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

Author: Mark Fletcher

Industry spin on Universal Magazines

mediaweek_uni.JPGThe latest issue of Mediaweek, self labelled “media industry bible”, reports on page 6 about my blog post about the performance of Universal Magazines titles. The story calls what I wrote “gripes”. It calls the comment posted by a representative of Universal a “response”. Language is everything here. Mediaweek, through its choice of words, belittles my legitimate and documented complaints and sides with the publisher. Mediaweek would have known from other comments posted here that plenty of newsagents agree with my assessment. Had they called, I could have shared cash-flow, sell through and other data which refutes the claims made by Universal Magazines. I could have challenged the claim that 78% of Universal titles are either monthly or bi-monthly and explained that a title with n on sale greater than 30 days is a cash killer for newsagencies.

What really gets to me is the bold face repeat in Mediaweek of the Universal claim that they are the most proactive publisher in pursuing efficiency. This is nonsense – unless you call recycling stock which does not sell through newsagencies on a repeat cycle until it is sold, lost or stolen efficient. Universal expects newsagents to pay for the freight to ship this dead stock which does not sell around and around. Sure, this is the magazine supply model I signed on for. Times have changed. Publishers have an obligation to be better citizens. I have an obligation to be efficient and profitable. I can be neither with Universal titles in my shop.

It is not easy to cancel the Universal titles from my shop. I have made the request but it is now being put to the publisher. My letter should lead to immediate cancellation.

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magazine distribution

More on the new VANA marketing group

Further to my post about VANA starting a new marketing group for newsagents, VANA has two Newspower shares. This makes their move to create competition for the newsagents owned Newspower even more curious. On a personal note, VANA has let me know how they feel by removing me from their Christmas party list. It is childish behaviour which started VANA down this read years ago in a dispute with GNS.

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newsagency marketing

More on the 7-Eleven Tattersalls deal

Further to my post yesterday about Tattersalls’ deal with 7-Eleven to sell lottery tickets, I have been to three 7-Eleven outlets this morning.  I can see the appeal.  In addition to usually being well located, these stores are open excellent hours, cover popular convenience focused product categories, are well lit, offer a cheerful service and are consistent across the stores.  Hang on, some of these are our assets – good convenient location, cheerful service.

The folks behind 7-Eleven have done a good job driving discipline behind their brand.  Suppliers like this.  They like that they can sign one contract and have it apply to a network of stores.  I have been told by three suppliers recently that this is what they like about 7-Eleven.

7-Eleven declared their intention against newsagents more than ten years ago in their successful efforts to break the ACCC authorisation for newsagents around newspaper and magazine overturned. Magazine publishers moved as did some of our customers.

We let 7-Eleven win ten years ago thanks to appalling leadership representing newsagents.  That loss was compounded by their being no plan B.

The Tattersalls / 7-Eleven decision announced yesterday would not have been a surprise to those representing newsagents.  I doung that they have a plan B – leaving newsagents to develop their own response.

Here are some ways newsagents could respond to this news:

  • Fight for a fair magazine supply model.  Publishers and distributors cannot give one retail channel more control over supply than another as is the case today.   7-Eleven has considerably more control over its magazine range than newsagents and they leverage this well.   We need to set our terms and have the guts to adhere to these.
  • Challenge Tattersalls over their dedicated area.  I am not aware of any newsagent mounting a legal challenge on this.  If we bound together and funded a well considered challenge maybe we could free up some of this golden mile real-estate in our stores for other products.
  • Challenge Australia Post.  Their government owned stores directly attack newsagents.  If we do not fight they will get magazines and newspapers and, maybe, lotteries.
  • Start making business decisions.  Too often I see newsagents spending too much time reacting to supplier requests (demands).  We need to spend more time being entrepreneurial.  From product ranging to marketing more of us need to exert control over our businesses.
  • Stand for something.  The most successful newsagents I talk with are those who energetically pursue a point of difference for their business.  It could be stationery, gifts, cards, ink, business services, flowers – just about anything.  With so many retailers selling everything newsagents sell we have to create our own unique position.
  • Compete.  Take on 7-Eleven if you have one nearby.  They do not have a monopoly on convenience retail.  If Australian coffee shops can take on Starbucks and win newsagents can take on 7-Eleven.
  • Lift our game.   The worst looking newsagents pull us down.  While we cannot strip them of their shingle we can separate them from us.  This can be done by the marketing groups being stronger in their disciplines.  Smart newsagents will join groups that are focused on discipline.
  • Lift our game (part 2).  This point is basic and practical and based on newsagencies I have seen in the last week: remove posters from the window, put working lights in the shop, un-clutter the counter, have good value impulse lines near the counter, get rid of stock which has not sold in six months and get staff looking decent.  None of this should have to be pitched but it does.

