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

Month: August 2013

Magazine distribution changes benefit shopping centre newsagents more than high street newsagents

While we are only a few weeks in, I am seeing data indicating that shopping centre newsagents are less likely to experience a negative affect from the recent magazine distribution changes which saw Wednesday and Friday deliveries combined to a Thursday delivery. High street newsagents, however, appear to have lost some sales.

Looking at sales by day reports I have looked at sales on Thursdays and Fridays in particular and they show a difference between shopping centre and high street businesses.

I did check a couple of rural / regional newsagencies and there was no discernable change.

Not all shopping centre newsagents have benefited from those I looked at. It’s clear that how one engages with magazines is a factor. Guiding shoppers to change their habit is important given the risk of losing sales to supermarkets on Thursday especially.

I’d like to see the major magazine publishers more fully research the impact of the magazine distribution change. If they do not want supermarkets to significantly grow magazine sales at the cost of newsagent sales they will need a plan to support our channel.

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magazine distribution

Debate in UK over raunchy magazines

Convenience Store in the UK is facilitating a debate about whether newsagents should display soft porn magazines – called lads mags. There is a difference between what independent retailers do and would do compared to national groups. This is similar to Australia with how we handle, for example, Zoo compared to 7-Eleven and the major supermarket chains.

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magazines

Hubbed is being promoted by the ANF!

I was talking with a newsagent yesterday who had been pitched Hubbed Connect by and ANF staff member who visited their shop. This is evidence that the ANF is promoting Hubbed. I was disturbed to hear this, to hear that an industry association employee is visiting newsagents selling or promoting Hubbed, especially when I have not seen any critical assessment of the Hubbed offer. The public enthusiasm for Hubbed being expressed by the ANF indicates that there is a commercial arrangement in place.

As I wrote on July 22:

Here are questions I’d want answered before contemplating Hubbed further:

  1. What is the nature of the relationship between Hubbed and any of the newsagent associations or anyone connected with the associations?
  2. Specifically, is there any money or other benefit whatsoever flowing from Hubbed to any of the associations and if so on what basis?
  3. What due diligence has been undertaken on the Hubbed business model?
  4. What due diligence has been undertaken on the proposed Hubbed contracts?
  5. Have all the claims made by and about Hubbed to newsagents been investigated?
  6. Is the ANF, NANA, QNF or any other association endorsing Hubbed and if so why and if not why?
  7. Has the ANF, QNF, NANA or any association promoting these sessions considered what of the Hubbed services are already available in newsagencies?

From what I can tell Hubbed is not offering anything significantly different to what newsagents have FREE access to today through ePay and Touch Networks. My understanding is that Hubbed will cost newsagents $7 a day or $17 a day depending on the level of service they choose. That’s a lot of money compared to the free services available already.

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Ethics

Cash-flow crunch for Queensland newsagents today

Tatts changes its lottery bank account sweep to Tuesday today, from the usual Friday. While the money being swept in Tatts’ money for tickets sold less payouts, the change itself will be a challenge for some newsagents to adjust to as they use lottery cash to support their business through the trading week and this change of day is not easy for them to switch.

I’ve been contacted by eight of nine newsagents expressing concern at the single step nature of the change. They would have liked a more phased approach. One even said they would have preferred a daily sweep. My advice has been they approach Tatts to express their concerns regarding their situation to see if they can handle the change differently in one-off situations.

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Lotteries

Hallmark’s Samsung Galaxy Tab 2 Father’s Day competition popular

The Win a Samsung Galaxy Tab 2 competition from Hallmark for Father’s Day is popular and it’s only been running for a day. One of our customers will win this tablet and we’re promoting this by showing off the actual unit they will win – it’s the centrepiece of the display.

Too often competition prizes promoted are retail network wide. We always get good take up when we show off that one of our customers will win the prize on offer.  This helps us reinforce the local focus on our business.

we are promoting the prize in this display behind the counter so all shoppers can see as well as on the lease line with our Father’s Day cards. Note the placement of a selection of Father’s Day cards with the display in the photo. I love that the team member creating this display included some of the product being promoted.

