagents on a range of initiatives, and newsagents will be able to send their comments to us through a feedback form on the website. Newsagents also have access to direct email contact: newsagents@news.com.au.
I spoke with Catrin Thomas – Director of Retail Circulation at News Limited, this morning about their decision to suspend the T2020 newspaper distribution consolidation trial in Queensland.
The trial itself is what has led to the decision to suspend T2020 as planned and to move to a more free market approach. News will shortly announce details of how newsagents can engage in their locally-driven territory consolidation models. They will also launch a new website to support this.
Catrin advised in the call that News remains committed to consolidated territories but that they will not set a size requirement for a consolidated territory. They are also committed to their public statements regarding financial viability of distribution newsagents. News also remains committed to the separation of distribution and retail activity.
Newsagents will be invited to submit proposals to News. While I expect that Associations will suggest that proposals come through them, I’d encourage newsagents to develop plans and submit them directly through processes to be announced by News.
The challenges encountered in the trial remain and some newsagents who do not navigate these challenges will find themselves in difficulty in the more competitive world that will now emerge. The extent of difficulty will depend on geographic situation and other factors. News is not saying this – it’s purely my observation / speculation.
What has changed are the trial itself in Queensland and the roll out by News down the Eastern Seaboard. The goals and principles remain the same. The move to a more market driven approach will provide proactive newsagents an opportunity to move sooner. It also opens up the prospect of competition from outside a territory. This could play out well for existing newsagents but it could equally intensify the challenges they face.
There is no reason for a distribution newsagents to adopt a wait and see approach. Now is the time to be on the front foot, pursuing change, pursuing what is best for your business. No one can tell you what to do in terms of your business other than the fact that you now need to do something – the timing is yours to embrace.
Footnote: It’s been suggested to me that one or more associations may create a commercial entity through which newsagents bid for and or drive consolidation. I’d see such a move to be outside their role as an association. They have no role to play in operating commercial enterprises.
Better Homes and Gardens had a terrific audit with sales up 2.5% off an already excellent base. We are promoting the latest issue with this aisle-end display, placement next to our top selling newspaper as well as a waterfall display in the usual location for the title. Friday through Sunday we will also have the magazine at the main sales counter.
Newsagents who want to grow sales of Better Homes and Gardens will do the same things and promote the title in two, three and four locations in-store. This extra work will drive incremental business for us. This is one of the easiest titles to grab extra sales of.
I urge newsagents to promote this issue and track sales performance over the next four weeks. Grab sales for your business and bank the results.
We have sold 22 of these Easter-themed Beanie Kid bunnies in less than a week. An extraordinary result further demonstrating the value of the Beanie Kid range for us. This excellent stock turn has strengthened our Easter return and further boosted our confidence into the next part of the season, a season that continues to grow for us.
While I understand Beanie Kids are not for everyone, we’re enjoying excellent results as these latest numbers show.
News Limited has announced the suspension of the T2020 territory consolidation trial under way in south east Queensland.
News Limited now moves to a voluntary consolidation model. This is particularly appealing to Victorian newsagents who have been at the forefront of territory consolidation for years and have been held back by the News T2020 process.
While there will be speculation about the reasons for the decision by News and claims by associations that they have driven this decision, I am certain the company made the decision because it suits them at this time. This is their decision and not something forced on them by anyone.
I see it as a pragmatic decision based on the challenges experienced in trying to consolidate territories in a state where newspaper home delivery has been in crisis for some years. Just over a year ago I claimed that the company was in crisis in relation to newspaper home delivery. They vehemently denied this at the time and engaged in an offensive pitching that they had a plan. Months later, T2020 was the plan.
While T2020 as planned will not happen, I am certain we will see consolidation, maybe faster than the company actually planned.
The needs of News Limited which were driving their pursuit of T2020 remain. Newsagents need consolidation. Indeed, many need the ability to hand back their runs urgently.
In the meantime, there are newsagents in Queensland in the middle of consolidation under the T2020 rules /guidelines who need attention from News. There is even an argument for compensation given the commercial impact of the now suspended changes that they had had ti live with for many months. These newsagents need independent professional advice.
The Daily Telegraph today speculates that Bauer is to close madison magazine soon. Sales fell 23.3% in the latest audit results.
I newsagent colleague shared product efficiency data with me earlier this week which showed that shoppers purchasing transport tickets purchased nothing else 84% of the time. This is in a business with excellent up-sell opportunities in place at the counter and excellent, engaging, customer service.
5% of transactions included a newspaper. Only .3% of the time did customers purchase anything with a margin close to 50%.
As the margin on transport tickets has been driven down by state governments (of all political sides), newsagents have stayed in the game in the hope that the traffic generated by offering transport tickets translates into add-on business.
