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

Author: Mark Fletcher

Where is my share of $240 million Mr Rudd?

I was shocked to hear that the federal government has agreed to give the TV networks $240 million over two years as compensation for increased competition and the impact of the global financial crisis.

What nonsense!

The federal government itself is increasing competition against me.  Newsagencies are impacted by competition.  We are also impacted by deregulation.  Oh, and the global financial crisis has not passed us by.

$240 million can be cut up as $60,000 per newsagency.  Imagine the benefit to local communities and families if we had that sort of money to invest in our businesses.

It is decisions like this which demonstrate how politicians feel about small business.  This mob and the mob before them are as bad as each other when it comes to support for small business.

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Newsagency challenges

Progress on understanding the Bill Express collapse?

Mark Hawthorne reports in The Age today that former directors of Bill Express delivered documents to the Federal Court in Melbourne yesterday as required by a court order obtained by the liquidator.  Eleven days of public examination are scheduled to start in March.

It is a pity that newsagents were not being given the same opportunity of transparency around the arrangements which led to so many to lose so much on Bill Express.

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Bill Express

Cookbooks as impulse opportunities

counter_offer_cookbooks.JPGFour cookbooks feature on the counter at our Forest Hill store this week as our key counter offer.  They deliver the margin we want from counter offers.  This is why offers like this will take precedence over lower margin product suppliers ask us to take.  The books also present as a compelling impulse offer.  We will leave the four cookbooks here for two weeks before deciding on the next move.  We sourced these through our relationship with ABW.

Looking at these cookbooks and comparing them to a couple from magazine publishers which are close to twice the price and which deliver less than half the margin, no wonder we’re happy pitching the ABW titles at the counter.

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Book retailing

Hallmark sound cards a hit for Valentine’s Day

hallmark_sound_cards.JPGHallmark sound cards are a hit for us this Valentine’s Day.  Customers are loving the original artists.  It’s great standing in the shop and hearing part of a song play from within the card department.  This active browsing adds to the theatre of retail and reduces the risk of theft.  The challenge is maintaining supply.

henderson_cards.JPGThe other card range I like this Valentine’s Day is from Henderson Greetings.  Their cards really pop from the display.  I especially like some of the darker colours they use.  They stand our well against the usual Valentine’s Day sea of red and pink.  This is our first year with Henderson.  They replaced another second supplier and so far are outperforming.

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Greeting Cards

Newspaper publishers don’t get it with the iPad

Forbes has an interview with Mark Contreras, incoming chairman of the Newspaper Association of America, on his thoughts about the Apple iPad and other devices.

Many newspaper publishers come across like spoilt brats when talking about new technology.  They’re just angry off that they don’t own the new channel.

Publishers don’t own good content.  They do, however, own the print distribution model – the created it.  If they wanted to own, or control, the next generation news and information distribution channel, they should have created it.  To now expect the creators of new channels to bow and scrape before them is laughable.

The world needs the iPad to be open, a channel through which good journalists and small editorial teams can self publish their content and completely change how news and information are gathered and distributed.

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Media disruption

More space for photography magazines

digital_photo_magazines.JPGWe expanded the space allocated to photography magazines yesterday, adding a column. This segment is performing very well and the extra column will enable us to do beacon branding and, hopefully, leverage the resurgence of interest further. We are always tweaking the magazine layout and space allocation. This obsession helps drive sales. We see it as what customers expect from a magazine specialist.

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magazines

Tyro in the news

Yesterday’s Australian Financial Review had a good story about Tyro, the broadband based payments eftpos payments system now being used by close to 400 newsagents – page 18.

The newsagency channel is a developing success story for Tyro.  From my own experience, in my newsagencies and through my software company, Tyro beats bank eftpos terminals for speed, accuracy and fees.

Two regular criticisms of the old Bill Express network was the need for additional computer hardware and speed.  Tyro works for us on both fronts.

As critical mass grows in newsagencies I am certain we will see more uses for this network.

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Newsagency opportunities

Promoting The Agatha Christie Collection

fhn_agatgha_christie.JPGWe are promoting the new Agatha Christie partwork, The Agatha Christie Collection,  at the front counter to tap into the usual promotional buzz around the first issue.

For those new here, partworks are important to the newsagency channel. Getting customers to sign up to have a partwork putaway locks in return traffic. I have data which shows that regular putaway customers are 30% more likely to purchase other items in a visit than a regular customer.

For the Agatha Christie partwork we will pitch putaways at the counter. The benefits are that we keep their copy aside, advise them by text message when the next issue is in and their special order is kept safe. It’s an old-school service which customers love.

On partworks more generally, my understanding is that this year will be quite lean on new releases. That is unfortunate (if it pans out that way). Partworks promoted on TV generate excellent traffic for newsagencies.

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Newsagency opportunities

Promoting Woman’s Day and Valentine’s Day

fhn_wd_feb082010.JPGWe are promoting Woman’s Day at the front of our shop this week, adjacent to our Valentine’s Day gift display.  The free cookbook with Woman’s Day offers recipes for love so the placement near our Valentine’s Day offer makes sense to us.  The display will remain up for a few days.  Read on…  I am frustrated with ACP and their promotion of Woman’s Day for four weeks with free cookbooks.  They cut our supply last week and this week and in doing this restricted the gains we could achieve.  It’s as if they don’t want growth.  Some decisions by magazine companies are ridiculous.

