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

Author: Mark Fletcher

Radio wants their $240 million from the government

The Australian is reporting this morning that radio stations want the federal government to give them a handout as was announced recently for the TV networks.

We hear so often, from politicians of all persuasions, that small business is the backbone of this country yet we rarely receive government largess on the scale of the $240 million for the TV networks or the billions paid to auto makers.

The case put by the government for the TV handout does apply to radio.  It also applies to small businesses like newsagencies.  We have to invest in change for us to have a future.  I doubt our need will gain any traction with any politician.  We’re too small.

This is the kind of issue on which newsagents could use their critical mass to make a point.  Imagine if every newsagent had a petition at the counter for customers to sign or if we handed out a postcard to be sent to the local member.

If we could make a loud enough noise we would get on their radar.  I doubt we would do it.  Our biggest asset, our national footprint, is rarely used by us.

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Newsagency challenges

Trader TAG set to struggle to replace Trading Post

trader_tag.JPGTrader TAG is another wannabe replacement for the Trading Post.  At $1.00 a copy and being supplied through a distribution newsagent, the numbers don’t work for me.  Trading Post at least had a higher cover price and was supplied direct.  I can’t see Trader TAG selling what enough copies to cover the space it will take in our newspaper stand.  I expect we will say no thanks to this title unless the publisher aggressively promotes it and fixes the margin problem.

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Newsagency challenges

Wired for the iPad

Chris Anderson, the Editor-in-chief of Wired magazine said the iPad-native version of their magazine would be a game changer.  Electronicista has a report on this.

What will really drive interest in moves like this is a new pricing model, setting iPad content apart from print content.

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Media disruption

Sharing newsagency supplier rewards

wine_sharing.JPGWhenever we receive a supplier reward we share it with the team.  The latest kitty to share is four dozen bottles of wine, some beer and some movie passes.  We don’t make alcohol available to any employees under 18.  Those 18 or older get to choose their own bottles of wine – we line it up in the back room for selection as this photo from yesterday shows.

It’s important that everyone working in the newsagency understands opportunities like these supplier rewards.  By sharing what we receive we help them understand more about opportunities beyond the income the business received from selling items for which there are other rewards.

Occasionally, we will use rewards as customer gifts but not often as we have plenty of these throughout the year from other promotions.

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Newsagency management

Strong Valentine’s Day sales

We achieved excellent numbers across the various stores I am connected with yesterday for Valentine’s Day related product.  While cards were at the core of the success, gifts and chocolates performed very well too.

In each situation, sales were ahead of last year.  Curiously, the two locations which performed the best are loacted in areas of considerable social and economic challenge.

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Greeting Cards

Diabetic Living display a hit!

Our Diabetic Living display at the counter is driving an excellent result with 40% of our stock sold in three days.  This is ahead of the sales we usually achieve in the first three days of on-sale.

Not every magazine reacts this way to placement in this premium location.  The key is to learn which titles work well here and which do not.

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magazines

Would you take firm sale magazines?

In a discussion with a small publisher yesterday they asked whether newsagents would take their products on a firm sale basis in return for 45% commission.

This is becoming a more common discussion point in the smaller publisher circles as they look for ways to break free from the traditional magazine supply model.

In addition to the firm sale commitment, they would be looking for guaranteed placement – not so much in a premium location, but certainty as to location of their title.

While the 45% is good progress, I would like to see a margin of more than 50%.  This would make the title very interesting.  Oh, and not a one off based on a sales stretch like with the latest issue of Cosmos but permanently in return for firm sale and placement guarantee.

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magazines

Nightline report showcases the Hallmark brand

ABC’s Nightline program last night in the US ran an excellent report on Hallmark Cards.  Starting out about Valentine’s Day cards, the report went behind Hallmark and provided perspective on the company responsible for more than half all cards sold.  The story also covered Hallmark innovation – something we are benefiting from with the Hallmark sound cards. Here is the Nightline story:

This report reinforces what I write here about brands.  Hallmark is a respected brand.  While anyone can produce a greeting card, Hallmark owns the feelings of respect, trust and innovation associated with their brand.

