Sales of home and living titles are on the rise for us following our magazine relay five months ago. We are seeing well into double-digit growth. Real Living is a popular title and it benefits from time in the spotlight. That’s what we are doing with this display on the aisle end for our women’s magazine aisle.
We also use Real Living on our magazine shelves to denote the start of the home and living section as part of our beacon branding strategy.
We are promoting the latest issue of UFC magazine with this display down in our men’s reading area. The cover for the magazine and accompanying poster work well with the contrasting background colour used by the creative team in-store. In addition to this aisle-end display for UFC, we have the title in prime position in with our sports and fitness titles.
While sales are not massive for us, UFC is a regularly browsed title. I think there is potential for growth.
There is a crisis gripping News Limited on the future of newspaper home delivery in Australia. My understanding is that there is disagreement between circulation executives in some News Limited state offices and their bosses at Holt Street in Sydney on the future model of newspaper home delivery and whether newsagents are part of the model.
The crisis in had its genesis in 2009 when somewhere between 100 and 300 newsagents handed their newspaper home delivery businesses back to News, claiming that they were not financially viable.
The company responded by saying that it would undertake a major review of newspaper home delivery. At around the same time they implemented what was called the migration project in South Australia whereby they took control of newspaper account payments by home delivery customers, even those directly won by newsagents. This cut customer traffic to some newsagencies as accounts could be paid through News rather than the shop. News also took delivery of newspapers to key hotels and some hospitals away from newsagents, they pushed their newspapers into alternative retail outlets such as coffee shops, did deals where newspapers were included in fast food meal deals and began a campaign of engaging with advertisers resulting in massive numbers of newspapers being given away at sporting venues, fitness centres and cinemas.
In short, News Limited responded to newsagents quitting newspaper home delivery by doing everything except working with newsagents on an alternative model. News executives will say that I am wrong and that they did engage with newsagents on an alternative model. I know what they did and would not call it engaging with newsagents. It was as if the company had a plan and they needed to ‘engage’ so they could tick a box and say they had engaged if asked.
My understanding is that today there are several News Limited executives in some parts of Australia in strong disagreement with the direction being taken by the company out of Holt Street Sydney. Some of those executives remain silent for fear of their jobs.
Whereas for decades News Limited left its state based newspaper silos (Herald & Weekly Times, Advertiser Newspapers, Queensland Newspapers etc) to control the management of newspaper home delivery, now all decisions around newspaper home delivery come out of Holt Street. The decisions are delivered by the state silos but they are decisions out of Sydney.
Some in News want home delivery management to revert to the states where managing relationships was easier and, usually, more successful for the newsagent, News an the customer. Others in News want the company to break free from newsagents and move to a fresh model. My understanding is that News has financial models of an alternative indicating that it is not financially viable, that they could not engage contractors prepared to deliver newspapers by early morning for a few cents remuneration each.
Just over two years ago News Limited told newsagents that they were undertaking a review of newspaper home delivery and that newsagents should expect changes. News executives told newsagents that they had three options: do nothing, consolidate or specialise. Newsagents were told that to do nothing was not an option.
Last week, News limited told newsagents that they were going to do nothing. I am told that this has shocked some in News Limited state offices.
One school of though is that the plan the company had is not financially viable and now they need to find a way to appease newsagents without letting newsagents increase the fee for delivering newspapers to rise to anything close to what would be necessary for it to cover newsagent costs.
This is the crisis in the company. One group wants to deal with newsagents equitably and continue the newsagent managed home delivery model. Others want to cut newsagents loose and strike contracts outside of the traditional newsagency model. I’m told that the dollars don’t support the latter.
News Limited controls the key levers which determine how much a newsagent delivering newspapers makes – they set the gross margin from the delivered product, the delivery fee charges, what can and can;t be delivered with the newspaper, the frequency of payment and how the newspaper is to be packaged for delivery.
By any measure, many newsagents are the working poor, often making just a few dollars an hour for work which often starts at three or four in the morning and runs through until six at night – following a model created and controlled by News Limited. While News is not responsible for this complete picture, it has been a key player for decades and in that time has resisted many moves for fair and equitable remuneration for newsagents.
