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

Author: Mark Fletcher

Magazine publishers need to be careful who they listen to

At a recent publishing event someone claiming to know was putting it about that newsagents were achieving a sell through rate of 50% for magazines.

The person reportedly saying this does not have access to data to backup the claim. I think it is their best guess. But they did not qualify it.

I see real sell through data for many newsagencies. While there are some with an overall sell through above 50%, there are many below. But this high level measure is unhelpful. The best measure is non weekly sell through as this is where newsagents are hurt the most.

Once I take out high volume weekly titles, the average magazine sell through I see for newsagents is close to 40%. That is, 60% of this stock fails to sell and is either recycled through the system at the newsagent’s expense or thrown out and wasted.

The MPA driven magazine code of conduct that is at the basis of a supply model trial with selected newsagents will not address this as the code does not go far enough. Replacing a failing title with another failing title allows a distributor to pass the code but fail the newsagent.

I want magazines I can sell. I’m happy for a 75% sell through – less than that does not work for me or the publishers I serve. The problem is that 75% does not work for the magazine distributors. hence the uncompetitive supply model forced on newsagents.

Yes, I hear you …  blah blah blah – nothing new here. That’s true. But I feel better for writing it.

14 likes
magazine distribution

Gordon & Gotch magazine fail #3

image[5] copyYep, the same newsagency as the last two, this time it’s TAN UNRESTRICTED. With no sales achieved from issue 54 through to issue 64, the Gotch magazine allocations experts have decided the newsagent needs to go from five copies to eight copies. This would be laughable if it was not so harmful to the business.

And you wonder why newsagents are getting out of magazines.

5 likes
magazine distribution

Cool Dolly cover series

dolly5Kudos to the folks at Dolly for their five different covers on the One Direction members. It’s a brave move. We have done what we can to show off the five covers but can’t devote enough full face pockets to have all on show at once. One Direction is not driving sales as it used to – calendar sales are the best indicator of that for me as I have good data.  Calendar sales laid out against first week’s sales of their latest album compared to their previous three shows that while the band remains popular, that popularity is not translating into the sales they used it.

2 likes
magazines

Are discussions under way on the next WH Smith acquisition?

I have heard from three suppliers in the last 24 hours that UK retail group WH Smith is in negotiation with an Australian newsagency group to acquire franchisor management control of that network and add it to its rapidly growing portfolio. We know from recent acquisitions that WH Smith prefer the franchise model over corporate stores.

If the reports lead to an acquisition, it will shake up the channel and considerably challenge several key newsagent suppliers.

I don’t have confirmation from the group so I will not name them here.

6 likes
Competition

Collectors are valuable newsagency shoppers

bbbearCollectors are a valuable customers – the challenges are discovering what they collect and understanding them. This was brought home to me last week when I delved into the world of the Breaking Bad collector, the world of someone who will purchase items related to the show and the knowledge they have about what they collect.

Take this pink teddy from Breaking Bad. It’s a sad looking thing but it is sought after by Breaking Bad fans. If you had it in your plush department people would think it’s damaged stock. If you put it on a pedestal under a spotlight, Breaking Bad fans would recognise it. Many would have read the history of the bear online, they would know that it is more than a bit player in the Breaking Bad TV series.

Thanks to the support from several specialist suppliers, engaged newsagents have access to products like the pink teddy bear that cater to TV show fans, band fans and collectors of other items.

I know through my involvement with the collector strategy of the newsXpress newsagency marketing that there is also considerable support to help newsagents to get into and make money from the collector space.

With a serious collector spending between $1,500 and $3,000 a year on their collection (of any sort), being able to serve them depends on product knowledge, good supply and smart shop floor engagement.

This is that the pink teddy bear represents – a lesson in the value of collectors and the role they can play in some newsagencies in unlocking new traffic for the business.

It’s hard work serving collectors. You need to step into their world of obsession. You need to understand their interests. You need to respect them. You need to enjoy their excitement at new products they can add to their collection. So, yes, it is hard work … and very rewarding personally and business wise.