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Greeting Cards

Promoting the Susan Boyle book at the counter

susan_boyle_book.JPGWe have made space at the counter to promote Susan Boyle, Living the Dream at the counter.  We are confident that this book will appeal to our customers at Forest Hill.  To drive sales, we have the book priced at $19.95 as we felt the list price of $24.95 was a bit high.  While I expect the majors to undercut us, our price should be close enough.

I am am pleased that newsagents were offered this book and that it was for more than the usual magazine margin.  While the book is not for everyone, being given the opportunity is always welcome.

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Newsagency opportunities

Pitching Valentine’s Day

valentines_gifts.JPGLike most newsagents, we are pitching Valentine’s Day with promotions for cards, chocolates and gifts.  Most of the gifts we have chosen will fit in our gift department after the day is over so the risk is not that great in terms of product selection.

What surprises me about Valentine’s Day is that few magazines engage with the opportunity.  I’d say we have no more than four titles with any coverage worthy of display with Valentine’s Day gifts.  Maybe publishers don’t see the opportunity.  I’d certainly like to play more in this space along the lines of gifts which are guilty pleasures.

One idea I had for a monthly would be a wraparound cover which can be removed after Valentine’s Day.  This could see the title promoted in advance of the day with a Valentine’s Day pitch and then revert to the more traditional pitch after.  Yes it would be some work but it may also help drive sales.

Sales for Valentine’s Day have been okay.  The next three days are the key of course.  I read somewhere that 75% of Valentine’s Day cards are sold in the last 48 hours.

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magazines

UK magazine numbers make interesting reading

Men’s Health in the UK is the number one title in the men’s magzines category in figures reported in The Guardian yesterday.  At 250,577 copies it is 20,000 ahead of nearest rival FHM.

The interesting trend out of the UK is the decline in what they call lads’ magazines.

The lads’ weeklies Zoo and Nuts suffered the biggest year-on-year declines for the second successive ABC period. IPC’s Nuts retained third spot among the paid-for titles, despite a 24.4% decline to 176,835, down 6.2% on the previous six months.

I think we are seeing this here, certainly in stores I am connected with.  The men’s health, fitness, bike and sports magazines are either holding their ground or growing while the lads’ magazines are static or falling.  Maybe this is because of a shift in buying patterns.  This would not surprise me as more people learn to buy magazines with fuel and convenience purchases elsewhere.

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magazines

Finding Trailzone magazine

trailzone_cover.JPGI like their reproduction of the Trailzone masthead on the bag they produced for the magazine.  While I am not a fan of bagged magazines, at least they have ensured that people looking for the title can find it on our shelves.  The publisher’s effort shows that they understand retail.

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magazines

Fighting Streetfighters

streetfighters_coverup.JPGA merchandiser representing Streefighters magazine visited, moved the title to a better position and put in a header card.  All for the one copy we were sent.  I’d accept this intrusion if they paid for the space but they don’t.  I choose which titles get premium space based on the revenue they generate as well as the opportunity for additional revenue.  Merchandisers are supposed to get permission before they go and make changes like this.

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magazines

iPad and comic books

Wired has a report about the iPad and its usefulness for publishing comics.  There are good reasons the Panelfly comic book reader should work: you can buy content vis iTunes (Marvel content is US.99c) and the size is comic book friendly.  The Panelfly website has the pitch:

Your local comic book store in your back pocket.

I expect we will read reports like this wwith increased frequency over the next few months.

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magazines

Magazine, newspaper sales decline in January

newsagent_sales_benchmark.jpgThe latest newsagent sales benchmark study reports a 7% unit sales decline for magazines and a 4% unit sales decline for newspapers in Australian newsagencies in January 2010.

Comparing unit sales for these and other key newsagent categories, the newsagency channel’s only sales benchmark study analyses sales for January 2010 compared to 2009 on a same store basis.

