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

Author: Mark Fletcher

Are newsagents killing sales of Australian 4WD Action and other magazines?

Newsagents sell 37% of all copies sold of Australian 4WD Action according to publisher Express Media Group.  Supermarkets and other distribution channels  account for the remainder of sales.

This 12 year-old title has a 70% sell through at retail.

Sales of Australian 4WD Action are declining in newsagents and growing in supermarkets.

Why is it that sales of Australian 4WD Action are declining in newsagencies?  Early returns is one reason.  I have been shown data, without identifying the newsagencies, where newsagents have early returned, leaving insufficient stock in the businesses to even get close to their average sell through.

This early returning action is driving sales of Australian 4WD Action down in some newsagencies.

If this is happening for Australian 4WD Action is it happening for other titles?  I think so.

In thirty or forty newsagencies for which I have seen data there appears to be no commercial reason for early return.  Indeed, these businesses are suffering financially as a result of the early return activity.  They are losing guaranteed sales.

Connecting this information with what I know form other publishers, it appears to me that ill-considered and sales killing early returning is at epidemic proportions in our channel.  If this is true, the implications could be most serious for us.

Beyond creating a self fulfilling prophecy about the future of magazines, there is the implied invitation for publishers to find other channels through which to see and distribute their titles.  I’d do that if I was a publisher and saw that retailers would rather send a title back than get guaranteed sales from it.

The data I have seen for Australian 4WD Action suggests a very serious problem which we all need to address for the future health of our channel.

The folks at EMG (Express) are particularly concerned since they have recently announced:

  1. Moving from full copy to topped returns, saving time and freight costs.
  2. Bonus margin for two months, giving a newsagents an opportunity to reengage in EMG titles.
  3. Shorter (4 week) on-sale periods, better for cash flow and space allocation.
  4. Better allocations for newsagents, leading to a higher sell through.
  5. A new customer service team to help newsagents, queries are handled quickly.

The early returning of the latest issue of Australian 4WD Action gives EMG a message that these moves are of no interest to newsagents.  That is not a message we want to give off at all … unless we want to kill off magazines in our newsagencies.

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magazine distribution

Getting ready for the launch of Grand Designs magazine

I am looking forward to the launch of the local edition of Grand Designs magazine from Universal Magazines early in 2012.  Last week, Kevin McLoud, host of the hit TV show was interviewed in Australia by MediaWeek about the show, the Grand Designs live show and the Grand Designs franchise overall.  Listen to the terrific MediaWeek podcast here, it’s good background to the launch of the magazine.

The Grand Designs magazine will be quarterly and priced at $8.95.  With the TV show attracting around 1 million viewers, the magazine is bound to generate strong interest.

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magazines

Fresh Halloween display for run up to October 31

The proactive team at one of my newsagencies refreshed the Halloween display earlier this week.  Check out the refreshed display in the photo.  Talk about retail theatre.

This display faces out into the shopping mall, drawing plenty of passers-by in for a browse and shop.

This display separates us from the rather boring displays in nearby supermarkets and general retailers.

Click on the image for a bigger version.

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magazines

Mixing it up with health magazines

Further to our promotion of the latest issue opt Prevention magazine, we have been using other pockets in the health area of our magazine department to promote popular titles and topics.  We review the titles being given feature position each week, remembering those which respond best to the full face display at the front of the eye level display.  As he photo shows we also mix titles from find when appropriate.  I figured that the Weight Watchers cookbook was worth a try between WellBeing and Good Health.

My experience is that a small investment of senior management time in your magazine department can increase sales.  Too often, newsagents leave magazines to junior employees … and then they wonder why the department is not performing as well as the rest of the shop.

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magazines

Promoting the latest Wheels magazine

The latest issue of Wheels magazine is the title we are promoting in the auto section of our magazine department.

We have watched male browsers and they pay little attention to billboard type displays.  I am sure this is the case in many newsagencies.  Guys tend to have a destination in mind when they enter and it is only when they reach the destination that they start to look around.