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magazines

Money more important than safety at The Age

age_feb082010.JPGThe Age had an excellent special liftout today with safety tips for young drivers.  Part of the promotional material for this special report on the front page of the newspaper was covered up this morning by another post-it type note – this time for ING Direct.  What is the point of a masthead or front page editorial promotional material if you’re prepared to take money to cover this up?

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newspaper masthead desecration

Playing with magazine fixtures

magazine_fixture.JPGWe are trying magazine fixturing in the photo in one of the stores I am connected with. It offers more full-face facings than traditional newsagency magazine fixturing. We have the units in the photo on the back wall and other (new but more traditional) fixturing in two aisles.

The lighting for the units in the photo makes the covers pop. It helps us get the most of the full face display.  Editors would like how their publications look.

The power of the display is crucial since this display is on the back walls. We are using this to draw people into the store. The pockets are deep – at least three times deeper than traditional newsagency pockets. This lets us store more product in less space.

We are using the back wall for our high volume women’s titles. While we co-locate a selection at the front of the shop, these are more to attract passers-by.

I first saw units like those we are using in high volume transit locations and have wanted to try them in a newsagency for some time. Space was always the issue – you display fewer titles per square metre.  Newsagents are used to focusing on range over visual merchandising.

While it is early days, I am very happy with their useability and the customer interaction of the new units.

Like all good fixtures, they can be easily changed – the days of purpose built set and forget newsagency fixtures are over.

The shopfit was designed and installed by Interfit.

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magazines

Promoting magazine brand extensions

hb_bathrooms.JPGWe are promoting Home Beautiful and the Bathrooms brand extension with each other.  It makes sense to try and leverage the main brand in promoting the extension – especially in the home and living category.  It surprises me how many brand extensions go unnoticed by newsagents.  They are a terrific opportunity to extend the shopping basket.  All it takes is careful placement in-store – a small time investment for a sales gain.

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magazines

Visual merchandising ideas from Chinatown

cny_forest_hill.JPGI went to Chinatown in Melbourne last week to seek out ideas for dressing our newsagencies for Chinese New Year. In addition to learning more about Chinese New Year and discovering some cool Visual Merchandising ideas, I was able to buy a range of collateral including the tiger in the photo. We have this and other items displayed around our lottery counter.

We have also located our range of Chinese New Year cards and red packets at the lottery counter. Some of these cards are from Hallmark and some sources during my trip to Chinatown.

Chinese New Year is part commercial season and part an opportunity to identify with and show respect for our customers from China, Malaysia, Vietnam, Thailand, the Phillipines and other Asian countries where this season is celebrated. Our display is more about the latter as our range of merchandise is quite small.

The trip to Chinatown was a reminder of the value of getting outside our businesses when looking for new ideas.

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Newsagency opportunities

Fishing magazines selling well

fishing_magazines.JPGWe are seeing good sales from fishing titles.  This is not from any special effort on our part other than maintaining a tidy and easy to find space in among the sports magazines.  The titles performing best for us are those locally focused like North East Angler and Fishing & Boating Monthly.  We give these titles good positioning since they better represent the point of difference of our range over that of a supermarket.

Our fishing titles are wedged between boating / yachting titles and caravan and motorhome titles.

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magazines

Valentine’s chocolate hearts a nice shopping basket extender

valentines_candy.JPGWe have had chocolate hearts at the counter in all of our stores for the last week.  While they are there for Valentine’s Day, they are really there to tap into shoppers treating themselves with a chocolate for their trip to the car or their next stop.  Most are purchased on impulse.  We usually sell two or more at a time.  While we have these hearts bagged as gifts elsewhere in-store, it is the counter unit which works the best.

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Newsagency opportunities

Last call for January sales benchmark data

On Monday I finalise the analysis of January 2010 vs 2009 sales data from newsagents participating in the sales benchmark study.  I already have data from more than 100 newsagencies.  Reading the results is interesting, as always.

Tower Newsagents can participate by sending a Monthly Sales Comparison report: tick the box to exclude home deliveries, and tick the box for a category breakdown. Set your first date range (on the left) to January 1, 2010 to January 31, 2010 and the date range of the right to one year earlier.

Once the report is on the screen, click the PDF button to save this as a PDF, go into your email software and send a copy of the PDF to me at mark@towersystems.com.au. I’ll publish the benchmark results here and elsewhere so all newsagents can benefit.

The results will provide newsagents with a useful comparison.  They will also provide a broader health check with which assess the broader channel.

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Newsagency benchmark

Fairfax Media unhappy with ABC Open initiative

The ABC Open project which was announced by CEO Mark Scott last year.  It aims to provide new online coverage of local stories in fifty locations around the country.  The ad posted this week by the ABC for producers shows the focus of the initiative:

The ABC Open project will offer regional audiences the chance to participate in ways that have never existed before. It will shine a spotlight on regional Australia through text-based stories, blogs, photography, video, and audio published online and on new platforms. 50 digital jobs have been created to help bring those stories and issues to the world.