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Gifts

Time Australia cover popular

We have ordered more copies of the latest issue of Time magazine because of the cover story about Australia. Within an hour of this placement with newspapers we sold a copy to a customer purchasing on impulse. We expect to sell all out allocation.  Time works well with this news placement when covers will have local interest.

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magazines

Discussion on why the Washington Post should cease the print edition relevant to newsagents

Check out the report at Gigaom by Matthew Ingram on why the soon to be owner of the washington Post should cease the print product.

If I’m reading it correctly his central thesis is that print newspapers, emphasis on news, will die so why not act now and reduce the pain and force ourselves to pursue the alternative more vigorously.

This same thesis applies to newsagencies. We continue to offer products and services today that are in decline. We invest capital in supporting products and services that are migrating to non retail store platforms (lotteries for example).

We ought to more carefully think about our capital investment and consider the long-term returns we are likely to get should these migrating products and categories migrate as many expect.

As Ingram says about the Post, making a decision for yourself could be a better business move than to find yourself reacting – and playing catch up.

Our channel has spent too long being told what to do and too many expect to be led to their future. The future for each of us in our businesses – newsagents and newsagency spillers – is 100% up to us.

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Media disruption

How plush works at the newsagency counter as an impulse line

Last week I saw first-hand how plush works as a sales counter impulse line. A customer came in and purchased one of our dogs, happily paying $24.95. She told me that she saw it earlier in the week when getting a magazine. I never thought of you for buying these she said handing the dog to me. She collects them and was going to another centre to buy them. I fell in love with this one when I bought That’s Life. Yes, that’s exactly what she said. As we chatted she revealed she’d buy one or two a month for herself and as gifts for friends and family.

I love this lady because she says a soft toy (as she calls them) is the best gift you can give someone. Her pitch was a perfect sales pitch and a reminder of the broad reach a good plush range can have.

When I handed her the receipt which included a discount voucher she beamed a smile and declared she will be back soon!

We won the sale solely because we have the range of dogs at the counter. She will be back because of the range and because of our front-end loyalty program. The one dog sale is worth a lot more confectionery than we used to sell in a dave from the same location.

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Newsagency opportunities

Tapping into the P!NK opportunity with marie claire

Here is how the creative team at another of my newsagencies is making the post of the free dry shampoo gift with marie claire this month. They’ve repurposed a display unit and placed some of the Kolorane product outside the magazine pack. This shows the gift and allows shoppers to browse it as well as the magazine.  The display unit is toward the front of the shop in the highest in-store traffic location we have.

The value of a display can only be measured in sales and in the store we’re seeing excellent results.

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magazines

Sunday newsagency marketing tip: living your sales pitch

It’s Magical in Hong Kong sells educational and fun products for babies and kids. I recently saw this store at Ocean Terminal in Harbour City Center Kowloon and experienced for myself that they seriously live up to the promise of their name and entrances.

Having a separate entrance for kids is a brilliant, magical, move. From outside the shop it tells me the experience inside will be different. I believed their pitch.

I think about It’s Magical and wonder what I can do to better pitch my newsagencies to shoppers walking past. I also wonder whether my shops accurately connect in-store with the pitch we make externally in our marketing.

Independent retail businesses including newsagency businesses struggle to get noticed because of limited marketing budgets. I suspect some of us don’t help ourselves by enabling a disconnect between our pitch and the in-store experience. We rely on a shingle – newsagent or newsagency – to define us when in fact it probably confuses.

My marketing tip today is to wholly embrace your point of difference, your USP, and ensure it is enticing shoppers into your business. Look at doing this so that those who don’t shop with you at least get what your business is and what you stand for. Achieve this and you’ll be thought of when they do want what you sell.

The challenge is that newsagencies today continue to be general stores, offering a variety of product. This lack of specialisation is good yet hindering us being remembered as specialist in a category.

I remember It’s Magical because of the kids entrance and that the shop itself lived up to the promise of this coupled with the name. I want people walking past my newsagencies to have the same experience.

