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

Associations as supplier mouthpieces

It is interesting to see that Associations continue to be used by newspaper publishers to promote their changes – Fairfax this week as the tabloid editions of the SMH and Age approach and News Limited promoting thier advertiser (BMW) driven Sunday delivery of The Australian. each time an association publishes press released from the publishers they do themselves a disservice. Their members are newsagents. Everything they publish and do should be solely for their members and reflecting the collective member position.

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Newsagent representation

Good February newsagency sales numbers

I’m happy with our February trading numbers. In a year on year comparison and adjusting the 2012 numbers for the extra day, we did okay, good in fact.

While magazines, overall, are down 2% for us, women’s weeklies are up 1% – significantly against trend. Diaries are up 99% off a good base for Feb. Plush is up 174% ($4K+ for the month) and Gifts are up 275%. Basket depth for us is up 11% – showing wonderful growth in shopper efficiency.

While Valentine’s Day was an excellent season, the rest of the month has been terrific with moves we have made paying off in some of the new money areas for traditional newsagencies.

Yes retail is tough and the newsagency channel is doing it tough, newsagents working as retailers, chasing change and standing for something in their businesses are, overall, doing well. This makes a newsagency good investment as every newsagency has these opportunities.

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Newsagency management

AFR announces price increase, margin increase and redesign

Fairfax announced yesterday a 10% cover price increase for The Australian Financial Review and Weekend Financial Review effective from March 11 and March 16 respectively. These moves are good news.

As a retail newsagent however, a sub agent in the eyes of Fairfax, I’d like to see a better margin. The AFR is loss making in shopping centre newsagencies with high occupancy costs. This is true for all daily newspapers with a volume of 15 copies a day or less.

So, while I am thrilled at the direction of the move, it’s time we saw a fundamental shift for an equitable return for the retailer. The return determines how we treat the product as my post yesterday showed.

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Newspapers

Pushing further into jewellery

We are pushing further into jewellery in a couple of my newsagencies. We’re learning more about what our customers will purchase from us as opposed to a specialist jewellery store.

Right now, jewellery products are part of gift for tracking and reporting at the moment but I can see value in separating them out into their own department.  We have done this with plush as the plush numbers were skewing overall gift.

When a category dominates sales in a department and is growing at a different pace to the department there is a case for separating it into its own space.

The range of jewellery in the photo is a small selection of the broader range we embracing.

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Gifts

A better Easter display

Check out our better looking Easter display.  This is an excellent replacement for the display a couple of us put together to a week back.

This new display has action and a sense of a story to it. It’s been up for a couple of days and it is working a treat – drawing shoppers to the business.

We have bought product for growth and are displaying for growth. We;’re certain we will see this – well into double digits.

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Gifts

Here’s what newsagents want from newspaper publishers to help drive sales

In my survey last week I asked: What marketing initiatives or incentives would you like from newspaper publishers to help you sell more newspapers? Here are all the responses to this question:

  1. If it did not cut the commission.
  2. In-store prizes, ad on sale incentives, combos etc
  3. Sell the paper to us at the same ridiculous price that some subscribers pay for their paper. We could preorder with no returns for a 7 day at $2.70, $3.95, $4.95 per week.
  4. More positive attitude to newsagents
  5. Stop delivery agent under suppling so you have product to sell after lunch time would be a good start before instigating any marketing initiatives
  6. Work on a tier system for better profits/margins
  7. Pair 2 titles together, ie our local paper retails $1.50 and smh retails $2.00 both fairfax publications sell 2 for $3.00
  8. Retail newsagent only special offer, with a healthy margin to offer
  9. Extra commission because 10% is nowhere near enough.
  10. Margin must be 25%, promotion items must be 25%. The rest we can do ourselves.
  11. Assistance with meeting delivery costs.
  12. Better content, more local content, more incentives for customers to buy the product
  13. SPECIAL PROMOTIONS/COUPONS/COMPETITIONS FOR READERS
  14. Promote Newsagents to public via Newspaper or via Commercial. Incentives – Commission on all promos to be 50%, Initative – Remove atrocious attitude towards its core customers which are Newsagents, these are the faceless men & women who we do not see not the Reps.
  15. Need to have less outlets so it becomes a destination not in every servo/corner store
  16. Increase the supply so we don’t run out. When people find you have run out they stop coming Advertiseheadlines on local radio
  17. Ability to sell deals/packaged subscriptions at the counter
  18. Being able to sell them (retail) in Week Blocks would work well.
  19. Reliable supply would be a good start. Margins need to improve. If we sell 400 papers a day thats good, but we need more than $80-90 in GM to justify the prime space. The publishers should advertise the masthead in the other media more ( e.g. radio, web etc)
  20. More margin. Nothing in our store should be less tan 30% margin. Punctual supply (it is an early morning product). More advertising of Newspapers on other media. Building an emotional link between customer and newspaper brand.
  21. for them to be supplied on time and the correct quantity. Good merchandise material, ability to seek commercial customers by giving them two weeks free papers delivered , once they see the benefits they usually continue paper delivery for years
  22. In SA News Ltd runs promos giving a free paper with a $2 purchase instore, only after 2pm, normally during the week. (a waste of time) Other channels, supermarkets and conv run these promos all day, normally weekends. I’d like to be treated equally with these promos. I’d also can’t understand why my competitor is my agent and shares in my profits 50/50 simply for delivering papers the last 1% of their journey. I prefer to run out of papers rather than paper for the labour cost on a Sunday night of processing the return. I make approx $120/wk from newspapers(on a good week) and spend $20 to $40 on labour processing returns.
  23. Better posters, subscription drives, more frequent giveaways and promotions
  24. Position newspapers as a premium product, for example in an office, junior employees read news on-line; senior managers get daily newspapers on their desk.
  25. When they have incentive programs like the recent one for news ltd for the children’s books that they not supply more of the books to Coles than they do us. As everyone came to us to collect the books as we had the ability to hold books and papers for them. Make sure they look after newsagents before chains like Coles.
  26. Reward customers for purchasing paper. Something like the old accident insurance that subscribers received about 40 (or more) years ago.
  27. Do special promotions for newsagents only, be it linked with magazines or free stock.
  28. Cooperation firstly then perhaps we can look at initiatives
  29. “at your local newsagent with your paper you will recieve x (special bonus) but only at your newsagent” etc etc – showing we are the specialist retailer of print products.
  30. DEALS
  31. The promo toys etc they do with the papers would be better if we actually got a better margin for them.Would like to see them actively push news agents in their advertising
  32. Our biggest day to day problem with papers is distribution quantities, i would like more control each day, so that we get the numbers right. sales targets – $$ for increase in sales per week : same time last year.,
  33. More sales margin
  34. Fair remuneration for home deliveries would incentives the me to chase new customers – current levels of remuneration actually discourage that! Promotions that use or encourage educational involvement e.g. Attenborough series
  35. Be reliable with timing delivery of papers to us. Have extras available within an hour. produce an online app to help us track sales taking into account weather events, school hols, sports events etc etc.
  36. Higher commission
  37. The West Australian used to do a 5-week car giveaway. The customers would then have to come back to the store to put the envelopes in the box. Their new campaign is just bingo, where all they have to do is buy the paper.
  38. I would like to have simply more margin. 12.5% is not enough. Reliable delivery (They’re so often late) would also be helpful. For us newspapers is an early morning product. We promote gum, quik-eze and enos, small confectionary and milk based drinks alongside highlight magazines
  39. Less low margin promotions like kids books and aust day hats which chew up newsagents time. If their going to do promotions stick to the bingo’s and car give away’s where the customer has to buy weekday papers to enter and the newsagent isn’t involved.
  40. Reasonable 25%+ margin (the current 12.5% does not even cover costs_ – Control over supply (not all distribution newsagents are good operators and many newsagents aren’t selling their full potential because of chronic undersupply) – Gradual price increases to abate the effect of declining sales on profitability
  41. They need to stop free papers for a start. They need to stop cheap – shitty give aways that belittle the price of the paper. Customers think the paper is desperate for sales by DVD giveaways etc. They tarnish their own brand. They need to reward customer loyalty of home delivery with special giveaways ONLY for those that regularly purchase papers NOT the whole world. They could run sweeps – where each day you get a code – could run for weeks – need the whole code (issued bit by bit in daily papers) to win a prize. Like Hallmark card promotion, purchase 20 papers (and get card stamped) get a free paper etc etc. Even without commission structure changing, if it encouraged an increase in newspaper sales (rather than decrease) it is off sets the lack of commission by more sales. Also it does not encourage people to download the paper if there is not any reward system or giveaways.
  42. Pay me more money you only get what you pay for no money who cares
  43. Promote newsagents as an outlet for there paper
  44. CONSTANT , REGULAR SUPPL,Y WITHOUT SHORTAGES WOULD BE A GOOD START
  45. Higher comm
  46. There should be a sliding scale commission basis, the more an outlet sells the more commission they get. This will weed out the poor performers and encourage all agents to better handle the product. At the moment there is no incentive.
  47. To have adquate supply of papers so that we are not sold out by late morning. This is the easieast way to lose customers. To consider the supply we request for holiday times (we are a big tourist area) and not cut supply to what they think we should have. We are finding people still like to read the paper either early before work or first thing in the morning to read over a cup of coffee. To accept that sales every day are different depending on the activities in the town, tour buses and to accept that newsagents with subagents serving hotels have different day requirements. The Advertiser ran a very successful book promotion but ran out of books in the country whilst the city had plenty. Good promotion and Advertiser sales spoilt by lack of product.
  48. CUT THE GOSSIP PAGESRUN PM CBD EDITIONS.DONT PRINT NOSENCE POSTERS.
  49. Bundle offers eg 5 papers to a business eg lawyers,doctor surgeries, cafes etc. for a reduced price. i think proactive newsagents would push and make up their own deals if their was a better commission base for newsagents
  50. Marketing is ok but we NEVER get enough supplies and topups never have extras so we have stopped trying
  51. Just advertising on TV would be a start with a subscription offer.
  52. EARLIER DELIVERIES, NO GRAVEL RASH ON PAPERS. INSERTS IN 99.9% OF PAPERS NOT 80%. FORGET SENSATIONAL JOURNALISM
  53. A Representative to call occasionally to keep us informed – as Retail only info is limited.
  54. I would like to see engagement on a retail level. It frustrates me when i see papers being offered to those outside the channel at better rates than we retailers ever get i.e. get 50% etc etc
  55. None, I want a higher GP to make it worth chasing more sales
  56. Supply more papers.
  57. More promotions, better content, more local news,
  58. No more discounted offers. No freebies at movies, gyms etc.
  59. Valid content.
  60. Emphasise quality & value of product. The closer newspapers get to being free, the lower their perceived value.
  61. None, get them here on time!
  62. Have a direct relationship with us for diving sales and not through a distribution agent.