This is what selling to collectors is about, knowing

5 likes
Newsagency management

Amazing Lego Christmas display

legoxmasOn Pitt Street Mall in Sydney is an amazing Lego Christmas display, standing tall and drawing families tas it lights up and Christmas music plays.

This is an inspiring pitch for the Lego brand. I saw kids loving the music and lights and adults in awe of the construction using Lego bricks.

The display reinforces the strength of the Lego brand and the value of a big display in attracting people.

Click on the image to see the bricks.

1 likes
visual merchandising

Advent calendar overload

adventoverloadFor years advent calendars were challenging to find. Today, we are swamped. In one shopping centre this week I saw them in supermarkets, discount variety stores, confectionery shops, newsagents, gift shops and even at the fruit shop.They all had boxes of them – many featuring licenced brands … and most were discounted. What was once a specialist retail line you could enjoy a good margin from is now another oversupplied line you will be lucky to break even on.

3 likes
Newsagency management

Excellent branding and placement leverages traffic

ksThis Kinder Surprise display at the front of the Woolworths supermarket on George Street in Sydney is terrific. There is no missing the Kinder Surprise branding as you enter of leave the store through the main entrance. Kinder Surprise owns the space. From the detail on the floor units to the large posters, this is a consistent and clear message.

While I expect there supplier would have paid for the space and had professional merchandisers create the display, the photo offers us inspiration for our local newsagencies, inspiration to give over key traffic space to a single brand that will interest our shoppers.

While many newsagents do excellent displays, they are often done on a small scale and end up fighting for attention in a visually busy shop. The approach in the photo shows the value of giving space reserved for multiple displays over to a single brand.

Click on the image for a larger version.

2 likes
retail

A reminder that colour blocking works

zumbo-macaroonsNowhere is the value of colour blocking more obvious than in the display at Adriano Zumbo’s kiosk at the QBV centre in the heart of Sydney. You can see people notice the colours of the display. It’s effective because of the colours they place next to each other. The same product arranged differently, may draw fewer people … it all comes down to effective colour blocking. Getting this right can draw people to anything. For good advice on colour blocking check out the advice from Apex display.

2 likes
Management tip

Dumping bagged discount magazines

wwbauerThis photo shows how the bagged discount magazine pack of Woman’s Day, OK! and NW from Bauer is being treated at a Woolworths supermarket – away from weekly titles, display unit for AWW. And on that, note the header provided by Bauer for AWW for the display. I’d have said yes to a floor display unit to promote the Christmas issue of AWW if I was offered one. The difference in support for supermarkets which sell fewer magazines than the newsagency channel is disappointing.

5 likes
magazines

How to cut theft in your newsagency

I did this video – How to cut theft in your retail business – for my software for my software company a few weeks ago. It contains non system specific advice on how to cut theft.

I am sharing it here this morning because in the last week I have heard from four newsagents who have discovered serious employee theft problems.

The advice is simple and will work =for any newsagent regardless of the technology you use. Unfortunately, newsagents tend to act only after theft has occurred.

5 likes
Newsagency management

News Corp’s Courier Mail recasts the WH Smith story

Someone must have complained to the folks at News Corp about their poor coverage of the WH Smith Supanews takeover story. As I noted when I wrote about this…..

The ‘corrective’ story they published at the weekend still has problems. First up, News Copr. Needs to stop referreing to our businesses as paper shops. We’re ot paper shops.

The Courier Mail report sought comment form the ANF:

Alf Maccioni, chief executive of the Australian Newsagents Federation, agreed the traditional corner store newsagent would survive the arrival of WHSmith.

Mr Maccioni said WHSmith was only likely to open new outlets in major shopping centres, where the rents were prohibitive for independent operators anyway.

I am not sure why the ANF would say this or if the Courier Mail has misreported. WH Smith in the UK is in malls and on thehigh street. As readers here would know, they have recently launched a new franchise model for independent newsagents that is gaining considerable traction in the UK. It’s called WH Smith Local. I looked at it when in the UK a few weeks ago. I’d expect WH Smith in Australia to leverage all of their platforms from the UK.

The growing presence of WH Smith in Australia is a wake up call our channel needed. The question is whether newsagents have the strategy to deal with this.

