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

Author: Mark Fletcher

Sunday newsagency management tip: never give up

No matter how tough your situation, no matter how impossible the road ahead, never give up, there is always something you can try, a step you can take to move forward.

While I expect that comes across as glib, the words are sincere.

I have never seen a difficult situation being faced by a business for which there is not something else to to try, someone to speak with, steps you could take to explore hope.

I have seen people give up too soon, locking in what they saw as inevitable yet which could have been avoided by owning the truth earlier.

There are newsagents facing tough situations today who may feel it is too late to change their business model. I say it’s never too late. There are also newsagents today when see dark clouds yet who are not acting because they thing a storm is inevitable when, in fact, they can avoid rough weather by acting now.

We have more control over what our businesses are, what they stand for, who they attract and their very future than we think.

I have seen businesses on the brink of bankruptcy turn around. I have seen businesses with barely 20% of revenue they once had turn around.

We are losing too many newsagency businesses because newsagents have given up.

This has to stop.

It stops by us believing in ourselves and our colleagues while at the same time acknowledging the challenges unique to our channel and those outside our channel.

We need to talk positively to each other, without ignoring the challenges of retail  the economy, print media and other factors. Indeed, those downers can be leveraged for a brighter future – if we adopt the attitude which is my management tip today: never give up.

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Management tip

Sunday newsagency marketing tip: use dead space for marketing

pwtvNewsagencies have dead space that is often not used where you can draw attention to products and drive shopper engagement by investing a few minutes of time. Take Something Sweet, the new partwork launched this past week. We ran a strip of the first issue on the floor in one of our magazine aisles. It used space which is never used, cheap space down low where people often don;t look. Shoppers noticed, sales engaged and we’re on track to sell out of part one easily – moving 120 copies and probably more.

the space cost us nothing and the placement was done in under two minutes. It made a difference in the aisle, drove sales and leveraged a good looking product which is being advertised on TV right now.

This is an example of no-cost marketing we can undertake to drive basket depth – drive additional purchases from shoppers in-store. Try it … it works.

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marketing

Growing Valentine’s Day gifts in the newsagency #5

vhThese Quick Stick hearts have been a hit for Valentine’s Day. the season is a perfect opportunity to get them out of the stationery department and onto a seasonal display. Why not? An excellent point of difference with a traditional newsagency product. Not my idea – an engaged team member did it. Terrific!

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marketing

Supermarkets do Valentine’s Day poorly compared to newsagents

valawfulI have seen Valentine’s Day displays in ten supermarkets this week when comparing parts of their businesses to ours. each supermarket has done Valentine’s Day poorly. The photo is one of the better ones. yet they will achieve reasonable sales simply because they have the stock. They are used by people who purchase on impulse because of convenience.

Newsagents can and often do do better than this. By better I mean offering a broader range of product people would be proud to give, better quality product in the gift area, displayed with pride and supported with customer service helping shoppers with choices.

It is seasons like Valentine’s Day where we have opportunities to compete with the supermarkets. Key to this is being on the lease line so those walking past can see our point of difference.

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Newsagency opportunities

Adding to the magazines we carry

msWe have recently added Manuscript to the list of magazines we sell – proving that newsagents do seek out additional titles to expand their range. I mention this to show magazine publishers who stop by here that some of us actually use a pull model. The challenge is that so much of what we get is pushed and pushed inefficiently that we rarely feel inclined to seek out new titles. The other reason newsagents don;t often order a new title is out of fear for being overloaded.

We regularly look for new titles to carry. And by we I mean everyone involved in the business. This is another factor in our growth in magazine revenue.

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magazine distribution

Newsagents trashing APN newspaper promotion of Staples

classroommakeoverHere’s a photo from one newsagent showing what they have done with the collateral from newspaper publisher APN sent to support the classroom makeover promotion being run with Staples.

The APN collateral is in the trash bin.

As I noted here, newsagents are angry that APN is promoting US stationery giant Staples and not the local newsagent businesses on which they rely to promote and sell the newspaper.

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Ethics

Newspaper circulation drops across the board in latest results

There is no good news in the capital city daily newspaper circulation numbers just released.

The decline is such that there must be a live discussion as when one or more of the titles ceases to be printed daily. Circulation of The Age declined 18.3% down to 106,838 copies. This is around 30,000 copies lower than the circulation of The Seattle Post-Intelligencer a respected broadsheet from Seattle WA, USA when it ceased being printed.

What’s worse for The Age is that there is no dramatic uptake in digital editions – the decline in print is not due to migration.

News Corp has plenty of bad news too with the Herald Sun down 7.9% Monday to Friday.

Shame on newspaper publishers for continuing to ignore opportunities for working with retail newsagents to grow over the counter single copy sales. Worse still, shame on newspaper publishers for not even having a current database of retail newsagents with home they could work on such a project.

