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

Author: Mark Fletcher

The Bulletin sells out

My store sold out of The Bulletin this week – the edition featuring overage on the life and death of Kerry Packer so I checked with some colleagues and they had the same story. It’s the best selling issue in years. The coverage in the magazine was excellent. It was interesting to me that some customers were buying the magazine as a keepsake.

Footnote for those outside Australia: Kerry Packer controlled ACP Magazines – publisher of the Bulletin, publisher of many of Australia’s top selling magazines, the Nine TV network and a string of other businesses.

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News Corp, MySpace and blogging

An interesting lesson on censorship and blogging for News Corporation as documented by the New York Times today. While the spinners will pitch the story their way, the facts of what happened seem to speak for themselves. Buying MySpace is different to buying a newspaper or TV station. The name says it all. The teenagers who use MySpace see it as TheirSpace and any tampering will turn them off and alight bushfires across the Net.

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End of newsagents in the UK?

Plenty of reports in the UK over the weekend about the bleak future for small retailers like newsagents as a result of tough competition from supermarkets. See: Mirror, Times, Guardian and our own Sydney Morning Herald. In fact a Google search reveals 45 articles related to this story.

The situation is not much different here in Australia. Coles and Woolworths have a voracious appetite and are pursuing product categories which small business channels like newsagents need to survive. They move in, take the cream business and leave newsagents with some action but at a much higher cost. Take stationery for example. Supermarkets and their associated retail outlets now own stationery yet their customer service is appalling., Range is poor and prices are high despite the consumer perception that they are lower. a cheaper pen, for example, is not always cheaper once you consider how long it lasts and whether it is the right pen for the job.

The challenge for newsagents is to get a consistent superior quality and service message out to consumers. Another challenge, too, is whether politicians are prepared to legislate to protect small business against the appetite big business has for their customers. And by protecting small business, like newsagents, I mean protecting them from clone businesses as well as the supermarkets.

Newsagents are important culturally to Australia and losing them from towns and high streets would be a big blow to the community let alone the loss of an entrepreneurial breeding ground.

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Newsagency challenges

Publishers ruin New Years eve sales

News Ltd and Fairfax circulation experts around the country demonstrated their knowledge today by cutting back supplies such that many newsagents were sold out by mid morning. In NSW it was more News Ltd product affected whereas in Victoria it was more the Fairfax newspaper – The Age. In my own case I was sold out of The Age by 9:30 am and they had no spare stock anywhere to satisfy angry customers. Someone at The Age told me that one customer was so angry they had to send out someone to support the newsagent affected.

After all the efforts this year to boos newspaper sales it amazes me that publishers could be so stupid to burn consumer loyalty on a day like today.

The knock on effect on other categories in store was noticeable.

What publishers should have allowed for was the $32 million supre draw lottery tonight. Our lottery sales were up 400% so imagine what we could have done with papers if we had the stock.

Idiots!

PS. I received plenty of Herald Sun product from News Ltd but 20% was unsaleable because of poor production quality.

H A P P Y N E W Y E A R

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Newsagency challenges

Australia Post snubs consumers

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This is the government owned PostShop opposite my newsagents at Forest Hill in Victoria today. Closed. It is one of the benefits of government ownership that Australia Post is able to snub landlord requirements and set its won hours for its corporate shops.

On a day like today I suffer because Post draws people and with it closed there is less traffic.

When it really matters is late Thursday and Friday night. I am required to be open until the centre closes. Post closes at 5pm. If I could set my hours to match sales in my shop I’d add at least $500 a week to the bottom line of my business and it would be reasonable that the saving is reflected in our pricing. The rules Post operates under are further proof of the significant benefits of government ownership.

Post needs to decide if its in retail or not. If it serious about retail then anachronisms like the day off today need to stop.

The government has no business owning the PostShop retail network and competing with businesses like mine.

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Google move intrigues

Google has refined its Google base classified advertising offering. Now instead of passing you to the original content site for an ad, they gake you to a Google page. This may mean reduced traffic for the originator. More of the story: here.

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Media disruption

Creation versus science

We had a customer yell at us yesterday for putting Creation magazine in our science section. They were angry as hell saying that Creation was full of anti science garbage.

We placed Creation where the magazine distributor has asked us to place it. Also, we do not have a religious magazine area.

Having now looked at the magazine I can understand their concerns. This is not a science magazine even though it;’s dressed up to look like one. Creation is published by Answers in Genesis. From their website: Answers in Genesis is an apologetics (i.e., Christianity-defending) ministry, dedicated to enabling Christians to defend their faith, and to proclaim the gospel of Jesus Christ effectively.

