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

Author: Mark Fletcher

Call for a paywall to stop browsing of newspapers in newsagencies

Check our this ‘story‘ fron NewsBiscuit:

Britain’s most prestigious publishers, including News International and Express Newspapers, are up in arms about shops which allow people to browse the content of their publications without paying for them, saying newsagents should protect their titles behind a pay-wall.

One complained that it’s worse than avoiding taxes. ‘That’s legitimate – unlike accessing our stories for free, which is morally wrong…although OK, technically legal.’

‘Unlike being a multi-millionaire who evades paying a tax contribution to a nation which has given him considerable wealth, the man who looks at newspaper headlines while shopping in WH Smith or Waitrose is breaking a social contract – trying to get something for nothing,’ argued the publishers.

‘Englishness is about fair play – every time someone sneaks a view of one of my papers without buying it, a little piece of England dies,’ said one tax haven-based billionaire.

Hilarious.

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Newspapers

WH Smith playing with self checkout

UK newsagent WH Smith – like Officeworks but with books, magazines, cards, stationery and other traditional newsagency lines – is playing with self checkout terminals.  My understanding is that they have self checkout terminals from NCR on trial in four stores.  One argument could be that they improve customer service.  Another argument could be that they eliminate customer service.  Given the increasing cost of labour it is not unexpected that national retailers are embracing self checkout more and more.

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Newsagency challenges

Harry Potter is late

potter-late.JPGWhoever is responsible for the Harry Potter cards and other products which newsagents received yesterday ought to check their diary.  The best time for this range, based on over the counter queries, was three weeks ago.  The movie has been out a while and fans are more satisfied today than they would have been three weeks ago. We will give the Harry Potter products a go but we are not expecting much given the poor timing.

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Newsagency challenges

Broken Choc Mint Balls

dl-damagestock.JPGHalf the Darrell Lea Choc Mint Balls we received in the last shipment arrived damaged.  I suspect there is a production problem with this product because quality is usually not an issue with Darrell Lea product.

We have had to remove the damaged product from the shelves as it looks bad for us and for the Darrell Lea brand.

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confectionary

Another fishing magazine?

tackle-ugh.JPGSeriously, we need another fishing magazine?!  A review of the sale of fishing titles will show that we are not coming close to selling out of the range we already recieve yet the allocations software has decided we need this title.  Tackle Junkie may interest some but not me.  I don’t have the space.  But this isn’t just about space.  It is about yet another title being funded by me without being asked if I would like to fund it. Supply decisions like this at the bottom end of the marketplace are killing newsagencies.

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magazine distribution

Why the supply increase for Money magazine?

money-dec2010.JPGACP increased our supply of Money magazine by close to 100% even though we have returned 20% or more of previous issues.  Even if this issue has content which will drive above average sales, I could not see any content warranting a 100% increase in supply.  I’d much prefer to see publishers supply a lower quantity and top this up if sales warrant.  It is better than I sell out than have stock available right through to the end of the month.

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magazine distribution

November sales benchmark study

I am undertaking a sales benchmark study comparing sales in newsagencies for November 2010 against November 2009.  This was announced to newsagency software customers of Tower Systems yesrerday. Newsagents participate by sending a Monthly Sales Comparison Report: tick the box to exclude home deliveries, and tick the box for a category breakdown. Set your first date range (on the left) to November 1, 2010 to November 30, 2010 and the date range of the right to one year earlier. Once the report is on the screen, click the PDF button to save this as a PDF, go into your email software and send a copy of the PDF to me at mark@towersystems.com.au. I will publish the benchmark results here and elsewhere so all newsagents can benefit.

Tower Systems is committed to helping newsagents make better business decisions through access to accurate business data in a timely fashion.

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Newsagency management

A unique Christmas range

pudding-lady.JPGWe are enjoying good success with this range of delicious Christmas treats from The Pudding Lady in Newcastle.

We have Christmas cake, shortbread, Christmas pudding with Brandy sauce and White Christmas.  We also have some nice salad dressing packs and marinating packs.

The range is very different to what customers see in a newsagency. While priced at the high side, the product gives off a feeling of quality – worth the reasonably high (for a newsagency) price point.

I first discovered the range at the Reed Gift Fair in Sydney a few months ago.

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Gifts

How to stop getting books from Gotch

I have received plenty of calls from newsagents asking how to stop Gordon and Gotch sending books with their magazine deliveries. I’d suggest the following:

  1. Write to Gotch on letterhead listing your account number asking that they do not supply you with any books without your express permission.
  2. Explain that you do not have the fixtures or space to support their books in yoour store.
  3. Note that since these are books, and not magazines, you cannot be held responsible for this unexpected and non-standard product and therefore accept no responsibility.
  4. Note that should they ignore your wishes you will have no choice but to return unsold product at their cost.
  5. Consider sending the letter by Express Post -so you have a record of delivery.  Fax yould be equally as good.

