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

Amazon speaks to magazine publishers

gigaom reports about a presentation in San Francisco by Amazon’s Vice President for Kindle content to magazine publishers on Monday about challenges publishers face as they move to digital platforms.

“Even books, which is an easier transition for people, is a difficult task. When we started, we didn’t look at who was selling digital books at the time, we looked at the print book,” Grandinetti said. “Because it’s lightweight, it’s resilient, it’s inexpensive. And the print magazine is also very very good at what it does. And the digital experience only approximates a small amount of that in many ways.”

He said the consumers love many of the things that have made books great for 500 years, and many of the challenges in getting them to adopt digital are even trickier with magazines. They tend to rely more on large glossy photos and less printed text, things that don’t always transfer as well to a variety of digital formats and devices.

Newsagents who want to be better informed about print media disruption need to read the article.

The possible end game here could be bigger than T2020. That said, I’m not scared by that. The opportunities for our business are tremendous as long as we develop business plans grounded in embracing and that serve our needs.

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Media disruption

Appreciating the Better Homes and Gardens Christmas cookbook opportunity

Newsagents should be pleased with the offer from Pacific Magazines for the Better Homes and Gardens Christmas cookbook. That we can opt in, achieve a 50% margin and enjoy delayed billing is terrific.

We are in control.

This is a beef I have with magazine distributors – they demand we pay on time yet they do not provide us with any reasonable ability to control our level of indebetedness. This to me is an area where we could challenge Network and Gotch (to a lesser extent) legally. Their treatment of newsagents with one-sided terms is appalling. It disgusts me.

Okay, rant over and back to this terrific offer from Pacific for the Better Homes and Gardens Christmas cookbook. It respects newsagents. We choose if we take it on. We choose the volume we receive. Our margin is book-level margin. The billing is delayed until December.

We have ordered for my stores. This is an excellent product backed by an excellent brand. The opportunities to promote with the magazine are excellent. I hope more publishers follow the lead from Pacific. Actually, it’s something I’d like to see ACP do with its cookbooks.

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magazine distribution

WH Smith imposes age restriction on gun magazines

UK newsagent WH Smith has banned the sale of gun magazines to under 14 year olds. While there is no regulatory restriction on the title, the company has taken the move because 14 is the age at which someone can obtain a shooters licence.

As the article in The Daily Mail points out, they are not imposing restrictions on car magazines even though you need to be 18 to own and buy a car.

The only age restrictions I am aware of for Australian magazines are those for porn titles.  It would be easy for us to check and control titles by age given the age facilities in newsagency software for tobacco products. That said, I would not be a fan (at least I don’t think so) of further restriction on the sale of magazines.

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magazines

Ink sale and counter move drive ink sales

We are enjoying tremendous double-digit growth with ink sales thanks to continuous flyer marketing to thousands of homes and businesses around our newsagency and thanks to moving ink to behind the counter.

You know you have a flyer that works when shoppers come in with the flyer in-hand the product they want circled on the flyer.  We’re focusing only on brand name ink and toner – HP, Canon, Epson and Brother. Our prices are competitive with every retailer in this space in our area – the flyer promotes this. Ink is our trojan horse, showing that our business is not expensive in the way Australians think newsagencies are expensive.

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Stationery

Corporate Express to rebrand as Staples

As expected, Corporate Express Australia is to rebrand as Staples, the name of their parent company.  Here’s part of the announcement just sent to customers:

Transition to Staples name and brand.

From Monday 29 October, Corporate Express will commence trading as Staples Australia.

Bringing our local operations further in line with our international operations means that you will benefit from a broader range of products, greater value due to strengthened global sourcing capability, and enhanced ordering and reporting processes and technologies.

Staples is the world’s largest office products company and a trusted source for office solutions. With annual sales of $25 billion, 88000 staff and a presence in 26 countries throughout the world – Staples provides products, services and expertise in the categories of office supplies, technology solutions, business furniture, print solutions, promotional marketing, kitchen supplies and facility solutions.

I am certain more changes will follow as Staples plants more feet on the ground in Australia. The implications for any business selling stationery will be wide-ranging.

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Newsagency challenges

Why 7-Eleven will beat newsagents

7-Eleven stores are independently owned and operated yet they trade with a discipline that drives success. The discipline is embedded in the agreement behind the brand.  Network-wide discipline will see 7-Eleven beat newsagents when it comes to supplier deals.

Around Australia and across the globe from the consistent shingle in, the brand stands for something, something consumers understand a trust.