In addition to disruption to print, migration of lottery products online and the drop in commission on agency lines, newsagents are also challenged by misrepresentation of our businesses, what we are capable of and the services we provide.

For a channel so connected to the media it is disappointing that reporting too often misrepresents us.

1 likes
Newsagency challenges

Another significant departure at Seven West

Also as part of the restructure at Seven West, Nick Chan, Chief Financial Officer at Seven is leaving the company. Nick was CEO of Pacific Magazines for many years where we oversaw the development of a strong portfolio of titles.

As CEO, Nick was a champion of newsagents, committing considerable resources to help our channel compete in a more diverse marketplace.

I was fortunate to meet Nick several times and while many newsagents would not know him, he was important to our channel.

Publishing experience is important in the magazine business and each time any publisher loses someone with good publishing experience, like Vicki Rossi and Nick Chan, the businesses loses valuable experience.

Indeed specialist business experience is important in any business. You only have to look at the damage in some publishing businesses when they replace category experts with FMCG people.

I’m sorry to see Nick go and whish him all the best for the future.

Newsagents need to look at the moves at Seven West and consider their own businesses. We are in an economy where efficiency is vital. Doing more with less is the rule of the day. Even though we do not have the obligation of publicly traded shares that Seven West has, our focus on operating costs ought to be as focussed.

6 likes
Newsagency management

It’s Taylor Swift season for magazines

magstswiftWe take note of who is on the cover of magazines and place titles together that feature the same person. This is why it’s Taylor Swift season in our fashion section and why we have Cleo and InStyle together and why we have them placed so that those who do not usually purchase these titles can see the cover. It’s all about driving impulse purchases – that’s how a good cover works for us.

1 likes
magazines

How newsagents treat the Bauer discount packs

bauerdiscountHere’s how one newsagent has placed the latest discount magazine pack from Bauer – the Woman’s Day fronted pack is mixed in with fashion titles.

We early returned ours as usual – we don;t want these discount packs as we don;t have the spare pocket and we don’t agree with the discount strategy.

I can’t see how this works for Bauer in newsagencies.

1 likes
magazines

Even the Financial System Inquiry report wants magazine supply to be data driven

Check out this excerpt from Chapter 3 Innovation of the Murray report – the final report of the Financial System Inquiry:

The Inquiry’s recommendations to facilitate innovation aim to:

  • Encourage industry and government to work together to identify innovation opportunities and emerging network benefits where government may need to facilitate industry coordination and action.
  • Strengthen Australia’s digital identity framework through the development of a national strategy for a federated-style model of trusted digital identities.
  • Remove unnecessary regulatory impediments to innovation, particularly in the payments system and in fundraising for small businesses.
  • Enable the development of data-driven business models through holding a Productivity Commission Inquiry into the costs and benefits of increasing access to and improving the use of private and public sector data.

These recommendations will contribute to developing a dynamic, competitive, growth-oriented and forward-looking financial system for Australia.

In our channel we have accurate data flowing between supplier and retailer, data that can drive efficiency for all stakeholders. Yet it is not used for to do so would reduce the income from one stakeholder.

While there is mucking around going on with magazines at the moment because of the code of conduct moves, it does not go as far as the world envisaged by Murray and others who worked on the Inquiry.

The current approach to using newsagent magazine sale and return data impedes our channel, it makes us less competitive. Murray would not be impressed.

8 likes
Uncategorized

Murray report could bring on help in card transaction fees

If adopted, recommendations of the Murray report could help newsagents and other small businesses when it comes to handling fees associatied with customer use of cards for payment.

Recommendations to reform the payments system would benefit SMEs (see Recommendation 17: Interchange fees and customer surcharging and Recommendation 16: Clearer graduated payments regulation in Chapter 3). The Inquiry’s proposals to lower interchange fee caps would reduce the fees paid by all businesses and reduce the difference in fees paid by small and large businesses.

What actually happens will depend on governments and banks.

See more small business coverage in the report here.

3 likes
Newsagency management

Australian newsagent discount voucher success reported in the UK

Screen Shot 2014-12-07 at 12.25.10 pmBetter Retailing has published a terrific report on our success with discount vouchers. I met with Steve Denham, a former UK newsagent and regular commenter here, who wrote the article when in the UK six weeks ago. We had a good talk about discount vouchers and their impact on sales.