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marketing

Sunday newsagency management tip: use day of week sales reporting to spot trends

The changes in magazine distribution from Monday, wednesday and Friday to Monday and Thursday are certain to change shopper traffic flow to newsagencies as many regular magazine shoppers are creatures of habit. It’s important we spot changing trends in our businesses early. For this, the best report is one listing sales by day of week.

Newsagents software should be able to report on at least eight weeks of sales on a page, making comparison easier. While I have started doing this in my stores, I am mindful of the impact of the our of sequence publishing of the royal baby issues.

In looking at day of week analysis newsagents need to look carefully at Wednesday, Thursday and Friday as I think these are the days on which we are most likely to measure an impact of the magazine distribution changes.

As I noted last week, I am seeing early evidence that suburban high street newsagents are losing some sales which capital city shopping centre newsagents could be beneficiaries.

Regardless of your situation, tracking sales by day of week and comparing reasonable periods can unlock a better understanding of what is happening in your business and open your eyes to trends you can leverage.

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magazine distribution

Terrific in-store promotion at Newslink outlets

I like the promotion running at Newslink’s transit location outlets at the moment as it connects products from several categories, making it clear that this is a promotion by the business and not just one supplier to the business.

If you buy any two magazines you can purchase something else, chips, a book, a travel pillow or headphones,  at a discount.

While all the products connected with the promotion should benefit, the business itself is the core focus as it should be with in-store promotions.

It’s rare we see a whole of business promotion in a newsagency outside the VIP and other loyalty promotions we see in newsagencies.

I also like the whole of store promotion with posters, floor decals and other collateral.

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newsagency marketing

TV coverage of P!NK & marie claire an opportunity for newsagents

marie claire is to feature on the Seven Network’s Sunday Night program as pacific magazines advised nexus members yesterday:

marie claire’s September issue featuring P!NK on the cover will receive incredible promotional support this Sunday at 8.00pm on Channel Seven’s Sunday Night television program.

The top-rating TV show will feature marie claire’s Editor Jackie Frank taking viewers behind-the-scenes of the making of marie claire’s September issue cover.

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magazines

Who’s next to have a crack at sorting out News Corp’s Australian newspapers?

Change agent Kim Williams ‘resigned’ from running News Corp. in Australia yesterday. He’s been replaced by the former Chairman of the Herald & Weekly Times Julian Clarke in a move many commentators label seat warming for a longer term leader – some are speculating about Lachlan Murdoch for the role.

Williams’ resignation is evidence of  company infighting at News. He was a change-agent recruited to focus on the digital platform. In this role he inherited T2020 – the name of the strategy to overhaul newspaper distribution.  Williams oversaw tweaking T2020 and then presided over its death or stalling at least.

Now it looks like print people are back in charge. News insider Mark Day said as much on ABC Radio yesterday.  This could mean T2020 or the goals of T2020 – cost savings for the company – are pursued again. But this is only speculation.

My expectation is that News will refocus on its print products and the costs associated with distribution of these products. They’ll do this because subscriptions and advertising revenue from digital come nowhere near what the company needs to serve its cost base or support its share price, nowhere near advertising revenue from print today.

I expect we will quite quickly see moves by the company on print given the saving some in the business expect they can achieve by focusing on the distribution costs. While I could be wrong as to the outcome, I am certain there are senior people in the company keen to ‘fix’ what they see as an expensive and inefficient distribution model – especially in capital cities.

The recent leaking of internal News correspondence, a reported by Crikey, showed discontent within the company and disputes between old and new guard factions.

It was put to me recently that some News execs see newsagents as a union they have to break in order to fix what needs to be fixed. The company will disagree, saying there is no one in the business who holds that view – just as they denied my comments a while back that News was in crisis in terms of newspaper home delivery.

While T2020 is what will matter most to newsagents flowing from the coup at Holt Street, the bigger picture is the future of the company itself. Challenges abound:

  • Print versus digital.
  • The financial model of free versus paid.
  • Subscriptions versus single copy sales.
  • The processes and costs of landing subscription copies on front lawns. That last mile is the killer for them.

