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

Author: Mark Fletcher

Promoting the OzLotto $40 million jackpot

tatts_mags.JPGWe are actively promoting the $40 million OzLotto jackpot deep into our newsagency, considerably beyond the lottery counter. At the main newspaper stand and atop the headers in our busiest magazine aisle we are ensuring our customers are aware of this jackpot opportunity.  OzLotto jackpots are good to promote because of the likelihood of one winner winning the first division prize – this rarely happens with the Saturday game.  The size of the prize to a single winner is important given the marketing around dreams.

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Lotteries

When no one buys a magazine

fhn_camping.JPGThe Complete Aussie Guide to Camping did not sell in our newsagency. We received eight copies at the end of November and returned all eight this week, three weeks earlier than requested by the distributor. By the time we are credited for the unsold stock our cash will have been taken for two months for this title. The distributor has access to our cash and maybe the publisher. This is an excellent example of how small business newsagents are used as banks. When we try and mitigate our losses, some distributors step in and deny us the right to reduce supply or cut titles altogether.

We need an arrangement where fringe titles such as this camping guide are paid only on a scanned sales basis. This means newsagents are not used as banks, do not have to fund theft and have more time and resources to act as retailers.

Our key asset for magazine publishers is our retail network. If only we controlled this as an asset and priced access accordingly.

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magazine distribution

Magazine distribution dispute hots up in USA

The dispute between magazine publishers and wholesalers in the US is hotting up.  Billboard.com has a good summary of the story as it stands today including these two paragraphs:

Source argues in the letter that while the magazine publishers characterize the brouhaha as a dispute over seven cents, the whole situation is actually a part of bigger picture negotiations to “secure necessary financial adjustments to outdated distribution agreements.”

According to a story on businesstn.com, retailers like Wal-Mart are increasingly turning to scanned-based-trading (SBT), which means they pay for magazines when the products are scanned at the check out counter, rather than purchasing them in bulk from wholesalers like Anderson and Source Interlink on the front-end. This new business model impacts cashflow and squeezes liquidity for wholesalers and inflates inventory on their balance sheet.

I have called for scanned based trading (SBT) on this blog for Australian newsagents for years.  See my Nov. 21, 2005 post.  It is the fairest way for our resources to be used to sell and distribute magazines.  The technology exists.  It it were used, newsagents would be more motivated than ever before to transact their business is a compliane way.  Magazine distributors will not implement SBT here because the could no longer use newsagents to financially prop up their distribution model inefficiencies.

Until newsagents take firm action the opportunity and benefits of SBT will remain locked away and in the banks for magazine distributors.

Mediaweek also covers the mess in the US including speculation that two magazine wholesalers were set to close and therefore put the distribution of many magazines at risk.

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Uncategorized

Foreign newspaper sales grow in January

Foreign language newspapers accounted for 15% of all newspaper sales at our newsXpress Forest Hill store in January.  Their sales rose 7% in January while sales of dailies fell by 9% in the same period.  While I write here more about our promotion of magazines, we feature the top selling daily newspaper in two locations – one near our busiest lottery counter.  Foreign newspapers have, on average, a 48% higher cover price, making each sale more rewarding.

Now, before News Ltd or Fairfax folk think about emailing me, I am glad to have daily newspapers.  While I wish you would focus more on loyal retail customers, reward retail newsagents for professional business support and set a commercially fair retail price, I like the product and the traffic it continues to drive.  My point about foreign titles is that niches are important and prifitable.  The growth in this category of newspapers is most welcome.

With daily newspapers available in a variety of retail outlets, it is the range of foreign language newspapers which define my newsagency and thousands of others as the news specialist.

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Newspapers

David Koch and the survival of newsagents

kochie.JPGI was disappointed to see Kochie’s 101 Ways to Survive 2009 on the shelf of one of my newsagencies. Kochie what are you thinking? I can get this information online for free. You’ve sent it to newsagents with a thirteen week on-sale period. We will lose money on this unless it sells out in the first couple of weeks. That’s not small business friendly Kochie.  The publisher will say the distributor controls supply quantity.  The distributor will say they have a contract to distribute what the publisher prints.  That is how these discussions always go.  In the meantime, newsagents have the stock on their shelves and they fund the title.

This publication is a book, not a magazine – we should be on book margin. Given the long on-sale period we should not be billed until the last week.  Like the John Tickell book, Kochie’s 101 Ways to Survive 2009 unfairly relies on newsagent financial support.

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magazine distribution

January newsagent retail sales benchmark update

I have started collating data from the newsagent sales benchmark study for January.  The results are interesting.  It is not too late to submit business data for this.  Tower Newsagents 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, 2009 to January 31, 2009 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.

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retail

Promoting Good Health and Medicine magazine with free Carmex

fhn_good_health.JPGWe are now promoting Good Health and Medicine magazine at our main sales counter position following the success of our Wiggles magazine promotion in the same position earlier between Monday and Wednesday this week.