There are plenty of other responses. This list is designed to prompt ideas.  The key is that this announcement from Tattersalls must cause us to take some action. You can’t make money from being a passive victim.

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Lotteries

Another bad Universal Magazines story

I have heard about another Victorian newsagency losing money from a Universal Magazines title.

This newsagent’s story is to do with the reissue of Contemporary Home Design Annual. Vol.7 No 1: On the initial issue, the store sold 40% of the stock. This was early 2008. The reissue is bagged with a back issue – Vol 6 No3 which was initially issued July 07. The original of this issue sold 35% of allocation in this newsagency. The back issue was returned from a newsagent in Central West NSW.

Achieving a 35-40% sell through, maintained over two years, represents oversupply. Based on a $3.00 cost per bundle returned, this business is paying $6-$9 to return remaining copies on each issue – only to have the returned product sent back again in a double pack. What a waste of fuel and an abuse of the returns funded by newsagents.

Besides the cash-flow, labour and real-estate impost on newsagents, there is a huge cost to the environment of this practice. Magazines being returned burn fuel. When they come back they are in plastic bags and sent burning more fuel. There is no good news for the environment in this story.

On the free copy with a current issue practice, advertisers in Universal Magazines titles need to ask what numbers are used for sales data given the reissue policy. I would have thought that you could not reasonably count the free copy of an old issue sent with the current issue as sold stock.

Instead of paying their lawyers to chase me and this blog, Universal Magazines could have achieved more by talking directly with everyday newsagents.

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magazine distribution

Promoting Christmas bags and wrap

frank_bags.JPGMarket research shows that while newsagents have around 37% of greeting card sales in Australia, we account for only 21% of packaging (wrap, bags and boxes). The newsagents doing well in packaging are those who actively promote the wrap category. Current best practice is to locate the cards and wrap department at the front of the shop. Unfortunately older shopfits being what they are, relocating a department is a challenge. At our Frankston newsagency, where we our shopfit will not be done until next year, we have created a display of some of our Christmas themed bags on an aisle end near our counter usually reserved for magazines.

While magazine publishers may be disappointed that we are taking prime space for another category of product, the time of the year dictates we make every inch of expensive retail space work for us.

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giftwrap

Gifts for teachers

teachergift.JPGWith school classes drawing to a close for the year, now is a good time to feature gifts for teachers. This day to a page desk calendar is at the high end of such gifts we have. There are photo frames, fridge magnets, journals, key rings – plenty of gifts for teachers from which to choose. Our experience is that parents often buy gifts for their kids to give to teachers so it makes sense that we cater to this market in newsagencies. While the end of the school year is no back to school season for us, most items sold are at a considerably better margin.

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Gifts

Tatts moves into 7-Eleven

Tattersalls has advised its Victorian outlets this afternoon that it about to sign an agreement which will see its lottery products sold in 7-Eleven stores. This is a blow for Tattersalls outlets and is sure to be felt at the cash register. Tattersalls says that they are targeting new customers in the convenience channel. The move by magazine and newspaper publishers into convenience means that this channel is seeing more and more traditional newsagency customers every week. It is a stretch for Tattersalls to say these are new customers.

