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

Month: May 2013

Getting interactive products together

With more and more interactive products coming into our stores we need to place them together as they speak to the same customer. This is what we do as the photo partially shows … I could not get all the interactive products we currently have in the shot.  Grouping everything tells a better story, it says you own this interactive gift space.

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Gifts

Double standards in News Limited South Australian move

In a statement on May 15, News Limited explained why they are introducing an 80 cent per copy surcharge (Monday to Friday) to the delivery of newspapers to newsagents in selected areas of South Australia.  This statement included:

We aim to continue to deliver newspapers to all areas of South Australia. However, News Limited has been subsidising a number of loss-making routes for many years. For our West Coast and Kangaroo Island routes, we now lose a significant amount of money on every paper we sell. This has become unsustainable and so in order to continue to deliver our newspapers when and where our consumers want them, we have been obliged to add a freight surcharge.

This statement is from a company that has for decades denied newsagents the right to charge an equitable price for the home delivery of newspapers. Despite irrefutable evidence that many newsagents lose money on home delivery, News has, for decades, denied increases in home delivery fees to a level that make them break even let alone profitable.

News has, through its denial of a fair fee for service, forced newsagents to subsidise the home delivery of its products through subsidisation by small business newsagents.

This is the double standard evident in the latest move in SA.  The company says it needs to charge the fee to create for itself a sustainable model.  If it’s good for the company why has it not been good enough for newsagents?

Okay, the T2020 sessions last year said the company got it and that it understood newsagents needed to be profitable. But what’s happened? How quickly is it moving? The best way it could show good faith with distribution newsagents would be to deliver an immediate increase in home delivery fees to an equitable level, so newsagents did not have to subsidise this activity from their own resources.

What are distribution newsagents doing about this?

Thanks to agitation from a local MP in SA this issue is gaining more attention in the media – including coverage by the ABC. I’ve just done a radio interview on SA radio about the topic. Hopefully, this attention will get News more fairly engaged with newsagents.

I know from prior contact that News would prefer me to raise the matters canvassed here with them and not here. I think the issues raised here are issues for all newsagents. They go back decades. The only solution is for News to immediately permit newsagents to do what it is doing itself – to charge a fee that reflects the actual cost to the business of providing a service.

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newspaper home delivery

Woolworths shows how to quit ink

A colleague sent this photo from their local Woolworths showing ink that was priced at $29.99 now available for $6.00.

Beyond the pleasure for the newsagent of seeing Woolworths not been able to sell the ink within the shelf life, this photo shows Woolworths quitting stock at below cost price, taking action to move dead stock.  I mention this as newsagents often ask me about when to quit non-performing stock and how to go about this.

My approach to quitting stock is to let the customers show what the discount price needs to be to move unwanted stock even if it’s offered for free. Moving stock from the shop becomes more important that it sitting on the shop floor and taking space.  Once we decide to quit an item I want it gone within a week or sooner.

But back to the ink. Woolworths setting a price of $6.00 is interesting. This is easier for shoppers than, say, a % off or even the term – half price.  People looking at  cartridge can see that it’s $6.00 – no doubt about that.

It’s important we have a clear strategy for quitting stock in our newsagencies – including knowing how we will show the discount to our shoppers.

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Newsagency management

Snakes in the shop

We have been having fun locating this free standing floor unit packed with plush snakes in various places in our newsagency.

This easy to move unit is perfect for displaying these snakes.  We have had the unit at the front of the shop and mid way down – in each situation attracting engagement. People don’t come to us looking for a snake. Interrupting movement in the shop is all about driving impulse purchases.

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Gifts

Promoting World of Knowledge

The team at one of my stores has kicked up support for the next issue of World of Knowledge.

Thanks to some cool collateral they have gone for a vertical and horizontal promotion in-location. This is situated so that it can be seen by anyone walking down our main magazine aisle.

This type of title is very strong in the UK. I hope we can grow the category here.

