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

Author: Mark Fletcher

How will the new super mining tax affect small businesses like newsagents?

I have been watching and listening to the debate between the federal government and the miners about the planned super mining tax and wondering about the impact of the new tax on small business.  I’ve also been wondering about the pathetic school yard jibes but that is a blog post for another time.

With some new mining projects already on hold and talk of others not developing as far as planned, newsagencies in mining towns will feel an impact. I know some of these businesses and the towns involved.  They have been enjoying excellent business and have invested considerably to serve the growth.

Given the disconnect between the income source for the planned super tax and claimed spending priorities for the revenue, there is no wonder that Australians are confused as the government says they are.

The economic uncertainty created by the way in which the government has handled the matter is impacting in mining towns already.

The behaviour of the government last week in bypassing its own regulations on advertising and breaking an explicit promise to the Australian electroate made during the last election campaign is, in my view, appalling.

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Ugh!

Another day and more Apple iPad frustration

ipad_case.JPGI don’t want to be frustrated about the iPad, certainly not before I have had it, played with it and experienced the joy with any new technology device.  But I am frustrated.  Apple yesterday sent me the case for my new iPad.  This is the third shipment of bits connected with my iPad order.  But still no device.  Their approach to pre-release committed online customers compared to the retail channel is appalling.  That they are not recognising this and turning the situation around is not what I expected from Apple.

Companies make mistakes all the time.  It is how they resolve them that matters.  My experience is that Apple is not investing any energy in turning around a problem they created.

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Media disruption

Helping newsagents collect newspaper home delivery payments

Tower Systems is helping newsagents in South Australia collect newspaper home delivery payments through its free eziPass electronic payments platform.  Using eziPass,retail newsagents will be able to collect payments from home delivery customers and receive a service fee for providing this service.  The fee itself is being handled between News and the newsagents.

Click here to download the signup form to get ready to access this facility through eziPass.  Newsagents already accessing Touch products through eziPass will not need to complete the form.

The eziPass platform is available to all newsagents regardless of the newsagency software they run.

This project is quite separate to the PayPoint project launched by Tower Systems a couple of years ago which enables retail newsagents to collect home delivery account payments on behalf of distribution newsagents.

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newsagent software

Promoting donna hay magazine and the free blackboard

fhn-donna-hay-jun2010.JPGWe are promoting the latest issue of donna hay magazine at our main counter thanks to the free blackboard gift.  News Magazines only gave us one poster (ugh!) so we copied the cover and used one of the blackboards to create the display.  While not our best visual merchandising work, my sense is that it will result on good sales for us.

We have built donna hay into a strong title in our store through consistent tactical activity at high impulse locations – like the counter location in the photo.

We will leave this display up until Monday.

I’d note that we took down our NW display which was in this location from Monday as it did not work for us – most copies sold from the usual NW locations.

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magazines

Leverageing Sex and the City 2 for marie claire

fhn-marie-claire-june2010.JPGWe are promoting marie claire in our women’s magazine aisle with a simple display which can be seen by everying entering the aisle.  This is the first of two initiatives we have planned for this issue of marie claire.  This display will remain up until after the weekend when we will act on phase two.

We decided on this simple display to start as it connects with the considerable publicity around the release of the Sex and the City 2 movie.

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magazines

Promoting June issue of Money magazine

fhn-money-june2010.JPGAfter resting our in-location display for Money last month, and experiencing a dip in sales abck to the usual number – we put up a simple display yesterday.  If we see a lift to what was achieved in April when we did our first display then it will provide the evidence that this type of display for Money works well at our newsagency.  While there is a real-estate cost for the poster, we have the space available in this men’s magazine aisle.

Given that our magazine unit sales were up 4% in May compared to May 2009 we’re confident that moves like these displays are working well for us compared to the channel average.

