Newsagents will be thrilled to learn that Touch networks now provides access to Vodafone recharge. Read the announcement here.
Accessible by newsagents directly from within their Point of Sale software and for no setup of additional fee, the arrival of Vodafone to Touch will make many newsagents happy.
In an interview in yesterday’s Australian Financial Review, Bauer CEO Matt Stanton forecast that there would be more magazine closures as well as some launches as the business responded to title performance. Newsagents with a copy of yesterday’s newspaper should read the article – page 38.
The bigger story in the AFR article is the growth in digital subscriptions with Stanton claiming 20 to 30 percent growth quarter on quarter. He says they have 116,000 tablet subscriptions across their titles.
Stanton I think mistakenly says that tablet subscriptions are pure profit once you have the back end setup costs covered. This presumes that you have a print product to cover all editorial costs. My reading on the topic indicates we are not seeing people embracing both platforms in large numbers – it is digital or print. So it would be wrong to say that a digital subscription is pure protect. It must wear part of the content creation cost.
The AFR article reports Stanton saying its feasible Bauer could achieve 500,000 digital subscriptions across titles such as AWW and Gourmet Traveller. The road to such an achievement is by way of current print sales. I expect strategists in all print publishing businesses see the current print products as the bridge to the platform they expect one day to overtake print in sales and value to the business. This is why publishers will continue to tell newsagents that print is important to them for some time yet.
An area where the company could save is in oversupply. There are several Bauer titles I’m receiving where sell-through is lower than 50%. These titles are loss making for us. The continued excess supply does not make sense.
We just about sold out of most Despicable Me 2 items over the weekend, selling more than 75% of our stock in two days. As the photo from Sunday shows, our display was looking pretty sad.
With the highly-anticipated kids movie still in preview this is an excellent result. It also speaks to the value of brands. Despicable Me 2 has attracted shoppers who would not usually visit because of the products being placed at the front of the store, facing into the mall.
the more we attract shoppers for high-margin products the better. It’s our goal to be known as the go to retailer for movie related product tie-ins. We have a major cinema in the centre, rear us, so this goal makes sense. We also have access to proactive suppliers who bring in a decent range of licenced product.
We have backup stock on the way.
We continues to have success with Diabetic Living by placing it with: weeklies, newspapers and other off-location positions such as the placement in the photo above our English magazines and next to our min placement of weekly titles. Diabetic Living responds to the extra attention with sales. We work on the view that it’s a title people don’t necessarily visit us to purchase. The cover of the latest issue demonstrates the broad appeal of the title.
We’re promoting the launch issue Batman Automobilia on the lease line facing into the mall as well as placement with other partworks in-store. This co-location approach works well for us with partworks – sales this season have been good for us.
While not the most attractive unit, the dump bin approach works in terms of driving sales and the floor space it takes up.
In a move with far-reaching ramifications for the entire newsagency channel, several Coles petrol outlets in Victoria are about to commence a trial selling Tatts lottery products.
It’s expected that the product mix will be similar to the Tatts products currently sold at 7-Eleven. When 7-Eleven got Tatts products newsagents were told it was about incremental business – business not won through the then current network. That has not been the case. 7-Eleven has marketed the products well, especially at jackpot time. I have no doubt that their consistent offer and marketing have seen some traffic diverted from newsagencies to their network.
I’m told the trial will be in seven Coles petrol locations. I expect it will expand beyond this in Victoria once the trial is completed and into other states as local hurdles are overcome. I’d expect Woolworths to follow in the Caltex outlets they acquired some time back. I can’t see Woolworths letting Coles get Tatts products and them not.
An additional 2,000 lottery outlets could open around Australia over the next two or three years. If this happens it will negatively impact on lottery driven traffic and sales in newsagencies with lottery products.
Newsagents facing Tatts mandated shop-fitting need to take this increased competition into account when planning for the capital investment. The capital investment must be responsible. Tatts cannot make you invest uneconomically. Indeed, I would have expected Tatts to disclose their longer-term intentions so that newsagents can make fully informed decisions.
