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

Author: Mark Fletcher

The value of some imported magazines

usmags.JPGImported magazines get a bit of a bum rap here and elsewhere.  While plenty of this is deserved, there are times when imported titles support newsagents and our need to be the place for magazines.  The two Christmas magazines are an excellent example of this.  They fit with our theme of helping our customers get ready for Christmas.  They also reflect content not readily available in Australian magazines.

We are displaying both titles outside of the usual category location.  Instead, we have them located where our shoppers are looking for Christmas decorating and entertainment ideas.  These titles reflect an important point of difference for us compared to all other magazine retailers in our shopping centre.

If I was given the ability to easily select overseas titles and control the volume received I am sure I would increase my range.  A smart distributor would give me these facilities and see their sales increase to proactive newsagents as a result.

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magazines

Spot the wedding magazine

smallwedmag.JPGThere in the photo, just peaking out above Bridal Showcase, is a small format wedding magazine which has not been designed for traditional newsagency fixturing.  You can barely see 1cm of the cover. While I am sure that the publisher has their reasons for the small format, maybe newsagencies are not the appropriate retail outlet given what the majority of us have in terms of display fixtures.

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magazines

Happy supporting McHappy Day

ni-fundraiser.JPGTen cents from every copy of New Idea sold this week goes to support McHappy Day and we are very happy to be supporting this well known and respected charity.  The collateral from Pacific Magazines makes it easy for us to support the promotion and connect with the fund raising.

I am keen to support all of these supplier fund raising intiatives as the customer feedback is excellent – just look at sales of charity supporing boxed Christmas cards versus those without such a connection.

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Social responsibility

Good new look for Gardening Australia

ga-nov2010.JPGI love the new look for Gardening Australia launched with today’s issue.  It is a genuinely new look throughout the magazine – beyond a fresh cover.

The different cover enables us to more easily co-locate the title outside the traditional gardening space and through this chase incremental business.

Well done Gardening Australia.

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magazines

Unsold magazines to cost shopping centre newsagents more?

I have heard from a newsagent that one landlord is reportedly to impose an additional charge for handling the recycling of unsold magazines.  For years, this landlord has allowed paper waste to be dumped in the recyclind dumpster.  Now, in the era of imposing charges for every possible thing, the landlord has said that the newsagent needs to pay a premium fee because of their recycle volume compared to other stores.

This issue is not yet resolved. Hopefully, commonsense will prevail once the landlord understands where control really lies on the volume of materials to be recycled.

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magazines

Is there a problem with NDD refunds?

I have heard from several newsagents in the last week about frustration with getting NDD account credits paid.  If the reports are accurate, it is frustrating for newsagents who are already funding the same titles now coming through Network and Fairfax.  Once again, the weakest in the supply chain are paying a high and unfair price.

UPDATE (12:38PM):  NDD has advised that all credit managers are still with the company.  Their details are on each NDD statement.  They are the best contact point for chasing upn a credit.

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magazine distribution

Gift cards for Christmas

blackhawk-giftcards-art1.jpgInterest in gift cards is increasing as shoppers start to consider their Christmas shopping plans.  I am glad that we established ourselves well in this space well in advance of the season.

While the iTunes gift cards and the most popular in the Blackhawk range, gift cards from Sanity, Jay Jays, Mitre 10, Dymocks, Super Cheap Auto and Angus and Robertson are also popular.

The gift cards are being sold with a greeting card more than 75% of the time, meaning a nice margin add-on for an already high margin sale.

While newsagents cannot build their future off the sales of gift cards , they can bank a higher margin from existing shopper traffic. This is the important next step to navigating to the future – building a better business today off of the traffic we have today.

The number of newsagents selling gift cards continues to grow solidly.

The latest extension to the gift card range further leverages existing newsagent traffic even further. The smartbox range offers experiences in a unique format for newsagencies. The price point provides another excellent margin building opportunity for newsagents.

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Gifts

Magazine sales decline 4% in September quarter

The latest newsagency sales benchmark study indicates that magazine sales declined 4% in the September quarter compared to the same period a year earlier.  Of equal concern is the 4% decline on greeting cards and a 2% decline in stationery.

