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

Author: Mark Fletcher

South Australian government fails to support small business

The South Australian government has signed a contract with two multi-national stationery suppliers, ignoring an opportunity to support small businesses like newsagents. The ABC has the story.

I don;t know why I am surprised that a politician fails to support small business. This is how it’s been in Australia for decades with successive state and federal governments. They have been quick to say how important small business is and slow to back their words with action.

Labour, Liberal and National Party politicians have consistently failed small businesses, like newsagents, in Australia. Yet we vote for them.  More fool us.  If we were serious about wanting governments to support small business, as our core issue, then we would lead a campaign across our counters at the next federal and state elections. We won’t, however, because we will prefer to complain than to actually do something about chaning the situation.

Shame on you South Australian government, shame. This is a socially irresponsible decision.

Okay, so what should government do? If they support Australia as they often say they will, they should be required to support Australian businesses ahead of others and small businesses ahead of others. These requirements should be mandated in a way that is fair for taxpayers.

My sense is that small businesses are more likely to invest in local communities. The knock-on economic benefit of governments proactively supporting small business would / cold be considerable.

The politicians, however, will only support small business if it is in their interests to at the ballot box.

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Ethics

Judging magazine covers for The Maggies

I was thrilled to participate as a judge for the shortlisting of magazine covers for this year’s 2012 consumer awards, The Maggies. We had close to 200 magazines covers to judge last Friday in Sydney to select a shorlist in eleven categories.

This year was the first time a newsagent was represented on the judging panel. It was fascinating hearing what magazine publishing and other media experts looked for in a good cover design. The day also provided an excellent opportunity for networking and, from my perspective, talking about the value proposition newsagents offer over other magazine retailers.

I urge newsagents to VOTE NOW for their favourite cover. Voting is open to anyone.

Click here to see the maggies shortlist announcement.

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magazines

Snowman ornaments selling well

We have had the Snowman Christmas ornaments on the shop floor for less than two weeks and they are selling very well. In fact, we are reordering to ensure we can sell deeper into the Christmas season.

What’s interesting in this success story is that we have the stand half-way in the store, near our magazine department, since we have had Halloween in the front.

They are working beautifully as a basket builder, adding valuable margin dollars to sales.

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magazines

Chasing Modern Family fans

We have the latest issue of men’s style magazine with the full cover on show to leverage the shot of Modern Family star Sofia Vergara. The Vergara cover should get more people picking it up than usual.

We are also giving GQ excellent positioning because of the Daniel Craig cover and the release of the new James Blond movie.

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magazines

Merchandising the New Idea Pantene offer

We have the New Idea Pantene giveaway this week and have decided to run fanned out as shown in the photo in a couple of locations in-store. This placement at the counter as well as the usual location for the title does take up more space but it also shows off the bonus value with this issue. I see this as an opportunity for us to promote a point of difference over others nearby selling the magazine.

I like now the giveaway is tied to supporting women with cancer.

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magazines

The Age announcement misunderstood

Fairfax used VANA to announce that the country edition of The Age would not be produced today and that the metro edition could be challenged or not produced at all. I’m not sure why the publisher did not make the announcement directly. Their website gets plenty of visitors – more than VANA. I can’t see any announcement on The Age website this morning.

Publishers have a history of using newsagent associations to distribute news they themselves should distribute.

A couple of tweets indicate the announcement form VANA may have been misunderstood.

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Newspapers

One Direction series reinforces value of longer on-sale

We have not returned any stock of the Girlfriend branded One Direction part series from Pacific Magazines and this weekend we saw the value in having the full series available and on-show. I personally saw our display drive impulse purchases two of which were worth more than $20.00 in part series titles.

I know of newsagents who have early-returned stock of these titles. While the early return opportunity is embedded in the model, I have no doubt that interest in this series is far from satiated. Yesterday, one set was purchased by a grandparent for a grandchild and the other was purchased by a parent who had finally given in – she told me she’d resisted for weeks but had not given up. I was happy with that.

Our social media campaign promoting the series is also showing that interest in the series remains strong. Several fans have said they are buying second copies of the series – one to read and another to collect. I hadn’t thought about this, that people could purchase multiple sets.

On eBay I found mint condition issue #1 is priced at $24.99 plus postage.

The set from Pacific Magazines is also helping calendar sales – we’re past 150 copies of that sold, adding around $4,000 to the One Direction related sales this year.

I plan is to keep the five-part set in-store for the entire on-sale. The indication is that it will easily pay its way.

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magazines

Making every moment count

With Halloween selling so well we had to consolidate all product to one display. This freed up space at the counter. We filled the available space with a carefully selected range of magazine titles like to work well in this impulse purchase location. It worked a treat with magazines being added to the basket at the sales counter.