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magazines

Bauer discounts TopGear at 7-Eleven

The 7-Eleven Facebook page is promoting TopGear at $6.00 – $2.95 off the usual price.  The deal is also being promoted on various websites that list deals and discounts – such as OzBargain.

This 32% discount shows 7-Eleven as a place for magazine deals – better than newsagents.

I would not be surprised if Bauer and 7-Eleven have negotiated a rebate based on sales to top up lost margin dollars – so 7-Eleven would be no worse off. However, I have no specific knowledge of this.

I am not happy about this deal. Newsagents account for more sales of magazines for Bauer than any other single channel. We should be offered cover price deals like this with backend rebates to protect margin dollars.

We have to ask – why is Bauer boosting the smaller 7-Eleven channel with a 32% off deal ahead of newsagents?

Here’s an announcement about this promotion that fell my way yesterday:

TopGear Australia has partnered with 7-Eleven in an Australian magazine industry first.

The innovative marketing partnership allows TopGear fans to download an e-voucher to their desktop, tablet or mobile phone from 7-Eleven’s Facebook page.

The voucher can then be presented at any 7-Eleven store, and guarantees purchase of a brand-new issue of TopGear Australia for just $6 – a saving of $2.95.

The promotion is the brainchild of TopGear’s web and news editor Dylan Campbell and was implemented by marketing guru Georgia Mavrakakis.

The voucher has been shared across TopGear’s 84,000-strong Facebook fan base, along with 7-Eleven’s 506,000 Facebook fans.

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Ethics

Robo Fish a terrific counter promotion

We’re promoting Robo Fish at the counter with this simple fish in the bowl display.

The supplier thought of everything giving us what we needed to set this display up in a small amount of space and to make the product look compelling for shoppers at the counter.

This is a terrific fun product and brings smiles to the faces of shoppers – I love that since even people not buying this get enjoyment from seeing the fish swim.

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Counter offers

Mobile phone recharge survey for newsagents

I have prepared a quick four-question survey for newsagents on selling mobile phone recharge. You can participate in the survey here. I created the survey because of the increasing number of newsagents I hear saying they will quit the product category given falling commission.  I’ll publish the results here.

In 2005 I wrote here about  a copy of a Vodafone mobile phone recharge invoice for a major supermarket showing their commission was 16% while for newsagents we were on 5%.  I suspect the difference between what supermarkets get and what we get continues.

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phone recharge

How the changing fashion ‘magazine’ can impact newsagents

I have been following a number of online and App startups in the fashion space, watching how they are connecting with readers interested in fashion and how they are providing an alternative to print fashion magazines.

Since magazines exist solely as a delivery platform for advertising, connecting with shoppers and monetising their enaggement is a holy grail for sites and Apps.

Monogram is an interesting App in this space.  It leverages the understanding and concept of magazines, collating content into magazines interesting to different shoppers. Monogram also encourages contributions to the magazines. The description of how it works is simple:

Monogram is a collection of fashion magazines created by the community. It’s a place to share your fashion stories and inspirations without having to start your own blog or building an audience. If you already have a blog, Monogram is a community to help you extend your reach.

Beyond our oversupply and undersupply challenges, beyond other retailers selling magazines and often getting trading terms that give them a competitive advantage, beyond Apps created by national and international magazine brands, there is considerable disruption from businesses like Monogram that more directly connect shoppers with common interests.

Leveraging the global interest in and engagement with crowd sourcing and using social media skills, among other techniqies, Monogram is building a following and helping people engage in their interest in fashion away from print magazines.

Newsagents need to be aware of trends such as this as we plan for our businesses. The world is changing beyond what we see in front of us and in our immediate community.  The more we understand this the better informed our business plans are.

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magazines

Selling cards for International Father’s Day

We are promoting a small range of cards of International Father’s Day on a stand facing into the shopping mall.  We are doing this promotion off-location since we suspect shoppers in the centre who could purchase such a card will not be in the centre looking for one.

Newsagents have an opportunity with minor card seasons like this to reinforce our position as the go-to retail channel for all greeting card purchases. That’s what we are doing placing this display on the lease line facing into the mall.