It reads to me like a citizen journalism initiative – community focused rather than commercial.

Brian McCarthy, head of Fairfax Media, was reported by Fairfax outlets yesterday as saying that ABC Open could force the closure of some of their regional newspapers.

He says the ABC Open network “threatens to undermine the viability of the excellent service commercial media organisations such as Fairfax Media and Rural Press have provided to regional and rural Australia for decades”.

“I do not believe it is the role of the ABC to disrupt the commercial landscape by building empires with public funds,” Mr McCarthy said in a statement on Friday.

While local and regional newspapers do provide local coverage, my reading of the remit for ABC Open is that it will be far more community driven than what we have seen before.  If would be hard for a commercial organisation with shareholder return as their key priority to deliver on this as the ABC could.

While I understand McCarthy’s need to protect his company’s interests, I see the local newspapers and ABC Open as operating in two difference worlds.

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Media disruption

Apple meets with publishers

Apple CEO and saviour Steve Jobs, met with key publishers in New York this week to pitch the iPad as CNN Money ed overnight:

But the fact that Jobs himself flew to New York a week later — and that the top executives of America’s leading national newspapers and magazines turned out to meet him — may be taken as a sign of how badly both sides need each other.

The iPad, in its current form or the next egneration (expected later this year) is a game changing device for delivering access to content.

Apple Insider has more on the pitch by Jobs.

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Media disruption

Pitching the AFL Record and AFL 2010 Season Guide

afl_record_2010.JPGWe are pitching the AFL Record NAB CUP 2010 and the AFL Record Season Guide 2010 at the counter and in our sports section at newsXpress Forest Hill.  They will sell well on impulse – hence the premium counter location for the next few days.

The 2010 season prospectus sold out in a couple of days.

As this week shows, this counter space is a key promotion location for us.  The AFL display we put up yesterday is the third for this week and while it takes time to create these displays, the effort is well worth it in sales results.  It is terrific seeing customers come to the counter with their purchases and add another item (or two) on impulse.  While not always pretty, these counter displays are functional and valuable.

The supply quantity we received is up 40% on last year.  I’m happy about that because we sold out.

UPDATE Saturday, 5pm: sales for the first two days are great.  We’re chasing a sell-out again.

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magazines

Magazine oversupply not justified

On January 21 I wrote about the gross oversupply of the latest issue of Gameinformer magazine.  Up to yesterday, sales do not warrant the 600% increase in supply.  We have the title in a half waterfall, taking valuable space.  This is a good example of where a publisher ought to carry the responsibility of using our space and time to support their expectations.

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magazine distribution

Strong early Valentine’s Day sales

valentines_day_cards.JPGValentine’s Day card sales seem to have kicked in earlier this year in several of my newsagencies.  We have been seeing good sales all week, more so than at the same point in previous years for this season.  We are also seeing good gift sales, especially for the Darrell Lea gifts – again earlier than previous Valentine’s Day seasons.

Where we are having the most success, we have Valentine’s Day product out in the high-traffic dance floor.  We prefer to not remove regular cards for seasons. The cards are placed with gifts: plush, mugs, frames, books and chocolates.

Hopefully, the early sales we are seeing augur well for the next week.

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Gifts

Parties for Kids no party for newsagents

parties_for_kids.JPGWe received Parties for Kids from NDD a couple of days ago. It’s dated, on the cover, Autumn 2006. Seriously!

Judging by the noticeable discoloration on the cover (click on the image to see the detail of this), I’d say this is stock from the back of a warehouse somewhere which someone decided to ship out because they needed cash. No wonder newsagents often consider themselves the dumping ground for some magazine product.

We will early return our stock next week. I don’t see any value on a discoloured four year old title taking up space on my shelves, especially since the segment is well covered by current day product.

That a distributor sees fit to circulate four year old title, damaged stock, to newsagents asays a lot about the sick one-sided magazine distribution system in this country.  Parties for Kids is the kind of title which makes newsagents angry and diverts our attention, space and cash from more important titles.

Good publishers should help us stop titles like this being distributed. However, since they all are guilty of sending junk, we ought to develop mechanisms to protect our assets from abuse.

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magazine distribution

Selling phones in a newsagency

phones.JPGWe sell phones in several of my newsagencies. They’re selling well. A couple of times customers have told us that they came to us because they didn’t want the hassle they get at a phone company shop. We don’t have plans to sell, just simple phones which work with a prepaid account.

There is good evidence around that selling phones drives recharge business. I’d agree with that from what I see. There is also the benefit of bonus recharge commission when you sell the starter kits – the telcos want new accounts after all.

The floorspace allocated to phones is small.  The collateral promoting the handsets doubles as a pitch for the recharge business.

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Newsagency opportunities

Hiding the magazine masthead

magazine_coverup.JPGSome publishers just don’t get it.  Promoting a triple pack is more important than promoting the title itself.  Maybe they think this is what gets people picking up titles in-store.  They should ask customers what they think about these packs.  I see them as lazy marketing.

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magazines
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