7-Eleven has fewer retail outlets than newsagents yet it achieves more in its negotiations with suppliers lottery tickets, transport tickets, FMCG items and magazines.  This is why I say 7-Eleven will beat newsagents.

Newsagents are weak because they refuse to work together. Yes there are some groups working together on some products, but not at the level being done in 7-Eleven. This is why we can’t sell mobile recharge for the margin of 7-Elven or sell iTunes cards at the discount offered in 7-Eleven.

Our business model relies on shoppers visiting multiple times a week. Every time one of our shoppers shops at 7-Eleven for a paper or a magazine or a phone recharge is another step they take away from our businesses.

Our strength is the critical mass of our retail network. Our weakness is the lack of discipline – the inability for us to genuinely to work together for the good of the whole – of our retail network.

While this post could be about Coles and Woolworths, I chose 7-Eleven because of their independent ownership and the discipline they demonstrate at the store level.  Yes, there are poor stores where discipline is weak. However, I suspect their percentage of the group is far lower than the percentage of undisciplined (selfish) newsagents we have.

Footnote: there are newsagents building strong independent businesses. This post is not so much about you. It is about newsagents who proudly show the newsagent / newsagency / N shingle thinking it, of itself, stands for something.

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Newsagency challenges

New generation plush sales soar

While sales of traditional plush items are strong, it is the new generation plush items with which we are achieving extraordinary sales. Plush brands like Monstaz, Beanie Boos and Angry Birds. They are selling very well with plenty of purchases made on impulse. We buy for seasons too – like the fun monster-like plush we have as part of our halloween product range. Shoppers get a real kick out of these one-eyed things.

In our case, a key driver for success with plush is placement at the front of the shop so people passing in the shopping mall can see the range.

Consider Angry Birds, the App has been downloaded more than 1 billion times.  Yes, 1 billion!  Right there is a sense for the market for the plush with the same brand as the runaway success of the game.  Now they have announced an e-book. We need to watch for trends like this and chase suppliers for products, like plush, through which we can connect to a rapidly growing brand.

Plush has come a long way from teddy bears and other items from even just five years ago. It’s a new category, a strong category – ideal for today’s successful newsagency.

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Gifts

Nice looking Cleo

I love the bright look of the latest Cleo magazine. The terrific cover and bright collateral accompanying it was reason enough for the team at one of my newsagencies to place this out the front, facing into the shopping mall.

I love how they personalised the display with orange and yellow card and used the cover run-ons at the sides to add impact to the display.

While on the weekend I said newsagents should free their team members to create displays without using supplier collateral, this display is an example of excellent use of the collateral … especially since it brightens the mood in the middle of what has been a cold Spring.

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magazines

Fair Work changes welcome but not enough

The changes announcement by the federal government today, introducing a 21 day limit on the lodging of an unfair dismissal claim, while welcome are not enough. They do not take us closer to a more productive and economically balanced cost of labour.

We need to find a balance between what we have and the old Workchoices. We also need an employment structure that makes Australia and its businesses more competitive.

On the 21 day limit, this would have stopped one person I know of from lodging a claim three months after leaving employment of their own free will.

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Ethics

Has Rupert Murdoch jumped the shark?

I think Rupert Murdoch has jumped the shark and here’s why:

Overnight, Rupert Murdoch tweeted that some of the victims of phone hacking undertaken by his News International were scumbags.

Charlotte Church, Hugh Grant and Jacqui Hames met with British Prime Minister David Cameron. The meeting was announced, its purpose public. Rupert Murdoch tweeted:

Told UK’s Cameron receiving scumbag celebrities pushing for even more privacy laws. Trust the toffs! Transparency under attack. Bad.

This is a bit rich coming form someone who presided over a company that was ultimately responsible for systematic hacking of the phones of the three and many others and a company that secretly courted favour with British politicians, the Police force and others.

Everyone who was responsible for the phone hacking, the cover up of the phone hacking, the cultivation of secret relationships with politicians and the police force … they are the scumbags.

Labelling Charlotte Church, Hugh Grant and Jacqui Hames as scumbags is an indicator of the decline of Rupert Murdoch.

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Ethics

Walmart moving back into smaller format stores

The trend in the UK has been for major retailers like Sainsburys and Tesco to move into small format situations in the high street. Now, in the US, we hear courtesy of Convenience Store News that Walmart is again playing with small format locations.  Coles is playing in this space in Australia but not yet on the same scale as in the UK or, apparently, in the US.

Some of these businesses overseas are rapidly redefining the town and city high street landscape. We need to consider this in our planning for our own newsagency businesses.

