We have been promoting the latest issue of Take 5 magazine with this display near the usual position for the title. Our thinking is to draw additional attention to the title near where the shopper can usually find it. The free lotto games make for a good prize opportunity.
We have been promoting the latest issue of That’s Life magazine with this display near newspapers. The free cookbook is a nice bonus with the magazine, a terrific value-add which should see us pass our sales target. We use the sales target tools from Pacific magazines to track our performance by title and compare ourselves. It’s a real incentive to have such easy access to this data.
News Corp. is shutting down the print edition of SmartMoney magazine which has a circulation of 800,000 copies. With ad sales dropping dramatically and a strong digital alternative to engage wit readers, the masthead had clearly reached a place where the economics worked for a shutdown. PaidContent has the story.
While this move is not uncommon in newspaper and magazine circles in the US, I wanted to share it here to illustrate that publishers are looking at the sweet spot when online traffic is at a point that a digital-only model works for a masthead even though it may have strong paid circulation.
I acted on a suggestion made here a few days ago and added a like button for comments. The immediate engagement with the buttons encouraged me to add a like button for posts themselves. These too are being used.
It’s terrific to see engagement with these. There is no control other than one like per computer per post or comment.
Your likes help inform suppliers and others who visit here to find out what news agents think.
I’ll happily talk to anyone about anything to do with newsagencies, newsagency suppliers or business specific issues.
A colleague told me a couple of days ago that a newsagent who read my blog every day and was experiencing tough times wanted to speak with me but wouldn’t because they had no commercial connection with me.
I’ll happily talk to anyone about anything to do with newsagencies, newsagency suppliers or business specific issues.
Commercial connections are not relevant. I’ll help any newsagent in any I can.
CONTACT POINTS
M | 0418 321 338
E | mark@towersystems.com.au
Here is some feedback and advice I sent to a two new newsagents last week who asked me to look at the data for their business as gathered through the Tower newsagency software. I have their permission to share my feedback here.
A bit of background first. The current owners purchased this newsagency just on a year ago. It is their first newsagency, indeed, their first retail business. They have spent much of the last year learning to be newsagents – we all know what that’s like. Right?!
Here are my comments after looking at your business data. I’d love your permission to publish this on the newsagency blog without identifying your newsagency location:
It appears from the Ranked Sales Report that you are not scanning everything you sell. 362 stationery items were sold as MISC STATIONERY. This is a concern. In my own newsagencies we scan everything.
I have looked at your data comparing March 1, 2012 through May 31, 2012 with the same period for 2011. I can see that you increased the number of sales by 2% across the period. While this is good, sales revenue is down 16%. Lotto revenue was up 41% but other departments are in concerning decline.
I have broken down my comments and advice by key departments. Please don’t be offended by the direct nature of my comments.
1. BALLOONS. Sales are down 67%. Is this by choice or lack of attention. I have found that balloons need constant work and that the rewards are excellent for this work. Done well, balloons can be an excellent traffic generator – especially when you have a display at the front of the store.
2. BOOKS. With sales down 16%, this is another challenged department. I can see from the data that you have switched suppliers. I suggest you look carefully at your sales. I can see kids books are delivering 37.31% of your sales. This is good. What are your kids card sales like? The two should go hand in hand.
3. CARDS. While revenue is up 4%, unit sales are down 5%. You have products from seven suppliers in this department with one of these delivering 95% of your revenue. I suggest a cull of suppliers to make your card message clearer. I could be mistaken but you seem to have discount cards in your mix. Is this the right message for you? I am not a fan of discount cards competing with premium cards – I leave the cheap stuff to cheap looking shops. Your card department is turning over around $100,000 a year. This should deliver to you a rebate of around 25% – check what your current rebate is.
4. TOBACCO PRODUCTS. Sales are down 66%. You’re doing less than $500 a week. I suspect that tobacco products are loss making for you once you account for space, labour and inventory holding costs. You can use our software to see what else tobacco shoppers purchase. In other newsagencies I have looked at, tobacco shoppers purchased other products less than 30% of the time.