We have found that guys do, however, pay attention to these in-location displays.  So that’ what we are doing for the issue of Wheels which came out Monday.

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magazines

Another newsagent walks from a shopping centre

This is becoming an almost weekly occurrence:  Another newsagent has decided to walk from their retail business in a relatively major shopping centre rather than pay a 10% increase in rent and fund the landlord required shop fit.

Some landlords are happy to accept this, and see families lose the businesses they have built up, often over many years, because there are those ready to take on a newsagency at the higher rent.  I have heard of cases where leeches are in the ears of landlord representatives long before a lease is up, as if encouraging the landlord to not offer the existing tenant a deal.

Other landlords accept a long term newsagent walking because they are ignorant of the newsagency economic model.

Newsagents in shopping centres owned by major landlords – AMP, Centro, QIC, Colonial First State, Westfield etc – need support from magazine and newspaper publishers, lottery businesses and the like to achieve more equitable rents. Otherwise we will see more shopping centres without newsagency businesses.

We need to stop families feeling so helpless that they walk away from their family business.

It takes a lot of guts to walk away from your business at the end of a lease.  This act alone speaks to the unfairness of lease terms and the competitive forces marshalled against the incumbent newsagent – sometimes including competitive forces of people closely aligned with the newsagency channel.

To read more about the cost of running a newsagency in a shopping centre, read Finding $17,500 extra gross profit this year, my blog post from August 17 about the cost of annual rent increases in shopping centres.

Newsagents facing a tough situation with their rent may have more options than they currently know.  For example, in Victoria there is the office of the Small Business Commissioner and VCAT which can be used to resolve tenancy disputes.  The Small Business Commissioner is specifically charged with helping resolve tenancy issues so that small business owners do not lose their businesses.  I have used this route with success.

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Newsagency management

Network Services website meltdown could hinder magazine sales

Newsagents had trouble contacting magazine distributor Network Services yesterday for the handling of queries, extra copy requests and the like.  The Network Services website had problems from mid morning and the best newsagency could achieve was to hear a recorded message when they called the Network help desk.

Newsagents need to lodge missed stock, damaged stock and reorder requirements by Monday to be certain of receiving stock by Wednesday.

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magazine distribution

South Australia to get a Small Business Commissioner

Despite opposition from the Liberal Party, South Australia is to get a Small Business Commissioner as announced last week.

This tremendous achievement is in part due to the work of some newsagents and Professor Frank Zumbo among others.

I know from the eight years of work by the Small Business Commissioner’s office in Victoria that this new body in SA will give newsagents a good forum for use in revolving disputes with suppliers and landlords.

Those who fought for a SBC is SA have done a good thing not only for all small businesses but specifically for newsagents.  Given the newsagent support and push for the SBC, the channel can be proud of the achievement in parliament.

Shame on the Liberal Party for not supporting this from the outset.  There is only so much you can oppose for the sake of opposing before voters see that you put yourselves ahead of voters.

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Newsagency management

Chasing the Christmas tape purchase

We are promoting Scotch Wrapping Tape to early Christmas shoppers with this display on one of our pillars.  It faces shoppers as they get about a third of the way into the newsagency.  Just in front of the display is our wrapping paper and our table of boxed cards.

Right now, shoppers are taking their time with Christmas.  There is some activity, but mainly around boxed cards at this point.  By the time we hit December it is more about convenience. We will move the tape from here to the counter as we get closer to Christmas.

On the side of the display is the Scotch wrapping paper cutter.  We have been selling this for years … it sells very well, just as our Christmas pitch for gift wrapping tape does.

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Gifts

The new issue of frankie magazine selling well

Our promotion of the latest issue of frankie magazine is working well, so well in fact that we have ordered more stock.  If this extra stock sells, and we expect it to, we will have driven well into double digit growth compared to the last issue which achieved double digit growth on the issue before.

