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

Author: Mark Fletcher

Newsagents beat supermarkets for magazines

royalengagement.JPGMagazine publishers only need to look at how newsagents have supported the royal engagement issues over the last few days to see the value of the newsagency channel compared to supermarkets, petrol, convenience and others.  Newsagencies have promoted OK!, Who and the early edition of Woman’s Day with clever placement in-store, good displays and training of employees.  I have visited Coles and Woolworths supermarkets on the weekend and they have done nothing.  I asked at a Coles whether they had the special issue of Woman’s Day and could not get past a shrug of the shoulders.

So why is it that magazine publishers give supermarkets more favourable terms than newsagents?  We work harder for them, we support initiatives like the royal engagement issues yet we are treated as the poor cousins to the supermarkets.

A smart magazine publisher would go back to basics in their relationship with newsagents, realise that we are the magazine specialists, respect the attention and support we bring to the table and pull back from their supermarket and other relationships.

Yes, we make money from the sales.  That is the argument put by publishers when I discuss this with them.  However, we are penalised with more time consuming returns and range management work than supermarkets.  We are also burdened with products which fail and this dilutes the value of the top sellers to our businesses.

The photo shows the smart work from the team at one of my stores.  They re-purposed this small footprint stand to enable us to get the engagement issues on display and facing into the mall.  It worked a treat!  No supermarket would be smart or interested enough to do this.

I wish that magazine publishers would show newsagents respect for the extraordinary work we do.

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Newsagency challenges

Selling out the front page of the newspaper

heraldsun-nov21.JPGThe front page of the Sunday Herald Sun today is an ad for the iPad app just launched for the newspaper.  Here we have the dinosaur paper product promoting the new kid on the block digital edition.  This promotion is regarded as more important than the news of the day except for one headline.

If any newsagent was wondering how much News Limited wanted the iPad app to success, the front page of today’s newspaper shows the answer.

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Media disruption

Learning from Big W banking dollars and not percentage

mc-cook.JPGNewsagents selling the Junior MasterChef range have had a lesson this week in banking dollars and not margin thanks to the Big W pricing policy on this range.

Some newsagents are obsessed about the percentage they make on each item they sell.  Too often they lose sight of the margin dollars they can bank with a smaller mark-up and a higher volume of sales for a higher than newsagency average priced item.

The suggested retail price of some items in the Junior MasterChef range was $39.95.  Big W had these items at $21.95.  We made a decision to go with a smaller mark-up which got us to a price for these items of $24.95.  At this price they are selling at a good rate, certainly faster than if we went with the suggested retail price.  We are banking more dollars on the sale of one of these than on three greeting cards.

Further, shoppers do not come to us expecting to purchase a Junior MasterChef item so the dollars banked are impulse purchase margin dollars – the very best kind as they boost our sales efficiency.

So, what is better, a higher margin on products or more margin dollars banked through considerably higher sales?  The latter in my view.  I can bank dollars.  I cannot bank a percentage.

Our approach to pricing was taken on the basis of goal sell through.  We would like to have the space back within 30 days.  This would definitely not be achieved if we went with the suggested prices.  It should be comfortably achieved with our Big W style approach to pricing.

Big W is all about volume.  They pursue banking margin dollars rather than margin percentage.  When you think about it, newsagencies are too.  We have excellent traffic every day.  Considerably more traffic than many other retailers.

Too many newsagents obsess about margin percentage.  As I noted above:  I can bank dollars.  I cannot bank a percentage.

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Newsagency opportunities

Darrell Lea attracts Christmas shoppers

dl-christmas.JPGChristmas is an excellent season to have the Darrell Lea range as it brings in infrequent visitors looking to stock up on their Darrell Lea fix.  While we see good impulse business from regular shoppers, it is those who visit seeking out Darrell Lea product because they know we carry this brand who interest me.  Given that pretty much everything else we sell is available in other stores in a shopping centre, the Darrell Lea control of retail outlets is welcome – especially this time of the year.

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confectionary

News Limited iPad coverage everywhere

heraldsunipad.jpgFrom dominating the front page of the the Herald Sun and the Daily Telegraph to dominating the websites for the titles and getting feature coverage on the Sunrise TV program this morning, News Limited is pulling out all stops for the new iPad apps which go on sale today.  Newsagents who have been in denial about the digital channel have the new competitor staring them in the face every time they sell a newspaper.

The most common question newsagents who now realise the impact of tablet computers ask is how can we make money off of this new channel?

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Media disruption

Royal engagement fever!

fhn-royalwedding.JPGWe are promoting Who, OK! and the special edition of Woman’s Day with (almost) full face displays in with our weeklies as well as tactical co-location outside the magazine department – next to daily newspapers.  Since space in our temporary location is limited, I decided that this full face display was the best approach to grab attention.