5. CONFECTIONERY & DRINKS. Sales here seem to be a bit all over the place making me wonder if your message is not clear. How are you merchandising gum, lollies, chocolates and drinks? Are you focused on brands. Are you leading shoppers to purchase from you? Also, you have drinks sales in two departments – get them together to provide clearer reporting.
6. GIFTS AND TOYS. With sales up 294% you’re heading in the right direction. Sales are 20% of cards – I use 33% as the base level so you have room to grow before being above average here. Look at your top selling card categories to see opportunities for growing gift sales. For example, if you sell plenty of new baby and kids cards then grow plush but don’t be cheap about it. People are happy to spend on babies and kids. If card sales are strong for women then look at women’s gifts like frames, glassware and the like. I can see from the list of suppliers you purchase from that you are mainly sticking with traditional newsagency suppliers – break free from this and deal with real gift suppliers.
7. LOTTO. Sales are up 41%. Whatever you are doing keep doing it. You’ll hit $2M in sales in the year – very nice.
8. MAGAZINES. The 14% decline is considerably worse than the industry average. How engaged are you with magazines? When did you last do a magazine relay? With magazines accounting for close to half all shopper traffic you need to own the department and present a genuine point of difference in how you display and manage them. The most concerning decline is with weeklies – sales are down 17% year on year. Something MUST change for you to arrest this. Don’t be like some others and say it is a sign of the rimes. With active engagement you can arrest the decline – relay immediately, create a magazine department which is fresh and reflects the pride you have for your business.
9. STATIONERY. Revenue is down 15%. Given that GNS is your main supplier I suggest you request GNS to work with you on a range review and a relay. make sure that you understand why people purchase stationery from you – range and price your stationery to reflect this. With stationery accounting for 1.82% of revenue it is close to becoming irrelevant to your business. Is this what you want? If you want to lift it then turn to an expert – this is where GNS can help.
You have a sizeable business but don’t appear to be managing this to its potential. I urge you to not be ‘victim newsagents’ – the type of people who say things are happening because of factors outside your control. There are plenty of opportunities for you to take control and own your situation for your benefit.
Being a newsagent today requires you to be a best practice retailer. It’s hard work. The rewards are money in the bank and a newsagency others will want to buy.
I hope the comments are helpful and provide you with actions which do result in you making more from your newsagency.
The feedback from the newsagents I sent this report to was terrific. I note that they were clear – they are not ‘victim newsagents’. Indeed, they are working proactively on their business and this is why they asked for the assessment of their business as reflected in the data.
In a welcome and smart move, ACP provided newsagents with a template for flyers promoting the launch of The Block magazine on June 25. I love this especially since I can include my details on the flyer to remind shoppers to come back to my store to pick up the title on the 25th.
It is small moves like this that are vital to newsagents. I doubt that any other magazine outlets will have received the artwork for the flyers.
The Block magazine was a runaway success for us last year. We sold more than double our initial allocation. Our goal is to chase 20% growth on last year. We find that setting sales targets is helpful in that it guides us to develop tactics in pursuit of achieving the target. While 20% year on year growth may be optimistic, we have a plan.
The pre release information provided by ACP, in addition to the flyers, has been excellent – helping newsagents to be ready and fully informed for the opportunity. This is vital to the success of one-shot titles like The Block.
The latest issue of MasterChef magazine is out with an appetising cover yet little to connect the magazine with the TV show. I can’t help but feel that this is a missed opportunity. With more than one million people watching the TV show why not leverage that audience into magazine buyers. It feels to me like there is a disconnect between MasterChef on TV and MasterChef the magazine. This means lost sales for us.
We are promoting the magazine by giving it prime positioning with food titles and tile at high traffic points: newspapers (still) and the counter. Our job would be easier in TV show fans were compelled to buy the magazine.
NANA last night advised newsagents in NSW of a delay to the announcement from News Limited on their future newspaper distribution plans. Here is part of the NANA announcement:
Following the announcement by CEO Kim Williams, News Limited’s Director of Retail Circulation, Catrin Thomas, advised the postponement of the anticipated “T2020” announcement originally scheduled for 28 June 2012.