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Greeting Cards

Is this why newspaper publishers don’t use retail newsagents to grow OTC sales?

It struck me this morning standing in line to order a Bacon and Egg McMuffin in Sydney for a breakfast on the go that in front of me was a key reason newspaper publishers virtually ignored retail newsagents to drive over the counter newspaper sales.

Newsagents can’t offer the same value proposition as, say, a McDonalds. McDonalds advertises in the newspaper, it has products that can be bundled with a newspaper and thereby deliver access to the newspaper for almost nothing yet record it as circulation.

I can see that a newspaper ‘sold’ through McDonalds with a meal bundle is more valuable and rewarding for a publisher than a newspaper sold in a newsagency at full cover price. They would think that the McDonalds ‘sale’ is more certain and can be budgeted for. The advertiser probably makes this point too.

Since we don’t have fuel, burgers, suagry frozen water drinks or many other highly sought after daily purchase items that we control with which to bundle newspapers we will not be the focus of attention of newspaper publishers. I suspect we represent the old-school approach to newspaper retail they maintain because they have to and not because we represent what they see as future.

I wish newspaper publishers would give retail newsagents a go. I am certain that retail newsagents can grow newspaper sales through genuine partnership with newspaper publishers.

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Newspapers

Rocks Gems & Minerals partworks reissue?

Like many newsagents I suspect I was surprised to see the Rocks, Gems & Minerals partwork reissued yesterday – even though it did not look like a reissue thanks to new packaging and National Geographic branding. I don’t remember it looking like this last time around.  The stock code in the EDI file points to the previous issue so this is connected to the previous rocks title we received.

72 copies, that’s what we received in one of our stores.

What do other newsagents think?

If we had control of our ordering, we’d have asked for 30.  here’s what galls me and, I am sure, most newsagents. We have to pay to return the unsold stock. We are penalised for a poor scale out decision, we have to pay for someone else’s mistake. It’s a disgusting impost on any business let alone small business newsagents at the end of the magazine food chain.

And magazine publishers wonder why some newsagents are actively and openly discussing exiting the category altogether.

Supply is the problem. It is drowning the newsagency channel and no one in authority appears prepared to do anything about it.  The result will be even more magazine sales lost from the newsagency channel to supermarkets.

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magazine distribution

Red Nose Day charity well-loved

Of all the charities we support at the counter and elsewhere in the business, the Red Nose Day support gains the most attention and engagement. It’s well known, easily understood and appreciated.

While I have said here many times that the counter today has to be about high-margin (above 25%) product, we do schedule in space and time for charities we care about. Red Nose day is one of those charities. I especially like it as we choose to participate rather than having it sent without reason or connection to us.

If this year is like other years we’ll move all the stock in a couple of weeks.

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Social responsibility

Rolling Stone brand front and centre

We have spread the Rolling Stone brand, in three magazine titles, across the best shelf in our music section as we feature the Bob Dylan one-shot, the Led Zepplin one-shot and the regular monthly magazine. Our commitment is to maintain this full face placement for the next two weeks. We’ll give the Dylan title a run with newspapers at the weekends – given the shoppers we typically see then.

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magazines

Terrific one day conference in Victoria yesterday

I was grateful for the opportunity to speak at the Lottery Agents Association of Victoria conference yesterday in Melbourne. It was terrific seeing a large room full of retailers giving up their Sunday to network with others and talk business.

The agenda was varied, full of challenges to build stronger and healthier retail businesses.  I really like one day conference events. People retain more. There is also an urgency since you only have a day to cover your messages.

Talking with people in the breaks I met people embracing change in their lottery businesses and newsagencies. Suppliers too – breaking with tradition and encouraging retailers to make independent moves.  Very encouraging.

For my part I put together a session picking up on some of my Newsagency of the Future themes as well as consideration of the opportunities we find in change in retail.

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Newsagency management

Staff recommendations promote newsagency magazine sales

I’ve written here before about our use of staff recommendations to bring attention to magazines that otherwise be missed in the sea of colour and text we present in our magazine department.