We selected Good Health because of the stunning cover and the free tube of Carmex Lip Balm which comes with this issue of the magazine.  The display was helped by excellent collateral delivered with the title.

While this display is not the power end display ACP Magazines may like, I am confident that it will drive more sales than a more attractive display and that’s what I care about as a retailer.

This space at the counter has become the most valuable magazine promotion space for us in terms of return on space and return on time investment.

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magazines

February 2009 newsletter

Click here to see a copy of our February customer newsletter. This is available to customers as they walk past our shop. You’ll see that we are promoting the Valentine’s day collateral we are also using in-store.  We will update this after Valentine’s Day.

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newsagency marketing

Retrospective billing for magazine returns freight

Newsagents on the Central Coast of New South Wales are reporting that freight company 1st Fleet Express has issued accounts which apply an increase in their fees for collecting unsold magazines, returns, by 66% and applying this increase retrospectively.

NANA, the state association representing newsagents in NSW is right on to this issue and has advised newsagents:

We strongly suggest that Agents effected by this increase contact 1st Fleet Express (Mr Paul Rowe Executive General Manager Ph 133040), and advise him, in the absence of any prior advice indicating any increase to rates, their invoice will be paid at the rate of $3-00 per carton up to and including the date of the account received.

The retrospective billing goes back months from what I am told.  If true this is appalling behaviour.  Newsagents need to follow the NANA advice.

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Ethics

Using Kevin Rudd on the cover of The Monthly

monthly_feb09.JPGThe Monthly hit the shelves in newsagencies perfectly timed yesterday given the coverage of the Federal Government second stimulus package.The Prime Minister is on the cover as The Monthly publishes his essay about the global financial crisis. The production is exceptional, making the magazine stand out even more than for the content itself.

We have The Monthly displayed at the counter, above our newspapers as well as with current affairs titles – overkill maybe but our view is that with the stimulus announcement top of mind we have a window of opportunity for around a week to promote The Monthly.

We need to be opportunistic in our magazine promotions, allowing a great cover to guide our choices.  I have seen countless examples of such opportunistic choices achieve incremental sales.  We don’t always promote the mainstream titles or titles from the biggest publishers.  Our approach with The Monthly this month is a good example of this – capitalising on the big news of the week.

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magazines

Donna Hay magazine expensive for newsagents

donnahay_feb09.JPGThe new issue of Donna Hay magazine arrived in newsagencies yesterday but the old issue is not due to come off the shelves for another month. While the publisher will say that it may sell, they don’t pay the retail rent or the labour to manage the additional stock. Delaying the return a month is a cash grab from which I suspect the publisher and distributor benefit. The process of managing a new issue of a magazine ought to be straightforward – the new issue goes out and the old issue is returned. To require newsagents to hold an old issue for a month after a new issue arrives is an unfair financial impost on small business newsagents.

If a publisher believes that having an old issue on the shelf next to a current issue will generate sales then they should back their judgement and not bill newsagents until the old unsold stock is due to come off the shelf.  In other words, they should take the risk with their money and not rely on newsagents to be their bank.

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magazine distribution

AFL Prospectus for season 2009

aflprospectus.JPGMy blog post about the AFL record season guide earlier this week generated plenty of emails and calls from newsagents wondering where they could source this so I thought I’d let people know that another publication, the AFL Prospectus for season 2009 is now available in newsagencies.

Distributed through Network Services, the AFL Prospectus is published by Champion Data and has a retail price of $29.95.

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magazines

Newsagents embracing selling cards with music downloads

Newsagents are flocking to Cardplai, the greeting cards which are sold with music downloads as the gift. My software company, Tower Systems, has exclusively partnered with Cardplai through our eziPass software. We have done this work pro-bono for the benefit of newsagents. We were offered a cut of every sale but preferred to see this invested in newsagent margin and marketing.

Monday was a big day in the Cardplai launch as it is when software was turned in the many newsagencies which have taken up the offer. The days since have been busy helping newsagents navigate the finer points of activating Cardplai cards.

One POS Solutions user reported a problem with Cardplai running on their hardware running the POS software. We logged into their system, found the incompatibility between our eziPass and the POS software and made a software change to address this.

Cardplai is a terrific opportunity for newsagents to get something exclusive for their channel which is being advertised extensively. Since it is new there are bound to be teething opportunities from which we can improve the offer.  Newsagents say they want to be relevant in the changing world.  Cardplai is such anopportunity with little risk.

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Ethics

Covering Sydney in the name of the newspaper

smh_feb4.JPGThe post-it type ad stuck over the masthead of The Sydney Morning Herald newspaper today is the worst damage I have seen done to a newspaper masthead in time I have been chronicling this activity here.

This desecration of their brand demonstrates how little value Fairfax places in what was once a great newspaper brand. Maybe they don’t think Sydney is all that important.

At some point in the future there will be a question of when media companies changed their view of the value of newspaper mastheads. I hope that the photos I have posted here of the use by Fairfax of this cover-up advertising will be of some assistance.