A useful cross-section of feedback for newspaper publishers.

For me, the key is a direct publisher / retail newsagent relationship.

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Newsagency management

I wish politicians would stop fighting over the NBN … just get it done

It’s frustrating that the opposition parties continue to fight against the NBN, using, in my view, specious arguments. This is an infrastructure Australia needs to compete in our digital economy. Every slowdown because of debate, every second-guess planted without facts in the minds of voters delays us getting access to what should be a world-class infrastructure.

Those in opposition had their chance to deliver good IT infrastructure and they ignores it. Labour gets in, acts and then the Liberls and Nats decide they have a better solution. They had their time.

In terms of the NBN, as a country we need to just get it done.

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Media disruption

Challenges for the Nook device

There is plenty of coverage online about challenges for the Nook ebook reader sold in the US by Barnes and Noble. The challenges are not limited to the Nook as there is a battle between device manufacturers for ‘ownership’ of the reader channel.

As tablet computers become lighter and have a longer battery life, readers will, I suspect, prefer a device that delivers a range of services and not just access to books, newspapers and magazines.

The ebook reader space is brutal, as Barnes and Noble is discovering. It would be interesting to see how the Kobo is going for Collins Booksellers.

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Book retailing

More evidence that Officeworks does not offer lowest prices

A diligent newsagents has sent me this comparison of the current ink prices laid out next to the same products from Staples and Officeworks.

The newsagent’s prices are cheaper for more items than Officeworks – yet Officeworks promotes that they have the Lowest Prices.

The newsagent’s prices are cheaper than most of the prices from Staples – yet Staples relies on a lazy 100% best price guarantee to make it look like their deals are better.

Yet Officeworks and Staples crow that their prices are better, using a variety of attention grabbing language in their expensive marketing campaigns.

The other big difference between this newsagent and the two national businesses when it comes to ink is that the newsagent spends very little advertising their better prices.

Maybe the value actually delivered by a business is the inverse of what the business spends advertising that they offer value.

In this election year I would like firm promises from politicians from all sides about this issue – big businesses claiming their prices are lower or the best when they are not.

I’d like to see firm commitments to fund an office within the ACCC for reporting situations where companies claiming their prices are the best can be reported and penalties easily imposed, penalties of sufficient scale to change their misleading behaviour.

In the meantime, if you sell an item for less than one of these national retailers that advertises that they are they cheapest, promote your advantage. Name and shame them. We have to stand up for ourselves.

Click on the image for a closer look at the comparison.

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Newsagency challenges

Challenging figures for Gotch magazine distribution business

PMP yesterday released their first half figures for the 2012/13 financial year. EBIT for the first half of this financial year is $200,000, 89.4% lower than for the same period a year earlier. revenue for the same period was down by 9.7% to $167.5 million.