“In light of the announcements across the industry this week, and following a long discussion with the Australian Newsagents Federation (ANF) this afternoon, we have decided that it is prudent to delay the timing of the T2020 announcement.
“This will ensure that we are putting forward a plan that builds in all the latest information. Our concern is that if we do not pause to consider the impact of the week’s announcements, that we could end up with a shorter term solution and be back at the drawing board much sooner than we would like. We are committed to creating a commercially viable and sustainable distribution network for newspapers and we will confirm an announcement date as quickly as possible,” said Ms Thomas.
It is important for us to take care when labelling magazines otherwise we can damage the product we want to sell.
The most common mistake I see is the wrong placement of the label on the cover. The barcode label should not obstruct the masthead. Publishers spend a considerable amount of money developing and promoting their mastheads and each magazine cover. A sticker in the wrong place could make it more difficult for a shopper to see a title and this could deny you a sale.
Place the label below the masthead – as shown in the example for Grand Designs Australia. This is still high enough to be seen from traditional magazine fixturing.
Place the label close to the left spine.
Train your staff to always use the same placement.
Most newsagency software packages provide a range of options for what is included on the label: MPA category, arrival date, return date, distributor, code, quantity in, type of return and more. Talk to your software company about what you can include and set your system to give you the labels you want.
Don’t label every magazine. It’s unnecessary. I don’t label weeklies or high volume monthlies
Label preference? Laser labels without a doubt. In my view laser labels are easier to read, easier to manage, take up less cover space and cost less.
The Facebook page for Inked magazine is now at 40,500+ fans. This is a 33% jump from when I last wrote about it.
The Facebook page is used by the publisher to drive newsagency traffic. I love their promotion of us as the go to place for purchasing the magazine.
Newsagents on Facebook should regularly check out the page to be across promotions that could be leveraged in-store.
The diary market is as strong as ever. Sales of 2012 diaries beat 2011 by more than 10% and sales of FY12/13 financial year diaries will easily beat FY11/12. This is a space newsagents own. Since Officeworks plays here but they do not maintain range like we do. Their prices are not great either – we are being them more than not and we are maintaining a good margin.
Our strategy for Financial Year diaries is the same as it is for most products in-store. We focus on brands. Shoppers tell us they trust brands. Brands support us by spending on marketing. It’s a win win. Generic products and cheap brands which are not recognised brands are not investing for our benefit.
News Limited, today announced a major restructure, compressing 19 operating divisions into 5 and cutting a yet to be announced number of jobs along the way. Cleverly, News CEO Kim Williams declared a commitment to print in today’s announcement, giving commentators the headline of the week: Fairfax abandons print for digital, News commits to print. Of course Fairfax has not abandoned print and News is as committed to digital as Fairfax.
While the spin was different ( considerably better), I expect time to reveal the moves by Fairfax and News to be quite similar. Market forces, consumer demand driven by disruption to habit brought on by new technology, will make it so. Print products will remain as long as they make money and serve the commercial needs of the shareholders.
Some in the newsagency channel have jumped on the Williams statement about print as good news for newspapers and newsagents. Kim Williams’ words need to be tempered with an assessment of the considerable investment by News in Apps for its mastheads and the relentless promotion of these. The company is investing considerably to migrate print customers to either move to digital or at the very least include digital in their means of access. Check out this quote from Kim Williams today:
Digital technology and the ever-increasing array of consumer devices and connectivity points represent an important core to the future of our company. To realise the huge opportunities presented we must ensure we have world-class resources supporting our editorial and sales teams.
It would be a mistake for newsagents to be complacent because of the News announcement today. I expect job losses to be right across the company, including some people newsagents work with today. Indeed, some of these positions have been made redundant already this year.
The plans to be announced by News on June 28 for the distribution model of newspapers will further inform newsagents and their plans.
Every newsagent in Australia needs to be working today on their business model where they rely far less on newspapers than they do today. It makes sense.
Based on contact from newsagents since the Fairfax announcement of Monday it is clear there are plenty who had not been planning for the scope of change which is forecast in the Fairfax investor presentation. Yes, print is not dead, but its future is more challenged today than last week.