News Limited should engage in a mutually respectful business discussion with newsagents on the future of newspapers and newspaper home delivery. This should be a serious discussion pursuing a mutually beneficial outcome. News executives need to trust newsagents when they say that they will not lose customers if the fee for the home delivery of a newspaper increases. Newspaper readers are prepared to pay closer to the real cost of the service. Addressing this price anomaly will create a mechanism through which the medium term future of newspaper home delivery by newsagents can be assured.
Newsagents with a newspaper home delivery component to their business need to engage on this issue. They need to sort out what they want and go for it. Doing nothing is not an option.
For background reading, check out:
I am in Sydney today meeting with newsagents on other matters. I am sure this issue will be raised. I understand the anger and frustration of newsagents. The only way to address this is through a unified and committed approach.
We are displaying at one of our counters a new range of cute charms along with magazines which relate to the charms product line. While the charms are targeted at young girls, we have taken the opportunity to pitch a beading and a jewellery title. We will play with these titles through the week to see what works best.
Introducing a new line, the charms, like this at the counter works as it ensures that a broader cross-section of our shoppers gets to see that we have the product in-store.
When selecting new products we look for items which connect with products from a different category which we carry already. The charms fit because of the magazines we carry and the agree group to which they appeal.
We are promoting The Essential Guide to iPad with the full cover of the magazine on show thanks to our ideal front pocket placement. We wanted to make the most of the opportunity of the free iPad cover which comes with this issue. We have been able to place the title so that the promo header does not cover the title behind too much.
Newsagents are struggling to connect commercially with the iPad user. This title and other iPad titles provide us with an opportunity of some sort of connection at least. I think this is the type of title we need to promote.
We are promoting the latest issue of New Idea magazine which is packaged with free Pantene shampoo and conditioner in several places in-store including this prime counter position. While the package is a challenge to display, we have made it work to leverage the opportunity for maximum sales … and sell it has! This counter location works the best because of the sep shelving we have in this position.
Unlike supermarkets where magazines are whacked into a pocket, we have thought about how to treat not only New Idea but other titles with gifts so that we can maximise sales and respect the product.
Peter Switzer on Sky last week interviewed Ross McDonald from Google about retail. It frustrates me when media outlets get one ‘expert’ who pushes the line which suits the business they represent. A Google representative was always going to talk about retail from a Google perspective.
While there is no doubt that retail is tough, plenty of retailers I speak with are enjoying success in their businesses, attracting new customers and driving more efficient baskets. Independent retailers are more nimble and therefore more responsive to today’s challenges than big retailers who tend to catch media attention.
The Switzer interview is worth watching if only to get a perspective on the structural change impacting the sector. This is real. But so is the positive response from many newsagents to the challenges of structural change.
The media section in The Australian today leads with a report claiming that the private equity business which owns Nine Entertainment, and through this ACP, would accept a price of $300 million for the business, a considerable drop in what was reported as the sale price. The report says that analysts feel that CVC might get a better return by selling the parts of ACP rather than the whole business. This will be an interesting story to watch given the direct connection with our businesses. Check out page 34 of The Australian today.
For more than two weeks now I have been hearing about another round of staff cuts (voluntary redundancies?) at magazine distributor Gordon and Gotch. I am not that surprised given the profit downgrade recently announced by the Gotch parent company PMP. With the share price at 38 cents, down from over seventy cents fur months ago, cutting costs has to be on the agenda. Click on the image to see the share price chart from the ASX website.
The challenge for Gotch, if they are indeed cutting staff, is that customer service often suffers from such a move. They are already under performing rival magazine distributor Network Services on the customer service front and fewer staff would have to make that situation worse.
To fix the situation, Gotch needs to get serious about working with newsagents, supplying magazines at a volume more closely aligned with sales, implementing real sales based replenishment and working more closely with publishers on providing timely sales data. Some system changes and a better customer service attitude from the top of the company could help build faith, sales and the financial return.
What ails Gotch needs top be addressed from the top down. While cutting staff may reduce costs and this may provide some relief around the share price, it is not a plan on which the business can rely to build the business.
Sort of related … What surprises me is that I have not seen a response from IPS, the Fairfax owned new magazine distribution business, to the Gotch challenges. IPS has a model which could see it pick up some of the Gotch titles and thereby lift its relevance to newsagents and further leverage its seven day a week delivery service. With logistics being such a high cost in magazine distribution I would have thought that IPS could offer a model of reduced costs for publishers.