If we think Coles and Woolworths are competitors with our newsagencies today we’ve seen nothing yet. The will follow the UK model to claim more of the high street.

In the high street and online, Coles and Woolworths are chasing our businesses and other independently owned small retail businesses. It sucks but it’s happening. The ACCC and successive governments have failed to challenge the supermarket duopoly.

The position we do not want to be in is complaining about what they have done after the event.

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Newsagency challenges

Maped has a terrific range of green stationery

Further to my lament about the challenges of creating a stationery department filled with green product, the Maped product range available in Australia is an excellent starting point. They have plenty of green products and their packaging is explicit as to the extent of greenness of a product. Maped is a range I wrote about earlier this year as their products were part of our Back to School offer.

Checking out their website yesterday, I was particularly impressed with their presentation on sustainable development.

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Environment

Promoting the frankie brand

We are promoting the frankie magazine, 2013 diary and 2013 calendar together in the usual location for the title. frankie is an important brand for us because of terrific sales and because it demonstrates relevance to a demographic important to our future.

This in-location promotion is in addition to the aisle-end promotion of the magazine that I wrote about yesterday.

Placing branded diaries and calendars with their respective magazines is vital to attracting impulse purchases.

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magazines

Sunday marketing tip: create a display without any supplier collateral

Newsagents are excellent at creating visual merchandising displays, especially magazine displays with collateral provided by magazine publishers. We are also good at allocating space to merchandisers for their displays. Given the common collateral, there can be a sameness to these displays.

I’d encourage newsagents to give employees free rein on a regular basis to create displays without using any supplier collateral. My experience is that team members come up with displays with excellent visual cut through, displays that are genuinely unique to your business and therefore more likely to be noticed than the same same displays using supplier provided collateral.

A display created using materials you have made and be visual fresh air. It’s certain to boost team pride in the business.

In addition to this display running at the moment promoting the latest issue of frankie magazine (click on the image for a larger version – we used a simple B&W copy of the cover for the backdrop), we have recently done displays promoting crosswords and Smith Journal using materials we have created ourselves.

Now to suppliers reading this … no, I am not suggesting newsagents stop using what you provide. rather, I am suggesting a break every so often to encourage greater in-store creativity.

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Management tip

Newsagent management tip: compare suppliers

If you have multiple suppliers of products for a department or category then use a Supplier Comparison report in your newsagency software to compare the performance of the suppliers. It’s the best way to compare the value of similar suppliers to your business.

Too often, newsagent suppliers use their own reports when discussing performance with newsagents. Their reports usually only show sell in when you want to focus on what you have sold.

Check out the report in your newsagency software.

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Management tip

Using Lance Armstrong’s disgrace to sell magazines

The media coverage for the disgraced Lance Armstrong has been extraordinary this past week thanks to the 200+ pages USADA report into the systematic doping of the US Postal Service racing team under Armstrong’s watch. Ultimate Cycling Australia has the Armstrong story as it’s cover story so it made sense to use to give it prime positioning with our bike titles.

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Ethics

Weekend magazine pitch

We are giving the second issue of Women’s Fitness magazine and the latest issue of Diabetic Living time with newspapers this weekend. Each titles was chosen deliberately, to get them in front of people who have not visited the shop looking for them. each time we do this, give magazines time with newspapers, we check the results so we know what works and what does not work.

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magazines

Disruption to continue with iPad mini

People online who know are talking about the imminent launch by Apple of the iPad Mini, a smaller version of their tablet computer. AllThingsDigital nominates October 23 as the date. Where there are already many mini tablets in the marketplace, a launch from SApple into this space would significantly lift consumer engagement because, well, because it’s Apple.

Not that we need reminding but here goes … how, when and where people access what they used to access anything in print is changing before our eyes. We newsagents need to catch up and get ahead of the curve. If our business models rely too much on print products for traffic and sales we will fade away. We need shoppers visiting for and purchasing other items.

While chasing growth in sales of print products, like magazines and newspapers, is important, it is not the same today as it was, say, three years ago. The performance of the whole business is more important than ever.

Newsagents keep wondering about the newsagency of the future and what it will be like. That question is redundant. The future is happening in front of us with each of these announcements.

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Media disruption

It’s hard to setup a Green stationery department in Australia

I am a few weeks out from opening a new newsagency and wanted to only offer green stationery – as a point of difference. This is proving to be a challenge. Even though our stationery department will be small with barely 800 SKUs, we can’t get this many with green – recycled and or carbon neutral – stationery items. In the US this would be much easier.

Ideas anyone?