Expansion of Tatts products into supermarket controlled petrol outlets would add strength to the perfect storm we are experiencing – migration from print to digital, migration of product sales to other channels, shoppers buying online products we’d usually sell, a soft economy, growing diversity around the newsagency shingle and its value and more retailers chasing the traditional newsagency shopper.
While Coles and Tatts can do what they like, newsagents could consider complaining to the ACCC. Rod Sims, ACCC Chairman, has the supermarket duopoly in his sights as he has noted several times since taking on the role. This move by Coles ought to interest him as it is a grab for greater market share by one of the two major supermarkets.
The geographic spread of newsagencies and other lottery outlets indicates, to me at least, that consumers are well served. More outlets does not necessarily mean more competition or better customer service. No, more outlets in petrol locations controlled by one or both of the supermarket duopoly businesses will, ultimately, lead to less competition.
So, I’d hope that newsagents and those who represent them take this issue up with the ACCC. I’d also like to see it taken up with politicians in the lead up to the election – calling for a halt to the growth of Coles and Woolworths. We need legislation to do this and this lottery move by Coles is a good reason to prosecute that case.
Now is not the time to worry about the reaction from Tatts if unified action against the Coles move is taken. Put your interests ahead of fear of reprisals.
Newsagents cannot afford for Tatts products to get into the petrol outlets controlled by the supermarkets. Newsagency businesses would suffer and the communities in which they serve would suffer.
Before anyone goes off about the ANF on this issue I’d note that it came to their attention a few days ago and that they are working on it.
Footnote: over the last six weeks, at the Newsagency of the Future workshops I talked about Coles and Woolworths, observing that they must want lottery products in their petrol outlets because of what 7-Eleven has achieved. I predicted that the supermarkets would pursue Tatts.
I made this observation without any inside information. Indeed, the dots have been there for several years for all of us to connect.
I connected the dots for hundreds of newsagents to underscore the importance for newsagents to assess whether their future is as agents or as retailers.
I was disappointed to see Get Your Business Online on the shelves of one of my newsagencies yesterday. It’s an expensive special interest title and as such should not be sent unless we request. This is the magazine distribution model I want, a pull model for special interest and other magazine titles that fit a range of criteria. In a pull model I am sure I’d be able to increase my magazine sales.
I don’t want Get Your Business Online because we have had titles for the same shopper recently and they have not paid their way. Indeed, the distributor has this data – there is no justification for now sending us this title other than for them to get paid a fee by a willing publisher ken to get stock onto shelves.
Blah blah blah, same old same old. I’ve written posts like this many times before. Magazine distributor behaviour has not changed. the sooner all magazine publishers realise that the distribution model is what causes newsagents to early return stock sometimes irrationally. It is also what is causing some newsagents to seriously think about getting our of magazines altogether.
I worry that publishers will not act on the model until it is too late.
Newsagencies often offer appreciated services that are not well promoted. many such services are actually hidden or forgotten. My suggestion today is that you promote them.
Magazine putaways, customer special orders, LayBy and photocopying are some of the services I am thinking of with this tip. Promote them and through this promote a point of difference you offer over other retailers.
Create a flyer to be handed to each customer, consider an ad in the local newspaper or have posters professionally developed for promotion in-store. Focus on services you offer that differentiate your business.
One newsagent I spoke to recently increased copying sales by $550 a month. That’s close to $400 a month in GP.
Many newsagents I speak with worry so much about decisions or situations that the worry gets in the way them taking action.
My experience in business is that the only way to deal with a fear is to confront it. Worry will not change anything.
I faced a major fear of mine yesterday when I climbed the Sydney Harbour Bridge. Ever since I was a kid I’ve been scared of heights. While I still am, that I made it up and down without freaking out (much) has left me feeling more empowered in relation to my fear, stronger.
Embarrassing photos like this one will remind me to not be blocked by a fear.
It was a thrill to be part of the ANF newsagent of the year awards dinner in Hobart last night. My newsagency software company was a sponsor so I got to say a few words before presenting the Tasmanian Retail Newsagent of the Year award.