The 7-Eleven move is based on technology like the Tattersalls / Bill Express integration where lottery tickets are sold using non Tattersalls hardware.  I would be curious to find out if this is an outcome from the interest 7-Eleven expressed in purchasing Bill Express when the company appointed Administrators earlier this year.

The move demonstrates that Tattersalls understands competition yet the company continues to refuse newsagents and other Tattersalls outlets to use the now useless Tattersalls scratch ticket bays.

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Lotteries

Selling out AWW Christmas cookbook

frank_xma_dec08.JPGWe are close to selling out of the Australian Women’s Weekly Christmas Cookbook from this prime position at the counter at our Frankston store. Sherie’s brilliant display draws attention without interfering with counter flow.

The AWW brand makes the cookbook an easy purchase.  You can see customers – they are at the counter with their items, notice this and buy the cookbook without a second thought.

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magazines

Grazia prize giveaway

fhn_graznov08.JPGWe are pitching Grazia at the counter at Forest Hill this week. The $1 million in prizes up for grabs makes it ideal for the impulse offer. It certainly meets the criteria we have set for this counter space. Grazia is still finding its feet with our customers so regular promotion in different locations in the store in important.  This counter location has an excellent track record in finding customers for titles which otherwise sell slowly in their regular location.

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magazines

New marketing group for newsagents from VANA

I have been told by four people that VANA has been hosting invitation only secret meetings with newsagents in Victoria to encourage them to sign up to a $495.00 a month (inc. GST) trial program which they claim will increase gross profit. Everything about the project sounds like a marketing group. VANA identifies it as such by the services on offer and by saying they do not want Nextra and newsXpress members involved.

Considerable fear is being demonstrated by VANA about this secret project.

The information I have seen reminds me of a project VANA proposed between ten and fifteen years ago, back when Peter Jordan was CEO. The project back then, as today, was developed by an external consultant. While VANA says this will be industry owned, it is the consultant who I would expect to make serious money – and makes a mockery of the claim of industry ownership. I actually don;t care about who owns commercail opportunities put to newsagents – the keys are true value and transparency. VANA is vague about both.

VANA would be better served focusing on delivering members services. It is an association after all. The $200,000 I hear bandied about on this project could be better spent serving members with practical association services.

Victorians have a choice between Newspower, Nextra, newsXpress and Supanews. For a channel with around 650 outlets in Victoria I would have thought that four marketing groups from whcih to choose was ample. If VANA wanted an alternative offer, why not work with an existing player – Newspower makes sense since VANA already has a share in that group.

This move by VANA is more fracturing of the industry by an Association which appears to have forgotten that it is an Association.

If I were on the Board of VANA, I would push for the organisation to focus on:

  • Pursuing, without fear or favour, a fairer and more equitable magazine supply model for all Victorian newsagents
  • Private and public lobbying around achieving a fair return for home delivery of newspapers for all Victorian newsagents
  • Lobbying the State and Federal Government for assistance to help all Victorian newsagents navigate the significant change ahead
  • Establishing a register (benchmark) of supplier terms which VANA members could use to compare terms they have been offered
  • Working with GNS, the industry owned stationery supplier to build a strong consistent statewide stationery business in all Victorian newsagencies

Once sufficient progress has been made on these five key areas and if VANA had resources available, I would push for what I would call phase two of the reinvention of VANA. I’ll leave those thoughts for another time.

VANA failed its members abysmally on Bill Express. It was not until the public meeting which Adam de Jong and I organised that VANA woke, briefly, on Bill Express. Because of their lack of leadership, some Victorian newsagents paid money for Bill Express equipment which they should not have paid.

I am a VANA member. I am also a shareholder in newsXpress, a marketing group for newsagents.