While these are challenging times for magazine distributors, newsagents are even more challenged with many unable to reduce their investment in magazine inventory.

The PMP numbers show that Gotch is making less from magazines – distributing fewer magazines. I suspect there is a difference in in scale out changes between magazine retail channels. The supermarkets, for example, would get attention beyond their market share, they would demand and get greater efficiency while newsagents demand and remain ignored.

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magazine distribution

Looking for the Ellen sales bump

We are promoting the latest issue of The Australian Women’s Weekly, with Ellen DeGeneres on the cover, in several places including this frot of store display.

Melbourne is in the grip of Ellen fever with news related to her dominating local media this week. Ellen’s wife is Victorian and that provides a local connection with her and media reports about her.

I have high hopes for this issue of AWW. We’re embracing the opportunity.

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magazines

Retail newsagents want newspaper publishers to engage with them

The survey I ran on the weekend produced a not unexpected result from the 93 participants – showing that newsagents do want direct publisher engagement, more commercial focus and a resolution of supply issues – so they can sell more newspapers.

It’s a pity that newspaper publishers don’t share the same goals as newsagents.

You can see more survey results here. I will publish responses to the last question – What marketing initiatives or incentives would you like from newspaper publishers to help you sell more newspapers? – later.

Over to you newspaper publishers. You have a willing retail channel here, one you have neglected to engage with and one which could increase sales of your products.

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Newsagency opportunities

More suppliers looking to the retail newsagency channel

The rate of enquiries I am receiving from manufacturers and importers keen to connect with the newsagency channel has increased this year.

I’d usually hear from a prospective new supplier every three or four weeks.  I’ve had eight enquiries in the last three weeks. Each with very different products, most new to the channel.

The vast majority of new products I hear about would rely on existing traffic to be successful. While this is good in terms of driving shopper efficiency, I am more interested in products that deliver their own, new, traffic to newsagencies. These products (and services) are gold to us and ought to be pursued relentlessly.

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Newsagency management

Scooby Do is another terrific brand to promote

Regulars here will know that I am a fan of brands in retail and in retail newsagencies especially. Brands draw traffic and ease the sales process. My experience is that people who buy known brands worry less about price. This is why we are thrilledto have the new Scooby Do interactive product from Hallmark.

In fact, we are so certain Scooby Do will work so well for us that we have it in two locations, to face the two ken traffic routes in the shop.  We often do this – leveraging the different traffic we see to make sure that key offers are not missed.

The photo shows the counter display. We’re using the screen from hallmark to show the product off running the Hallmark collateral.

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Gifts

Promoting 15 Minute Meals

We are the 15 Minute meals cookbook from Bauer with this aisle end display.

We find that placing the price on the display helps engage shoppers more – but we’re not sure if this is shoppers new to the range. regardless, promoting the price helps in our situation.

I’m not a fan of the free cookbook stuck to the cover of the main product. These stuck on cookbook gifts have been overdone and don’t add value.

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magazines

Is it time newsagents ceased as directors of newsagent-owned enterprises?

Newsagents sit on the boards of various businesses supplying newsagents including stationery wholesalers and associations. While I am sure they discharge their duties to the best of their ability, it is appropriate to consider whether newsagents are the best directors of these business enterprises.

Newsagent owned businesses, and associations conducting commercial activity to newsagents, operate in a commercial world quite different to a newsagency – distribution or retail. This is why I question why newsagents make the best directors.

Directors are usually paid fees for their time. Are they worth it ? Are their decisions adding value to the businesses? Are the boards they sit on performing well? Would they get a gig on the board of a competitor business?

I know from my own experience on the ANF board in 2003/04 that newsagents bring personal baggage to the boardroom table. I saw a lack of commercial savvy and a disinterest in due diligence and transparency.  Bill Express is a perfect example of a bad decision by directors ill-equipped to make the decision. Before I resigned I expressed concern at the excess of the ANF Board meeting bar tab – a 45 minute fight ensued which I lost. They spent more time arguing about this than matters of serious commercial consequence for newsagents.

I have other stories I could share of my own and from others. If only newsagents knew.

Boards ought to be focused on big picture issues, setting direction and holding the employees of the organisations to account. Too often that is not the case, giving the competitors a free kick and wasting member and shareholder funds along the way.

These newsagent owned commercial enterprises collectively turn over well over $100 million a year.

Isn’t it time we populated the boards with quality commercial directors as competitors of these businesses do?

