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

Author: Mark Fletcher

Newsagents should check MasterChef magazine numbers

Newsagents expecting to sell plenty of stock of the new MasterChef magazine ought to contact Gordon and Gotch to determine their allocation and ensure they have the stock coming they expect to need. I have heard of several instances this week where initial allocation was considerably below what the newsagent expects to sell.

Think back to last year and the launch of Prevention.  The allocation numbers determined by Gotch were low in plenty of stores and sales were missed as a result.

By at least checking your numbers you have a chance to get close to what you need and help Gotch get the allocation right.  This must be what the publisher, advertisers and newsagents all want.

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magazine distribution

Strong early engagement with iPad newspaper apps

In a conference call yesterday discussing quarterly numbers, for News Corporation, Rupert Murdoch said that they have 64,000 users of the iPad application for the Wall Street Journal.  It’s important to understand the difference between a use of the iPad app and someone paying.  It’s early days to see the monetisation model for the iPad.  The prospects are good but it will be a year before really useful numbers which reflect churn and other criteria can be assessed.

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Media disruption

Excuse us while we play

You’ll notice an ad to the right.  We are playing with Google Adsense to see what happens.  With between 1,200 and 1,500 visitors a day, Google feels that there is a revenue opportunity.  We’ll see what happens over the next few weeks after which I will decide whether the ads stay.  In the meantime, we are likely to play with style changes to see what works best.

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About us

Australia Post to revamp stationery offer?

I have heard from several sources that government owned Australia Post outlets are set to revamp their stationery offer with supply to be controlled outside the organisation. One contact says they will offer stationery under a new sub brand in store while another says that the new supplier will fly under the radar – i.e. no sub brand.

Newsagents competing with a government owned outlet (there are 865 of them) should watch out for a more competitive stationery offer from Australia Post.

While stationery is still some distance from selling postal services, it is closer to their core offer than sewing machines and laptop computers.

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Australia Post

Chewing gum trashes Rolling Stone

rolling-stone-gun.JPGTwo copies of Rolling Stone magazine have been trashed in one of my newsagencies thanks to a customer wedging chewing gum between them. This is disgusting behaviour. It trashes the product and makes our business look bad to someone else browsing Rolling Stone.

This type of behaviour is not uncommon in newsagencies– it comes with the territory.

What can we do about it? Be more vigilant I guess. However, labour necessary for such vigilance is expensive, especially for a slim margin product like magazines. So, we tolerate it and whinge a bit.

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Newsagency challenges

Promoting Burke’s Backyard for impulse purchase

bukres-backyard-may2010.JPGWe are promoting Burke’s Backyard in front of our newspaper stand this week. We think that the free roses booklet will appeal to our customers – hence the placement in what has been a good impulse purchase location for us. We will leave the title here until the weekend and reassess based on sales.  While not the prettiest display, we have found this taactical placement to work better than a more attractive display.

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magazines

Free cookbook for Mother’s Day

aww-cakes-may2010.JPGWe are promoting the ACP cookbook Mother’s Day offer to shoppers as they leave our women’s magazine aisle this week as well as in with our cookbooks and one other high traffic location in-store. We are promoting the offer heavily as it’s an opportunity to sell down cookbook stock.  We want to do this so we can reconfigure the range.  Mother’s Day is an excellent opportunity to clear out older stock.

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magazines

April a rugged month for sales in newsagencies

Sales data I have seen from a selection of newsagencies for April 2010 and compared to 2009 shows we have just experienced a very tough month.  Even allowing for the Easter impact, sales in core departments – magazines greeting cards and newspapers – are down in most stores.  Several newsagencies have reported a double digit decline in sales.  The average overall decline in sales is 5%.

There is some good news – some departments have reported growth.  Books, Gifts and lottery products have all performed well in stores reporting an overall decline.

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Newsagency challenges

Smart marketing for MasterChef magazine

masterchef-magazine1.JPGKudos to News Magazines for the teaser postcard they sent to newsagents and other magazine retailers yesterday promoting the soon to launch MasterChef magazine. I can’t recall a publisher teasing the launch of a new title in this way. With magazine departments crowded and busy, the postcard is a good reminder of a major launch without intruding too much on our day to day business.