Deeper analysis within data for the magazine department shows weekly titles are at the core of the decline. This must concern newsagents as the weeklies are key to magazine department profitability. In some newsagencies, the weekly titles decline was in excess of 20%.

The other result of interest is the decline in special interest magazine titles. Previous sales benchmark studies have reported this as one of the strongest performing categories.  The january study shows it as vulnerable.  I’ll wait for further study to see if this is a one-off.

Within the newspaper department, foreign newspapers continue to buck the trend, reporting unit sales growth of 3% for January 2010 over 2009.

As previous newsagent sales benchmark studies have shown, newsagencies in rural situations fared considerably better than their city counterparts.

The good news is growth showing in new (for newsagents) departments such as Ink, Gifts, Calendars and electronic voucher product. There is plenty of evidence of newsagents successfully shifting focus to new money areas and away from more traditional products. These departments are upsides for newsagents and anyone considering buying a newsagency.

While the decline in core products is a concern, it must be noted that this is a comparison for one month.  Trends can only be considered when comparing longer periods.  I decided to look at January as a result of discussions with a couple of newsagent suppliers who wondered about performance given anecdotal evidence they had seen.

I undertake this sales benchmark study through my software company, Tower Systems.   The 135 participating newsagents are a small but reliable and compliant subset of the 1,650 strong community of newsagents using the Tower software.

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magazines

Helping Madison magazine

fhn_madison_feb1010.JPGMadison magazine is not doing so hot for us.  Some months it is break-even, often it loses money once we pay for the retail space and labour.

I decided yesterday to engage more with the title and help it find buyers.  The first move I made was to place a quantity of Madison next to our stack of Australian Women’s Weekly.  This is at the entrance to our busiest magazine aisle.  I’ll see how this goes for the week and decide what to try next.

I had thought about putting Madison in a pocket above newspapers but felt that the title did not fit that location.   AWW feels light a good fit to me – customer behaviour will tell me if that is right.  The decision yesterday was helped by the nice contrast in colours of the covers of both magazines.

Publishers should take note of these moves which many newsagents make to help titles.  Sometimes, a strategic placement is more important that a big bold display.

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magazines

Moving the AFL Record

fhn_afl_feb1010.JPGWith demands on display space at their peak in our newsagency (and I am sure many others) this week, we moved our AFL Record display from the counter to our main newspaper stand – next to the Herald Sun.  We also have product located in our AFL section.  We ran this title with newspapers last year with considerable success.  We will leave it here until next week when we will move it again.

A newsagent called me yesterday to talk about how many times we move titles.  he wanted to know why we bother for 25%.  What that is a fair question, my view is right now magazines are a key point of difference for us.  We need to seize every opportunity – hence the constant changes.  I just wish we were valued at more than 25% of cover price.

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magazines

Promoting Take 5 and free Corn Thins

fhn_t5_feb1010.JPGWe are promoting Take 5 at the counter this week.  The free pack of Corn Thins encourages us to do more than just place it on the shelf.  we’re tight on space so stole some bag rail space.  We’ll leave this up until the weekend if stock lasts.  While this issue is a challenge to display, the free gift is one I;d expect to connect with Take 5 customers.

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magazines

Promoting Diabetic Living at the counter

fhn_diabetic_feb1010.JPGWe are promoting the latest issue of Diabetic Living at the counter for the rest of this week.  This title has carved out a loyal following for us.

While we prefer to reserve this location for titles with a free gift, Diabetic Living works well here, especially early in the on-sale period.  It is one of those titles you need to promote in front of customers.

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magazines

Promoting Home Beautiful magazine

fhn_home_beautiful_feb1010.JPGWe are promoting the latest issue of Home Beautiful at the front of the shop in a single title display leading to our main lottery counter.  It  replaces our Woman’s Day display.  We are sticking with single title displays in this location for the next few weeks.

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magazines

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
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