How has the closure of NDD affected newsagents?
I am interested in what newsagents think about the closure of NDD.
Has it affected your business in any way?
Has it imporved competition or lessened it in your view and why?
Cashing in on the Next Top Model controversy
Harpers Bazaar will have two different covers next month playing up to the controversy surrounding the announcement of the winner of Australia’s Next Top Model. Newsagents have an opportunity to play up to this by inviting customers to preorder – I know that in some stores this will work well.
Brilliant cover Scientific American
We have the best opportunity in a while to drive sales of Scientific American with the latest issue out yesterday. What a great, eyecatching, cover!
We have placed this issue near newspapers in the hope of getting more shoppers to at least pick the title up. My sense is that they will and we will see a sales lift as a result.
Promoting Madison
We are promoting the latest issue of Madison magazine to customers as they enter and leave the store. We have stock in an impulse stand next to the display – to leverage the display into sales.
Given the shortage of space in our temporary location we will leave this up for just under a week.
VANA election choice for newsagents
The non newsagent Director position on the VANA board has become a contest with Trevor Mason being nominated to challenge the long term incumbent Robert Wade.
Wade has served as non newsagent and independent Director for many years. He outside the channel view has been useful as VANA has navigated some complex issues.
Mason was behind the Futures Project which sought to use newsagent funds to embark on a commercial venture that, in my view, had no relevance for an industry association. He has gone on to establish a similar venture outside of VANA. I would expect that some VANA members will want to know whether he will seek to reignite the Futures Project or anything like it if he is elected.
As I resigned from VANA in April last year, my right to an opinion is somewhat diminished.
Why the rush on advertising screens for newsagencies?
Newsagents are firmly on the radar of companies wanting to get us to take on their advertising screens. I know of five companies who consider newsagencies to be ideal for hosting their screens.
Some want screens to be placed in windows, facing onto the street. Others want screens in-store. There are promises of a share in advertising revenue as well as the opportunity to include your own ads.
I have been approached by several companies wanting to talk about their plans. To date I have not agreed to meet because I am sceptical about ad screens being of value to newsagents. Here are my concerns:
- Content. If we are to give up key real estate then we need control over content. There is no pint in running an ad which competes with what we sell.
- Return. I am yet to see numbers for any in-store digital signage business which is delivering a reasonable return to the host retailers.
- Barrier. Some screens I have seen act as a barrier to people looking into a newsagency window. In one case, The centre of the main store window is taken up by the screen. This stops passers-by seeing the inside of the store.
- Parasite business. A product which is places next to a very popular product is considered a parasite product – it is relying on traffic for the popular product to guide its success. That is what these screens are. There are enough challenges to the traditional newsagency business model to indicate that we should not dilute the focus on our business. These screens run the disk of doing that.
- History. The newsagency channel track record in this space is not good.
I have seen newsagencies with in-store advertising screens which promote only products sold in-store. While the content is usually produced locally and is therefore not as slick as professional ads, there is evidence of success.
Personally, I think this is where newsagents should focus their attention – on promoting products and services available in their own businesses on ad screens. It is far more valuable to you to get an existing shopper to buy an additional item in your store than to earn a commission from an ad which encourages them to buy something elsewhere.
Newsagents need to do their own research and make up their own mind. Caveat emptor.
Attracting younger shoppers with Halloween fun
Colouring competitions are a great way to attract younger shoppers to a newsagency. Newsagents traditionally run these at Easter and sometimes at Christmas. We have done it for a few years now for Halloween and each year it is bigger than the last. This year is no exception.
The competition works on several levels. It gets kids engaging with the store, meaning they are more likely to remember us. (We have to get them while they are young I am told.) It can bring family members in to see the art. It can provide local schools and clubs a fun Halloween activity with also connects back to the business.
Of course, there is the commercial opportunity – Halloween product sales as well as sales of many other items including pens, pencils and colouring materials for competitions like this.
Loving passionate customers
We had a customer visit one of my newsagencies yesterday looking for a calendar for Cairn Terriers. $67.00 later she walked out with three calendars – two regular size and one slimline. This is what calendar sales are like at this point in the season, people feeding their passion or getting in early to serve the passion of a friend or loved one. Dog breeds are especially popular … and lucrative with two or more calendars in many sales.
We are having a great calendar season and it is only just getting under way. The keys to the success are our range and the layout of this in-store. In terms of range, we have focused on interests our customers are passionate about. As for layout, we have the calendars in a high traffic but browser friendly location.
Daily Telegraph cover price disrespects newsagents
I was in Sydney today and picked up a copy of the Daily Telegraph at the airport. There, on the masthead, it crows that it is still only $1.00. That is nothing to crow about News Limited. While your ad rates, the source of most of your revenue from newspapers, have risen over the years, you have forced newsagents close to being the working poor.
