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

Author: Mark Fletcher

Is Metcash looking at acquiring a magazine distributor?

The Sydney Morning Herald today reports that Metcash is considering acquisitions in the newsagency channel among others.

THE food and beverages wholesaler Metcash is examining acquisitions worth up to $1 billion as it seeks to apply its expertise in distribution to industries such as pharmaceuticals, newsagencies and hardware.

Gotch could be a target given the challenges at PMP.  Network could be a target given the financial challenges imposed on the business by CVC.  NDD could be a target because, as the smallest of the three, they need to reinvent themselves.

Maybe Metcash is considering establishing a new newsaget-focused distribution opportunity.

I have no idea if Metcash is in discussion with any magazine distributors or whether they are planning to enter the market. While I don’t plan to let my thoughts run with a what if they buy a amagazine distributor scenario, Metcash is clearly a company for newsagents to watch.

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magazine distribution

Promoting outside the newsagency

hotink_foresthill.jpgOur landlord has given us free lightbox space in the centre at Forest Hill Chase for large format posters.  We are using these this month to connect with our ink offer.  The posters promote saving money and brands – the two most important messages when it comes to driving ink sales.  Given that our HOT Ink! brochures hit homes around the centre last week, the placement of the posters is timely.  Our only cost has been in creating the artwork and having the posters printed.

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marketing

Promoting gifts

Click here for a copy of the June Newsletter for our Sophie Randall gift shop businesses.  We have evolved this into a more professional, outcome-focussed, document.  The June is the second in this new format.  The customer reaction has been excellent.  We are applying more learnings from our gift businesses into our newsagencies.

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Gifts

Tough May sales numbers

We have experienced a tough May at Forest Hill with overall newsagency traffic down 14%.  While the landlord will not share centre figures, we expect that our traffic result is not different to other retailers.

All key departments are down except for Books up 39%, Calendars up 100% (at $300), Diaries up 122% (at $900) and Gifts up 436% (at over $2,000).  Magazines were down 10%, ink down 16% (this reflects a promotion last year which this year’s promotion did not start until May 28) and stationery down 23%.

Overall store revenue (not including lotteries) was down 6%.

While it would have been easy for me to not publish these figures, and provide fodder for some, I am committed to this blog being a place of transparency.

We have several promotions under way in the centre as well as external marketing to drive traffic.  We are also extending two departments which we feel will work well with our customers as well as planning to make some changes to the shop to allow us to evolve our magazine offer.

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How is business?

Books and magazines share challenges

The New York Times has a sobering report about book sales in the US from the Book Expo America, the industry’s annual convention which ended Sunday in New York.

I found the report interesting on a couple of fronts: the evolving challenge of print and the reliance of the channel on mega brands – Dan Brown and Stephenie Meyer to name two.  In the magazine space we are challenged by mega brands too, the top selling titles account for most of our sales.The opportunity newsagents have had for years is to focus on range.  We have not done this well and now that it really matters we are losing out.  I know people who will travel to a Borders for range of magazines instead of to their local newsagent.

Newsagents can embrace range and build a marketing campaign around this point of difference – if we are serious about our future in the magazine category.

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Book retailing

Embedding newspaper content

Google web elements is one reason newspaper publishers don’t like Google so much. Embedding newspaper content via Google is easy.  Newspaper publishers don;t like not having control over their distribution channel.  The thing is, if they refuse their content to Google they will lose eyeballs on their brand. The element below aggregating news with the keyword newsagents was created in seconds.

Thanks to BuzzMachine for the tip.

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Media disruption

Pitching Australian Women’s Weekly at the counter

fhn_aww_jun09.JPGWe are featuring the Australian Women’s Weekly at the counter this week.  While this space is reserved for titles with a free gift we have not received any new stock which qualifies.  We created the AWW display primarily using covers we copied – in the absence of anything from the publisher except for one poster.

Complaints aside, this issue of AWW has sold well and we are only one week in.  This second week promotion at the counter should help our sales nicely.  Indeed, all issues of AWW have sold well this year except for May which was average.

We support AWW with a waterfall display, front of shop co-location for the first two weeks and an ACP basket builder pocket near one of our registers.  This extra activity is because we have found it is often purcahsed on impulse.

