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Behind the decision to change magazine delivery days

I have spoken to a few people about the cutback in magazine distribution from three days a week to two to try and understand more about the move. While no one I spoke with is prepared to go on the record, here’s what they say about the move:

  1. Planning began long before Bauer purchased ACP and before the management changes at Gotch.
  2. Money is at the core of the cutback in distribution days – the profits of Gotch and Network.
  3. Gotch and Network have been on the same page, pursuing a reduction in days as a means of cutting their costs.
  4. The ANF was consulted – they were told magazine volume was declining while costs were fixed. Apparently they did not request data to confirm the accuracy of this assertion.  Volume has not declined as much as the distributors claim.
  5. No discussion took place between the ANF and distributors about the impact on sales cycles in newsagents nor traffic flow on different days of the week.
  6. Plenty of magazine publishers, large and small, are unhappy with the move.  Mid size and small publishers feel helpless because of what they call a magazine distribution duopoly.
  7. In deciding on Monday and Thursday, they had to choose days that worked with sales based replenishment (if they ever get it working) and provide a reasonable spread apart to serve the needs of the major weeklies on Monday and Who at the end of the week.
  8. The overall move and most other decisions have been taken to serve the needs of Gotch and Network.

Personally, I am not against the move necessarily. I understand that businesses need to cut costs. However, I remain concerned about the potential impact for newsagencies versus supermarkets.

On the need to cut costs – it disgusts me that Gotch and Network use this as their reason yet they do not provide newsagents with reasonable ability to achieve cost cutting in magazine supply. This move is another example of do what I say and I will stop you doing what I do.

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magazine distribution

Chasing sales over the long weekend

The Queen’s Birthday weekend is one of the quietest weekends for retailers. Many retailers in a variety of retail channels tell me this is their experience.

This year, we are pursuing a change in the Queen’s Birthday experience in one of my newsagencies. We are running a campaign of 30% off all gifts and plush.

Our engagement in this campaign is putting into practice our belief that we make our own success.

While we could have been more selective and targeted only on the slower selling product, we decided to offer the discount on all gifts and plush so there is no doubt for shoppers. They can easily understand the pitch.  No fine print shows that we  reject the selective discounting game many retailers play.

The sale is for three days only, until the close of trade on Monday, so the risk is not great. Also, our buying on all gifts and plush is good, at better than average prices. Even at 30% off we’re in good shape.

Our artwork was created in house with a use of A3, A5 and A4 in-house printed posters and a couple of A1 posters printed offsite.  We deliberately chose yellow on black as it tested well at cutting through the sea of colour in the newsagency.

Care has been taken to dress the shop with collateral throughout – carefully placed to tell a story from entrance to exit, to drive shoppers visiting for one product category to consider other products on sale.

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Newsagency management

News Limited trashes news for money on yesterday’s Herald Sun newspaper

News Limited has been fierce over the years in dealing with newsagents who don’t follow their rules – where newspapers are placed, displaying of posters, advertising their masthead. Year after year they threatened newsagents and sometimes breached them for not following their rules. All the way through they said it was about selling the newspapers by promoting news.

All the rules are gone now as the company scrambles to make as much money as it can from the declining sales of its print product. Case in point – yesterday’s Herald Sun. The headline of the day was covered by an ad for Eureka Report, a media outlet News owns.

A house ad is more important than the lead story of the day in the top selling daily newspaper in Australia. Go figure.

This photo shows how important news is to News Limited today.

How times have changed.

If I was a newspaper publisher I’d be focusing on fresh content, content people want. Content is what makes news or breaks outlets. Disrespect content and you disrespect your product.

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Media disruption

Promoting mini cookbooks off location

We’re running a campaign of promoting the mini cookbooks from Bauer off location in a selection of positions in-store. In the photo you can see that we have the mini cupcake book sitting above Girlfriend magazine. We did this because young girls like cupcakes.

Tactical placement can be more important than stunning visual merchandising.