I am hopeful that the innovation of the postcard is an indicator of what we can expect when the title launches later this month – in terms of content and supporting collateral. This will be essential for the new food title to find its place in a crowded food segment.

Ideally, I would like to see publishers launching titles provide retailers with tools to help leverage retail sales:

  • Flyers to drive putaway requests.
  • Flyers to give to customers making other purcahses in-store – with room on the flyer for a business stamp.
  • A one pager of research to help understand the title – target customer etc.
  • Better margin (50%) for the first three issues to respect the additional time and space commitment involved in launching a title.
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magazines

Logies give TV Week a boost

tv-week-logies.jpgTV Week is selling well this week thanks to Sunday night’s Logies Award TV Show telecast and we are making the most of the opportunity.

In addition to placement of the magazine in its usual location, we have a pocket of stock on our main newspaper stand (above the Herald Sun) as well as the display in the photo on the power end of our busiest magazine aisle. We will keep this additional activity up until Friday morning when we will trim back to one display.

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magazines

Promoting Harpers Bazaar magazine

harpers-bazaar-may2010.JPGWe are promoting Harpers Bazaar in its usual location deep in our main women’s magazine aisle with an A2 poster placed above a double column of stock. We chose to do this to promote the free Collette Dinnigan T-Shirt which comes with the magazine – the pack looks better opened out rather than folded as you will see in most retailers.

Like similar displays we have done in recent weeks, our hope is to educate shoppers about this regular location for Harpers Bazaar – it can be seen from outside the magazine aisle.

While we continue to promote magazines outside the magazine aisles, it is these in-location displays which have got my attention at the moment since they reinforce repeat behaviour around a title –I hope for this at least.  We are being careful to not overdo these in-location displays.  We have set ourselves a limit of no more than three across the whole magazine department.

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magazines

Tax review, what tax review?

Is it just me or have we experienced an illusion over the last year. The Henry tax review was announced with much fanfare. For the last few months we have waited for the big reveal. Journalists were locked up most of yesterday to prepare the toe big tax story of the decade and then, well, all we needed was a pretty lady in sequins and we’d have had a great illusion.

Maybe I am missing something but I don’t see any major tax reform in the package. Sure there may be a reduction in company tax and the possibility of faster depreciation for some purchases. No taxes have been eliminated. No red tape appears to have been eliminated. It all seems like an opportunity lost to me.

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Ugh!

Family Circle works well at the counter

family-circle-may2010.JPGWe made a decision this morning to display the winter edition of Family Circle at our main counter for the rest of this week.  Sales today have vindicated the move – all sales were from this impulse purchase location.

I expect this title to perform well on the back of strong sales for food titles and the respect that still exists for the Family Circle brand.

We also have Family Circle in our food segment.   Once the counter display comes down later this week we will feature it in another good impulse location.  Since the title is quarterly it will not be top of mind when shoppers browse the newsagency.  I know from past issues that it responds well to being moved over the course of the on-sale.

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magazines

Magazine ad revenue numbers interesting

March quarter magazine ad revenue numbers published by The Neilsen Company and reported in the Australian Financial Reveiw today (page 44) provide an indicator to the health of the major titles we sell.  Australian Women’s Weekly, Who, Better Homes & Gardens, Marie Claire, Cosmopolitan. OK!. House & Garden, InStyle, Women’s Health, Good Taste, NW and New Idea all report good growth in ad revenue.

While we rely on sales for our revenue, an increase in publisher revenue will provide better financial support for the titles and must, even in a small way, be reflected in their engagement with retailers through better product or more promotion.   The growth in revenue for monthly titles is particularly pleasing.

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magazines

If you are buying a newsagency don’t be ripped off at the stocktake

The most accurate way to determine the value of stock being sold with a business at the time of changeover is to use the stock value in a Point of Sale system used by the business and where a stocktake is done, using the system, at changeover.

The resulting stock listing and valuation is based on actual buy price of the stock and not a calculation of implied cost using the retail price as a starting point.

The old school manual stocktake method relies on a physical count just like the computer stock take. The difference lies in the calculation of the cost price. Some stock takers ask the outgoing newsagent for their mark-up. Others get some invoices and work out the mark-up based on some samples – this also relies on information provided by the outgoing newsagent.