The royal engagement has the potential to bring customers back to the weeklies who may have reduced their frequency of purchase or stopped altogether over the last two years.  There will be plenty of us watching to see if this happens.  I hhope it does – weekly magazines could use a long lasting stimulant.

Today’s Woman’s Day is restricted to Metro Vic, NSW and QLD due to logistics and timing constraints. There will be a commemorative issue on Monday for all newsagents.

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magazines

Rupert Murdoch’s most exciting project?

In an interview of News Corp.’s Fox Business Network on Tuesday, News Chariman Rupert Murdoch was asked what his :No. 1 most exciting project is right now.”

His answer: “Certainly the Daily…”  Yahoo has more on this story including a link to the video.  Click here.

The Daily is to be an iPad and similar tablet computer device national daily newspaper for the US.

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Media disruption

Would you leave your shop unlocked at night?

Newsagents should take care with who they permit to access their computer system without their knowledge.  I know of at least two newsagency software companies who have access direct into newsagency businesses without the knowledge of the newsagents.

This is a security risk.

You should always know who is accessing your computer system and why.  You should not agree to unfettered access as some newsagents accept today.

If someone outside your business can access your computer system and thereby your business data, how can you be sure that your interests are protected.  If they need to access this for maintenance reasons then you can let them in each time as you would any guest coming toi your home.  This is how my software company Tower Systems operates.  I would never want the risk of having unfettered access to a newsagent’s business without their knowledge.

Be careful as I have seen instances over the years where the interests of the newsagents affected were not protected.

So, would you leave your shop unlocked at night?  Some newsagents do, sometimes without knowing it.

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Ethics

Promoting Your Garden at the counter

yg-nov2010.JPGWe are promoting the latest issue of Your Garden with a tactical co-location strategy – in with gardening titles as well as at the counter this week.  being a seasonal publication, it’s natural that customers will not be thinking of Your Garden when they visit.  This issue has been out for a couple of days and so far is showing promising sales.  We plan to run with the co-locatio strategy for the next two weeks space permitting.

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magazines

M-Cups – the ideal impulse Christmas gifts

mcups.JPGWho would have thought that newsagents could sell measuring cups at the counter as an impulse line five or so years ago?  The M-Cups are going great … with shoppers off all ages.  They connect with the foodie interest right now.  We are promotting them with our food titles as well as at tthe counter.  The counter position is the winner.  Christmas gifts under $20 are selling very well this Christmas.

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Gifts

Beware of the generic tablet computer

Some newsagents have been offered cheap tablet computers from China.  These unbranded devices look appealing as they could get us better connected with the migration of readers to digital platforms – that is the sales pitch being put to newsagents.  Priced at under $150, the devices I have seen look good, cheap but good.  The problem is that they are not a known brand and do not appear to have reasonable local backup support.  This could be problematic should a device fail and a customer return to the newsagency expecting satisfaction.

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Newsagency challenges

Do we really need this handgun magazine in Australia?

handguns.jpgWhile there are strict restrictions on the sale of handguns in Australia, there appears to be no such restriction on handgun magazines. This latest issue of Concealed Carry Handguns went on sale yesterday.

While I don’t know if this magazine is promoting guns which are illegal in Australia, I would certainly be uncomfortable with this title on my shelves.  It is from the US, a country with a very different approach to handguns compared to Australia, a country, too, with far more handgun related deaths than we see in Australia.  In the US they report 15.22 firearm deaths per 100,000.  In Australia we report 2.94.

While I am no prude, this magazine crosses a line for what I’d consider reasonable in an Australian newsagency.

The Parliamentary Library publishers a helpful guide on resources available on firearms in Australia.

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magazines

Riding Junior MasterChef coattails

j-masterc.JPGWe have a good range of Junior MasterChef products out on display to leverage the extraordinary interest in the TV show which just ended its run.  These and the mook (magazine / book) which goes on sale on Monday will combine to give is a strong presence around this brand which is popular with parents and kids.

While the Junior MasterChef products are in homewares and other stores, I am confident that they are a good fit for newsagencies.

This range of products should also help continue good sales for food titles by broadening the appeal of our stores around this niche.

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magazines

Gardening Australia revamp selling well

gardeningaust-nov2011.JPGWe have seen a sales lift for Gardening Australia with the latest issue.  Hopefully this is due to the revamp of the title and sales continue at this higher volume.  We have the title in three pockets of prime position in our gardening section – there is no room for co-location in our temporary smaller location.  The new look cover works particularly well in traditional newsagency fixturing.

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magazines

A royal engagement to boost sales

The royal engaagement announced overnight should give us some good sales of weeklies and maybe even AWW from now through Christmas.  Diana sold a forest load of magazines.  Selfishly, this engagement has come at a good time for magazine retailers.

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magazines

How’s your health?