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Stationery

Big W disrespects quality calendars

Big W is showing that price beats customer service and any other reasonable value proposition by discounting quality brand-name calendars by 35% months out from the New Year.  While I understand that discounting is the point of difference for Big W, they don’t apply a similar discount to some of the junk they sell – cheap products from overseas on which they can whack a terrific margin and still offer them at an apparent discount.

Suppliers should see this – that Big W discount, from what I can tell at least, brand name products more so than it’s own stuff. I guess this is because consumers can;t easily price compare their own stuff.

The way for us to compete with this predatory pricing – and that’s what it is with 35% of 2013 calendars this time of the year from such a big retailer – is to leverage a point of difference. Those newsagents directly affected by this Big W move need to promote calendars in a competitive way: a package deal, a competition with each calendar bought going in the running, a buy this and get that deal or a discount coupon given with each calendar purchased.

Another way to compete is on range – check out the Big W range in the store near you and focus on your range point of difference. This is our approach. calendar sales already this year are up 15% on this time last year and we’re not discounting. We will not discount prior to the start of 2013.

It might be worthwhile complaining to the ACCC about the Big W calendar pricing too.

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Calendars

Promoting Dolly

We are promoting the latest issue of Dolly with this high-profile aisle-end display as well as placement of the title in the usual location – right near an attention-grabbing One Direction product placement. The main display will be up for a week as there is plenty of demand on limited display space right now.

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magazines

No surprise as MasterChef magazine closed

NewsLifeMedia has shutdown MasterChef magazine as a monthly title according to The Australian this morning, switching to special themed issues when the TV show is back on.

As I have noted here previously, the magazine did not leverage the TV brand as it could have. Then, they devalued the product by widely giving it away.

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magazines

Where do we draw the line with Australia Post?

Check out Stephen King’s excellent post at Core Economics about plans for Australia Post to enter the broadband sales market. He ends the piece with two excellent questions:

So Australia Post’s internet venture signals two things. It is time to rethink how the govenrment provides ‘basic mail’ to remote Australia. And it is time to rethink the boundaries for what government-owned businesses can do with our money.

A common theme of my posts here about Australia Post is that it trades outside its remit as outlined in the Act under which it operates. Every day newsagents see Australia Post government-owned corporate operate outside what is permitted. When challenged, politicians of both sides ignore complaints – they want the profits that flow.

Government owned business should only be able to conduct business in areas not already covered by commercial enterprises and which require government assistance to reach the population. The government should not be able to get into station, ink and gifts competing with family owned small business newsagents.

This is not a new argument. I doubt the politicians will listen. Australia Post is too well connected. I have been writing about this issue for seven years and have personally lobbied many politicians on it from John Howard down. Until politicians feel there are votes in it, the issue will not be addressed.

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Australia Post

Promoting the green stationery

I saw this while overseas yesterday, a Treehugger I Was A Newspaper Pencil. The packaging and the display unit this and associated product was in had a clear pitch around recycling newspapers.

The packaging has more details about what makes up the product. It also claims that some of the proceeds from the sale of the pencils goes to replanting of indigenous trees in China.

As I have noted before, playing in the recycled product / environmental product space is something we can do well – better than major retailers. It’s certainly something I would like to see newsagent suppliers more engaged with.

In an ideal newsagency all the stationery items I sell would be green: carbon neutral and, where possible, made from recycled materials. What a marketing message that would be.

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Environment

Promoting Sharpie markers as hip to drive sales

Check out the ad for Sharpie markers in a recent issue of the excellent (and local) Acclaim magazine. Acclaim is a hip title, targeting males from teens to mid / late twenties. The magazine advertisement for Sharpie markers has been created to fit perfectly into the magazine and appeal to the target Acclaim reader. This is smart, a win for publisher and a win for advertiser which being relevant to the consumer.

This ad is a reminder for us that some products we treat in a conservative (boring) way can have a broader appeal if we connect them in a more thoughtful (targeted) way. for example, what if we did a Sharpie display in-store using a skateboard as shown in the Sharpie ad? Even better, what is Sharpie used this theme in other media and we times our in-store engagement to leverage that additional media coverage.

This is what I am talking about – suppliers working with newsagents to educate us and open us to opportunities to promote products in a way that better connects with the target consumer. Anything we can do to make stationery more appealing has to be good for our businesses, especially if it makes us more relevant to younger shoppers.

On Acclaim, check out their website – it’s a terrific magazine.

On the Sharpie range, check out their website – it has excellent product information retail team members should know.

Click on the image for a larger version of the ad in Acclaim.

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Newsagency opportunities
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