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Ethics

Slam magazine supply shows failure of the magazine supply model

I can’t make sense of the recent supply of Slam basketball magazine at of one of my newsagencies. Indeed, the allocations have been so mishandled that I am left wondering about the future of Gotch. Publishers using the company ought to be equally concerned.

Looking back on the last nine issues, for the first four issues – April 2012 through July 2012 – we received four copies and sold four copies.  Our increased supply to six for the next two issues and we sold 1 and 2 copies respectively. Gotch then switched us to 2 copies for the next two issues and we sold zero. Now, this month, we received nine copies.  We have decided to early return all copies.

All through this we have not altered the placement of the title.  The only explanation I can offer for the shift from selling four copies an issue to one or two is a shift in in shoppers we serve.

The accounts people at Gotch hold me accountable for the level of my indebtedness to them yet they do not give me reasonable leavers with which to control this level of indebtedness. Indeed, it goes the other way with some allocation decisions making them look like a customer using my business as an ATM to prop up their cash position.

Newsagents have been told to adopt best practice IT infrastructure to manage magazines. It is disappointing that the newsagent investment in IT is not being used by the magazine companies to deliver fair and equitable supply.

Magazine publishers need to realise that over and under supply of magazines are harming the performance of the newsagency channel.

Click on the image to see the data backing-up my claims.

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magazine distribution

Great gift fair deals

I caught up with a bunch of newsagents in Sydney last night and loved the stories of buying success at the Sydney Gift Fair and the Home & Giving Fair.  Getting 20% off products that sell well from a supplier you already deal with is excellent. There were plenty of stories like these plus stories of good innovative product.

If you’re chasing gift sales, this has been the event to be at.

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Gifts

A new magazine ideal for foodies

Newsagents with foodies as customers should look at how to shop like a chef. This is a very specialised title from Universal Magazines. It’s only been supplied to the top 50 newsagents in the country in the food category. But others can order it. It’s on sales for three months with delayed billing. The price is $19.95 – I’ve seen the title and it’s worth it. The title is exclusive to the newsagency channel for the first two months.

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magazines

Excellent sales from ‘new’ gift line

I was surprised to discover that the Keep Calm and Carry On styled poster board is to top seller from the new gift / homewares line we introduced ten days ago. I expected it to do okay but not be the best seller because I’ve seen it around.  While the whole range has done well, this particular one has been exceptional. We expected to sell this line through over a month or so and not replace it. The sales in ten days have seen us reorder as we’re confident we can move more. We’re thrilled.

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Gifts

Promoting the iPad mini magbook

We have been promoting The Independent Guide to the iPad Mini magbook placed upright next to / in front of The Age.

We decided on this placement since it’s a title shoppers are not like to be looking for – we need to find them with high traffic location placement.

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magazines

Sunday newsagency marketing tip: break the rules

Newsagencies have been built on more than 100 years of formal and informal rules and regulation. Embedded in many newsagency shopfits are rules about what goes where and how it is displayed. Burnt into our brains are rules about how we handle certain product. Supplier representatives, too, have rules they expect us to follow. All because that is how it’s been done.

Many rules and regulations are nonsense and should be tossed out.

Today’s world dictates that we need to operate our businesses based on rules appropriate to our own businesses.

Here’s a tiny example. After Valentine’s Day we had a space Hallmark card unit. Instead of storing it for the next major season, we placed it at the entrance to our women’s magazine aisle with a selection of cards we felt would appeal to the shopper entering that space.

This off-location placement of the card unit gets the cards seen by people not visiting the shop to purchase cards. That action along will drive some incremental business for us.

It’s a rule broken … for the good of our business.

Footnote: this was one of the points of my post earlier this week about the Westpac Bank branch I saw in Auckland.

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marketing

Sunday newsagency management tip: roster for you and not your team

I have written here before about the need for newsagents to look carefully at their roster, to consider carefully the cost to the business of each hour of employment you pay for.

Too often, I see rosters loaded with unnecessary hours. Hours rostered to give friends work. Hours rostered because employees say they need extra help when they don’t. Hours rostered to reduce theft when the theft actually reduced costs less than the cost of the extra hours.

Each hour rostered needs to deliver a measurable return to the business. This return needs to be tracked and the roster adjusted based on the data gathered.

It’s simple: your best sales people work the shop floor, your best organisers work your business operations processes – all for the profit of the business and nothing else.

How would your bottom line look by the end of 2013 if you cut 10% or 15% from your weekly roster today.  In one newsagency I looked at this past week the bottom line saving would be more than $50,000. If they make the recommended changes I am certain the $50,000 will flow through to their bottom line.

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Management tip