At any one time we have two or three titles we feature with a personal recommendation.  the photo shows our latest recommendation – for new magazine renegade Collective. we chose this title as it needs help in being understood.

Creating these recommendations does not take long once you have looked and understood the magazine. The reward is worth it. At the very least you further separate your magazine offer out from that in supermarkets.

The artwork for the recommendation text was developed in-store by one of our creative team members. It’s is consistent for all recommendations.

Click on the image for a large version.

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magazines

It’s all about Apps

Apps are huge today and we’re trying to tap into the popularity of this software by featuring app related titles at the heart of our IT magazine titles. The free cable with The Essential Apps Guide got it prime place in this small display.

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magazines

Sunday newsagency marketing tip: think Grab and Go if yours is a convenience model

Convenience store owners and their suppliers talk about Grab and Go offers, products that are compelling, easily understood and good value, products places at or near the counter and other high-traffic locations.

The term Grab and Go defines the type of products to place in this high-profile impulse purchase situation. In newsagencies, focussing on Grab and Go items is essential for those with a convenience-centric model.

I mention this term here to help change perception. We have spent too long offering the same old products at the counter. We need to focus on fresh impulse lines that offer more than 25% GP. Newsagents in the convenience space need to get serious about convenience and thinking about products in the context of Grab and Go is part of that in my view.

There is an excellent article at Convenience Store Decisions about this. I encourage convenience-centric newsagents to read this.

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marketing

Sunday newsagency management tip: ring up all your sales

Too often newsagents start ringing up all sales in the Point of Sale software after they have encountered an employee theft situation. I have no sympathy for them since it’s retail 101 to track all cash down to the last cent in your business.

The excuse of it takes too long is nonsense – it takes seconds and can save thousands.

The excuse of we have to then to do lottery sales on two devices is because tatts won’t let your Tatts terminal send the sale value to your register. They do even more than this for 7-Eleven. Get over it.

The excuse of the counter is too busy to make this happen is nonsense – many many newsagents handle this without a problem today.

One way you will certainly reduce the opportunity of being a victim of theft is to ring up everything you sell using your newsagency software.

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Management tip

Newsagency of the Future workshops this week

The free Newsagency of the Future workshop this week are:

  • May 20 @ 11am Canberra Rydges Canberra Capital Hill, Cnr Canberra Ave & National Circuit Forrest ACT 2603 Parking: Onsite parking available $10.00 flat rate
  • May 21 @ 11am Newcastle Crowne Plaza Newcastle, Cnr Merewether St & Wharf Rd Newcastle NSW 2300 Parking: Valet parking $28.00 per day subject to availability or free street parking.
  • May 22 @ 11am Albury Hotel On Olive, 579 Olive St Albury NSW 2640 Parking: Free parking
  • May 23 @ 10am Geelong Four Points By Sheraton Geelong; 10-14 Eastern Beach Rd Geelong VIC 3220 Parking: Cunningham Pier 3min walk to venue $7.00 per day
  • May 24 @ 11am Hobart Mercure Hotel Hobart, 156 Bathurst St, Hobart TAS 7000 Parking: Onsite underground parking available at a cost of $1.00 per hour.

Click here to book online or email bookings@towersystems.com.au. This session is open to all newsagents and suppliers.

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Newsagency challenges

Newsagents in the news on shop lease

Check out the story in The Morning Bulletin in Rockhampton about the closure of two newsagencies.  It’s a reminder of the importance of getting rent right from the outset and not agreeing to lease unless you are 100% happy.

I have recently walked away from two new lease opportunities because the terms were not what I wanted. A newsagency opportunity I walked away from three years ago because the terms were not good is, I’m told, about to close because the tenants are walking away from a ‘bad’ lease.

Get the lease right at the start. Changing it mid-term is challenging with most major landlords.

A side point about the story is the headline: news agents. Talk about focusing on the agent part. I bet agency business accounted for only a small portion of sales in this business.

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Newsagency challenges