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magazines

The Age for half price

run_melbourne.jpgThe Age has pitched an exclusive subscription offer to participants in Run Melbourne, a half marathon (and other distances) event on June 28.  They are offering 20 weeks of Monday to Friday home delivery of The Age for $70, less than half price.  I don’t mind this offer since they are not using retail sales to promote it.

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newspaper home delivery

Green Living performs well

green_living.JPGGreen Living magazine launched around six weeks ago has performed well for us.  85% sell through in five weeks.  We had Green Living in a prime position, located next to Better Homes and Gardens.  It was in a column with four other green titles in the same column.  Hopefully, the success we have experienced with the first issue will continue – this is one of the better magazine launches.

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magazines

Business Solutions magazine not performing

business_solutions.jpgAustralian Business Solutions is not performing for us.  We are lucky to sell one copy per issue yet the distributor (Network) has increased supply.  We have supported the title with a good location, tried co-location and also promoted with posters.  It is time to cut our losses and quit the title.  I wonder if sales are impacted by sameness of covers.  Look at the two issues in the photo.  Regular browsers will struggle to notice a difference unless the take the latest issue out of the display pocket and look at the whole cover.

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magazine distribution

Chasing a flexibile newspaper stand

bartuf_newspaper_stand.jpgWe are planning to replace the purpose built newspaper stand at our Frankston newsagency with a smaller footprint unit on castors.  Something along the lines of the Bartuf unit in the photo which they developed for the WH Smith group in the UK.  We have been using a larger mobile unit at our Forest Hill location for years but that is too big for what we need today – and it does not support the variety we now want.

The unit we ultimately go with will be strong, flexible, movable and able to display multiple categories: newspapers, magazines, confectionery and even a line of greeting cards for special promotions.

It is changes like this, at the core of our businesses (the newspaper stand) where newsagents need to begin the transformation.  While some publishers may push back on these changes, time will show that they will not lose sales.

We installed our first flexible and movable stand at Forest Hill around nine years ago when we were required to have a  purpose built stand.  We were given permission and agreed to change if sales were affected.  They were not.  Our stand stayed.  In the meantime many newsagents were forced to build a boat anchor of a stand which can be used for nothing else.

There are rules we need to break.  There are fears we need overcome.  The newspaper stand is a good place to start.

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Newspapers

Would you like wrap with that?

wrap_upsell.JPGWe have a small selection of animal themed wrapping paper on the table with our animal themed jigsaw puzzles.  While this is common in major retailers, it is less common on newsagencies.  We have achieved good success with suggesting items which go together – like the wrap in the photo.  This approach works especially well in the gift area where gift offers are themed.

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Gifts

Promoting Girlfriend and post it notes

girlfriend_wat_may09.jpgThe team at our Watergardens store has cleverly used heart shaped post-it notes from 3M in the Girlfriend display which faces into the mall.  Both magazine and post it notes are available for purchase – and they appeal to the same demographic.  It is great to have team members using their initiative to put products together in this way.  It’s more important to our business than an attractive yet single purpose magazine display.

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magazines

Ethnic media grows in the US

There is an interesting story at xinhuanet about the growth in ethnic media is the US in the face of declines being experienced by mainstream US outlets.  I have noted here for some time that foreign language newspapers outperform capital city dailies in terms of year-on-year same-store sales growth in newsagencies.  On a year to date basis in my own newsagencies I am seeing double digit growth in foreign language newspapers.

Foreign language newspapers are an excellent opportunity for newsagents.

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Newsagency opportunities

Promoting the OzLotto $20 million jackpot

fhn_20_million.JPGWe have gone out early with increased promotion for the OzLotto jackpot and it is paying off – we would usually wait for the jackpot to reach $25 million.  It has been a considerable time since Oz or Powerball jackpotted and we figured a $20 million division one prize was worth promoting as since lottery sales have been patchy.  The result was an immediate lift in sales.  No surprise there.

What is surprising is the comments from regular customers who had no awareness of Oz reaching $20 million.  Oz is one of those games customers drift in and out of based on the jackpot level.  Non-regulars take little notice of the posters we and other retailers put up each week charting the new jackpot.  It has taken a string of balloons and a sign above the entrance to get their attention.

Our (secret) hope is that Oz does not go off for a few more weeks.  We have plans to intensify the promotion as the jackpot climbs – to fight store blindness.