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magazines

Mixed interest in special Woman’s Day issue

We have experienced mixed interest in the Jennifer Hawkins wedding special issue of Woman’s Day today with sales at a 20% of regular Monday sales in one of my stores – but up on Friday sales. The test will be where we get to by the end of Monday.

We have the magazine at the front of the business, on the leas line, as well as in prime position with our weeklies. So, we’re actively supporting it.

The photo shows what the production fuss was about yesterday. The barcode is a sticker stuck on the cover. It’s usually printed on. While most newsagents did not need the barcode, supermarkets and petrol outlets could not cope without it.

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magazines

Potential impacts for newsagents from magazine on-sale day changes

I have been thinking through the possible impacts of the magazine distribution changes announced earlier this week. Both Network Services and Gordon and Gotch are switching from Monday / Wednesday / Friday deliveries to Monday / Thursday deliveries.

While handling the switch operationally in-store will be easy for most with newsagency software, it will require some roster changes. However, enough time has been provided to handle this. The change will also require careful consideration by newsagents with sub-agents as it changes the dynamic of the work week. However, again, addressable given the time.

I am concerned about the potential impact on shopper behaviour and newsagency traffic flow.

Wednesdays have been important for us for the weeklies on sale that day – Take 5 and That’s Life – and for other titles. While sales of Take 5 and That’s Life have been in significant decline for a couple of years, we should not dismiss their importance to our businesses.  Both titles are still often in the top 10 in most newsagencies. In many newsagencies, weekly magazine sales decay reports show that between 55% and 75% of all copies of Take 5 and That’s Life are sold on the Wednesday. It would be wrong to think that these regular shoppers will shop with us on a Thursday.

What if for the Take 5 and That’s Life purchase on a Wednesday we are the destination? Then, what if for a Thursday shop they have other items and we are not the destination?

Newsagents can look at their data and see how many sales on a Wednesday include Take 5 and That’s Life and assess the potential impact of losing these sales on that day. Good reporting will sold sales of the titles alone and with other items and what those other items are.  They can also consider the knock-on effect if they don’t retain all those customers on the Thursday.

The risk I see is that the shift to Thursday makes buying Take 5 and That’s Life more convenient at the supermarket when shopping for the weekend. I am told that Thursday is a big shopping day /night in many areas for supermarkets as it’s often a pay day and, in some states, has late night trading. If supermarkets see a traffic boost Thursday it could be that the magazine delivery shift presents them a better opportunity.

Think about it from a shoppers perspective – if they buy Take 5 and That’s Life or other Wednesday titles available at supermarkets and need to do a supermarket shop, why go to two shops when they can go to one?

I don’t think shoppers are as loyal as we wish or think – certainly in the city at least.

Every time someone buys a magazine from a supermarket it dilutes the position of newsagencies as the go to place for magazines in their minds. That’s how we have to see this at least.

I don’t think I am jumping at shadows in pondering this. While I don’t know what will happen I am concerned for newsagents who are not already planning for the change, planning on driving traffic on Wednesday, planning on bringing Wednesday magazine shoppers with them to Thursday, ensuring current Wednesday magazine generated traffic is somehow encouraged to visit Thursday.

It would be complacent for newsagents to view this as simply a shift in delivery days. This move has the potential to impact our traffic and sales. We need to view it as a structural change that impacts us more than our biggest retail channel competitor.

I’d be interested to know whether the magazine distributors consulted any newsagent representatives on this and whether any concerns, such as those outlined above, were put.

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magazine distribution

The ultimate newspaper sell out with flu-page page one ad

The Age and The Sydney Morning Herald newspapers sold their front page on Wednesday to department store David Jones and in doing so provided an insight into where news sits in their organisation.

These once venerable newspapers of record in Victoria and New South Wales sold off the most important page of a newspaper to advertising, completely. The only non advertising content was the masthead. Why bother?