We get in early, in the first week of on-sale, with ordering extra stock to ensure that we have enough to get deep into the on-sale.  By looking at sales in the first few days of a monthly we can usually predict what we will need.

I’d urge all newsagents to look at their sales of frankie.  This is is a title you can use to achieve growth in magazine sales and to attract younger shoppers.

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magazines

Promoting the latest issue of T3 magazine

We are promoting the latest issue of T3 magazine as the feature magazine in our technology section.

This simple in-location display is seen by all browsers of this section as well as all guys shopping the computer, car, bike and sports area of our magazine department.

This is a smaller format, less intense in-loction display.  It is designed to act as a beacon without detracting from the overall magazine offering in the space.

The goal with these displays, beyond selling more magazines, is to make the magazine department look more fresh and relevant than the usual aisle of magazines all in a line.  We don’t want to look like an average newsagency.

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magazines

Promoting Cleo magazine in-location

We are promoting the latest issue of Cleo magazine in-location at the entrance to the aisle where the magazine is usually located.

All the girls and women who enter our women’s magazine aisle get to see this display, along with some looking across from other aisles.

We are in a smaller format store, by choice and preference, and so we have to make the most of every space opportunity.  We can lease in-location displays up for longer than a more traditional billboard type display.

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magazines

How the telco world is changing

A friend put me on to the Viber App a few weeks ago while I was overseas.  It lets your phone call another phone with the Viber app, using a wireless network, at no cost.  This means that I could call the office, friends and others with a Viber app on their phone and avoid having to call through a hotel or my regular mobile service.  The savings were extraordinary.  Viber is, in my view, easier and better than Skype.  Ideal for business travellers.  It’s also easy for businesses to call businesses.

No, this is not an ad.

My point, I guess, is that who’d be a telco right now?  Seriously. They are migrating from making money from phone calls to making money from the overarching network.  Hence the importance of the NBN play.  It’s a major structural shift for the telcos.  Not unlike the structural shift we are seeing in print and experiencing in newsagencies.

All around our businesses, and inside our businesses, change is the order of the day. Telcos are walking toward and even through change.  We need to do the same.

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Media disruption

Appalling handling of a page one news story by News Limited

Shame on News Limited for allowing the news photo on the front page of The Advertiser newspaper on Saturday of the new South Australian Premier to be covered by a stuck-on ad for X-Lotto.  As the newsagent who shared the photo with me noted, this is disgraceful.

If the ad is more important than the photo then why not just sell advertising space rather than disrespecting the photo?  This placement gets the ad revenue and lets News Limited make a political statement.  While people at News may say that this was not their intention, it would certainly be reasonable for people seeing the ad to take the handling of the photo as commentary by the newspaper.

The circulation people at The Advertiser would be unhappy if a newsagent blocked the front page of the newspaper in a newsagency.  What they are doing to their own product is the same thing.  It tells newsagents that seeing the main story of the day is not that important to selling newspapers.

I want to see newspapers and their editorial content respected.  These stuck-on ads leave me wondering if publishers allow it now because they care less today about the medium than previously and want to extract as much revenue as possible as long as it lasts.

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newspaper masthead desecration

Customers love the photo Christmas card

Customers are loving this photo Christmas card we have in our boxed Christmas card range.  Their feedback is that it is ideal for sending to people you wold not send a gift to but want to give them something more than a regular Christmas card.  It also works well for people living away from family members – the photo gives the recipient a keepsake for the year.  Our price of $6.95 for six cards is a good value deal … plus each box sold raises 10 cents for the RSPCA.

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Greeting Cards

Promoting the 2012 frankie magazine calendar

We were fortunate to get stock of the 2012 frankie magazine calendar.  Placed next to the frankie magazine it is selling well.  We will be out of stock in a couple of days.

Getting known in the area as the go to place for frankie products – the magazine, diary and calendar – is important as it makes us relevant to a demographic which is a challenge for the more traditional (old school) newsagency business.