My message was simple – we need to move from being agents making cents from a sale and embrace being retailers where we bring customers in based on our decisions and to purchase items at 50%, 60% and more GP. This means owning our own success and not expecting others to own it for us. It means being retailers being responsible for and pursuing our own success.
In a room with plenty of suppliers I made the point that our success depends more on us and less on our suppliers.
Let’s focus more on action and less on complaining.
I’ve just caught up with an interview on ABC Radio’s AM last Saturday with Andrea Carson a Melbourne University lecturer in media, politics and society. In the interview, Carson says:
So I think five years’ time, it would be unlikely to still have a Monday to Friday hardcopy newspaper for Fairfax.
I think the weekends have other attractions. They’re still in the broadsheet form at the moment, and advertisers do like the weekend papers because they know that readers have more time to sit and read the newspaper over a weekend.
From what we see happening around us, moves large and small, I except to see capital city dailies start to withdraw from seven day a week publishing of print editions much sooner than five years. This is not a new position for me, it’s something I’ve been saying for a couple of years now. What is different today is the increase in moves by publishers supporting my (undesirable) expectation.
The wet and cold winter weather in Melbourne was on our side this week as we put out a new line of heat packs at the front of the shop. As one of our team members started putting these funky products out we sold two. We were thrilled.
The first customers were drawn to the funky looking products. This is pretty special to us. It’s a goal – drawing traffic for products other than traditional newsagency lines … good margin products.
A challenge for newsagents in this gift / funky gift space is the constant change – we have to manage for that whereas in traditional categories of cards and magazines our suppliers do it for us. Harder work but compared to magazines better margin. Plus we get to make our businesses different.
This line of bug-eyed plush items being promoted by mass merchant K-Mart look surprising like a line we have been selling with tremendous success for more than a year. Their price point is very low. It matches the quality of the product.
What separates us with plush is our more creative engagement with the products in-store than you see in K-Mart. We see every shopper as a plush prospect.
The Official Guide to the Tour de France is selling well for us – nine copies in two days.
We are pitching it here at the counter as well as with our sports magazines. It’s great seeing people add it to purchases at the counter on impulse. This where a 25% margin product at the counter is okay – if it is selling in sufficient quantity.
We expect sales to do very well this weekend. We’ll assess sales Monday or Tuesday in the context of a move from the counter.
Question 8 of my magazine distribution change survey asked newsagents for any other comments. Click here to see all the comments.
69.5% of newsagents prefer Wednesday as the second magazine delivey day of the week according to my survey of newsagents receiving 407 responses in just four days.
Only 13.8% of those responding prefer Thursday, the day selected by the magazine distributors.
Click here for the survey results.
This result flies in the face of the claim by the distributors that they consulted prior to making the move. Consultation of newsagents would have shown that Thursday is not a good day. Indeed, the result articulates the concerns of newsagents about Thursday, that they may lose sales to supermarkets and other retail channels – indeed, 65.4% are concerned about this.
Magazine distributors and publishers need to take note of this live concern held by newsagents. It’s borne out of what we see on the high street and in shopping centres. If any party would know what could happen to shopper traffic it’s newsagents who live this battle every day.
Do magazine publishers want to participate in a decision that facilitates a shift in magazine purchases from newsagencies to supermarkets, petrol and conveniece? I bet not since that is a shift that would not play out for them in the long run. The problem for us is that some publishers may not understand the risk for them oof migrating sales from independents to mass groups.
Click here for more on my concerns about Thursday as the second day for magazines.
Okay, this worry about a Thursday on sale could be nothing, it could be us worrying unnecessarily. Is that a risk the magazine publishers are willing to take? A genuine consultation process would have thoroughly explored these issues.
The survey results show newsagents as understanding of the need to move from three days to two. I thought the response on this was quite reasonable.