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newspaper masthead desecration

Buy a newspaper day

Chris Freiberg, a reporter at the Daily News-Miner in Fairbanks, Alaska, created Buy a Newspaper Day the day with a site on Facebook.  It took place on Monday this week.  Editor and Publisher has some coverage on the idea.  I like the initiative.  A check of Google News shows that it did not receive much coverage in newspapers. The blogosphere has considerably more coverage.

Like Magazine Week in the UK, Buy a Newspaper Day is designed to (re)focus the mind of consumers on print media.

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magazines

Valentine’s Day in Frankston

frank_val_09.JPGThe team at our Frankston newsagency have created a wonderful display for Valentine’s Day, part of which can be seen in the photo. The centrepiece is the coffee machine which one lucky customer will win. Around this they have placed a selection of our Valentine’s Day gifts and behind is the start of our Hallmark Valentine’s Day card range. I had not seen the shop for a week and was immediately drawn to the stunning display when I walked in.

A good display is about theatre.  It is also about shopping.  This display delivers on both fronts – it looks great and is easy to shop.  Of course, the proof will be where we stand by February 14.

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Greeting Cards

Newspaper half price offer misses opportunity

While on the Gold Coast yesterday, I saw the coupon being used in the Gold Coast Bulletin newspaper to attract consumers to the half-price offer. Prominent in their pitch is a drive for subscription sales. Given the retail only status of some newsagents involved in the campaign, this ultimate goal of taking sales from retail to home delivery is cheeky.

While I accept that the publisher has to try and drive sales, I think the Gold Coast Bulletin publisher is missing an opportunity to build loyalty around consumers who prefer an over the counter newspaper purchase. I am certain that newsagents would embrace such a campaign.

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newspaper home delivery

Vodafone selects e-pay

Vodafone has announced that it has appointed e-pay Australia as its exclusive distributor of Vodafone prepaid recharge products via retail channels. For some months Vodafone has also supplied through TAFMO. This relationship appears to be at an end. Newsagents using the eziPass platform from my software company can access Vodafone recharge product direct from e-pay.

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phone recharge

OzLotto jackpots to $40 million

With $40 million now in play for division 1, OzLotto is going to attract serious consumer attention over the next week. This is an excellent opportunity for newsagents to leverage additional traffic. I’ll some thoughts on that in the next few days.

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Lotteries

Harvey Norman OFIS to close

Harvey Norman announced to the ASX today that all five OFIS stationery and office products stores would close by the end of this year and that no further investment would be made in the OFIS brand.  Here is part of my assessment of their first store from my April 10, 2008 blog post:

The store itself felt, well, bland. The pink logo is the strong visual but even then it’s only in the uniforms, plastic bags and at the front. In-store signage, which may be temporary, was not the bold message I expected.

To support the opening they give you a brown paper bag and anything you can fit inside during your shop you get 15% off. While it’s not a new idea, the execution at Ofis is good – I was offered the bag three times and told to fill it up. I know the idea has been used in at least one stationery outlet in the US with good success.

So, what does Ofis mean for newsagents? If Harvey Norman is committed for the long haul, and I am yet to be convinced of this given what I saw, newsagents need to be prepared for more competition in the stationery space. We need to get back to basics – the best range, keen prices, exceptional service and marketing our offer outside our four walls.

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Newsagency challenges

Participate in our January sales benchmark study

I am undertaking a sales benchmark study comparing January 2009 against January 2008. 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, 2009 to January 31, 2009 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. Newsagents not using Tower software should email for a spreadsheet template. I’ll publish the benchmark results here and elsewhere so all newsagents can benefit.

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Newsagency opportunities

Officeworks sells stamps now

officeworks_stamps.JPGI was surprised to see stamps advertised as being available at Officeworks. When we applied for one of our newsagencies Australia Post refused. They said we were too close to one of their shops. I know of an Officeworks next to an Australia Post shop. I bet they have stamps. It is wrong for Australia Post to do a deal with Officeworks yet refuse an individual newsagent for being too close.

That said, I am not surprised as I expect the two businesses have ties elsewhere which were leveraged to make this deal happen.

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Australia Post

The Age modifies subscription model

The Age notified newsagents yesterday that they are changing the subscription model, or how they deal with newsagents at least.  They are moving from fixed-term subscriptions to open-ended subscriptions.  Beyond giving newsagents only seven days notice to make considerable data and system process changes, there are questions customers will have when the previous fixed-term subscription continues.  While The Age ‘manages’ the customer relationship, newspaper home delivery customers often like to talk about these things face-to-face.  Of course, in this day of subscription based home delivery the newsagent no longer owns the customer.

As a retail newsagent, I would prefer The Age invest in over-the-counter customers.  They are as loyal yet cost significantly less than home delivery customers … except that the margin for The Age on retail sales is not as good as their home-delivery model where newsagents share the cost of subscription campaigns.

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newspaper home delivery
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