News Limited columnist Mark Day, the guy who claimed newsagents had been protected for decades, calls in today’s newspaper for accuracy in numbers for advertisers. Day should follow his own advice on accuracy. Still no apology or clarification from Day which makes me think that his pitch was part of a plan.
I was in a Woolworths supermarket yesterday and a Coles this morning and could not see the Whitney Houston Woman’s Day tribute issue which came out Friday. After some searching I found it (in each store), leaning forward in such a way as to completely obscure the cover. This issue comes with a free gift of a make up stick of some sort. The gift made the top of the magazine more than twice the thickness of the lower part. When the title has been placed in the pocket no one had thought to do it in such a way as to allow the cover to be seen. While I will never know, I suspect that this will hurt sales – in this supermarket at least.
Supermarkets don’t like to have to manage magazines. They want to be able to put out all the stock they receive and leave it there for the on-sale. In our newsagency if we received this stock we would put less in the pockets and ensure that the full cover could be seen. We would then top up the pocket as the week goes. I suspect that this is what m oct newsagents would do.
In the supermarket they see a magazine as a SKU. They expect the supplier to care about merchandising and replenishment of the shelves. This is where our channel is different. I wish that all of our suppliers would take more note of this. Newsagents would have derived more value from this gift than the supermarket I visited yesterday.
As for the gift itself, I don’t begrudge ACP placing it on supermarket product and not ours. Newsagents get gifts with Woman’s Day when supermarkets do not.
With the latest Moshi Monsters magazine out now we have an opportunity to promote not only the Moshi Monsters Magazine but access to the popular kids online game. We sell the Moshi Monster access thanks to Incomm launching this and other products to newsagents through the Touch platform. As you can see in the photo, we are promoting the online game vouchers with the magazines … this has worked a treat for us. Anything to extend the basket and get products from more than one category in there.
As well as the bonus sale from the Moshi Minsters card, we are reminding shoppers that we have this and hopefully they will think of us first next time they need a top up.
We are giving the latest copy of Australian Healthy Food Guide some time in the sunshine with this prime positioning in among our food titles. Being a low volume and physically small title it is easy to overlook. I wanted to get it out front to show our food title shoppers that we cater to healthy eating as well as more indulgent eating. This is one of those titles which could easily fit in two sections of the magazine department: food and health & fitness. We give it a shot in both even though they are located in the same aisle. I am hopeful that this issue of Australian Healthy Food Guide will work particularly well because of the words weight loss on the cover. They can be magic for sales.
We are promoting the latest issue of Men’s Health magazine from Pacific Magazines with this high profile display in among our sports titles. We are also giving the magazine a run next to newspapers this week to attract impulse purchases as it is the type of title which is easily picked up and purchased off location. This type of additional promotion an be done right through the on-sale as Men’s Health, for us at least, sells right through.
A report at paid Content indicates that UK titles Men’s Health, T3 and GQ and leading in digital edition sales. While numbers are still not massive, there is some interesting data on subscription conversion from downloads.
I was speaking at a business conference last year and was asked to explain how an independent retailer can come up with fresh marketing ideas. Brainstorming is the best approach. Free form, no rules, ridiculous and crazy brainstorming.
In a brainstorming session it is often the most ridiculous ideas which are the best to explore and finesse to suit your needs. They usually come from a place which is unencumbered by business rules.
Sometimes, retail businesses need to look for marketing ideas which are not encumbered with business rules, crazy ideas which challenge how the business looks at and presents itself. This is certainly true for newsagents.
Here are crazy marketing ideas for retail businesses. The list is deliberately provocative. This is to shake up how you see marketing in your retail store and to encourage you to extend your own boundaries. Who knows, innovation could be in this list and waiting for your business:
Before you discard any of these ideas, think for a moment whether they or any thoughts which flow from considering them could work for your retail business. Remember, sometimes it is the crazy and unconstrained ideas which work best.
Rupert Murdoch had no sooner announced that a Sunday edition of The Sun newspaper would be published in the UK and social media sites like twitter lit up with people urging other to not buy The Sun. News in the UK has become a toxic company mainly of its own doing through the phone hacking scandal and now the reported bribery of law enforcement officials.
Newsagents ought to look at the UK campaign and see how all sorts of people are getting behind the campaign against The Sun. Look at traffic for the #dontbuythesun hashtag.
There is plenty newsagents could learn from UK campaigns against News for a local campaign on News Limited treatment of distribution newsagents.