My understanding is that Thursday was selected primarily because of Who magazine. Because of how key content is sourced, out of the US, an on sale earlier in the week than Thursday would not be possible. Indeed, I am told from within distributor ranks that being ready for Thursday will be a significant challenge. If that’s the case then why not deliver Who on a Friday through IPS and leave all other titles for a Wednesday delivery? Surely a deal could be struck between Pacific and Gotch to permit such a move.
I am sure there are many complex factors that fed into the decision. However, from where I sit, it feels like newsagents were not consulted and or listened to. The result is not good for us. The magazine distributors win. Some publishers win. The vast majority of newsagents are worse off.
It is not too late to throw the issue on the table for genuine consultation. That’s what I hope will happen given the weight of the survey results. Do I think it will happen? I’m not confident. Our suppliers have a track record of mouthing how important we are and how they value our opinion. The actions of too many suppliers tell a different story.
So, magazine publishers and distributors … are you prepared to reconsider the decision and actively consult with newsagents? We sell close to 50% of all magazines sold in Australia. We’d appreciate being part of the conversation on such a business critical move.
Footnote: while we can’t be certain all responses are from newsagents, we can be certain, thanks to the survey software, that only one response per computer was received. Given the readership of the blog, I’d say the vast majority of responds were newsagents.
I am in Cairns today for the last of the current round of Newsagency of the Future workshops. It’s been terrific evolving the workshop as I’ve gone around the country talking with newsagents in many different situations.
Yesterday, I shot a video of a shorter version of the presentation. This should be available from the blog in the next week. Slides need to be integrated and some other post production done.
My survey about the magazine delivery changes will close at 9pm tonight. I left it open another day given the rush of last-minite responses – we’re currently at 379. Please click here the link to take part in the survey.
Newsagents are disappointed that the latest issue of CEO magazine as it’s promoting a competition with a year’s worth of office supplies from OfficeMax.
Once newsagent who brought the competition to my attention said they were early returning the title as a result.
It’s a misstep that this small Aussie publisher is promoting a giant american business in this way. The alternative was that they promoted Australian businesses, like newsagents, in the promotion. It would have been easy to organise. Plus it would have done kudos for the magazine from readers and from the retailers who sell the magazine – us newsagents.
OfficeMax is fierce competition for newsagents. Click here to see who owns OfficeMax, it’s an American company with an extraordinary footprint in Australia in the school book and stationery supply space. They claim to be the largest education supplies company in Australia.
Anyone supporting OfficeMax is not a supporter of Australian newsagents in my view.
Coles Supermarkets has expanded its online shopping pick up offer with the opening of click and collect locations at shell petrol outlets. The photo shows the collection lockers at a Shell location at Garden City in Queensland.
Magazines are among the products Coles customers can purchase and collect using this service. In fact, I’ve seem magazines pitched as basket builders by both supermarkets.
Newsagents who say online will not affect their business do not understand the fundamental shift taking place in how and when people buy.
We are promoting the latest issue of Dolly magazine and the cool free clutch bag gift that comes with the magazine with this off-location display at the entrance to the aisle with our newspapers and placed facing onto the dance floor. This location places the magazine in front of more shoppers, many who would otherwise not see it.
We’re also promoting Dolly it in its usual location in our women’s magazine aisle.
My brief survey canvassing newsagent opinions about the magazine delivery day will close tomorrow. Please click here the link to take part in the survey. I’ll publish the results in full.
I have heard from several newsagents of more redundancies at Fairfax and News businesses – in the circulation area, the part of a publishing business that deals with newsagents the most. One report has the entire circulation department of one News Limited capital city operation being closed with responsibility transferring to Sydney.
Yesterday, Seven West Media announced 100 jobs are to go at The West Australian.
Several newsagents have mentioned they have been approached to consider the Lyoness ‘loyalty’ program. I say ‘loyalty’ as Lyoness looks to have elements of a pyramid scheme. from what I dead, what you make depends on those you attract to the program.
I urge newsagents considering Lyoness to research the model online. In a few minutes I found several reports here, here, here, here and here.
While the lure of something bigger seems appealing, there are enough warnings about Lyoness to make it unappealing to me for my businesses.