After the decades of fights, threats and contract breaches imposed by publishers, including Fairfax, at the treatment of their products, now, in what some call the last of days for print newspapers, we see that advertising is the thing and the pressure on newsagents over treatment of content was for nought.

Customers don’t like their newspaper being damaged in this way or by stuck on ads. They say so across the counter.

It’s action like we saw on Wednesday that will speed up the death of print newspapers in Australia as it challenges newspaper reader perception of the product. It shows the newspaper as an advertising medium ahead of a news medium. This will encourage some to look for news elsewhere.

On the websites for the mastheads, Fairfax did not cover the news with ads for David Jones as the screenshot shows.  A news junkie would have had a better experience online than with print Wednesday.

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newspaper masthead desecration

Production issue for Woman’s Day special issue tomorrow

The early publication of Woman’s Day, tomorrow instead of Monday, featuring the Jennifer Hawkins wedding story and photos, has been hit by a production challenge.  I’ve been told by several people the cover is missing the barcode. While this would not be an issue for newsagents, as they can print barcodes to standard in-store, it would be a challenge for supermarkets.

My understanding is that not all areas will get stock tomorrow as planned as they cannot get all stock stickered and onto trucks in time.  As I noted above, they could send all newsagents their stock without a barcode.

The folks at Bauer are still working through how this will play out.  I’m told Queensland looks set as does metro Victoria and NSW. Country areas appear unlikely to get stock.  Lots of people busy putting stickers on magazines this afternoon.

What we do not want is our competitors to have stock and newsagents not. I suspect they are working a plan to ensure this is not the case – i.e. that all retailers in an area have stock.

Someone somewhere will be in a lot of trouble for this mistake for an issue they had high hopes for.

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magazines

Bagged magazine frequency increased by Bauer

The frequency of these bagged magazine offers from Bauer has increased significantly this year. They will say they’re getting sales growth as a result. I don’t see it in the data. Regardless, I am worse off if I sell these titles if the sale of a discount pack results in selling less of the titles inside.

I am told that our major channel competitors are compensated at the full cover price of the magazines in the bag. The only way to know for sure would be to see the billing details to these major competitors – something we will never see. All we can do is speculate. My certain speculation is that we are not being treated the same as our major competitors when it comes to these discount bags.

Out of respect for newsagents, Bauer should disclose their arrangement with our competitors and provide evidence of this.

The other factor for newsagents is the space cost. Since we get the original titles too we have to find another pocket – the bagged item is like an additional stock item for us.

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Bagged magazines

Promoting magazines?

Check out how one convenience store I walked past this week is promoting the availability of magazines inside. What I saw inside was as pathetic as this A4 sign was on their window.

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magazines

When a supplier and your landlord take business from you

I was disappointed to hear from the Bauer owned Ticketek that they were taking our Ticketek agency business from us and giving it to Westfield. This was happening because our centre recently switched from AMP to Westfield.

While Ticketek was within their rights in terms of the contract, it disappoints me that a key supplier to newsagencies and my landlord can do this.

We had served Ticketek well, building excellent sales for their brand in the centre, delivering an excellent service for major and smaller events.  We opened long hours – far longer than I expect the centre management desk to offer.

Why Ticketek agreed to the Westfield deal years ago is beyond me – especially with them knowing that many newsagents offered Ticketek.

My disappointment at the move escalated when the landlord had the gall to place a sign right in the front of our store on the weekend promoting Ticketek now being located elsewhere. It was a reminder that big businesses take care of their own.

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magazines

Stretching the VM display onto the shop floor

I love display for Calvin Klein I saw at Auckland airport earlier this week. It’s inspiration on a few fronts: the colours a vivid and break free from the sea of colour in-store, the design does this too and the spilling of the materials onto the shop floor brings the display alive.

I’m posting the photo here for inspiration. Click on the image for a larger version. Note the screen to the left 0- the movement in the video attracts attention.