These are matters of serious interest to newsagents and to News executives. They go to the core of the change in leadership I think.

We’ll read from industry associations that they are seeking meetings with the company and that they will advise newsagents once these meetings have happened. The reality is that News will advise newsagents about its plans when it is ready and not because someone demands answers.

The changes to the distribution of newspapers are far from over. Newsagents can be on the front foot by themselves consolidating to deliver News greater efficiency. I’m certain News will welcome more proposals from newsagents that reduce drops and the number of newsagent accounts they have to manage.

My advice to distribution newsagents is – do not wait for action from News, get on the front foot now, develop a business plan and pitch it to the company.

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Newsagency challenges

Good use of VTAC Guide traffic

I like the tactical placement by a team member at one of my stores of the new range of Magbooks with the VTAC Guide. These Magbook titles appeal to the people buying the VTAC Guide.

Thoughtful tactical placement like this can achieve incremental business in a newsagency, using a popular seasonal title to draw attention to other titles people have not come in to purchase.

On the VTAC Guides, one of my stores sold 350 as a bulk order for a local school – very nice business and an extension of traditional back to school business.

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magazines

Street directories still popular for Father’s Day

A few years back I wrote here that I expected street directory sales to slow down due to sat. nav. devices and maps on phone. I was wrong.  While directory sales are off slightly, the decline I am seeing is very small. We expect good numbers from the latest Melway street directory, the 2014 edition. It’s in just in time for Father’s Day and we’re having a ripper go with it.

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Newsagency opportunities

How some gift wholesalers lost sales at the Melbourne Gift Fair by prejudging newsagents

Oh you’re a newsagent, come over here and see these cheaper lines then. That’s what a rep for one supplier said to a newsagent who visited their stand keen to place an other.

I didn’t realise you were a newsagent. You should see the discount cards we have they’re probably more suited to you. Another said.

We don’t sell to newsagents. Said another.

We sell premium products. Said another in a snooty tone when asked why they would not sell to newsagents.

Each of these situations happened at the Melbourne Gift Fair this week. The newsagents who were treated this way entered the stand of each business keen to buy the products on offer – they had done their homework and we sure the products were right for them.

Several of the newsagents telling me these stories, and there were plenty of them – more than my examples above, sell more gifts than your average gift shop. In one case a newsagent selling close to $500,000 a year in gift and related product was turned away from what he hoped would be a new and profitable supplier for his business.

Even the smaller newsagents turned away are valuable in that a newsagency doing $15,000 in gifts has base traffic and cash flow that make them more viable for many suppliers.

These ignorant suppliers need to visit newsagencies and see our handling of gifts before they judge us. They need to understand the growth some are achieving and the threat we pose to independent gift shops. I could take them to newsagencies they would be thrilled to have as customers, newsagencies that look nothing like the businesses they assume we are.

Several newsagents were so annoyed at their treatment that they switched name badged, replacing Newsagent with Retailer.

Given that newsagents sell over 30% of all greeting cards sold in Australia and that we are the largest single channel in the category, gift suppliers ought to take us more seriously. At newsagency can easily achieve gift sales equal to a third of card revenue. I see results considerably better than this in newsagencies run by retailers – as opposed to newsagencies run by shopkeepers.

Of course it’s not new newsagents are treated like this at the Gift fairs. This year in Melbourne however it felt worse according to some regulars.

There are some ignorant gift suppliers out there who did not write the level of sales this year that they could have.

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Gifts

Is the latest newspaper price rise for The Australian more about digital than print strategy?

News Corp. has announced another round of price increases for The Australian newspaper. The Monday to Friday product will increase by 20 cents to $2.20 while the weekend product will increase 30 cents to $3.30.

While two increases in the last year are welcomed by newsagents, this is tempered with the drop off in sales. Sales data I have seen indicates sales declines follow price rises. The last price rise for The Australian saw a sales decline of around 10% for some newsagents.  Newsagents I have spoken with over the last couple of days expect a similar drop off when the latest price rise hits from August 19.