We are focused on being relevant to younger shoppers, from primary school through to mid twenties, while maintaining relevance to older shoppers.  Our growing sales of frankie magazine show that we can attract more of the younger shoppers and make this commercially viable for us.

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Calendars

Newsagencies cheaper than supermarkets and others for Halloween products

A week back we shifted focus of our Halloween display to face out into the shipping mall.  The display has been drawing excellent traffic.

At the newsagency yesterday a mum was dragging her kid away saying that the fork and face mask would be cheaper at the at another shop.  Well, no. I checked our prices against others in the centre and we are cheaper.

I’d go as far as saying that newsagencies are the best value shopping destinations for Halloween product.  We are promoting our price difference with some posters this week.  however, we have to do this in a way which does not breach our agreement with the landlord.

From what I can see, supermarkets are using Halloween products to claw back GP from the thousands of items they are discounting.  i.e. get them in with cheap milk and bread and charge way more than they should on Halloween product.

I’d urge shoppers who come by this post about Halloween to shop at their local newsagency for Halloween products.  You are likely to find a better range at better prices.

Newsagents with Halloween products in their newsagency and a Facebook page – promote it this week and be sure to promote that your prices are competitive.

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Gifts

Bill Express connection should kill activ8me NBN roll out involvement

Further to my post of a few days ago, I have written to the Communications Minister to express concerns about activ8me being involved in the NBN given the pedigree of the company and the damage they and those associated with them wreaked on the newsagency channel through Bill Express.

Newsagents were lied to by those selling Bill Express into our businesses when they got us to sign five year agreements, often based on false and misleading information.  We were let down by the organisation itself through its management of its affairs.

The cost to our channel of the Bill Express mess was tens of millions of dollars.

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Bill Express

Merchandise challenge from The Australian gets newsagents engaged

The national merchandise challenge run by The Australian through Facebook generated plenty of interest.  It got newsagents engaged with The Australian as well as with Facebook.  You only have to look at the Facebook page to see the fun some had with the opportunity.  It also generated sales from what newsagents have told me. Display competitions like this are terrific for these reasons and that they give the business a fresh look for the duration.

The photo is just a small part of the display activity from newsXpress Bondi Eastgate the National Winner as well as the NSW/ACT Winner. Talk about engaging with your product!

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Newspapers

What’s wrong with our sales of The Monthly this month?

While there are reports that the latest issue of The Monthly magazine, with the Andrew Bolt article, is selling well, we have not sold a single copy.  It was in a good location with the cover on display.  Yesterday, I moved it next to the Herald Sun.  Hopefully this move will generate some action for us.  This is the first issue out since the magazine relay I did, maybe that’s it.  We’ll see over the next couple of weeks.

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magazines

Home Beautiful display drives sales

Our promotion of Home Beautiful magazine is driving sales.  We are set to beat our average and that’s the goal with a title we promote by giving it premium space.

We always track the sales results for each title we invest time and space into.  Otherwise, what’s the point of the displays.

Checking the sales results for a specific date range is easy … vital to good magazine management.  This data helps us make decisions as to which titles to promote in the future.

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magazines

Tough quarter for Officeworks and stationery

Check out this from the report by Inside Retailing yesterday about the September quarter results from Bunnings

It was not such a pretty picture in the sister operation, Officeworks, which retails stationery.

Total sales for the quarter were $361 million, up just 0.3 per cent on the corresponding period last year when the division posted a 9.9 per cent increase on the 2009 year figures.

There is no doubt from the data I am seeing that the September quarter was tough for newsagents in terms of stationery.  Seeing a major in the same situation is somewhat comforting.  The thing is … we need to reverse this and kick-start stationery sales outside of the once or twice a year push.

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Stationery

Feedback from a magazine customer about their newsagency experience

Check out this feedback from a magazine lover about their encounter with an Australian newsagent earlier this week.

So disappointed with my local newsagent.  I went early to get the latest issue of [title deleted]  (I always count down the days till the release date)

.  There they were sitting on the bench of the newsagent so I was super excited and I asked the owner can I please have the new issue. (pointing in the direction)

.