The newsagent reporting that 84% of transport ticket sales are for tickets alone is not unique. Indeed, this figure for alone sales is low compared to others I have seen – some are as high as 94%!
On first glance it is easy to argue that transport tickets are not efficient and that we do need to assess their value on the margin made from the tickets and not from the hop of selling something else to the customer. However, we also need to consider whether the transport ticket customer will remember us when they do want something else and come back in and purchase other items.
My view is that transport ticket shoppers are blinkered when they need a ticket or a transport card top-up and that it is unlikely they will think of us when they want a card, a gift or something else. They usually get transport related products from us because it’s convenient when using public transport. That’s the mindset they have when coming to us. They’d be in a different mindset when shopping at a more leisurely pace.
I do not believe suppliers of low margin products and services when they say that we will benefit from the traffic they generate for us. This is an argument we need to challenge as there is no data I can see to support such a case.
Okay, I am no psychologist with insights into the minds of shoppers, not even close. But I do watch shoppers and I listen to them. I suspect that many buying a transport ticket don’t even know what else we sell. I suspect most would not think of us when they do want to buy the other items we’d like to sell them.
So we come to the question: are these slim margin products (anything with a margin of 6% or less) worth it to us? This is a complex question we can only answer for our own businesses considering our own circumstances. It’s a question newsagents need to ask themselves. They need to make a thorough assessment based on their own business data and considering future plans for their business.
For me, my newsagency businesses are less interested in these slim margin traffic generators than we are in lower volume, high margin, more sustained products and services that we have more personal control over – products and services so valued by customers that they will seek us out.
I love the licenced AFL card range coming from Hallmark. This will go gangbusters. Couples with AFL Beanie Kids and other AFL product we’re set for an excellent AFL season launch in-store – and to sell cards to people who may otherwise not have been card customers. This range makes perfect use of the Hallmark interactive initiative and, for me, it’s another example of Hallmark helping to build my business.
We have been promoting the latest issue of GQ magazine with this aisle end display in the men’s section of our magazine department.
This is a terrific issue for promoting because of the Prince Harry cover. This should help sell additional copies to those would not usually purchase the title.
The sports bag with the magazine is an excellent gift.
Good retailers know that placement of products is everything. Make sure that what you want people to purchase is easily seen and understood – especially when comparative products sit next to each other.
The new tabloid formatted broadsheets from Fairfax allow us retailers to place them such that then can be as easily seen, scanned and understood as their News Limited competitors. Shoppers don’t need to turn their head to read the headlines.
I’d expect this equal-footing placement to count for sales growth for the Fairfax titles – even though I suspect Fairfax and News would not consider the products to appeal to the same shopper. This where the cover comes into play. Previously, shoppers could not easily compare the titles. Now, shoppers can compare and this is where sales growth opportunities lie.
For the first time, thanks to the format change, the News Limited titles have a more equal competitor. This is a good thing.
Click on the image to see an example of how a social media mention can support newsagency businesses. While not earth shattering of itself, here we have a Corey Taylor (lead singer for Slipknot) fan tweeting the fan club about a tweet and seeing the magazine in a newsagency.
If the tweet mentioned a national retail brand they would respond. Since newsagency businesses are independently owned, no one responds to these random tweets – thanking the person for mentioning us. I have on occasion and the response is usually appreciation for noticing.
I love it when newsagencies are mentioned like this in tweets – it maintains a digital presence for the channel.
Woolworths stores have an excellent gift with which to promote the latest issue of The Australian Women’s Weekly – $12 worth of L’Occitaine Shea Butter. This is a perfect gift for the target AWW shopper.
While I understand publishers cycle promotions through the channels, it is frustrating to see a big point of difference as with the current issue of AWW.
Newsagents in major shopping centres with Woolworths nearby lose out. Indeed, the gift was drawn to my attention on the weekend by a regular shopper.
Food magazines account for 4% of our overall magazine sales and sales are up year on year. One reason is our obsession with placement. we ensure that appropriate titles are next to each other. Take our foodie titles, we place them in a line with the full cover on show. It’s careful placement like this that helps drive shopper efficiency – getting people to purchase more than one title.
By taking time and being deliberate about what titles we place next to each other, we can increase sales. This is another reason we need the right people putting out magazines – it’s not a menial task … indeed, it can be the difference between magazine sales growth and decline.
deliberate magazine placement ought to be the goal of every newsagent.
The launch today of the new tabloid size of The Age has resulted in sell outs across all retail channels. In one of my stores, in a major shopping centre in Melbourne, every outlet with the title has sold out and none is able to get more stock. This is frustrating.
The strong interest is being driven by the excellent coverage of the new size.
I urge newsagents to read the important and timely editorial from Lisa Mora in Vintage Caravan Magazine as she discusses whether to publish a digital version of the delightful and engaging magazine.