I have no issue with the publication of this magazine. However, they need to use a more appropriate cover so the purpose of the magazine is clearer. They also need to provide better direction as to where the magazine ought be placed on newsagent shelves.

The world has become confused enough with the whole Intelligent Design versus Evolution discussion. I don’t need to add to that on the shelves of my store.

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Kerry Packer

Newsagents are certain to reflect on the passing of Kerry Packer as they trade today. His influence over their businesses was considerable.

His companies published our most successful magazines (Australian Women’s Weekly, Woman’s Day, TV Week, NW, Madison, Real Living, Take 5) and distributed many many others. There was not a day that would pass without contact between a newsagent and a Kerry Packer owned company.

As newsagents sell their newspapers today carrying Kerry Packer as front page news, some will hope for a happier relationship with his companies, others will worry that with his passing goes a support from within his companies for small business newsagents. While in recent times Packer companies have made some decisions which have hurt newsagents, they have, overall been very supportive of the channel – actively investing in marketing strategies designed to help newsagents compete with supermarkets and others moving into the magazine space. Indeed there are stories of Kerry Packer personally intervening and reversing at least one decision by his management team which would have hurt newsagents.

Publishing needs more people who have grown up with and have an affinity for “the business”. Kerry Packer was unique and I reckon newsagents will miss his influence.

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Newsagency challenges

It’s official, calendars are stuffed

In the days leading up to Christmas several times I heard customers in my shop comment to each other that they should hold off buying calendars because they’ll be half price after Christmas. The same comments were being made in stores around the country. Early discounters marked calendars down by 25% to 25% from November. That is what newsagents would usually mark them down to right after Christmas. The damage done to consumer perception about the price of calendars by discounters like Big W (Woolworths) and others we have to come out of Christmas Day at 50% off and then go to 60% from New Years Day.

Calendar publishers and retailers who rely on calendar revenue will need to take a very different approach to the 2006/07 season. We need strategies which take us out of the discount marketplace, strategies which result in a product/service mix which allows a premium price and which the discounters are less likely to follow.

Something must be done because left as is, there is no point in my newsagency and thousands like mine being =in the calendar space.

The only comfort I have is that Calendar Club and other similar specialist offerings are, anecdotally and off the record, making similar negative mutterings.

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Newsagency challenges

Magazines at risk because of bird flu and anti terrorism legislation?

As a result of the raft of recent legislation and global events:

Explode magazine has been removed from sale because of the new anti terrorism laws recently passed.

Capture magazine has been removed from the shelves because of the new anti terrorism laws recently passed.

Time magazine has been removed as a result of the new Industrial Relations laws. There is no time any more.

The Bombers magazine is being removed because of a fear it will incite terrorism.

The Magpies magazine has been struck by bird flu. Indeed all bird magazines are being removed because of fears over bird flu.

The Saints magazine has been removed because of concerns it encourages religious vilification.

The ashes magazine has been removed out of respect for the dead.

PC User has been removed for drug connotations.

New Idea has been removed as a result of the new literacy policy in education. There is no room for creativity.

Who has been removed because of the new terrorism legislation. It’s unsafe to ask such questions.

Take 5 has been nominated the official workplace reform magazine because five minutes lunch is the preferred lunch break time.

Family Circle is being renamed 50 50 circle in response to the new 50/50 split of parenting being forced on the Family Court.

People’s Friend is being renamed persons of interest since the government prefers this to friends.

All 150 shooting, hunting, military, war and weapons magazines are being removed because selling them is sure to land the newsagent in some legal trouble.

All Oprah magazines have been removed because of overexposure.

Dissent is banned because of the new sedition laws.

All Martha Stewart magazines are being removed because the promote unhealthy corporate behavior.

Okay so I made the list up – with apologies to some recent emails going around. Good for a laugh.

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Thre relevance of newspapers for advertising

We launched a new online business four months ago. We set out to create a sustainable business focusing on one category of product and with our entire marketing spend to be focused online. Four months on, our monthly marketing spend as a ratio of sales is falling nicely, repeat business is growing and new customers are landing on our website each day as a result of effective keyword advertising partnerships. We could not have achieved anywhere near the same result through advertising in more traditional media of newspapers, radio and TV. This is why newspaper publishers are reinventing themselves. It is also why newsagents need to reposition themselves. Our online experience is helping refocus our retail newsagency so that it is more relevent for the over the counter opportunity.

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Newsagency challenges

Bill Express moving into McDonalds

After gaining an excellent footprint in newsagencies, Bill Express has announced the signing of a heads of agreement with ETT which will see kiosks offering Bill Express products and services in McDonalds stores. (The ETT announcement has more detail.)