The newsagent responded with “no you can’t have those I am not opening that now”.

Magazines are vitally important to our individual newsagency businesses and to our channel as a whole.  We, all of us, need to work the titles we receive, especially Australian titles.  We need to regular magazine shopper, whether weekly or monthly, to drive sales of other products we sell in our businesses.

I am confident about the accuracy of this story.

In my own newsagency businesses we resource appropriately so that we get magazine product on the shelves early, well ahead of any other retailer nearby.  We gladly open bundles if we have yet to put out a title being sought by a shopper.

While we can respond to this story with our customer complaints or complaints about magazine publishers and distributors, a better response would be to remind our team members and our colleague newsagents that we need to get magazines right every time as they are our only national point of difference right now.

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magazines

Halloween behind the counter in the newsagency

Click on the image to see the detail of our behind the counter promotion for Halloween at one of my newsagencies.  With so many other retailers coming on board Halloween is getting easier.  More competitive, certainly.  Easier too as it is better understood and more mainstream.

For average-side newsagents Halloween can be a $500 through to a $5,000 season.  It’s certainly traffic generating.  Our front of store display pulls a younger than usual audience to our newsagency.

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newsagency marketing

Digital subscription to The Australian announced

I was fortunate to be briefed by News Ltd yesterday about the launch of a digital subscription service for The Australian which will launch on Monday.

The Australian is the first of the News Limited newspapers to move to the long talked about paywall model.  On Monday, they will start with a free three month trial.  This will be followed by a ‘freemium’ model – some content will be free but the good stuff will be behind a pay wall.

On Monday they launch a redesigned website and a new m-site for mobile devices.  The iPad App stays as is for the moment. After the three month free trial period, the price offers will be:

  1. $2.95 a week for what they are calling The Australian Digital Pass.  This will give you access to the entire website, iPad and Android Apps plus the m-site.
  2. $7.95 buys you The Australian Digital Pass for 7 days and the print newspaper home delivered for six days.
  3. $4.50 buys you The Australian Digital Pass for 7 days and The Weekend Australian home delivered.
  4. $5.20 a week buys you The Australian Digital Pass for 7 days, The Weekend Australian home delivered and one more single weekday edition home delivered.
  5. Existing six day subscription customers will receive the Digital Pass for no extra cost.

I like that they have print in with the mix.  While I am not a fan of paywalls, I understand that publishers like News have to take this step.

What the folks at News do not have an answer for at the moment is how newsagents could engage in selling the $2.95 a week Digital Pass. News is open to suggestions on this.  It is with their permission that I encourage newsagents to email their suggestions on how we could sell or promote or otherwise commercially engage in the Digital Pass.  Email your suggestions to: circulation@theaustralian.com.au.

It would be relatively easy for newsagents to sell coupons to pay for the digital subscription, like we sell the iTunes cards today or like a phone card on the eziPass platform.  We could also sell it directly through our newsagency software and gather required customer details for emailing by News of login for the digital content.  So a technology solution is achievable at the newsagent end, feeding data real-time to News.  There is a question whether News has the appropriate technology at their end to receive this data real time for efficient handling.

I have put the idea of a newsagency software based technology solution to News.  I’d encourage newsagents to put their ideas to the company.  This is at their invitation.  They are genuinely interested in engagement suggestions around driving uptake of the Digital Pass.

There will be some reading this saying that we should do nothing to assist or support the uptake of the Digital Pass.  Resistance or lack of engagement by newsagents will not slow or block the progress of the Digital Pass.  News is doing what I would do if I were them.  It is no different to magazine publishers embracing the iPad and Android devices or lottery companies selling their products online.  Such moves are inevitable.  It’s why we need to be reinvent our businesses outside of our business with magazine and newspaper publishers.

How we engage on opportunities around The Australian could define what we do when this model is offered for the state based dailies in the News Limited stable.

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Media disruption
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