Too much time in the newsagency channel is spent complaining about what we can’t do when every day there are (even small) moves we can make to drive success.

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magazines

Marketing tip: with loyalty rewards be sure to reward for genuine loyalty

There are many different types of loyalty systems and loyalty offers in retail businesses and in Australian newsagencies. Too often, I see newsagents and small and independent retailers more generally implement a loyalty system and make expensive mistakes.

Here are some tips for successfully implementing a loyalty program based on my experiences in my own retail businesses and experiences working with retailers in other channels including some who have implemented more sophisticated and networked solutions than any in the newsagency channel.

  1. Reward above-average behaviour and drive a better return for you.
  2. Use of the basket data. This is your key benefit.
  3. Control your data and how it is used.
  4. Use your data to drive your program.
  5. Leverage the program to serve your needs ahead of all else.
  6. Be consistent in your offer.
  7. Keep it simple.
  8. Use your loyalty program to reinforce your point of difference (USP).

I started the newsagency channel’s longest running loyalty program in 2004. It’s still running today and is a key factor in above average performance in participating stores. It meets the eight points noted above.

The back end of managing a loyalty system is complex. It takes sophisticated software to leverage the real value of collected basket data. This is where major national retail chains do well – their pockets are deep and they have suppliers who will fund the work because of the value of the data.

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marketing tip

Management tip: look at the McDondald’s Canada move to sell ground coffee

McDonald’s Canada is set to sell bags of ground coffee in a further change to the model of the fast food business. read the excellent article on this published by the Canadian Financial Post – it goes into the background for the move.

Look back at McDonald’s and the moves they have made over the last ten years and you see a company that does not wait for disruption to impact their business. Okay there may be a couple of instances – but in the main McDonald’s has sought out change and played with their traditional business model. They have done this in various outpost locations, including Australia.

Other retailers are doing this too. Look at Cotton On, a well-established fashion retail brand in Australia and not they have Typo, it’s like Smiggle for grown-ups. They sought change to effectively disrupt their traditional business.

The management question every newsagent would benefit from asking themselves today is: what am I doing right now to disrupt my business model, to break from tradition and to pursue change in my newsagency?

The future of newsagencies in Australia depends more on this than any action by any supplier.

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Management tip

Newsagency of the Future workshop and video update

I continue to be asked about another round of the Newsagency of the Future workshop series. My plan at this stage is to host a completely new and considerably more action-oriented session early in 2013. This will have greater urgency and will reflect some significant shifts in retail.

A version of the existing workshop is available at YouTube:

It’s had 524 views and the series itself was seen live by more than 750 people including a couple of conferences this year so far.

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newsagency of the future

Supporting The Australian Women’s Weekly risky move

The current issue of The Australian Women’s Weekly is the first with a male on the cover in fifteen years. It will be interesting to see how much Hugh Jackman helps them move stock. We have been supporting the title with several locations including placement with newspapers. Sales are okay, no spike at this stage but it’s early in the on-sale.

Up through to the end of today we have AWW in four locations. That will be pulled back from tomorrow.

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magazines

Updated T2020 communication for newsagents from News Limited

Click here to see the updated FAQs from News Limited T2020 and here to see the letter sent earlier this week. I have spoken with Catrin Thomas this week and am assured that News is genuinely listening to and engaging with newsagents through this trial in Queensland.  I saw this happen first-hand earlier this week between a newsagent and News to address a concern over the recently announced delay.

Having been involved in this process since it began three years ago I’d note that the approach of News over the last six months is completely different – more engaged with newsagents, more flexible and more transparent – than in the two and a half years prior. It is good to see News working direct with newsagents. This is a project to be worked on operationally by the contracted parties and not through a third party.

I have a vested interest in T2020 with 1,700+ newsagents using my Tower Systems newsagency software, many of whom offer home deliveries. I have no deal with News.

I understand what they are doing and why. It is necessary structural change. Many newsagents saw it coming years ago and made appropriate business decisions. While this is not an I told you so, I’d note that I sold my newspaper home delivery run in late 2006. I explained here why I did it and what I thought would happen with runs.  Associations and brokers had this same information. Industry leaders had the information too. Yet many let newsagents steam ahead thinking it was business as usual for newspaper home delivery.

Newsagents are complaining about News Limited and what they are doing with T2020 should look back at themselves and the newsagent leaders over the years and ask why they did not act before.

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Newspaper distribution

News Ltd announces printing changes for Victoria

News Limited announced yesterday some upcoming changes for the printing of newspapers from its Port Melbourne site. Ultimately, they will move from six presses to four. Newsagents will naturally be nervous about this and the potential for impact on distribution times. The first changes will occur on Saturdays, from November 12.