There are newsagents still running very traditional businesses – retail, distribution and retail and distribution. These folks need to move quickly. They are in a race with a tsunami of change. Yeah, tsunami is the best analogy I can use for what is happening. In fact, multiple tsunamis as I explained in the Newsagency of the Future workshops recently.
For what it’s worth, I think the most important action all newsagents can take today, as a matter of urgency, is to reduce debt. If News Limited makes the announcement some expect, this coupled with the Fairfax announcement would be noticed by banks. Newsagents will be better off if they reduce their debt levels of their own accord than under a plan forced on them by their banks. Less debt will offer more options.
If you are not sure where to start in reducing debt then you are already behind in the race. Here are some tips for immediate attention:
While debt is only part of what newsagents should be working on it is the most important given that you are relying on your bank and their risk assessment. I know of a couple of banks that have changed their position in relation to newsagencies this year – for dumb reasons I would add.
Banks are looking at all business sectors but retail in particular because of what is happening online and what has been happening and is continuing in Europe.
If your debt is under control (less than 30% of the reasonable value of your business today) then the broader business plan can and should be be considered. If you’re in distribution it has to be finding ways to use your infrastructure to generate more income. If you’re in retail it has to focus on broadening the appeal of your shop – bringing people in for more reasons than currently, making the shop floor more successful at driving people to purchase more in each visit and reviewing your pricing to ensure that you are making the maximum gross profit on each item without harming sales.
Newsagents who open their doors each day without a plan to increase traffic, drive sales efficiency and reduce costs face the toughest challenges in this disrupted world.
No one will solve these challenges for us, nor should they. We own our situation … that’s what being the business owner is all about.
Click here to hear the interview I did on ABC 774 in Melbourne yesterday morning before leaving for the US. I’m happy it was a positive pitch for newsagents.
I have arrived in the US this morning to attend the Hallmark Gold Crown Summit with a delegation of colleagues from newsXpress. We are the only Australians participating in this best practice event hosted by the most important and most recognised greeting card brand in the world.
Outside of the summit, a group of us will participate in a series of main street retail visits in Las Vegas and, over the weekend, in New York. These retail visits are designed to tap into best practice retail situations that resonate with newsagencies in Australia.
I’ll continue blogging as I’ll be in touch with my newsagencies in Australia through remote access and other means while away. Plus, as is always the case while on the road, there is day to day business to care for – being out of the country is no longer an excuse to get work done back home.
Sales for the new One Direction poster title which came out last week show that interest in the boy band has not waned. I stuck a unit holding the title at the front of the newsagency along with our 1D posters and sales followed.
Getting the new poster magazine in has refreshed sales for older One Direction titles which we have kept in stock for a while longer.
Our 2013 One Direction calendar arrives in store in a couple of weeks. I am looking forward to see what we can achieve with them.
We have restocked our range of AFL beanie Kids several times since getting the range in-store. The latest shipment arrived a few days ago and they are selling well.
I am surprised at how well the AFL Beanie Kids are selling this late in the AFL season.
Those buying them vary from fans of AFL teams, to Beanie Kids collectors to people buying gifts for others. Our sales are helped by having the stand on the lease line, facing into the shopping mall.
The announcement from Fairfax yesterday outlining the most comprehensive restructure in the history of newspapers in Australia was not a surprise. Not to me and many others. But plenty were surprised.
Fairfax CEO Greg Hywood had told us major changes were coming. News Limited CEO Kim Williams has told us that News, too, was preparing a major announcement on its plans for the future. While we should not be surprised by what Kim Williams announces shortly, some will be.
I have written here for almost eight years about media disruption – 985 posts in all and I’ve barely covered what has been happening around the world.
If we look at music and books we have guidance on how a major shift in how the audience engages with content can play out for the distribution channel. How many music stores are left? What are print book sales versus digital downloads? You know the answers.
But newspapers were different. We love them. We feel like we own them. John Howard, as Prime Minister, commented several times about the warm feeling of hearing the newspaper land on the front lawn. We have had a long love affair with getting our news by engaging with ink on the page. But newspaper are businesses. They live or die based on profitability.