Of course, if you are happy getting these books then do nothing.  I am sure they will continue to come.

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Book retailing

ACP kills two Disney titles

Disney Girl and Disney Adventures have been killed off by ACP.  A new magazine, Disney Magazine will launch later this month – from a different publisher.  The children’s magazine segment is in all sorts of bother based on newsagent sales data I see.  It’s loss making for many newsagents once you account for retail space and labour.

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magazines

Promoting Christmas bags

christmasbags.JPGWe are promoting Christmas bags on the side of one of the columns in one of my shops with success.

This is the best way to display gift bags in my view.  The display shows off the bags without customers having to go looking for them or lean down as some displays I have seen recently require.

Kids are drawn to the range from this display and kids attract parents.

Near the bags we have tissue paper which can be used to better package gifts placed in the bag.

We switch the side of the column use to promote bags every few weeks.

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giftwrap

Beware the iTunes turf war

giftcards-xmas.JPGePay is apparently delivering iTunes cards to newsagents unannounced.  I have received calls from several newsagents who claim this has happened to them.  They have been confused by the unexpected delivery.  Newsagents can sell these iTunes cards but they will need a magnetic card reader for activation based on what I have been told.  The alternative, which I recommend, is that newsagents sign with Blackhawk gift cards.  Blackhawk (delivered through Touch) provides a nice stand and a range of national brand gift cards including iTunes gift cards.  You don’t need a magnetic swipe reader to sell these cards.  Indeed, you most newsagents will be able to use their existing system.

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Newsagency challenges

Small business opportunity for new Victorian Government

Successive state Labor governments around the country have presided over deep cuts to the margin made by newsagents and other small businesses on the sale of transport (Myki) tickets.  This started in 2004 in New South Wales.

In Victoria, the Labor State Government presided over what I would label as preferential treatment given to 7-Eleven to lower their operating costs in selling and recharging transport tickets.  What they facilitated for 7-Eleven they denied for newsagents.

The election of a Liberal National Party coalition government in Victoria is an opportunity them to demonstrate their often claimed support for small business.  They could do this by ensuring that small business newsagents receive fair compensation for the sale of transport tickets.  By fair compensation I mean an increase in real terms to the retailer margin on the sale of transport tickets instead of the decrease presided over by the Labor government.

While there are many other moves the new Coalition government in Victoria could make in support of newsagents, ensuring fair compensation for the sale and recharge of transport tickets would be a good start.

For what it is worth, fair compensation is my mind is 7% of ticket price.

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Newsagency challenges

Promoting on the floor

new-idea-floor.jpegIn our cramped temporary location, finding space for displays is most challenging.  So, we have decided to use the floor to promote the excellent Pictionary giveaway with this week’s New Idea.  We have taped around the edges to protect against scuffing. I’m very happy with the result – it certainly draws attention to the offer and the overall women’s weekly magazine section. Yeah, well pleased with this.

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marketing

Sex slave book from Gotch

sex-slave.JPGGordon and Gotch sent out this book, Sex Slave, to some newsagents with their magazines.  I bet magazine publishers would not be happy with it being treated like a magazine.  Newsagents are certainly not happy – a book at magazine margin, an odd size for newsagency fixturing and delivered late in the month putting newsagents out of pocket for at least a month.

While I am no lawyer, I consider the supply of books to newsagents without giving us the opportunity to say no is an abuse of the magazine distribution model.

I didn’t receive this title so I cannot protest.  If I did, I would certainly protest to Gotch and use any other low cost regulatory avenue available.

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Book retailing

Promoting Quarterly Essay

qe-dec10.JPGWe are promoting the latest issue of Quarterly Essay in a prominent location near our newspapers – to leverage the good media coverage for this issue which went on sale last week.

We have found that Quarterly Essay responds well to media coverage so it makes sense to be tactical about placement.

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magazines

Using (abusing) newsagents to sell books

supersize-book.jpgSome newsagents received this book with their magazines this morning.  Did you?

Magazine distributors should not be sending this type of product through the magazine distribution channel without gaining permission from newsagents first.  Beyond the margin problem there is also the issue of where and how to display the product.  Sure newsagents could put it with other books but they are often remainder books.

As with the John Tickell book last year, supply of this book through newsagents is ridiculous.  It sucks out cash on the last day of the month.  It is an abuse of newsagents.