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Newsagency challenges

Christmas Cards in The Age

The Sunday Age has a story today about Christmas card trends.  I would have liked the report to include current sales data which shows that newsagents have 37% market share of greeting cards, more than any other channel.  That market share is growing too.

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Greeting Cards

Australia Post discounts Christmas cards

apcarddisc.JPGI was surprised to see this sign outside the Government owned Australia Post store at Forest Hill yesterday. Not only is Australia Post pushing deeper into traditional newsagency lines but they are discounting Christmas cards at a time when there should be no discount. I suspect that the supplier of greeting cards is funding this. Australia Post would have relied on their network size, established by virtue of their Government monopoly and protection, to negotiate the deal.

Card experts tell me that Australia Post does not do that well with greeting cards. Maybe so. however, the category is there in Post Shops, at the front and making their businesses look like newsagencies.

I wish that Post Offices were Post Offices as they are in many other countries and that the Government retail network of 860 or so stores stopped trying to take customers from newsagencies like mine. They abuse their government ownership to their competitive advantage. Rather than offering an incidental service as the Act under which they operate states, they aggressively pursue their small bus8iness competitors.

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Australia Post

When you sell out

pfriendpapers.JPGWe sold out of the Melbourne Observer on Friday (we have upped our order Ash) and filled the empty stand, which is next to our newspaper stand, with People’s Friend as it speaks to the same demographic. Sales spiked as a result. With the Melbourne Observer very popular in our shop it made more sense to leverage the traffic into something else than to leave the stand empty. Too often I see stands in newsagencies which would usually hold popular product left empty. The range of what we sell in our newsagencies means that we can always find a substitute which will benefit from the traffic.

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magazines

Textile fibre forum magazine success

iss408.jpgTextile fibre forum magazine is an example of an independent magazine which can work for a newsagency. In our case this title has a good sales. Supply quantites are close to what we sell which helps. It its nicely in our arts and crafts category and reinforces our credentials as a magazine specialist. It is a fine balance between being the specialist and drowning is non-viable titles for the sake of it. If I could manage my mix of magazine titles more effectively and be sure that supply is more closely aligned with sales I’d take more independent titles. Independent publishers reading this could consider talking with newsagents and their distributor about such arrangements.

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magazines

Open Office costs money

openofficemag.JPGOpen Office is free office software covering word processing, spreadsheets and other tools. There are plenty of online resources covering how to get the most from Open Office. I am surprised that anyone would pay $16.95 for a magazine about software which is free and for which there are free resources online. What happened to the open (free) office software concept?

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magazines

Natural Health cover up

namethemag.JPGThe folks at Australian Natural Health thing offering a free (old) magazine is more important than their masthead. This is not the way to sell magazines – especially since the same free magazine bag is used on other titles.

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magazines

Promoting OK! on Friday

okausnov08.JPGOK! is our magazine of the week as a reminder that this title is now published on a Friday. We have this small stand at one of our lottery counters to encourage impulse sales. While we still have OK! in its usual place, we felt it was important to promote to those not browsing our magazine department and because of the difference in weekend versus weekday customers. We created the display unit by modifying a spare acrylic stand we had.

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magazines

Magazines as a Christmas gift

magazine-christmas-2.jpgThis is the artwork for the poster for newsagents to promote magazines as a Christmas gift.

The poster is a free service for all newsagents from Tower Systems and is available A2, A3 or A4 size.

We will finalise artwork mid next week with fresh magazine covers.

I have funded the development of this poster for the same reasons I funded the recent TV commercial – to help newsagents have pride in their unique offer and to help increase sales in newsagencies, especially of magazines.

I was prompted to do this when I saw the email promotion of magazine subscriptions by Magshop. I realised that we did not professionally promote magazines as Christmas gifts in newsagencies. I took this as a challenge to create an enticing poster which newsagents could use in-store for this purpose.

While we could complain about the Magshop pitch, their offer makes sense. They will attract different consumers to those who visit newsagencies. Our job is to connect with our traffic. Hence the importance of a poster such as this connected with back end processes for putaways and the like.