In the eleven or twelve years (please let me know if I am wrong) that you have held your price at $1.00 rent for newsagents in shopping centres has gone up at least 70%, labour costs have gone up at least 70% and business expenses have gone up at least 100%.
Over the last twelve years publishers have pushed newspapers into more outlets, diminishing the return from the newsagency newspaper real-estate even more.
I would love to see a public debate between newsagents and News Limited on their cover price strategy.
Magazine distributor profit drops 42%
In the Annual Report for PMP Limited which was released last week, the Gordon and Gotch magazine distribution business reported a decline in revenue of 4.6%, to $408.9 million, and a decline in profit of 42.4% to $7.5 million.
The report notes that PMP has undertaken some restructuring including redundancies. Newsagents would have seen this in the last year.
My understanding is that more redundancies are on the way which will impact newsagents.
While some newsagents will take pleasure from the bad news for the Gotch operation, I am concerned for a number of reasons:
- To improve the situation Gotch will need to cut costs and increase margin – moves which would not be good for newsagents.
- They will probably look at how they can increase sales. Every additional bundle of magazine they distribute improves their situation because the logistics overhead is there regardless.
- Would they consider extending distribution beyond the newsagency channel? remember, they are paid based on volume distributed.
- I wonder if the Gotch situation is a tail reflecting what we have experienced or a warning of greater challenges to come in the magazine space.
- If they are unable to arrest the decline will they look at alternatives which are not palatable to newsagents?
A couple of years ago, publishers and distributors said that the magazine sales decline was temporary and impacted by external events. It has been going on for too long and impacting too many levels in for this to be the case. Publishers, distributors and retailers are all reporting declines. It is the retailers who carry the largest cost since we have only one income source and that is highly speculative.
Promoting the outdoor room
Tower Systems, the newsagency software company I own, has published a coupon promoting the outdoor room, the new magazine from Pacific Magazines, for printing on receipts using the Point of Sale software. The coupon is available from the downloads section of the Tower website. I’d be happy to send a copy to any newsagent wanting to use this with other software.
The coupon / ad can be printed on a receipt based on what the customer has purchased or just included on all receipts. This type of receipt based marketing is proving successful at attracting customers to return andeven to get customers to make an additional purchase while in the newsagency.
Promoting The Monthly
We are promoting The Monthly above our newspapers. The Julian Assange cover looks good and leverages his high media profile of late.
My only complaint is that the folks at The Monthly send out very little marketing collateral. This month it is two cover run ons. No poster, nothing else. Hardly enough to create an impression.
We are relying on our placement with newspapers to drive sales for us. It has worked well in this location before.
Selling the Collingwood Grand Final souvenir
We have placed the AFL premiers souvenir, A Cakewalk for Collingwood, in the only logical place for it today, between the Herald Sun and The Age newspapers. Based on questions from customers yesterday about the Knight poster I’d expect the souvenir to sell very well over the next couple of days.
ACP Magazines in a reality TV show
TV Tonight is reporting that ACP Magazines will feature in a 10 episode observational series set in the ACP offices of Cosmopolitan, Cleo, Madison, Dolly and Shop Till You Drop.
This should be good for us, bringing focus to the medium and showing what happens behind the scenes. Maybe we could find a way to leverage the show.
MPA focus shifts from publishing
On Friday, Magazine Publishers of America announced that it is changing its name to MPA. The new tagline for the body is The Association of Magazine Media. The change reflects a shift of focus by the organisation away from print.
This is relevant to Australian newsagents as it is further evidence of a shift in focus by magazine publishers, albeit in the US this time, from print to other distribution channels.
Newsagents are lagging behind their suppliers in investing in new revenue streams. While some are innovating, the channel is not. Leadership is lacking on considering the future.
Condé Nast launches new online offer
US magazine publisher Condé Nast continues to innovate in seeking revenue from digital publishing with the launch on Monday of Golf Digest on Demand, a golf-instruction video series that will sell for UA$9.99 per month, AdAge reports.
This move takes interaction between readers and Golf Digest to a new and more interactive level. It represents the new paradigm of what we used to know as magazine publishing.
Newsagents who are concerned about magazines containing advertisements for subscriptions are likely to be equally concerned about magazines which advertise their iPad apps and other digital products such as Golf Digest on Demand.
Halloween 2010 passing Halloween 2009
We are only two weeks in and already Halloween 2010 is well on the way to passing Halloween 2009. Yesterday, with the lull in trade thanks to the AFL Grand Final replay, our team took the opportunity to completely refresh our main Halloween display. Click on the image for a larger version of the photo.
An average Halloween product sale for us is $25.00, making it a rewarding season for gift related items.
The new people attracted into the store by the Halloween window display are also buying other items – cards and magazines especially. This is where a Halloween promotion pays off. It gets shoppers seeing your store in a different light. It especially attracts a younger shopper and this is vitally important to newsagents. Some of these new shoppers will stick.