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magazines

May was a tough month for newsagents

I have now reviewed sales data for May 2010 and compared this with May 2009 for twelve newsagencies.  It’s been a challenging month for newsagents and retail in general..  While there is a risk in only looking at data for a month, here is a summary of what I have seen:

  • Magazines.  The average decline in unit sales is 4%.  That said, my newsXpress Forest Hill store recorded year on year growth of 4% in May.  Our weeklies are up 7%.  Looking closely at the performance of the 12 stores though, May 2010 is better than thefirst quarter of the year – the decline appears to have softened.
  • Newspapers.  Down 4% in unit sales.  Newspapers are more affected by the news cycle.
  • Stationery.  Sales are pretty much line ball year on year in most stores for which I have data.
  • Books.  Excellent growth in the stores with book sales at $2,000 a month or more – i.e. stores selling more than the discount novels.  Of the twelve in this initial sample, only three were into books in any reasonable volume.
  • Copying & faxing.  Double digit growth in all but two stores.
  • Gifts.  I only looked at stores with $2,000 a month in sales or more – double digit growth in most.  Of the 12 stores, only four were into gifts in any volume.
  • Cards.  This is the hardest hit department.  Red ink everywhere – declining unit sales ranging between 5% and 20%.
  • Customer traffic.  Down on average 7% – but a couple reporting a concerning double digit decline.

I have seen Year to Date sales data from a landlord for our retail category and they are reporting a decline of 9%.

While the news does not look ideal, there is good news in the data for entrepreneurial newsagents who are driving change through their businesses.

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Newsagency challenges

World Cup magazines go off!

worldcup-mag.JPGSales for just about any of the World Cup titles are excellent with sell outs being reported by many newsagents. Even Soccer International Magazine’s World Cup Program which arrived late in the cycle is selling well – our success has been at the counter as an impulse purchase – good considering the purchase price.

Part of what is driving such good sales of World Cup titles for newsagencies is our range of foreign language titles. These attract a broad cross-section of shoppers from countries with a strong interest in the game.

Newsagents not actively promoting their range of World Cup titles should take action today – there is still time to achieve excellent sales.

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magazines

Beecher: iPad exhilarating

Read what Eric Beecher, former editor of the Sydney Morning Herald and former editor in chief of the Herald and Weekly Times and current publisher of Crikey thinks about the iPad:

Using the iPad to consume journalism is an exhilarating experience. It is, almost certainly, a game changer for the way media consumption will evolve.
Just as the internet revolutionised the paradigm of media useage more than a decade ago, imagining where this kind of light, portable, rich, instantaneous, bespoke iPadish platform could go feels very much like another Gutenberg moment.

But, for the future of newspapers and old media, it also feels very much like a Hindenburg moment.

All the hype bloviating from newspaper companies about how the iPad will secure their future seems so much like wishful thinking based on mindless logic…

Click here to read the rest of the piece.

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Media disruption

Promoting Top Gear magazine and the free DVD

fhn_topgear_may3110.JPGWe are promoting the latest issue of Top Gear magazine with an in-location display at the entrance of our men’s magazines aisle  – despite the title not being targeted by ACP for any special treatment this week.  early indications are good for this issue of the magazine.  That said, next week we will give it a push in a higher traffic area.

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magazines

Frustrating Apple iPad customer service

I called Apple today wondering where my iPad 3G is given that it was bought and paid for close to three weeks ago.

After selecting a bunch of options on their phone system I got to speak to a human.  Well, I think she was.  The truth is that I got little more than canned answers and my name repeated every fourth word.  Ugh!

The Apple representative had absolutely no joy for me and no explanation as to how people could buy off the street today what I preordered and prepaid for three weeks ago and am yet to receive.

No matter how I couched my questions the canned answers kept coming.  What irritated me the most what that she understood my concerns and wanted to help me.  Not!

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Customer Service

A whole new way of reading the news

australian-ipad.JPGThe ad on page 10 of the media section of The Australian yesterday should focus the minds of newsagents on the new world in which we now live.

The photo of a iPad featuring The Australian on its screen resting on a front door mat is a play on the quintessential image of a home delivered newspaper in the same situation. News Limited is not Robinson Caruso in their approach.  Publishers across the world are promoting the iPad as an alternative to their print product and home delivery specifically.

The arrival of the iPad and its promotion as a new distribution channel should not surprise newsagents, but it will. The advertisement in The Australian is just the first steps of promoting this new distribution channel.  I’d be doing the same if I were them – leveraging the old distribution channel to promote the new.