Lisa’s thoughtfulness about the reader experience is compelling. For me, her reasoning for commitment to print is a call-out to newsagents, especially those newsagents who do see magazines as a continuing point of difference for their newsagency business. It is special interest titles like Vintage Caravan Magazine that provide us with a point of difference on which we can rely for valuable traffic to our stores.
My view is that magazines continue to offer us a point of difference. Yes, we need to manage range to ensure it is efficient and viable. However, we need to be careful to not cut range too deeply and damage our point of difference.
Lisa regularly comments on posts here and actively engages in discussion with newsagents as she see us as playing an important role in getting her magazine into the hands of people interested in vintage caravans.
Read the editorial.
We are promoting Your Garden in the best location in our garden section to make the most of the growth reported in the recent audit results.
The year on year sales growth of 8.71% is excellent and a terrific reason for us to promote the title. This plus the excellent cover shot.
I’d encourage newsagents to check where they have the title. Make sure the full cover is on display.
TIP: Your Garden works well when placed next to your top selling newspaper.
The final edition of Grazia magazine, billed as a collector’s edition, has achieved mixed sales results based on what I have seen in my newsagencies and what I have heard from others. In most cases, sales were at the recent average for the title or one or two copies above – delivering a soft exit for the six year old title that sought to redefine the weekly magazine space through its fashion focus.
We gave Grazia a good send off with excellent placement showing off the full cover.
Check out a panorama view of one of my newsagencies yesterday. This captures the focus of the business and shows off how present product and don’t rely too much on posters in-store.
Click on the image for a large version.
This store is three months in and delivering an excellent GP, well above industry average.
Stand in front of your newsagency and count how many different marketing / promotion messages confront your shoppers. By different I mean different content, different core messages and or different look and feel.
If your newsagency is like a typical newsagency, there will be at least twenty different messages to customers. The messages will lack consistency in look and feel and lack consistency in value proposition.
These messages are not marketing your business as much as the products they are promoting.
A business like a newsagency should have no more than two (maybe three) core overall marketing messages confronting shoppers from the entrance to the middle of the store.
Provide a consistent, good, message and you;re more likely to see engagement.
In many newsagencies I see, pen sales account for around 30% of all stationery sales not including ink and toner yet pens usually take up less than 10% of the floor space and reflect around 10% of the investment in stock.
These numbers make pens valuable, probably more valuable than newsagents consider.
With such a valuable return on investment and return on floor space, how do you treat them? Do you treat them as the most valuable and important category in your stationery department? Do you consider carefully what you situate either side of pens, in front of pens and in display to shoppers as they leave the pen area?
We know from newsagent sales benchmark data that pens are valuable not only for the revenue they generate but also for the value we derive from the traffic they indirectly generate.
My sense is that we could leverage the pen opportunity more by better staff training, more attentive management, watching product adjacencies and, maybe, tweaking margin.
I played with our AFL Beanie Kids display to reflect the drugs cloud currently hanging over the Essendon Football Club. It was a bit of nonsense fun but couldn’t get it right so I put the display back. I was looking for represent the Essendon mascots as drug enhanced compared to their competitors – like the upstanding Carlton.
Don’t tell the boss I was goofing off.
It is interesting to see that Associations continue to be used by newspaper publishers to promote their changes – Fairfax this week as the tabloid editions of the SMH and Age approach and News Limited promoting thier advertiser (BMW) driven Sunday delivery of The Australian. each time an association publishes press released from the publishers they do themselves a disservice. Their members are newsagents. Everything they publish and do should be solely for their members and reflecting the collective member position.
I’m happy with our February trading numbers. In a year on year comparison and adjusting the 2012 numbers for the extra day, we did okay, good in fact.
While magazines, overall, are down 2% for us, women’s weeklies are up 1% – significantly against trend. Diaries are up 99% off a good base for Feb. Plush is up 174% ($4K+ for the month) and Gifts are up 275%. Basket depth for us is up 11% – showing wonderful growth in shopper efficiency.
While Valentine’s Day was an excellent season, the rest of the month has been terrific with moves we have made paying off in some of the new money areas for traditional newsagencies.
Yes retail is tough and the newsagency channel is doing it tough, newsagents working as retailers, chasing change and standing for something in their businesses are, overall, doing well. This makes a newsagency good investment as every newsagency has these opportunities.
Fairfax announced yesterday a 10% cover price increase for The Australian Financial Review and Weekend Financial Review effective from March 11 and March 16 respectively. These moves are good news.
As a retail newsagent however, a sub agent in the eyes of Fairfax, I’d like to see a better margin. The AFR is loss making in shopping centre newsagencies with high occupancy costs. This is true for all daily newspapers with a volume of 15 copies a day or less.
So, while I am thrilled at the direction of the move, it’s time we saw a fundamental shift for an equitable return for the retailer. The return determines how we treat the product as my post yesterday showed.