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Book retailing

Putaway supply: inept management by magazine distributors or a conspiracy?

partworks-ugh.JPGMagazine distributors receive information about pre-sales, putaways.  They know from this data, which is provided as part of the IT standards they established, what a newsagent needs to satisfy putaway requirements.  Why, therefore, do they ignore this and undersupply many newsagents when it comes to putaways?  Are they inept or is there a conspiracy here?  It has to be one or the other since they know the supply requirements of newsagents in advance. Ottherwise, why make it part of the IT standards years ago?

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magazine distribution

Did The Sunday Age sell out yesterday?

In one of my newsagencies yesterday we sold out of The Sunday Age at noon.  The distributing newsagent will not even take our call if we call after noon on any day of the week.  Even though we are only a couple of minutes away they would rather miss the sale than make stock available for us.

Newspaper publishers need to look more carefully at sell out situations in retail only newsagencies.  Our software lists sell outs and the trading time lost.  This is an easy report for area managers to access.  In our case, the report contains bad news, especially on weekends for The Age.

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Newspapers

Profitable angels build a better basket

mag-angels.JPGThese magnetic angels sold well last year so we decided to give them another shot.  We are on track to sell out.  Customers are buying three and four at a time, on impulse.

While the angels make an excellent counter offer, we move them around.  This past week we have been promoting them near boxed cards – with terrific success.

Items like this are about building a deeper basket first and driving margin dollars second.

Okay, so we won’t retire on the profits from this one line.  However, they are an excellent way of driving greater value from the existing excellent traffic we see in our stores, especially at this time off the year.

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retail

Disappointing move by Darrell Lea into Woolworths

dl-woolworths.JPGI have been thinking through the move by Darrell Lea to place their liquorice in Woolworths supermarkets.  It does not make sense to me.  Darrell Lea has been demanding of their licencees for many years, requiring that their product be displayed in Darrell Lea fixtures to respect the brand and requiring that we take a minimum range of product and not just top sellers.

There are many rules, rules which most newsagents have embraced because they want the point of difference that carrying the Darrell Lea brand brings.

Given that liquorice is the stand our top seller for Darrell Lea, newsagents and other Darrell Lea stockists have lost the point of difference.

While we will still sell Darrell Lea to our shoppers, there will be some who stop buying.  These are the regular (pun intended) customers who stop by each week for their bag of Darrell Lea liquorice and nothing else.

This move by Darrell Lea is like the move by newspaper publishers and magazine publishers into supermarkets and other retail channels.  They still require us to adhere to rules which they ignore for their new retail buddies.  We are restricted in what we can do while the new channels have more control – with magazines especially.  The rules for us versus them make us less competitive.

Darrell Lea are doing what they think is right for their business.  Good luck to them.  As a Darrell Lea stockist I am left wondering about all of their preaching for many years about the respect they want from retailers for their brand.  Going into a mass network like Woolworths throws all that preaching out the window.

I saw their liquorice in two Woolworths supermarkets yesterday.  It was lost in a sea of candy and treated the same as the cheap liquorice next to it.  Back at my newsagency, Darrell Lea continues to be treated as a hero product, situated on the Darrell Lea required wood stand and located in just about the best position in-store.

It feels like Darrell Lea does not respect its long standing retail partners.

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confectionary

Promoting to customers as they leave

knox-leaving.JPGThe photo shows the display facing customers as they leave one of my stores.  Our team invests as much time in displays facing customers as they enter as they do in displays facing customers as they leave.

Throughout the store there are displays designed specifically to engage customers as they leave an area of the store.

We watch customer interaction and adjust accordingly.  The displays are significantly changed weekly.

Displays facing out from the front of the store are designed to attract traffic from across the mall.  Displays facing customers as they leave are designed to grab attention up close for easily understood season specific impulse items.

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Newsagency opportunities

The value-add point of difference

book-reindeer.jpgWe have the Hallmark The Night Before Christmas recordable storybook and have been good, until the Target Christmas catalogue came out a week ago.  Target gutted the price of this and a bunch of stock to kick start what I understand has been an awful Christmas for them so far.  Rather than be seen as a direct competitor and lose on price, we have the Hallmark reindeer plush on offer for just $5 extra with the storybook.  These reindeer retail at close to $15.00 so the combined deal is $10.00.  On top of this we have the storybook priced at $5.00 off RRP.  So, the total saving is $15.00.  This takes us away from being a competitor of Target.  Target does not have the reindeer.

The recordable storybooks are wonderful products. They provide a level of emotional connection between giver and recipient which goes far deeper than a regular gook gift.  Kudos to Hallmark for this innovation and their backing of this with a national TV campaign starting tonight on Hey Hey It’s Saturday.

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Newsagency opportunities
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