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visual merchandising

Gordon and Gotch goes to two days a week magazine delivery

In a  move demonstrating independence and a lack of collusion, magazine distributor Gordon and Gotch has this afternoon announced it will move to a two day a week magazine delivery – Monday and Thursday.

Effective, just like the change announced earlier today by Network Services, from July 15, newsagents have some changes to deal with. Newsagency software should handle the announced day of week change without issue.

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magazine distribution

Network Services goes to two days a week magazine delivery

Magazine distributor Network Services has announced today it is moving to a Monday / Thursday magazine delivery roster.

This not unexpected move will alter workflow and shopper traffic in newsagencies. I can think of plenty of Take 5 shoppers who will be disappointed. You only need to look at the seven day sales decay curve to see the impact.

I do wonder if this is part of a broader move around other changes – time will tell.

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magazine distribution

Woman’s Day out this Friday

Newsagents have been notified that Woman’s Day is coming our this Friday, three days early. There has been no announcement from Bauer or network services. Newsagents found out because they have received the electronic invoice already.

I could be wrong but I doubt the interest in Jennifer Hawkins’ wedding justifying the effort and challenges of going on sale three days early.

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magazines

Digital ad companies chasing newsagents

Newsagents are the flavour of the month with digital ad companies. I’ve been approached by four digital ad companies wanting to put screens over the last two weeks.  I’ve said no to each.

I see these digital ad platforms as not offering fair compensation to access out traffic. Further, I don’t see them bringing in new traffic.

Our focus today needs to be on generating new traffic. The last thing we need is another leech product or service.

Caveat emptor.

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Newsagency challenges

Minimal lotto fitout requirements in NZ

Checkout the lotto fitout in a Whitcoulls store in downtown Auckland I was in on Monday.

With fitout costs being top of mind for newsagents in Australia I figured seeing what’s required in NZ could interest some.

The space requirement is smaller and the shop fit requirements simpler than what we see in Australia. However, for the fifteen minutes I was there the lotto counter was not buys so it could be that this was the wrong store to compare.

What you can see in the photo was the only corporate branding for lotto in this store.

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Lotteries

A different approach to parcels / post

In New Zealand on Monday I saw this unit in-stor for Croxley Prepaid, a different approach to outbound parcels.  Shoppers buy a box or envelope, fill it with what they are sending and it’s then delivered through the DX network. Kind of an interesting model.

Click on the link for more details.

Given the placement in-store and the state of the display, I got the feeling it’s not a highly sought after service.

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Newsagency opportunities

Minimum wage increase encourages newsagents to drive GP

Yesterday’s decision to increase the minimum wage should act as encouragement to newsagents to drive their gross profit. I have italicised should since I am not sure this will be the case.

The traditional response by small business owners is to complain about rising wages. While I understand that, it is also reasonable to ask what is being done in the business to improve its situation for handling rising wages.

What have we done to grow gross profit? What have we done to attract more shoppers? What have we done to get existing shoppers spending more?

Retailers understand the importance of doing these things, they understand taking responsibility for business performance. Shopkeepers, on the other hand, will complain about rising costs and, usually, expect others to drive traffic, GP and shopper efficiency.

Was the increase in minimum wage justified? Yes, in my view, something we can work with … if we’re retailers.

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Newsagency management

Why General Mills should be paying newsagents for shelf space

Newsagents currently have three magazines on our shelves with sachets of Uncle Tobys oats stuck inside. The free pack of oats makes each magazine fatter than usual, requiring more shelf and or storage space and taking up more time to manage.

This is why newsagents should be paid extra – to cover the extra space and time involved.

Just as General Mills will be paying the publisher of each magazine – including Bauer for Australian Women’s Weekly – a premium for the thick ‘ad’, newsagents should be paid a premium. It’s only fair.

The challenge is we don’t have a relationship with General Mills. We rely on publishers and distributors. However, when it comes to thicker than usual magazines I’m not aware of them thinking about us and the extra services they expect us to provide.