These declines appear to be partly attributed to a decline in overall customer traffic. I put this down to suppliers pushing their products into more outlets and on terms which are more attractive than in newsagencies.

The continuing magazine decline is concerning given that overall supply by the magazine distributors to newsagencies continues to increase.

The average overall basket size has not altered, maintaining newsagencies as one of the least efficient retailers for the basket size metric.

In the benchmark study data I see plenty of success stories, newsagencies trading against the trend as well as categories trading against the trend.  for example, newsagencies with a consistent ink offer can often see double digit growth against a decline in stationery overall.

Here are the key takeaways for newsagents based on this latest benchmark data and that for the previous two quarters this year:

  • Diversify.  Leverage your existing traffic into business for other categories.  The easy extensions are gifts, ink, office services.  Look beyond these.
  • Manage your floorspace.  Consider reducing your space allocation for categories which are in long term decline.
  • Make your business attractive. The days of the old school newsagency of ten and fifteen years ago are over. Take a serious look at your store layout, range and appeal to new shoppers.
  • Exert more control.  Embrace opportunities to exert more control over your business, even in areas where you think you make have little control.

My view is that the newsagency channel has a good future if we, individually and collectively, get serious about what the newsagency shingle stands for.

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Newsagency benchmark

Get Convenience World magazine free

convenienceworldmagazine.jpgRegulars here would know that I like Convenience World magazine.  It publishes excellent insights into products which are of interest to many newsagents.  It is also a useful news and information souurce on the convenience retail channel which newsagents would find fascinating and useful.  I highly recomment Convenience World to newsagents who are looking for opportunities.  Subscriptions are free.  Just email sacha.delfosse@retailmedia.com.au.  Sacha Delfosse is the Editor.

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Newsagency management

Chasing early diary sales

tvw-mag.JPGOne of our team cleverly placed the TV Week diary next to the magazine this week.  It stands to reason that people buying the TV Week magazine are likely to buy branded diary from here than specifically look for it in our diary range.  Hopefully the logic pays off and we see early sales.

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Diaries

What is your NW experience?

nw-nov2010.JPGIs it just my experience or are others finding that the sell through rate for NW magazine is such that the title is loss making?  Weeklies should have a sell through rate of 75% or above.  NW is nowhere near this.  I was surprised, therefore to see a supply increase this morning considering the poor sales data we have for this title.

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magazines

And now … the virtual newsagent

MOBILE carriers could become virtual newsagents following a world-first deal.

So starts a report from Lara Sinclair in The Australian newspaper this morning outlining a deal which will see Optus promote a subscription to The Australian to customers who sign up for a Samsung Galaxy Tab device on a 12 or 24 month plan.

This is a logical and smart partnership between Optus, News Limited and Samsung.  Others will follow.  I suspect that some newsagents will be angry at News. The reality is that News is doing what it needs to do.

The question for every newsagent: what are you doing to reinvent your business?

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Media disruption

Promoting carbon neutral diaries for 2011

kyoto-2011.JPGWe are continuing our environmental push with the active promotion of the Kyoto carbon neutral range fof 2011 diaries from Collins Debden.  Our push last year has paid off with customers coming in specifically to purchase a Kyoto diary from us.  It is good to see shoppers making such a conscious choice.  This year, we have the Kyoto diaries on our dance floor in a high traffic location.

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Diaries

Newsagents can play a role in brain fitness

The Age yesterday published an excellent report on brain fitness and how completing crosswords and other puzzles can help combat dementia or Alzheimer’s.  This is an excellent report to cut out and display next to your crossword magazine section.  It is also worth sharing with staff so that they have more information with which to help drive crossword sales.

The report also promoted the Brain Fitness Challenge bring run by Florey Neuroscience Institutes. This is a team based online competition involving cognitive challenges.  It is part awareness on brain health and part fundraising for the Institute.

With brain experts advocating more attention to brain fitness, newsagencies could become as important in this area as gyms are to physical fitness and Jenny Craig, Lite n Easy etc. are to weight loss.