For many years newsagents petitioned News for more equitable pricing for its newspapers without success. Now as the challenges for the print medium intensify News is increasing cover prices. It makes me wonder if the print price rise now is about the print product or the digital product News is keen for readers to take up.

Competition in the digital space pursued by The Australian is tougher for News than in print. There, News has to contend with Fairfax, The Guardian Australian edition, The Conversation, Crikey and a slew of other titles. Maybe this is why their digital access price is set at just $2.95.

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Newspapers

Are other newsagents experiencing increased supply of AWW cookbooks?

We received 23 copies Number Cakes, the latest mini cookbook published under the AWW brand, 16 more copies than we should have been sent based on our sales history.

Escalating the issue through network Services we know the allocation was a mistake by an allocations person at Bauer. While I appreciate that I’m able to return the covers of the excess supply, it’s frustrating it happened. Why a human is involved at all is an issue for me. This should be automated and based on the considerable dataset they have for my business.

Bauer should give newsagents a mechanism by which we can preset our title requirements as I noted recently including this:

Here’s what retail newsagents need from magazine distributors Network Services and Gordon & Gotch to enable us to compete with supermarkets, petrol and convenience:

  1. Scale out based on sales data – you don’t ship all copies provided unless the sales data warrants it.
  2. Increase or decrease in supply only if we approve.
  3. Add a new title only if we approve.
  4. Top only returns.

There are other things I could put on the list, as I have done before, but I wanted to keep this simple. This list of four items is easy for you. Technology could make steps 2 and 3 easy for us and you.

Our competitors have these benefits already. That newsagents do not makes us less competitive and less profitable.

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magazine distribution

A different approach to displaying bulky marie claire

I like the creativity of one of the team members at one of my newsagencies in handling the bulky issue of marie claire magazine. This retail package is too bulky to fit into traditional magazine display units so we had to find way to professional represent the stock and the gift. By using the magazine, a poster, the gifts and some wrap our team member created a display in keeping with the quality of the magazine – in a location chosen to drive impulse purchases.

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magazines

Tatts introducing barcodes to make sales easier

Kudos to Tatts for introducing barcodes on their coupons that contain the ticket value and can be scanned by Point of Sale software. This move will help newsagents track lottery cash. I first approached Tatts seeking this more than ten years ago.

Shame on Tatts for not advising software companies directly.

The cynic in me wonders why this change has been introduced now. Is there another retailer keen for the barcode innovation?

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Lotteries

Bauer Divorce magazine has newsagents laughing this morning

The Ultimate Guide to Divorce is a new magazine title from Bauer out today. Beyond the surprise that it would be published, newsagents are laughing that the barcode used is the barcode for the 2011 royal wedding magazine. While this is probably not intended commentary by Bauer about the wedding of William and Kate it’s giving newsagents a good laugh if the calls and emails I have received already are anything to go by.

Another laugh newsagents are having relates to the feature promoted on the cover of the magazine: Family getaways you can afford. Of course it depends on how the divorce goes as to whether you can afford a holiday.

As for the title itself. the scale our is another example of oversupply from Bauer. When will they start using their much vaunted sales based replenishment?!

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magazine distribution

Instant lottery tickets in decline but not everywhere

I am in the middle of collating newsagency sales benchmark data for July 2012 to June 3013 and comparing this with a year before. Instant lottery ticket sales are down, on average, between 15% an 20%. However, this decline is not as prevalent in Victoria. While I am still digging into the data, the oly difference that springs to mind is that Victorian outlets have Intralot instant games whereas other states have Tatts.

I’ve spoken to a couple of Intralot people who tell me that the network experience generally is sales are up year on year. I’m not sure of the reason, whether it’s games or the competition with tatts. The sales news is good for retailers.

Newsagents I have spoken to in Queensland are concerned at the significant change in approach they are experiencing from their area managers under Tatts management compared to what it was like under the old Golden Casket management. My own experience with Tatts was that there were more interested in ticking KPI boxes tan they were in sales you achieved.

If the decline in sales continues for tatts instant products and Intralot sales do increase then I am sure newsagents will want answers.

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Lotteries
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