Getting people to not see us as a traditional newsagency is vitally important to us. Seeing the new traffic results reinforces my optimism.
We have been doing Halloween for five years. We can see from our numbers that this year will be the best. What is interesting is that most of our sales so far have been from new shoppers attracted by the display and not our existing customers.
In our new temporary location we are directly opposite The Reject Shop. They did Halloween last year and there was a 25% cross over in our ranges. On every item they were considerably more expensive. It will be interesting to see their pricing policy this year.
Three ‘new’ magazines from Universal to clog newsagent shelves
We received three new ‘titles’ from Universal Magazines yesterday. I say ‘titles’ because they are actually packs of old titles bundled together to give them another go around. If we are to keep this stock we have to find space for the new product. If we do what Universal wants, we have to carry this stock for three months.
Had I been asked if I wanted my cash, retail real-estate and labour used in this way I would have said no thanks. I am satisfied with the range I have of fresh backyard, scrapbooking and quilting titles. I certainly do not need these packs which contain product which has failed to sell previously. I do not need more old bagged product acting as a barrier to a happy browsing experience.
Just how many times can a title be sent out before it is considered dead? How is this recirculation accounted in reports to advertisers? How is it handled in an audit situation?
It is an abuse of the newsagency channel that we are sent this stock without approval. While Network Services and Universal Magazines will say that they have every reason to believe these products will sell, their justification will not take into account the costs newsagents incur in carrying the stock. Their behaviour shows little belief in that. If they did believe the titles would sell then they would have requested a top only return. Instead, they require a full copy return – maybe so the titles can be sent out again.
Universal will complain that I am targeting them. They set themselves up for this complaint by bundling old product and sending it out to newsagents expecting us to fund their decision and expecting us to fund the costs of carrying the stock.
Not so Grand Final Day
Melbourne this week has not felt the same as the previous week. While we all know the AFL Grand Final is being replayed, there is not quite the same buzz. I will be interested to see how today pans out, whether the shopping precincts become ghost towns from lunchtime. Maybe that is it, the focus this week will be on the game and not the hype.
Notebook closes, it’s official
The speculation of Thursday was confirmed yesterday with an official announcement from News Magazines about the closure of Notebook.
The closure is disappointing but probably for the best. Now, if only some other publishers would take such a pragmatic view.
AFL Grand Final Record opportunity missed
While a AFL Football Record has been produced for the AFL Grand Final replay tomorrow, this is not being distributed thorugh newsagents because a satisfactory arrangement has not been reached according to what I understand. This is disappointing. I am certain we would have sold more copies this week than we did for last week’s draw.
The Record is available direct from the publisher or at the MCG tomorrow.
Telstra cuts newsagent phone recharge margin by 20%
Telstra has announced a cut of 20% to the commission earned by newsagents for mobile phone recharge sales. This must be part of their plan to reverse their poor financial performance.
Telstra has extraordinary market power and they have just showed that in relation to newsagents. We will not do anything about the 20% cut because we would not want to lose their business. They know that. I wonder if they cut anyone else.
Our margin ought to have increased given the increase in our overheads – rent, labour and other costs.
I would like to know the commission paid on Telstra products sold in supermarkets. On October 17, 2005, I wrote here that I had proof (in the form of an invoice) that a national supermarket chain was earning 16% commission from Vodafone recharge sales while newsagents were on 5%. Maybe the same difference exists for Telstra.
SMH or The Age for $2.49 a month?
Fresh editions of The Sydney Morning Herald or The Age can land on your iPhone for $2.49 a month. No sign of their iPad app though. The Fairfax offer is okay but not a patch on the New Zealand Herald iPad app – this is the best I have seen for a newspaper app.
To be fair to Fairfax, the first offer is always going to be a learning experience. The real concern for newsagents needs to be the next generation of devices and the third of fourth incarnation of newspaper apps. These are not far off.
Hallmark voice changers working for Halloween
The Hallmark voice changers we have as part of the Halloween offer are selling like hot cakes. It has been perfect having them and the rest of Halloween out during the school holidays. We are seeing people of all ages buy the voice changers from grandparents down to kids spending pocket money. The add wonderfully to the soundscape of retail in the store.
What is also working is a deal we have where the voice changer can be bought for $9.95 if three cards are bought in the same purchase. the regular price is $14.95. This is a great way to build the basket.
Is Notebook magazine set to close?
The Australian is reporting that News Magazines may be about to close Notebook magazine. Such a move would not surprise me. It is drawing falling sales in a well crowded segment of the market.
Notebook started fading when they took flowers off the front cover. Seriously, sort of. This change represented other changes for the title and indicated, to my untrained eye, that they had lost their way.
If Notebook does close it will be one of the most significant closures in recent years. It would also put the spotlight on other titles in the 70,000 circulation region.
UPDATE (Oct. 1) The Australian is this morning reporting that an announcement is expected today.