I hope that newsagents like the poster and can put it to good use.

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magazines

Saying no to titles from Maximedia

We have written to magazine distributor NDD requesting that the cancel supply of all titles from Maximedia. We took this action following a review of the performance of their products. Poor sales, oversupply and long shelf life makes the Maximedia titles uneconomic for our newsagency and, I suspect, every other newsagency in Australia.

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magazines

Building better newsagencies

I will be in Townsville next week (Wednesday, 2pm at Jupiters Hotel and Casino) and Darwin the week after (Wednesday at 2pm at the Holiday Inn) talking with newsagents about strategies for building stronger businesses. These sessions are part of the Tower Systems Spring User Meeting Tour which has attracted newsagents from around the country keen to work on building better businesses. If you would like to come along to the free workshop, please drop me an email. All newsagents are most welcome.

As I have traveled around Australia over the last month on this tour it has been a thrill to meet with newsagents who are embracing change and focusing on the opportunities in the marketplace. I am excited by the innovation I have seen and heard and the positive attitude of so many newsagents.

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Newsagency management

Free Christmas message artwork

For years, the Tower Systems software has made it easy for newsagents to promote their businesses on receipts. You can include any image easily. This could be a coupon or some offer to lure customers back. Coupons work extremely well in the US. I think they could work well here too. As a service, we are making artwork for the two coupons below available for anyone who would like them.

ccoup.JPG

The artwork for the two coupons has been emailed to Tower newsagents. If you would like a free copy please email me. All you need is POS software which can include images on receipts.

Receipts are free advertising space for us – it makes sense to leverage this opportunity for our own businesses. After Christmas, use the coupon space for back to school offer or a back to uni offer. Keep using this space to pull customers back in.

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newsagency marketing

Groovy Grandmas is not a porn magazine

ggrand.JPGI really did think Groovy Grandmas was a porn title when I first saw it.  It’s not, Groovy Grandmas is a good magazine.  It appears to hit its demographic.  This new title is hard to locate in our vast range and difficult to find space for in an already full fixture.  My bigger concern is the financial aspects of this title.  NDD decided we should get 19 copies.  At $9.95 each, this means we are providing $141 in funding for the launch copy.  With a four month on-sale and the space requirements, there is no way we can cover our costs – expecially given that we received no marketing collateral.

NDD gets upset when I point the finger at their broken magazine scale out model.  They say that they have a good relationship with the ANF and are working with them on magazine KPIs.  Well, this NDD/ANF relationship is now three years old and we still get grossly oversupplied with long shelf life product.  Based on Groovy Grandmas a fair assessment would be that NDD will do what NDD wants.  On Groovy Grandmas, like other titles, I suspect that NDD is paid for each copy they move.  Newsagents shold be on the same terms.

The scale out of this title would be a good test case for the ACCC to review as it demonstrates all that is wrong with the magazine supply model – oversupply, supply not based on sales data and a long shelf life.

Newsagents cannot be the banker for independent publishers and magazine distributors any longer.

We will promote the title for the next couple of weeks but we expect to be early returning at least half what they sent us – probably topped since I should not have to pay the freight for another NDD stuff up.

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magazines

Is Victoria about to get a new marketing group?

Rumors have been circulating in Victoria for several months that VANA is close to forming a new newsagency marketing group.  While VANA has denied these rumors, that they continue suggests that something is afoot.  Just what that something is I am not sure. 

VANA has a long track record for playing outside the traditional association space.  As a VANA member I would prefer to see more robust representation on association matters and less on competing with existing industry suppliers.

Since VANA and GNS had a falling out a couple of years ago, VANA has spent member resources competing with GNS is some areas.  Member funds could have been better spent elsewhere rather than spiteful competition.

Disclosure – I am a Director of newsXpress, a marketing group for newsagents.

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newsagency marketing
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