At some point, newsagents will become upset about the new distribution channel such is the ignorance in some quarters about what has been an obvious goal among publishers for years as I have discussed here many times.

Our focus needs to be on our model for the future, a model which recognises the disruption caused by the iPad and the devices which will follow.  The answer is not for us to sell newspaper subscriptions for the iPad as some newsagents are proposing.  The suggestion reflects ignorance of how the new channel works.

While publishers (magazine and newspaper) are telling newsagents that the iPad will not impact retail and home delivery sales, I think they will.  Not so much in the next two or three years but certainly beyond.  This is why it is essential we focus on our businesses today.  If you need motivation, pull out The Australian from yesterday and turn to Page 10 of the media section.

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Media disruption

InStyle magazine promotion works

fhn_instyle_may3110.JPGOur in-location display for InStyle magazine has worked very well.  We have achieved a 77% sell-through in 13 days.  This is the only place the title was promoted.  The display has helped push the performance of this issue of InStyle above average for us to this point in the sales cycle.  I am not suggesting that the display is the only reason for the sales success.  No, the magazine itself has plenty to do with this including the cover.  The display is designed to help people looking for the title to easily find it as well as to promote it to others browsing in the aisle.  It’s all about making shopping easy.

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magazines

Promoting the NW magazine VIP card

fhn_nw_may3110.JPGWe are promoting the latest issue of NW magazine at the counter this week.  The free VIP card stuck to the cover which gives the reader a discount on shoes is a good value add-on to the magazine which we are happy to promote.

The value add is the reason we are promoting the magazine in such a prominent position as well as in its usual location and the basket builder stand.

The execution by ACP is excellent – well attached VIP card to the cover, good marketing collateral, good offer.

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magazines

Promoting the Zoo discount

fhn_zoo_may3110.JPGWe are promoting Zoo with newspapers this week since they are running another of their $1.95 special offers.  It’s frustrating because it will sell well and then fall back next week to not paying its way.  I understand why ACP runs this discount campaign, I just don’t see any long term upside in newsagency sales other than extending a few baskets the week the discount cover price applies.

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magazines

Why the iPad is not an ideal home delivery device

The Apple iPad in its current form is not ideal for assisting with newspaper home deliveries.  The GPS is not accurate enough nor the update speed fast enough for what would be needed in a suburban newspaper distribution situation.

Also, the only sat nav facilities in the iPad are for Google maps, not Melway or other maps.

The other barrier is cost.  Would newsagents be prepared to put around $1,000 of technology in a vehicle for deliveries?

I think the iPad has many applications of interest to newsagents and other business operators – just not in the home delivery area at this stage.

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newsagent software

Why would you buy a newsagency today?

I am often asked by people looking at buying a newsagency why they should given the issues and challenges discussed here and elsewhere.

In my view, a newsagency represents a good investment and offers good opportunities, plenty of upside – despite some challenges presented by out of date practices.  The value in theupside is why I have expanded my own involvement.

There is plenty about a newsagency business you can control.

There are excellent new traffic opportunities: ink, books, gifts, services and some other new products areas I am not prepared to name here just yet.  These are brining new customers in.

There are excellent sales efficiency opportunities – selling more to existing customers. This is achieved by cleverly leveraging high traffic products such as newspapers, lotteries and major magazine titles to drive impulse purchases.

There are good margin opportunities. For example, ditching magazine company calendars in favour of dealing with calendar specialists – newsagents more than double their margin.

Proactive newsagents can transform the business. This is where the biggest opportunity lies. By respecting existing key traffic generators and evolving the business offer in other categories, smart retailers can significantly increase sales and profit. Yes the traditional newsagency is old and tired. The new newsagency is vibrant and profitable.

Change. Yes technologies like the iPad will impact our businesses. This will be more in a good way than a bad way. Entrepreneurial newsagents are seizing the opportunity of change and using this to motivate internal change.  There are newsagents making good money from cafe services, online businesses and expanded distribution businesses.

So, why would I buy a newsagency today? The opportunity!

The only caveat I would apply is that you need to buy at the right price.

I will be covering the themes in this blog post in detail at the Newsagency of the Future workshop next month.