The end of newspapers began when classified advertising moved online and while plenty in newspaper publishing businesses said it was business as usual and that print would be here for the long term, they know otherwise when advertising revenue started to decline and then fell off a cliff.
I don’t want newspapers to shrink and close. I like the medium. But times change, people change. Paper is being replaced at work and in the home. And we are experiencing just the beginning of this change.
Newspaper publishers told newsagents that the paper product will remain because they needed newsagents to be their partners to the end. Newsagents provide the cheapest newspaper delivery option available. Newsagents are part of their decay play, they give the home delivery of newspapers a longer life. I don’t begrudge newspaper publishers their view, it’s practical for them and their shareholders. Newsagents should have known better, they were warned.
What I wrote wrote in February about News Limited being in crisis in terms of newspaper home delivery was true. The crisis was in part brought on by newsagents walking away from their home delivery businesses, in numbers which alarmed News. The announcement coming soon from News was expected to speak to the extent of the crisis (or whatever you want to call it). The Fairfax announcement could mean that News pulls back somewhat from or delays the full implementation of its plans to see how the Fairfax move plays out.
I have no doubt we will see the closure of some daily newspapers in Australia. This has been my view of some time and I’ve stated it here before and in other public forums. It’s one of several reasons why I have been calling for newsagents to reinvent their businesses, to seek out new traffic drivers for retail, to source new uses for distribution infrastructure.
I also have no doubt that we will see sales of some newspapers grow … when engaged publishers realise what people will pay for in this marketplace.
Fairfax owes newsagents nothing. The challenge is that many newsagents disagree. You can’t force a business to operate an unprofitable operation. Yet that is what many newsagents have done for many years. Maybe the Fairfax announcement yesterday will shake these newsagents to take charge of their own situation.
I am not changing my business plan in the wake of yesterday’s announcement. I will continue to focus on broadening sources of traffic for my newsagencies. I’ll continue to adjust the product mix and placement to increase the basket size. I will drive margin when I see an opportunity to make a product more valuable to the business. I will do all this without disrespecting traffic I get today from core newsagency lines like magazines, greeting cards, stationery and, yes, newspapers.
Here is what has changed in case newsagents missed it – just a few years ago we could rely on newspapers to deliver 50% or more of our foot traffic every day. 80% or more newspaper sales were for a paper and nothing else – most likely from people who would come back in another visit for other purchases. As they purchased fewer newspapers they thought less of the newsagency for the other items. If we did not maintain our relevance outside newspapers we lost some of these previously welded-on shoppers.
Newsagents who have not replaced newspaper traffic and have been surprised by the Fairfax announcement need to move quickly to rebuild relevance and to bring in new traffic.
I’ll gladly help any newsagent feeling challenged by what is happening.
Check out the display created by the team at one of my newsagencies to promote Slow Cooker 2 from ACP. This display cuts through visually, it makes the title the hero. I love the less is more approach. When I first saw it I felt wow!
While I love colourful posters for promoting magazines, I also like to see the use of collateral that frames and or underlines the product itself. That’s what has been achieved with this display for Slow Cooker 2.
I love that we regularly promote magazines in a non-corporate and more engaged way.
We have taken care to place Inked and Inked Artists with each other to make the most of the common masthead. I’d encourage other newsagents to so the same thing.
Tattoo artists will seek this title out. Put both together and you’ve got a better chance of selling both in the one sale. Our care for tattoo titles has made us the go to newsagency in the area. Sales are up.
We have given the latest issue of InStyle magazine prime placement at the entrance to our women’s magazine aisle. The $92 worth of Model Co. make up gifts packed with this issue of InStyle make it a must buy title for shoppers, it deserves the best location. This location made it easier for is to display the pack.
The marketing people at Pacific provided wonderful range of collateral provided.
We are chasing sales of Woman’s Day Lunchboox cookbook with this tactical placement next to super food ideas, one of our top selling cookbooks. I made the decision for this placement, choosing a popular title which is purchased by someone who would be likely to be interested in the lunchbox cookbook. No sales yet but we’re only a couple of days in to this move.