I know of three newsagents who have each had a heart attack in the last week.  While they are on the mend, it is a reminder of the need to take steps to reduce risk.

With the hours newsagents work and with many handcuffed to their businesses out of necessity, achieving a healthy lifestyle can be a challenge.  It is better that we act early, before warning signs (or worse) for the sake of our families, our friends and our businesses.

All of us in the channel should look at what we can do to improve our situation and that of colleagues.

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Social responsibility

Apple iBookstore pricing kinda good news

The pricing of books for Australian customers on Apple’s iBookstore for the iPad is good news for book retailers, for the moment.  Prices are high.  An astute shopper can buy the print version of a novel for around the same price.  This is contrary to the US experience.  It will need to change for the new channel to take off.  Book publishers will need to decide if that’s what they want.  Oh, wait, consumers will decide for them by shopping through US sites like Amazon and read these books on the Kindle iPad app.

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Book retailing

The value of some imported titles

uk-foodtitles.JPGHere are more magazine titles which demonstrate the value of imported titles in the overall magazine range.  These titles are a welcome extension of Australian cooking titles.  They make our food section more interesting that Coles or Safeway.

Magazine distributors need to make it easier for newsagents who want to specialise in a magazine category.  Right now, there are too many hoops to jump through and the results too uncertain.  Give newsagents more control and I think you would see some interesting and competitive specialisation emerge.  I know that I would play more with the mix if distributors engaged with us in a more business like and fair manner.

While we do not sell masses of these food titles, they set us apart from our magazine competitors in the shopping centre and that’s certainly a good thing.

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magazine distribution

Interest in digital scrapbooks

baby-scrapbook.JPGThe range of digital scrapbooks we have from Hallmark are generating good interest.  They have been on the shop floor for a couple of weeks and we have sold some already.  This is good considering the uniqueness of the products. It will take a while for us to learn how to help sell them …while some will purchase on impulse, others will need help.

I like that the digital scrapbooks are themed, like the baby one in the photo.  This gives us a unique gift to offer for this occasion.

Interactive gifts are certainly in.

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Gifts

Do newspaper apps cannibalize print?

James Murdoch, head of News Corp. in Europe and Asia thinks so.  He also prefers the Apple iTunes store to newsagents.  Read for yourself what he is reported as saying last week:

“We go to the iTunes store because it’s frictionless. They charge a percentage but the guy on the newstand and the newsagent charge a percentage, and they don’t even merchandise it properly,” he told the Monaco Media Forum.

Regardless of whether he is speaking from a UK perspective or not, it’s an unfortunate and unhelpful statement.

Here is his comment about apps as reported by Reuters:

“The problem with the apps is that they are much more directly cannibalistic of the print products than the website,” he said. “People interact with it much more like they do with the traditional product.

Yesterday, News Limited launched apps for its capital city dailies with more cities to follow.

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Media disruption

Smutty wrapping paper

smutty-wrap.JPGWe encountered a customer on Saturday who was angry about this wrapping paper from Hallmark.

I heard her complaining to one of our team members at the sales counter, telling them, and other shoppers nearby, that we should remove the paper from the shelves.

Our staff were busy serving customers and couldn’t engage that much. She went back to the paper display.

I’d heard the comments from elsewhere and went to speak with her, expecting to find that it was a prank.

The disgruntled shopper was in front of our wrap display, busily removing the product which offended her. Seriously.

I advised that we would continue to sell this design. She reiterated that the product was rude, disgusting. She said she would complain to centre management.  She eventually left but not before complaining to other team members.

Customers who heard her comments were surprised and sympathetic towards us.

Some days, people working in newsagencies face the most unusual experiences.

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retail

Need to watch Wrapaway

vint-rtuck.JPGLocal magazine distributor Wrapaway snuck this vintage truck title in under the radar. While I am happy to cater to the special interest group targeted by the title, I and other newsagents should have been consulted on volume. My other issue with Wrapaway stock is that it does not come through XchangeIT, meaning manual processing. Groan. There should not be a single item getting access to newsagencies outside of an electronic invoice process.

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magazines

Promoting Zoo and the $1.95 offer

zoo-nov151.JPGOur temporary layout benefits Zoo Weekly as it enables us to better promote special issues like this week’s $1.95 offer with an in-location poster placement.  The text based poster is less likely to offend customers and that’s a good thing with our mix of customers.  While I am not a fan of these regular price cuts – as I think they educate customers – I still support them with displays such as in the photo.

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magazines

News Corp and yahoo together?

There are rumours flying around online about a News Corp. and Yahoo merger.  Who knows if there is any truth attached. News has certainly denied any interest.

It’s interesting to think about though. Especially from the perspective of News and the direction it would lead the organisation.

As publisher content gets further away from being on the printed page, diversification which previously would have seen implausible will make sense.

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Media disruption
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