While Bill Express needs to do what is right for its shareholders, they went into newsagencies making certain promises on driving traffic to newsagencies and newsagents being their preferred retail network. The work with newsagents in nowhere near done yet they are developing the retail brand elsewhere. The announcement yesterday risks diluting the newsagent/Bill Express connection.

Newsagents have committed significant leases to fund the Bill Express equipment in their stores and many will be wondering about that investment in the context of the McDonalds move.

Bill Express will pitch that their move is about serving the consumer. I could be persuaded to agree with that. However, there is plenty of consumer satisfaction which could be achieved in the 3,500 or so newsagents offering Bill Express today and this should be the focus ahead of the McDonalds project. The easier it is to sell Bill Express products and services in newsagencies the greater the sales and the more suppliers who will be attracted to the network.

If the announcement is more about kiosk type operation then locating the kiosks in newsagencies might have been a better first step.

I hope this is not a case of independent small business retailers being beaten by a giant US corporation like McDonalds. Only time will tell.

Footnote to those precious souls who read my opinion here and mistake criticism here as an indication that I am against them and or their position on the topic under discussion. To make such an assumption would be wrong. I mention this because of recent comments from people representing businesses I have commented on. There is nothing to lose and plenty to gain from robust debate.

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Bill Express

Video iPod channel booming

While it’s yet to hit here the video iPod is proving disruptive in the US. PodGuide.tv lists over 200 “programs” with some being one off and others ‘published’ daily. The most popular program categories, by content, are News, How To and Adult. There are also plenty of video podcasts of varying quality and on all manner of topics. As podcasting has grown from zero to close to 1 million in just over a year and is now well embraced by traditional media outlets, watch for the video iPod to be equally embraced by mainstream and non mainstream media players. Disruption, what disruption?

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News Corp. cutting out wholesalers in the UK?

The Telegraph in the UK is reporting the Rupert Murdoch’s local operation, News International, could be planning to bypass wholesalers for the distribution of newspapers in some areas. Telegraph commentator Roy Greenslade is calling News’ plans a revolution.

News’ UK plans are interesting in the context of the review of distribution of newspapers being currently undertaken by News Ltd in Australia.

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Evolving the retail newsagency

We have just completed a shot fit in our newsagency and below are some photos.

The purpose of this fit was to redefine what we see as a newsagency – to move our store (at least) away from the tradition of the 1960s and 1970s. We’ve gone for a clean corporate feel without making the shopping experience too clinical.

The actual refit covered 40% of the floor space but because of relocation of stock from a customer perspective looks like a 70% change.

We’ve built in an enclosed professional window display and here is our first crack at using it – a strong message for diaries and calendars.

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We’ve gone from skirting the card space taking a very strong stand – more than doubling our range and dramatically increasing consumer comfort. Early in the new year we’re installing two easy chairs and a coffee table.

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We have also created another magazine promotions area – besides the two major areas. This one is ours in that we will not be using it for supplier driven promotions. We want to promote categories not usually covered which make a statement about our depth of range.

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Special interest magazines sliding?

First I noticed it in data from my shop and now I’ve seen it in several newsagencies. Magazine sales are down more than 20% in the special interest category. Special interest magazines cover: buses, woodworking, railways, family history, UFOs, horoscopes and westerns among other interests. These titles account for around 15% of all magazine sales yet they take up around 35% of shelf space. So, there will be a tipping point where the real estate, labour and logistics costs are such that they are eliminated from allocation.

There was a time when these specialist titles were crucial to the success of retail newsagents. Our stores were the only place where such specialised information could be obtained. Of course the Internet has changed all that.

I’m thinking that I’ll be better off cutting some of these titles than have then fade away slowly and cost me more money in the meantime. I could sure use the space to better promote the magazine categories where I’m seeing significant growth.

Australia cannot afford the luxury of 4,600 newsagents carrying such a vast range of specialist magazine titles any more.

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Newsagency challenges

Newspaper videocasts

The Roanoke Times in the US has launched a daily online video newscast. Called TimesCast, they are putting together a four-minute piece which is a mixture of news and local colour pieces. There is no better way to sort out how to respond to change than by immersing yourself in it as this newspaper is. Check out the video cast here. I’d love to see some Australian newspapers playing in this space if only to produce material for use in store to better promote their product.