A year and eleven months in with discount vouchers and having used a points based program as well as buy X and get Y program, I rate discount vouchers as the most successful loyalty program I’ve seen.  It’s whole of business and that is key. It is more easily understood than the old points based program plus it has no hoops that make customers groan.

Better Retailing is a highly recommended read for Aussie newsagents – it publishes plenty of ideas from which we can learn.

7 likes
Newsagency management

When we lose good people from our newsagency channel

Vicki Rossi finished up with Pacific Magazines a couple of weeks ago as part of a restructure within the business that saw several senior people and others leave the company

As Retail Sales and Circulation Director, Vicki was the executive at Pacific most responsible for the newsagency channel. In this role, Vicki served us the company well, ensuring that newsagents were a key part of Pacific circulation strategies. Sure there was progress with supermarkets, but there was progress with newsagents too.

Vicki and those who reported to her were responsible for the nexus program, the best supplier support program for newsagents in the history of our channel. Yes, it is better than Connections because it offers practical business growth tools newsagents can use like email and SMS campaigns, it offers rewards based on real sales growth, it offers us access to comparative performance data by title and marketed us personally to people in our postcode area. Vicki was a key driver for nexus.

I have seen sales data that demonstrates the value of nexus to newsagents. Those who use the tools of the free nexus programs out perform newsagents who do not.

We have Vicki and the team she led for years for this opportunity.

I am sorry to see her leave but I understand that pacifies and parent Seven West needed to address poor numbers and cutting costs is one way for them to do this to appease shareholders.

I am grateful to Vick for her active support of newsagents publicly and privately. pacific magazines will miss her.

23 likes
magazines

On The Run magazine offer challenges newsagents

otrmagzFurther to my post Saturday about the low cost Tatts fit out at the On The Run convenience stores in South Australia, check out the magazine department in this same outlet.

This is competition folks, serious competition.

Convenience outlets usually focus on a small range of no more than thirty titles, top sellers. This location and others like it from this group have a far bigger magazine over, one that competes on range with local retail newsagencies.

Newsagents with businesses competing with On The Run locations need a comprehensive strategy for effective competition – this is a chain out for your everyday business given not only their magazine range but their lottery products, greeting cards as well as stationery.

I’m not writing this to scare you. I am writing this to better inform newsagents that convenience is the channel targeting us even more so than supermarkets. Each of us needs to reflect this in our own business planning if we are chasing the same convenience shopper.

9 likes
Competition

Love for The Melting Snowman as strong as ever

msbowThis is our third year with The Melting Snowman and sales are as strong as ever. We thought it might slow and so placed it among all Christmas products and not under the spotlight at the counter as for the last two years. It’s sold from the regular Christmas table. It’s purchased as a gift for a co-worker, for Kris Kringles and even for home for fun with the kids.

The rapid stock turn makes The Melting Snowman a top performer this Christmas again on the return on shelf space and return on inventory investment measure stakes.

3 likes
Gifts

Frozen working at the newsagency counter

frozencounterThis counter placement of Frozen product is a small part of our overall Frozen pitch. We chose these products as they are easily purchased on impulse – including the $15.00 vinyl collectible characters. While there is Frozen overload in retail, having different products is important as is ease of purchase – hence the counter offer.

Stocking stuffers are especially popular as impulse purchases at the counter. We think very carefully about what we place here and we change it regularly through the week.

5 likes
Gifts

Who magazine shines with Hughes coverage

whohughesThe Who cover story on the passing of Phillip Hughes was timely and respectful. It’s one of their best issues of the year, showing how a magazine can stand apart with coverage of a major local news story. Well done to everyone involved. We embraced the opportunity with full cover placement with weeklies and with newspapers.

3 likes
Uncategorized
Trending Articles

Fairfax changes approach to TV Guide, disrespects newsagents

Published on April 20, 2011

What do you think of the Powerball changes?

Published on February 16, 2018

IPS releases new magazine contracts

Published on June 21, 2011