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crosswords

Age delivery fee rise cuts into the weekend

Fairfax announced a newspaper home delivery fee increase for The Age late on Friday and as a result sent newsagents seeking out assistance on how to handle this with their newsagency software.  They could have saved work for newsagents and software companies which provide weekend support by releasing instructions for implementing the delivery increase with their announcement of the rise.

The rise itself is good news for distribution newsagents, especially for customers they have acquired for themselves.

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newsagent software

Australian Women’s Weekly wins Magazine of the year

The Australian Women’s Weekly from ACP magazines has been named Magazine of the Year at the second Australian Magazine Awards. Runner’s up were Better Homes and Gardens and Vogue Australia.  MasterChef won the launch of the year.

While I like the AWW sales volume and the changes they have made to the product, my choice of magazine of this year is Frankie.  This is based on sales growth, efficient sell through and the customers it attracts to my business.

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magazines

Alan Rusbridger on the future of newspapers

Alan Rusbridger the editor of The Guardian newspaper was interviewed on ABC radio’s PM program last night, talking about the fututure of newspapers and the success (or otherwise) of paywalls.  Click here to hear an extended version of this fascinating interview including this quote:

The question is whether you believe that print is going to be that resilient. If you do then, you know, then I’m the last person to be saying that you should be bailing out of print but when you look at the, in Britain and American and most of Europe, you look at the slide in circulation, you just have to question the long-term survivability of print.

Newsagents, distribution and retail, must be thinking about these same issues as they plan for the future.

Alan Rusbridger is coming to Australia later this month to present the Andrew Olle media lecture on November 19th.

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Media disruption

The season for teacher gifts

teacher-gifts.JPGThis display of gifts for teachers at our counter is generating good interest.  We have it placed next to graduation gifts.  These teacher gifts are ideal for primary and low to mid high school.  They are at a good price point – an easy impulse purchase decision.

End of year teacher gifts are another opportunity for leveraging better business from our good existing traffic.

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Gifts

The increased cost of Bank Guarantees

Bank Guarantees are a regular part of a newsagency business, indeed any small business.  In our channel, landlords and some suppliers require them to reduce their financial risk in the event of an insolvency event.  For example, every newsagent would have a bank guarantee lodged with Network Services.

Prior to the Global Financial Crisis, a Bank Guarantee was fairly straightforward to obtain.  Your bank would usually write the guarantee based on your overall position with them.  That all changed last year as the impact of the GFC reverberated through Australian banks.

Today, most major banks require Bank Guarantees to be backed by cash on deposit or 100% securitisation with property where only up to 60% (or thereabouts) of the bank valuation of the property can be used.

In addition to tougher rules, the fees associated with Bank Guarantees have increased.  One major bank dealing with newsagents has increased annual Bank Guarantees by 400%.

These one relatively cheap instruments of protection for creditors are now quite expensive.  Which brings me to my core point…

The cost to the newsagency channel of the Network Services required Bank Guarantees has increased dramatically over the last two years.  This is an additional cost we need to factor into our assessment of the profitability of the magazine department.

I would like to see the use of Bank Guarantees reduced for products over which we do not have reasonable control over our level of indebtedness – such as magazines.  Such a move could free tens of millions of dollars for the newsagency channel.

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magazines

Draft Christmas magazine poster

christmas2010magazine.jpgWe are developing a poster at my newsagency software company promoting magazines as a Christmas gift. The image to the left is where we are currently at.  We hope to have the artwork completed next week and available through this blog and elsewhere.  Last year, our Christmas magazine poster was downloaded 300+ times.

Magazines make an excellent give as they cater to known special interests.  We have the opportunity to sell single copies as well as several issues in a row as a putaway.

The poster is as much for newsagency employees as it is for shoppers. I think that we sometimes forget that we have plenty of items available, like magazines, which will appeal as Christmas gifts.

I know I bang on here about the inequity of the magazine supply model. That does not stop me from embracing every opportunity I can think of to drive magazine sales.

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magazines
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