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buying a newsagency

Check your Master Chef allocation

With issue #2 of Master Chef magazine just around the corner, newsagents who expect to sell plenty of copies should check with Gordon and Gotch on the planned allocation.  Given that many newsagents did not get addditional stock and that allocations will be based on actual sales, getting now for additional stock would make sense.

I expect issue #2 to be strong since the TV show is still running and there will be plenty of customers who missed out on issue #1.

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magazines

Better Homes and Gardens sells well at the counter

bhg-counter-jun10.JPGIn addition to our in-location display we promoted the latest issue of Better Homes and Gardens at our main counter over the weekend with tremendous success.

Weekend shoppers dropping for a newspaper or lottery ticket were our target and it worked.  It was terrific seeing this in action first-hand.  We restocked the display Saturday afternoon it had done so well for us.

Better Homes is one of those titles which responds very well to promotion at the counter.

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magazines

Woolworths / Safeway decline to support World Cup promo

Woolworths ( and Safeway) supermarkets will not be participating in the World Cup Soccer Flag promotion with The Sunday Age (and the Sun Herald?) today.

I am not sure of the reason for Woolworths not participating and don’t really care.  This provides another opportunity to reinforce the difference between a newsagency and a supermarket for circulation product.  If only the publishers would get this and leverage the opportunity of the service newsagents provide.

While there will be some grumpy customers today who are frustrated at having to walk to us to get their flag, there will be others who check us out and even buy something as a result.

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Newsagency opportunities

Still no sign of my iPad

sad-ipad.JPGIt is frustrating hearing from and reading about people who bought iPads from Apple stores on Friday and yesterday.  My desk has several iPad attachments, as the photo shows, but it lacks the device.  The Apple website still says my iPad will ship by June 7.    My frustration is heightened by reports that TNT has had the devices ready to ship for more than a week.  This is not good treatment of someone who committed to the device well in advance of the release date.

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Media disruption

News coverage on the Modern Award

I have done a couple of media interviews over the last week on the Modern Award – one for background material to help the journalist understand where newsagents sit in the mix of the changes.  Some of what I have written here has been picked up.  We have a long way to go to sort out the challenges the award changes have delivered to newsagents and plenty of other businesses.  The frustration is that the process of negotiating exceptions and regulatory changes is time consuming and expensive.

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Newsagency challenges

British magazine display drives sales

The British magazine display which we ran at the front of our newsXpress Forest Hill store for a week delivered an excellent sales lift – making the space and time allocation well worth the effort.  My sense is that it also drew browsers into the store since we were showing ourselves as carrying more than only the top selling magazines.

A key point of difference as newsagents is the depth of our magazine range.  We ought to embrace and promote this more.  By only promoting top selling titles, as many of us do today, promote that we are me-too retailers, competing in a crowded market.  The british magazine display and other specialinterest displays we do push against this.

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magazines

Promoting free coffee with New Idea

new-idea-coffee.JPGWe gave over a couple of pockets to promote the free coffee available to readers with New Idea this week.  The simple display with an A4 poster worked well for us, delivering strong sales.

Given that some customers will choose between a few titles, promoting a value proposition like the free coffees can help guide the choice.

I’d much rather promote a value add than discount a title to get the sale – especially in a shopping centre where rents are high and every cent is valued.

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magazines

Puzzler Arrowords sales collapse for us

puzzler-arrowwords.JPGThe latest issue of Arrowords from Puzzler has not performed at all.  Yesterday morning, I returned everything we had received after leaving the title on the shelves for six weeks to achieve at least something.

We also supported title with a co-location promotion in with our women’s weeklies titles for a week.

This is where the magazine distribution system is flawed.  I have given over my space, my labour and my cash to support Arrowords and I get nothing in return.  The magazine distributor is paid regardless.  We price our assets too cheap.

As I have written here many times previously, there needs to be a non performance fee which applies where a title does not perform to minimum standards.  Given the little control newsagents have over what they receive from two of the distributors such a safety net for our investment is fair.

I think the folks at Puzzler need to work on their titles.  Lovatts are creaming them and while that is good for Lovatts it is not good for healthy competition on our shelves.

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magazine distribution
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