This issue is something newsagent associations could usefully spend time on, negotiating fees for extra services such as thick magazines, heavy magazines and magazines that do not meet minimum performance criteria such as a 50% sell through.

The current approach of taking extra space and time from us without compensation is unfair. It disadvantages us over most of our competitors on the magazine retail space.

While I’ve left the oats sachets in the magazines in my newsagencies I know of some others who have removed them. I can understand that, especially for titles they would usually try and flat stack. You can’t do that with the current issue of AWW.

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magazines

Disappointed Collective magazine advertises subscriptions in our shopping centre

I’ve supported the launch of Australian mag renegade Collective in my newsagency as shown here, here and most recently here and so I was disappointed to see subscriptions being promoted at 45% off on the ad screens in the public areas in my shopping mall.

There was no call to action to get the title at retail,  no mention of my newsagency in this centre where the advertising was running.

I get that the ads are part of a national campaign to run, probably, in multiple locations on the digital ad network. I also get that subscriptions are part of any magazine supply mix. But don’t use traffic generated in part by the many thousands of dollars I pay centre management to bring traffic to my centre to sell products I sell direct to my customers.

I and many newsagents are helping launch this title with display space without cost. Some shoppers could recognise the title in these digital ads because of the free help we have provided.

Yeah, I’m not happy about this campaign.

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magazine distribution

Grazia second time around

I groaned when I noticed the UK edition of Grazia on our shelves. The Australian edition had not performed well for us – and others based on its closure. We’re onto our third issue of the UK edition and, surprise surprise, it’s going okay.

I was all set to early return the copy I found on the shelf and contact Gotch to cancel supply. However, selling two copies of the three we have been sent for the first two issues caused me to not be hasty in cancelling this title.  Acting without checking would have been wrong. I could have ended up losing sales of two, maybe more, copies a week for a year.

At two copies a week its paying its way for us.

I think part of the success is due to clever placement by one of our team members with UK titles. It makes sense when you think about it.

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magazines

Sunday newsagency management tip: back yourself!

I was talking with a relatively new newsagent this past week, someone who had owned their business for a year. They commented that they were starting to get the hang of things and realised that a couple of the people they relied on, with years of newsagency experience, had been giving them poor advice.

When they purchased the business they kept on all the staff and fell into the routine of being told what to do by some of the staff. This challenged their confidence and, in hindsight, made them prisoners of the confident directions of some of their staff.

They told me they felt they had no choice because they’d never owned a newsagency before many of the business practices were new to them. It was only after one of the staff members left that they realised they had been given bad advice.

It’s not the frist time I’ve heard a story like this.

My advice to people buying their first newsagency is that they back themselves and immediately assert control over the business as the owner and manager.

It’s your business. You need to work out the best way to run it for yourself. Okay get advice along the way but make decisions for yourself. Don’t be told what to do. Don’t be made to feel inadequate in your own business. Sure you’ll make mistakes – embrace them as they’ll be excellent learning.

Because something has always been done a certain way does not mean it is right for the business.

Just because someone have been in the business for years more than you it does not mean they know what is right for the business.

Follow your instincts … it’s your money after all.

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Management tip

Sunday newsagency marketing tip: An inspiring retail window

gizmo gifts on brunswick Street Fitzroy in Victoria is making excellent use of their windows. Indeed, this all red window was inspirational – presenting excellent VM ideas. It’s one of two windows the store has and they are using it to attract shoppers with a colour themed display.  They are displaying product from a number of suppliers for excellent effect.

Here is the other window. This time with a white theme. Equally as effective as the red window. A good range of products appealing to a range of shopper interests and needs. Their colour theme is what attracts your eye to this and the red window display first up and then you notice the gifts. Very smart.

These are the types window displays we are competing with in the gift space. It’s my marketing tip today since for many newsagents, the window is a key part of marketing strategy.

Click on the image to see the detail.

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marketing