Often it is the placement of a product which is more important than a display.
Newspaper publisher Fairfax announced major changes to its operations today under the heading of FAIRFAX OF THE FUTURE.
The changes prepare the company for a digital only model. Indeed, on page 17 of the investor briefing document, Fairfax acknowledges that the move to digital only is inevitable, tying remaining in print to revenue. With print revenues in steady decline for years, there can only be one end point, an exit from print.
Click on the image to see the point made on page 16 of the investor briefing. See the pie chart – 34% of the company’s cost base goes to production and distribution. The document notes these as: costs not required in a digital only model.
Every part of the announcement from Fairfax today prepares the company for a reduction and, possibly, ultimate complete retreat from print. The move of The Age and SMH to compact formats (great move and long overdue by the way), the introduction of digital subscriptions (somewhat overdue for their quality journalism offer), the closure of the Chullora and Tullamarine print sites and their digital-first editorial model make the end game clear for Fairfax … and for newsagents.
Fairfax has intensified its focus on cost cutting, targeting annualised savings of $235 million by 2015. It’s in a race again market forces as evidenced in the chart on page 12 of the investor briefing showing the Fairfax audience by media type … chilling stuff.
I suspect that market forces will impact this plan and see the company act on at least one or more of its daily mastheads either shedding some days from the print roster or move to a digital only platform before 2015. Circulation continues to decline for all but a couple of daily newspapers in Australia and this is putting pressure on advertising revenue. Page 17 of the investor briefing makes it clear Fairfax will move to a digital only model if print advertising and circulation revenue declines materially. I think this is happening.
A day by day analysis of the return achieved for The Age newspaper, for example, would, I suspect, reveal at least three days of the week to be loss making: Monday, Tuesday and Friday. I’d expect Wednesday to be doing okay because of classifieds (but only just as advertising is falling away rapidly), Thursday to be strong due to the Green Guide, Saturday to be strong due to advertising and Sunday to be strong due to a good weekend read.
If my assumptions (above) are right, we could (should) see The Age cut days. A number of seven day newspapers in the US have done this. Equally, Fairfax could switch from seven days to digital only of the cost savings of eliminating all production and distribution costs justified the move. I think we are more likely to see days cut in advance of a complete move – but a switch to digital only is inevitable.
I’d note that the news itself will most likely result in fewer people reading the print products as it puts migration to digital more top of mind.
The Fairfax moves are focused solely on their share price. They should not come as a surprise to anyone, especially not to newsagents. However, I think there will be newsagents who are shocked by the Fairfax moves.
Some state based newsagent associations have spent and continue to spend more time and effort on print distribution issues and plans than on retail yet the future of our channel depends more on retail. I wonder when they will realise their mistake.
While there is value in distribution newsagents consolidating in pursuit of efficiencies, there is even greater value in developing a newsagency model in a world where most newspapers in Australia are replaced by digital only platforms. We know from Fairfax and News that distribution costs are a key focus. There is no up side for newsagents from this focus. What little control newsagents had to drive their distribution businesses is fading. But this is not news. If only channel leaders realised this and engaged with their constituency more proactively. They should have been spending more time representing the whole channel and not just distribution.
Fairfax is doing what it needs to do for its survival. Its needs do not match the needs of newsagents. Newsagents need to act on what is right for them. In my case, the decision to get out of distribution years ago feels more right every day.
Are newsagents focused on their future? Some are but not enough of them. Hopefully, today’s announcement from Fairfax will be a wake-up call for those with their heads in the sand.
While I feel for the 1,900 jobs Fairfax will shed, many more will be shed in newsagencies as digital replaces print for new consumption. This is a moment of fundamental restructuring which cannot be blamed on anyone. We have seen it coming for a while. Maybe some of those losing their jobs will not engage with more flexible and content driven online platforms.
News Limited is next up to the microphone with their announcement.
A like button has been added to the comments facility here enabling readers to like a comment without having to make a comment themselves. To like a comment just click the button, you don’t need an email address or anything.