Okay so everyone agrees that newspaper sales are challenged thanks to falling consumer interest among the 18-34 year olds and thanks to many more access points to news and information such as websites, blogs, mobile phones and other hand held devices.
The newspaper and magazine publishers and distributors are responding to this by wanting to get their product into every location possible. They are turning what were once destination products into impulse purchases. They are educating the consumer and devaluing their mastheads along the way. They are starving the channel which could actually grow their business.
Whereas for more than 100 years newsagents were the prime retail outlets for newspapers and magazines in Australia, they now achieve between 45% and 50% of sales. Petrol and Convenience, Supermarkets and other retail account for the rest. But in making this shift to more outlets, the publishers and distributors have only taken care of the top 50 to top 100 titles. The other 1,500 to 2,000 titles retailed in Australia have been left in newsagencies â€“ with fewer eyeballs to find them.
No wonder newsagents are struggling more than ever.
A smart publisher or distributor would focus exclusively on the newsagent channel. Why? For some simple reasons:
A smart publisher or distributor would not encourage competition against newsagents out of fear of missing an impulse sale. No, they would nurture this 4,600 strong retail channel which is unique to Australia and find a way to create the classic win win.
It is easier to advertise an issue of a magazine being at a newsagency than at the range of stores publishers are pursuing today. Think about this. A TV ad for a magazine sold in five different retail channels and 10,000 stores if harder to advertise than a magazine sold in 1 channel and 4,600 stores. This is the value of the newsagency channel and itâ€™s being lost on our suppliers. They will be like the banks and realise when it is almost too late that they turned their back on the golden channel.
In September 2004 the ANZ Bank announced that they were reversing their branch rationalisation program. They started opening branches. They got it wrong and responded with what consumers wanted.
Consumers were happy with newsagencies. There was no consumer push to get product into other outlets. No, that was coming from newsagent competitors. It was a campaign not dissimilar to the one being waged by Woolworths today against pharmacists.
Publishers and distributors have acted like lemmings and chased other retail channels and, I’d suggest, NOT found the sales they wanted.
The answer is for one publisher or distributor to ignore the lure of the me too business strategy and focus exclusively on the newsagency channel. The right engagement will generate results which will make others reconsider their pursuit of petrol and convenience and other outlets.
For their part, newsagents need to be clear in their message to consumers, make it obvious that you are the retail destination for news and information. Embrace range as your point of difference and prove to the publishers that even in this time of significant change our channel is a channel which can boost business.