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Newspapers

Taking on new magazine titles

We have arranged for supply of 15 magazine titles from IPS following a review of what they have available and the categories of magazines we see selling in-store.

I love the ease of doing this and the control I have. Gotch and network could learn from IPS.

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magazines

Terrific Better Homes and Gardens promotion

We were fortunate to receive a floor display unit for promoting Better Homes and Gardens and we are making the most of it. We have placed the unit near the counter, next to our busy photocopier.  After a week here we will place it at the front of the store, facing into the shopping mall.

We also have Better Homes and Gardens located with newspapers as well as in the usual location for the title. Sales are strong – we’re seeing excellent growth as has been the case for most of the year with this title for us.

I want to mention the display unit – it’s physically strong. This is important especially in the Christmas season with traffic up and things getting knocked about.

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magazines

No slowdown in desk calendar refill sales

Sales of desk calendars are strong as ever. Indeed, I think we’ll end this season with nice growth. We have them in two locations – with diaries and here at the counter. It’s the counter location that works best for us as has always been the case we are topping up every day. It’s an easy and goof value basket filler.

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Stationery

Planning a new magazine cash flow study

Given the discussion here this week on the magazine distribution model, I have been re-reading my 2006 report – THE CASH-FLOW IMPACT OF MAGAZINES IN AUSTRALIAN NEWSAGENCIES.

I am considering doing this study again, probably in the December / January. I think it is time to update the data on this part of the magazine model.

It’s easy to get sell through data from any newsagency.This cash-flow study approach takes it is a deeper level. I harvest retail space and labour costs down to the title level. This enables me to assess the cash-flow impact at the title level.

Just because a title is cash-flow negative does not mean it should be cut. However, it does mean there must be another reason for the title being supported.

Given the nature of the study, I’ll need to pull the data from within the 1,800 or so newsagents using the Tower Systems newsagency software as this has a magazine cash flow data harvesting and reporting facility build in.

Once I have the data it takes a couple of months checking it and doing the analysis.

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magazine distribution

Halloween is our season to own

Halloween continues to grow for us. We are now well past our sales goal. In fact, we are more than double the sales growth goal we set for ourselves.

For years I have considered halloween a key season. It’s fun, ideal for high margin impulse purchases, available for us to own and a wonderful segue into Christmas.

I see Halloween shoppers of all ages and all walks of life. Schools, offices and homes host Halloween events. Kids love the season and grown-ups do too. It’s not uncommon to be invited to several Halloween parties.

Check out the article by Chip Davis published at The Huffington Post about Halloween – in the US it’s a $7 billion season.

In sales, All Hallow’s Eve is second only to Christmas. It’s also second only to New Year’s Eve in terms of numbers of parties thrown. Many analysts attribute this to baby boomers trying to recapture the nostalgia of their youth.

I am shocked when I hear a newsagent diss Halloween, shocked that they pass up an opportunity. A well stocked display in prime position with an element of theatre is sure to deliver a traffic and sales bump.

The photo is from the in-store display of our glitter pumpkin, our hero product. We sold out, ordered more and sold out. Brilliant! Sales this year have not been hurt by it being on a Wednesday.

Our only frustration was that stock we’d ordered from GNS was going to arrive too late – six days before October 31. We cancelled the order.

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marketing

Excellent SugarCraft sales

We received four copies of SugarCraft magazine a few days ago and have already sold three. The last issue sold out in two weeks. The success of this title is an indicator of interest in all things baking, something I doubt will decline for some time yet given the new cooking shows announced for Tv next year.

SugarCraft is a terrific title for people serious about cake decorating. I’m glad we have it as it reinforces our magazine specialist status in a category that is important to us.

So, amid all the hubbub from newsagents about margin and supply, here is a title off of which I am making a good financial return – both from its sales and from related business thanks to the cred the title provides the newsagency.

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magazines

One Direction continues to deliver

With the final part of the One Direction part series from Pacific Magazines now out we are making the most of the opportunity with promotion at the front of the shop on the lease line. This prime placement plus placement in three other locations in-store has been key for us in making the most of the 1D opportunity.

The buzz created by the Pacific marketing team is generating welcome destination shoppers. This also makes it easier for us to promote the titles as we are.

1D will have added more than $20K to our sales this year.

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magazines

Leveraging interest in portrait photography

We have noticed photography magazines with a feature of portraits selling well and are leveraging this knowledge withplacement of Digital Photography, featuring a cover story on portraits, next to The Essential Guide to Portraits – another in the magbook series.

Every magazine purchased on impulse is margin dollars in the bank.

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magazines