There is no good news in the latest newspaper circulation results. The numbers remind newsagents of the need to proactively engage with other traffic generators to build the viability of their businesses.

Do I think we can grow newspaper sales? Yes!

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Newspapers

Discount magazine bundles don’t help Bauer stop deep declines in weeklies

Weekly magazine circulation has declined again based on the latest audit results published at mUmBRELLA.. From the declines speak to the failure of their discount bagged magazine strategy. here are the Bauer declines: Zoo (now terminal) 36%, NW 15%, Woman’s Day 5.7%, TV Week 4.4%, OK! 3.7% and Take 5 3.4%. Pacific weeklies declined too: Famous 14.5%, Who 12%, That’s Life 6.3% New Idea 3.5%.

Consumer habits have changed and some titles are yet to catch up with that in terms of content they offer. The publishers also need to engage differently with retailers. They focus too much on billboard displays and not enough on engagement that fits with retail today, specifically retail in newsagencies.

The publishers have not helped themselves by spreading into retail outlets where magazines are not treated well. Their arrogance has distanced some publishers from the newsagency channel.

In short, publishers need to reset their contact, change how they engage at retail and embrace newsagents as their specialist retailers. We’re all in this together and can support each other. However, supermarkets, convenience and petrol will not see themselves that way.

These declines are not new. The lack of a smart response from publishers is also not new. In some respects it is like watching a train wreck in slow motion.

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magazines

Magazine circulation figures sobering

Circulation of Bauer Media’s Dolly dropped 42% year on year in the latest audited circulation report – as reported by mUmBRELLA. other Bauer titles dropped: Cleo 25%, AWW 4.2%, Cosmopolitan 9.2%, PC & Tech 19%, Top gear 19.8%. Pacific titles dropped too but not at the same level as Bauer: Girlfriend 22%, Total Girl 29%, Men’s Health 19%, Women’s Health 12%, Marie Claire 9%, Better Homes and Gardens 6%.

Frankie, which usually achieves growth, dropped 3.5%.

Only a small number of titles reported growth this quarter.

Magazine publishers could grow sales by changing how they engage with newsagents. I am certain that newsagents could help publishers in return for a more commercial relationship. We could more actively promote magazines and engage in campaigns that increase multi-purchase as well as attracting shoppers back for their next purchase.

Newsagents have an opportunity to engage with the category differently to supermarkets, and P&C outlets where the focus is only on the SKU. For a better margin we can nurture and support magazines. It all depends if Australian magazine publishers want this.

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magazines

Strong January sales in the newsagency

January numbers for my newsagency show revenue up 19% year on year. There has also been a significant increase in gross profit percentage. The small team at the newsagency has worked hard to make this happen.

Here are key measurements for the business:

  1. Traffic – up 2%
  2. Average sale value – up 17%
  3. Average items per sale – up 2%
  4. Cards – up 28%. (24% of total sales)
  5. Everyday counter cards (birth to death) – up 26%.
  6. Diaries – up 24%. (5% of sales)
  7. Gifts – up 135%. (8% of sales)
  8. Magazines – up 5%. (21% of sales)
  9. Women’s weeklies magazines – up 9%.
  10. Newspapers – no change. (6% of sales)
  11. Plush – up 5% (10.39% of sales)
  12. Stationery – up 14%. (5% of sales)
  13. Toys – up 210%. (4% of sales)

Two thirds of what we sell has a gross profit of 55% or more. Toys for example is at more than 60% as is plush and most gifts. Magazines remain an important part of the business for revenue and for what we achieve with the traffic.

I appreciate these numbers may seem unreal to some. Like all the data I publish here, I will provide an opportunity to see the reports for themselves, to be certain that the numbers are true.

What we are doing in this business is living by the principles I have been writing about here for years – living by the principle that every day is our pay day.

The key factors to the growth are our whole of business discount voucher program, acting as retailers and not agents, chasing change in what we sell and how it is presented, using data to understand our customers and making the shop a destination for non-traditional products.

The discount vouchers continue to deliver the best result I have seen from a loyalty program. I launched the channel’s first loyalty program more than ten years ago and have used a clip card approach as well as a comprehensive points based approach. Discount vouchers are different again and customers love them.

Newsagents can grow their businesses by standing for something and relentlessly pursuing this point of difference.

Keys to success are multiple traffic generators for the business, above average margin, leveraging existing traffic as much as possible and being ruthless when things don’t work.

This 135 sq m shop is in a Westfield centre with another newsagency, two Coles supermarkets, Target, K-Mart, Australia Post and plenty go gift shops selling cards and gifts. It’s a highly competitive situation. We do not have lottery products or tobacco products as traffic drivers.