The only accurate stocktake is based on real cost price data and real stock on hand count data. Anything less is inaccurate.

It is my experience that the incoming newsagent, especially one buying a newsagency for the first time, is the most vulnerable in the current common approach to stocktaking as they don’t know of tricks which can be used to inflate the stock buy price.

As they say, let the buyer beware.

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buying a newsagency

Consistency key to weekly magazine sales

weekly-magazines.JPGOur weekly magazine sales fell by 35 units in January through March 2010 compared with the same period in 2009. This is half a percent fall. The average I saw in the recent newsagent sales benchmark study is a fall of 7% for this segment.

I put our better than average performance down to active promotion outside the usual location for the titles, leveraging other high traffic areas (lotteries and newspapers) and being consistent in our women’s weeklies display and management.

The photo shows our weeklies section from yesterday (Saturday) afternoon. This is what it would look like most Saturdays. We adjust the layout daily based on stock availability and time in the week.

The actual location of titles is fixed except that we occasionally flip the column used by New Idea and Woman’s Day.

There are a some points about our women’s weeklies magazine display I’d note which work very well for us:

  • The crossword column on the far left drives excellent sales. Our main crossword section is in another aisle.
  • The food column on the far right of the photo also drives excellent sales. Our main food section is further down in the women’s magazine aisle.
  • The double pockets above the weeklies: Real Living. Better Homes & Gardens work well for us. We change the titles in these top two pockets at least weekly but only place titles which will appeal to the weekly magazine shopper.
  • As the week progresses and weeklies sell down we fill the space pockets with more titles which will appeal to the weekly magazine shopper.
  • We start the week with Famous and NW on the flat and moving part way up the columns. We flip this on Friday when OK! and Who come in.

These are all processes which we follow like clockwork. We found early on that having structure for magazines, especially the high volume titles which account for 20% and often more in sales saves time and helps drive sales.  The weeklies section in the photo including the crosswords and food column accounts for 23.5% of our sales.

Consistency is key for women’s weeklies and indeed all magazine segments.  That does not mean that you should ignore change.  Rather, once you set a location in place, use it consistently through the week, chasing the different shopper you see as the week unfolds.

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magazines

Promoting Mother’s Day 2010

fhn_mothers-day.JPGWe are promoting Mother’s Day across the front of our newsagency starting with the display window shown in the photo.  Here, we are promoting a selection of the Mother’s Day product we have in-store.  On the shop floor we have products displayed together by category: gifts, books, greeting cards, magazines and chocolate / candy.

Notice magazines in the list?  There are plenty of titles with a Mother’s Day theme (Lovatts crosswords, That’s Life, Australian Women’s Weekly to name a few) as well as the ACP cookbooks with their Mother’s Day offer of a free cookbook.

While Mother’s Day sales have been excellent so far, it is this next week which will drive the majority of the business for the season – hence the amount of floor-space we are giving it.  That said, we are being careful to not dilute the message that we are a newsagency to passers-by.

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Newsagency opportunities

In there value is newspaper posters?

I’d be curious as to whether any newsagents have evidence off the value of newspaper posters.  I ask this with the knowledge that some publisher representatives are visiting newsagents saying that they will lose 2% of the sale price of the newspapers they represent if they do not display newspaper posters.

As Australian publishers have placed their product in so many other retail outlets (coffee shops, fast food outlets, convenience stores, petrol outlets) and increased free distribution (sports events, cinemas, major events) they have shown newsagents that they are not as important as they once were.  This has encouraged newsagents to assess how they use their space.

It is often a one-sided relationship between newsagent and publisher.  Newsagents have no mechanism for dealing with publishers who act to dilute their retail sales yet publishers, some at least over recent weeks, quickly wave their big stick for not putting up a poster exactly where they demand it be put.

The best way for publishers and newsagents to engage is in dialogue pursuing a common goal – with big sticks checked at the door.

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Newsagency challenges

iPad enables publishers love the iPad

It is interesting to see the coverage in newspapers which have announced iPad editions.  Take The Australian.  Since their announcment a couple of weeks ago, their iPad coverage has been most positive.  Just in the last week there was a report about newspapers lining up to embrace the iPad and the advertising packages they will offer on the iPad.