Source: www.cyberjournalist.net

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Media disruption

Expensive free gifts

Magazine publishers are pulling out all stops to drive sales. These gifts have a high cost on the shop floor. TV Hits, for example, is offering a pack of hair colour. This magazine used to take two pockets to hold 40 copies. Now I have to give it a flat (premium)position and at least six additional pockets. This means that for this month in my store TV Hits has a real estate cost of $35.00. That’s just for rent. Even if I sell all the stock I won’t cover real estate and labour costs. The option is to not display all the stock – however that adds to the cost of managing what is on the shop floor compared to the back room – hence the need for newsagents to display all magazine stock on hand on the shop floor.

Free gifts are well and good to drive sales. However, publishers would do well to liaise more closely with retail newsagents to develop more economically viable sales drivers.

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The Internet not impacting greeting card sales

Based on the data I’ve been looking at representing a small group of retail newsagents in Australia I’d suggest that the Internet is not impacting greeting card sales. Sales this year are up on last year. Across the counter comments suggest that people feel there is no substitute to writing the card yourself and posting or handing it to a friend, colleague or family member.

So, while the Internet rips into some magazine categories, newspapers, books, music and many gift lines, the personal touch of the greeting card ensures the category remains solid.

I suspect that this has something to do with the journey of the choice of card purchase and the giving. These are not things to speed up because if you do you’re worries the recipient will sense you think less of them. It also has to do with the bit of ourselves which goes with greeting cards. The Internet will struggle to deliver this personal touch … at least for now.

Card companies have done well to continue to evolve their category and improve the finishing of their product, reinforcing that you need to touch the product to make the right purchase.

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Unique Cars magazines talks down its retail channel

Page 244 of the current issue of Unique Cars magazine carries a full page advertisement promoting direct subscription. Here’s the headline for the ad:


SUBSCRIBE TO UNIQUE CARS…
and you’ll never have to race to the newsagent again!

Unique Cars has been a fixture on retail newsagent shelves since it began. Newsagents have been instrumental in building its brand. Newsagents are justifiably by the way they are represented in this advertisement. Some have decided to remove the product from their shelves. Others have written to the publisher.

While it is understandable that publishers pursue direct subscriptions, to do so in a way which offends the biggest channel, the newsagent retail network, is dumb. The publisher of Unique Cars would do well to issue am immediate apology to newsagents and pursue over the counter sales building initiatives with newsagents.

Unique Cars is part of the buying and selling category. It, along with all other titles I the category, is suffering from consumers and advertisers moving online. Indeed, the magazine is part of the carpoint.com.au operation. Maybe the anti newsagent pitch in the advertisement represents the impact of the decay in sales. Regardless, but for a line of copy, newsagent anger could have been avoided.

19/12 UPDATE: Stuart Jones, Circulation Manager, has apologised to newsagents and expressed his own surprise at the wording of the advertisement.

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Australia Post favoured treatment

At 2 pm today in my shopping mall the government owned PostShop, where more than 70% of floor space is dedicated to Christmas gifts and the like, closed for the day. Small businesses like mine are not allowed to close. Our lease precludes it. The PostShop can close because it’s government owned and an essential service. While I doubt I would want to close, my point is that the management of Australia Post uses its essential service facilities when it wants and ignores them when it wants. Independent businesses do not have that luxury.

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Newsagency challenges

Kath and Kim missing in action

The Herald Sun ran a promotion last month – a free Kath and Kim DVD with the paper. They provided newsagents what they thought would be enough stock and told us to take orders if we needed more. Today, more than a month on, we are still waiting for the new stock. This is a free service we provide the publisher and the consumer. The people coming into newsagencies every day asking for the DVD are getting angrier and they are taking it our on newsagents – especially since the Herald Sun reported that additional stock was not available.

Rather than adding value to the masthead this promotion, or the way it has been managed, is damaging the masthead and the reputation of newsagent retailers who are at the coal face. It’s taking some of the shine off the season.

The Kath and Kim DVD promotion is the type of promotion you need to under promise and over deliver.

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Newsagency challenges

New York Times podcasts

Good to see the New York Times moving further into podcasting. Their website now offers a science podcast and a weekly selection of op-ed material. They’re free. While not the ideal use of the podcast channel by a newspaper it’s a welcome step forward.

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Podcasting

News Corporation and harm for small business

Spare a thought for small business newsagents in Victoria and South Australia who are being forced to open on Christmas Day to deliver and retail Christmas Day editions of News Corporation product. This is despite News deciding to not publish in New South Wales on Christmas Day and despite some newsagents facing $55.00 an hour in wages for people to work on that day. Thanks to the News contracts newsagents are not in a position to pass on additional Christmas day costs whereas News can charge a holiday loading for advertising. Most newsagents will lose money for their Christmas day efforts.

Newsagents are happy that fairfax has decided to not publish on Christmas Day.

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Newsagency challenges