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Lotteries

Driving ink sales into tax time

hot_ink_fhn.JPGThe HOT Ink! ink and toner campaign which started a week back is working very well for us.  Sales have been fantastic – brilliant yesterday!  The brochures distributed to homes and businesses around our centre are generating good traffic including plenty of new customers.   The brochure shows us as competitive on well known brands of ink.  The brand message is as important as the price message.  This is important in the ink space and stationery more boradly.

We have the HOT Ink! brochure in a stand at the front of the shop (see photo) to attract passers-by in the centre and we give one to each customer.  This is a good time to be promoting ink since it fits with the end of the financial year and sales which major retailers are running right now.  HOT Ink! is a nice competitive pitch.

Disclosure: HOT Ink! is an exclusive newsXpress offer.  I am a Director of newsXpress.

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newsagency marketing

NDD to trial Australia Post delivery of magazines

Magazine distributor NDD sent the following to newsagents in the Newcastle area this week:

NDD will undertake a trial delivering NDD product into the Newcastle area via Australia Post for both newsagent and supermarkets for a three week period for onsale Wednesday 3 Jun; Wednesday 10 June and Wednesday 17 June 09.

It is anticipated that your store will receive the NDD Delivery of magazine daytime Tuesday prior to the onsale.

The key parcels and bulks will be stickered with an Australia Post barcode for tracking.

British Football and Inside Football will be delivered by 1st Fleet on the Wednesday.

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magazine distribution

Publishers discuss charging for online content

PaidContent reports that a group of US newspaper executives met secretly to discuss charging for online content.  Their next moves will be crucial.  If they get this wrong they will suffer the same consequences of films, videos and music and have their content made available free through a variety of sources online.  The Atlantic has good coverage on this story too.

Publishers need to understand that their main funding has not come from charging for access to content, it has come from advertising.  To try and monetise content online through consumer payment will require a significant shift.  I don’t see this working.

Look at what Dennis in the UK has done.  They have created new online brands for specific demographics.  They have engaged advertiser support.  The financial model is based entirely around the new model and not trying to fund the high cost of the old (print) model.  Look at what Crikey has done here in Australia – a pure online brand, subscription and advertiser supported and, again, based entirely around the new model.

Publishers trying to backend their operations into an online content paid for model is a recipe for failure.  The people to build monetise content online most successfully will be more likely not currently working for a print media company.

Go back to the interview with Rupert Murdoch to which I referred earlier today.  In discussing weather and similar services he says people will have to pay for this.  No, they will not. It is too late for publishers to try and charge for what is free from so many sources.

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Media disruption

Rupert Murdoch on newspapers

Here is Rupert Murdoch talking about the future of newspapers. A must watch for newsagents.  The opening questions is: will there be newspapers?

This interview is interesting in the context of contract newspaper distribution negotiations. I remain unconvinced about the need for contracts.

The interview follows an ad for the Fox Business Network.

Every day there are more stories about this topic yet newsagents continue to agree to build shop fits with expensive purpose-built newspaper and magazine stands.  Our shop fits need to be flexible, able to change without additional capital cost.

What the interview and see for yourself the changes we need to embrace in our newsagency businesses.

I respect Rupert Murdoch.  He knows what his business stands for and pursues that relentlessley.  He also cleverly uses his own channels, like Fox Business Channel, to preach his message.  We can learn from this.  We have a traffic rich channel today yet many of us are not using this to take our customer’s hands and lead them to our future.  This is because we don;t know what the future is and because we are scared about engagement with our customers.  But those are conversations for another time.

UPDATE:  Check out the coverage this has received in the last 24 hoours.  Murdoch’s important place in this discussion is obvious.

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Media disruption

Driving extra magazine sales.

impulse_mags.JPGWe have been recording good sales from the single pockets of Take 5 and That’s Life which we have been placing above New Idea and Woman’s Day in recent weeks.

Take 5 and That’s Life are located four columns to the right from the location in the photo – further into our women’s magazine aisle and while some are sales we would have received anyway, some are sure to be sales solely due to  additional placement of the titles.

We will rest Take 5 and That’s Life in this location shortly and focus on other titles likely to be purchased by New Idea and Woman’s Day customers.

We find this additional placement works well on the weekend, when the less ferquent magazine shopper shops.

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magazines
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