Stories such as these are about an alternative channel to print – newsagents need to get that.

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Media disruption

Being better sales people

How much time do we put into training our front line, the people who have the most to do with our customers? Whether these people are newsagency owners or employees, regular training on how to sell is vital – especially since we think that customer service is a kay point of difference for us.

Sale training could be as simple as a regular staff meeting talking about events in the business, seasons and selected products or as complex as structured training delivered by external experts.

We are in a highly competitive environment with all retailers working hard to win in the customer service stakes. The difference we have is that we are more likely to spend effort on actions rather than smoke and mirrors around customer service.

To me, good selling in a newsagency is about:

  • Natural friendliness.
  • Local knowledge.
  • Proactive service – getting out from behind the counter and genuinely helping a customer.
  • Understanding the importance of the customer to the business and reflecting that.
  • Being at work because you want to be there.

This last point is vital. People who front up to work out of grudging necessity can do plenty to harm the business. The same is true with newsagents. We should only be serving customer because it’s what we want to do.

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Customer Service

Rush to increase tobacco excise unwarranted

Don’t get me wrong, I am not against an increase in the tobacco excise as a mechanism for reducing tobacco consumption – as long as it is a mechanism which works. The cynic inside me wonders if the move to increase tobacco excise by 25% at midnight yesterday is about more that the health of Australians.

My real issue with the announcement is the short notice of this. Retailers need to plan for such a price change – even if they have good software tools which make the change straightforward.

I spoke with one newsagent employee last night who didn’t know what to do about existing stock since the owner was overseas an uncontactable. I spoke with another who lost business yesterday because the supermarket a few doors away had plenty of cartons for sale at the ‘old’ price.

While any change is bound to have challenges, it is the rushed nature of this which will lead to mistakes for which business will ultimately pay a price.

The rush reminded me of the other rushes of this government: the ETS, the plasma and poker machine stimulus package, the home insulation program and the problematic schools building program.

Okay maybe some people were stocking up because of an expected price increase. I’d suggest that that is less of a problem than the one presented by the government yesterday in its announcement of a new price regime which is in effect today.

I know we were inundated with calls at my newsagency software company about to handle the change – thankfully it’s pretty easy (advice sheet G38). This significant increase in call traffic became a barrier to getting to more important calls from our customers.

The government needs to understand that rushing things leads to mistakes.

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Newsagency challenges

Raising money for the McGrath Foundation

henderson-greetings-mothers-day.JPGWe are proud to be promoting Henderson Greetings’ Mother’s Day cards since their sale raises much-needed funds for the McGrath Foundation.

Outside of the fundraising, the cards themselves are terrific, offering a broad range of price points, plenty of captions and a quality I am pleased to stock.  You know you have a good product when customers comment positively.

That many of the cards are printed in Australia is a bonus in terms of keeping jobs local and in terms of carbon pollution.

Mother’s Day is a huge card season and having variety in the range if we are to be taken seriously as a greeting card outlet.

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Greeting Cards

Promoting Girlfriend magazine

fhn_girlfriend_apr2010.JPGWe are promoting the latest issue of Girlfriend magazine in its usual location with teen magazines but using a double half waterfall display capped by an A2 poster.

The display is located in the last area of our main women’s magazine aisle. The poster stands out and can be easily seen from the entrance to the aisle – our goal is to draw people down to see the promotion, especially the free Billa Bong jangles whichsome with this issue of the magazine.

We mounted the poster on a double thickness of cardboard onto which we had stuck some black card – to provide a nice border for the poster.

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magazines

Seeking advice on a gift product

russ_pictures.JPGI am curious as to whether anyone has the Galleria range from RUSS. They are painting reproductions on small canvasses. We have had them for a month and they are not working. We expected them to work very well for us. They are a quality product with a good price point.

It may be our location or something we are doing wrong in our treatment of the product. It could also be that the product is not performing well. I’d be interested to know – especially if the product is working for you. All suggestions gratefully received.

Gifts are a challenge.  get it right and you do very well.  get it wrong (for your demographic) and you lose money.  Every new product is a good learning opportunity.

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Gifts
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