A small bundle of a title meant for one of my newsagencies was delivered to a competitor by mistake. It was clearly labelled. Plus they did not have the electronic invoice for the title. They unpacked it, put it on the shelf and sold out by they time we had sorted out with the distributor what had happened. This competitor newsagent does’t care about the situation.
Okay we are competitors. but to act in such an unethical way against any other business is appalling. I guess it is better that we know this about their ethics.
The ABC yesterday launched a new Football magazine, an annual. The thing is, I can’t find a newsagent with this title. The TV commercial says that it’s at a number of retail outlets including newsagents. Hmm … I wonder what went wrong. Based on our AFL record sales I think we could easily sell 30 or more copies of this new ABC title. That’s close to $300 in sales. If only we had the stock for the launch day.
Mumbrella has more including a copy of the TVC. This is where I got the cover shot from.
Newsagents, if you got the title please let me know.
Here is how another of my newsagencies is promoting the range of Whitney Houston related cover stories. This display is located behind the counter. It’s support Who, Woman’s Day and OK!. This behind the counter support is in addition to displays with newspapers and in-location for each of the magazine titles.
I could be wrong but I suspect that interest in Whitney will pass quickly given today’s news cycle. That’s why promotion this weekend is vital … it’s the biggest opportunity we have with the story.
Here is how one of my newsagencies is promoting the Who magazine Whitney Houston tribute issue. Check out the detail in the display – Renee our in house merchandiser extraordinaire (and manager) has picked up on elements in the Who collateral and extended the reach of this beyond the magazine poster … just wonderful.
I think that with this type of very special tribute issue it is important to be respectful of the subject and this display achieves that – while appropriately drawing shopper attention to the opportunity.
I love the cover of Who – the photo and the gold work well together.
One of my newsagencies is promoting the Woman’s Day Whitney Houston tribute issue on the column at the front of the newsagency facing into the shopping mall.
I love the treatments like the stars included to draw attention to the display and reinforce the special nature of this issue of the magazine.
Going above and beyond for this special issue is a way we newsagents can own the opportunity and the moment. No supermarket would do this.
Sales on the first day have been good.
News Limited kicked off a project a couple of years ago around the future of newspaper sales and distribution. They presented newsagents with three options: do nothing, consolidate or specialise. News Limited senior management made it clear that do nothing was NOT an option.
Yesterday, News Limited told newsagents that it was going to do nothing. The promised new newspaper distribution contracts are not coming.
Newsagents have been stressed through the process since the knowledge of a decision by News about such a key part of their business made newsagencies difficult to sell and difficult to access funds for. Any bank manger will confirm this.
I would go further and note that the earlier decision by News Limited to force changes around newspapers has been a key factor in the considerable decline in the sale of newsagencies over the last two years.
Newsagents were dealt a blow yesterday when the company advised that it is not ready to provide newsagents with the contractual certainty which it had said it would provide. News Limited has opted to do nothing … leaving newsagents with a longer period of uncertainty. Promised new contracts are not coming. News is not saying how long for … things could not be more uncertain.
the VANA blog has more details on the meeting with News Limited yesterday.
This inaction by News Limited means that finance will be harder to obtain for newsagency businesses, newsagencies, especially those with a distribution component, will be harder to sell and capital investment in the distribution side more challenging to complete.
News limited created the uncertainty and the cost to newsagents by launching their review. They are continuing it by their inaction. This is not socially responsible nor is it ethical.
Newsagents have very right to be angry.
While Valentine’s Day was a good season through the four weeks leading up to the day, the real sales surge for us occurred in the last four days. We say a four fold sales surge in the last four days compared to the same period last year, far more than the sales surge for the whole four week season as we measure it.
While gift sales were up, it was cards which worked the best for us with sales up well over double. Thanks to our in-store hallmark category and segment performance reporting we can see where the sales growth came from at the segment level. For us, it was Husband and New Love which did particularly well on the previous year. Oh, and the handcrafted Valentine’s Day lifestyle cards did very well. Knowing the sales results at this micro level immediately after a major season is a real boost not only to our business performance intelligence but also to how we interact with suppliers.
Data is king (and queen) in this marketplace. Bring on Easter!
Paid Content has an excellent report on the state of digital payments for News Corp. They also graph digital subscription uptake against print sales. The two data lines make for compelling reading for those of us living in the print world.