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Newsagency management

Comparing the challenges of bakers to magazine publishers

Screen Shot 2015-02-12 at 9.32.59 pmI am grateful a newsagent drew my attention to an article on page of The Australian Financial Review yesterday. Baking giant’s profit crumble on page 27 is a timely read as what Goodman Fielder has experienced with Coles and Woolworths, Australian magazine publishers could also experience as bread and magazines share some common aspects.

Here is what the newsagent wrote to me about this:

The comments in the AFR today regarding Goodman Fielders result (page 27) and the steps this company is taking to recover from a huge drop in profit due to oversupply and massive returns of bread sound just like magazines. I wonder how much push came from the supermarkets or is the effect on Goodmans bottom line the driver. Maybe we can learn something.

We see supermarkets driving some activity with magazines around discounts and bundled deals – all pitching the titles at below their cover price.

I wonder if there is pressure for this to increase – offering discounts, bundles and other promotions. Supermarkets are more active in the magazine space than at any recent time.

The only way we newsagents can address this is to be a unified channel of value to magazine publishers. I suspect, however, that the behaviour of magazine distributors toward newsagents is s barrier to that happening.

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magazines

Promoting Men’s Health mini mag

magsmenshWe are promoting the Men’s Health Cover Model Muscle mini magazine with our news, property and money titles swell as with men’s health related titles elsewhere in our mag department. It’s the right time of the year for the title. We’ve suggested it as a Valentine’s Day gift to some.

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magazines

Terrific looking Cosmos magazine cover

magscosmI love the look of the latest issue of Cosmos magazine. It stands out among the sea of colour of the magazine department. we have the whole front cover on display – to leverage the terrific cover.

If you put this in the old-style magazine pockets some newsagency shopfitters still make you will lose the benefit of the impact.

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magazines

Print readership continues to decline

The Australian reports newspaper print readership contracted in December:

PRINT readership of Fairfax Media news mastheads continued to contract apace, with an analysis of December figures showing Fairfax’s major national, metropolitan and regional Sunday titles lost one in 10 readers collectively.

News Corp’s major Sunday titles slipped 3.2 per cent in the Enhanced Media Metrics Australia figures, while its weekday titles were down 1.2 per cent (7.8 per cent for Fairfax).

Newsagents need to factor these results into their business planning. The decline is not inconsistent with the newsagency sales benchmark study results I have published here.

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Media disruption

Pushing Something Sweet partworks launch issue

magssweetMy issues with the use of the N logo aside, we are promoting the launch issue of the Something Sweet part series on the lease line as a traffic driver for us.

The floor display unit is terrific – nice and strong and well branded. We expect to sell 120 copies of the launch issue and achieve additional sales to people attracted to the shop as a result of the new traffic.

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partworks

DeAgostini TV ad misbrands newsagents

deagWhile I am thrilled to see Something Sweet Collection advertised on TV, I don’t understand their use of the N logo. They use one of at least three quite different N logos in use. I’d guess than less than a third of all newsagents use an N logo and that less than 10% of retail newsagents use the N logo in the DeAgostini ad – making its use redundant.

The N is not representative of this channel. It stands for nothing and is backed by no discipline. It’s value is represented by poor and undisciplined uptake by the channel.

I’d like to know who advised DeAgostini to use the N logo – whoever it is got it wrong.

My other frustration is that the N logo is placed to be recognised but the word newsagents is on a pale background and lost.

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magazines

Despite sales failure Bauer continues to send discount magazine bags

nxpackBauer Media continues to supply newsagents their bagged discount magazine bundles. What was originally pitched as a four times a year promotion is now promoted regularly.

I’d prefer magazines to be purchased for their content and not because of a discount to the cover price. Regular discounting is a slippery slope. People who purchase on price are, in my view, likely to only purchase again when there is a price offer.

I don’t understand Bauer sending discount magazine packs out when I see sales data. The image below is sell through data I received from one newsagent earlier this week. It covers some the packs they have received. Click on the image to see the detail.

Screen Shot 2015-02-11 at 7.17.27 pm

On the basis of this data, the newsagent should not be sent more discount packs by Bauer Media as the packs clearly do not work in this shop, they are not profitable.

The thing is, I suspect the Bauer allocations people do not look at this data when allocating stock to this or other newsagencies. If they do look at the data and still send stock which will certainly not sell shame on them. What a waste of newsagent time, space and money.

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magazine distribution

Gross oversupply of Yours

magsyoursDespite a sell through of between 40% and 60%, the allocations experts at Bauer Media sent us an extra 40% of the current issue of Yours magazine. I shake my head and wonder what I have done to deserve such a fine from the company. What a ridiculous waste of paper and time.

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magazines