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

Attending Hallmark Gold Crown Summit in Las Vegas

I have arrived in the US this morning to attend the Hallmark Gold Crown Summit with a delegation of colleagues from newsXpress. We are the only Australians participating in this best practice event hosted by the most important and most recognised greeting card brand in the world.

Outside of the summit, a group of us will participate in a series of main street retail visits in Las Vegas and, over the weekend, in New York. These retail visits are designed to tap into best practice retail situations that resonate with newsagencies in Australia.

I’ll continue blogging as I’ll be in touch with my newsagencies in Australia through remote access and other means while away. Plus, as is always the case while on the road, there is day to day business to care for – being out of the country is no longer an excuse to get work done back home.

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Newsagency management

More One Direction related sales

Sales for the new One Direction poster title which came out last week show that interest in the boy band has not waned. I stuck a unit holding the title at the front of the newsagency along with our 1D posters and sales followed.

Getting the new poster magazine in has refreshed sales for older One Direction titles which we have kept in stock for a while longer.

Our 2013 One Direction calendar arrives in store in a couple of weeks. I am looking forward to see what we can achieve with them.

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magazines

AFL Beanie Kids selling well into the season

We have restocked our range of AFL beanie Kids several times since getting the range in-store. The latest shipment arrived a few days ago and they are selling well.

I am surprised at how well the AFL Beanie Kids are selling this late in the AFL season.

Those buying them vary from fans of AFL teams, to Beanie Kids collectors to people buying gifts for others. Our sales are helped by having the stand on the lease line, facing into the shopping mall.

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Gifts

Surprised at surprise to the Fairfax announcement

The announcement from Fairfax yesterday outlining the most comprehensive restructure in the history of newspapers in Australia was not a surprise. Not to me and many others.  But plenty were surprised.

Fairfax CEO Greg Hywood had told us major changes were coming. News Limited CEO Kim Williams has told us that News, too, was preparing a major announcement on its plans for the future. While we should not be surprised by what Kim Williams announces shortly, some will be.

I have written here for almost eight years about media disruption – 985 posts in all and I’ve barely covered what has been happening around the world.

If we look at music and books we have guidance on how a major shift in how the audience engages with content can play out for the distribution channel. How many music stores are left? What are print book sales versus digital downloads? You know the answers.

But newspapers were different. We love them. We feel like we own them. John Howard, as Prime Minister, commented several times about the warm feeling of hearing the newspaper land on the front lawn. We have had a long love affair with getting our news by engaging with ink on the page. But newspaper are businesses. They live or die based on profitability.

The end of newspapers began when classified advertising moved online and while plenty in newspaper publishing businesses said it was business as usual and that print would be here for the long term, they know otherwise when advertising revenue started to decline and then fell off a cliff.

I don’t want newspapers to shrink and close. I like the medium. But times change, people change. Paper is being replaced at work and in the home. And we are experiencing just the beginning of this change.

Newspaper publishers told newsagents that the paper product will remain because they needed newsagents to be their partners to the end. Newsagents provide the cheapest newspaper delivery option available. Newsagents are part of their decay play, they give the home delivery of newspapers a longer life. I don’t begrudge newspaper publishers their view, it’s practical for them and their shareholders. Newsagents should have known better, they were warned.

What I wrote wrote in February about News Limited being in crisis in terms of newspaper home delivery was true.  The crisis was in part brought on by newsagents walking away from their home delivery businesses, in numbers which alarmed News. The announcement coming soon from News was expected to speak to the extent of the crisis (or whatever you want to call it). The Fairfax announcement could mean that News pulls back somewhat from or delays the full implementation of its plans to see how the Fairfax move plays out.

I have no doubt we will see the closure of some daily newspapers in Australia. This has been my view of some time and I’ve stated it here before and in other public forums. It’s one of several reasons why I have been calling for newsagents to reinvent their businesses, to seek out new traffic drivers for retail, to source new uses for distribution infrastructure.

I also have no doubt that we will see sales of some newspapers grow … when engaged publishers realise what people will pay for in this marketplace.

Fairfax owes newsagents nothing. The challenge is that many newsagents disagree. You can’t force a business to operate an unprofitable operation. Yet that is what many newsagents have done for many years.  Maybe the Fairfax announcement yesterday will shake these newsagents to take charge of their own situation.

I am not changing my business plan in the wake of yesterday’s announcement. I will continue to focus on broadening sources of traffic for my newsagencies.  I’ll continue to adjust the product mix and placement to increase the basket size.  I will drive margin when I see an opportunity to make a product more valuable to the business. I will do all this without disrespecting traffic I get today from core newsagency lines like magazines, greeting cards, stationery and, yes, newspapers.

Here is what has changed in case newsagents missed it – just a few years ago we could rely on newspapers to deliver 50% or more of our foot traffic every day.  80% or more newspaper sales were for a paper and nothing else – most likely from people who would come back in another visit for other purchases.  As they purchased fewer newspapers they thought less of the newsagency for the other items. If we did not maintain our relevance outside newspapers we lost some of these previously welded-on shoppers.

Newsagents who have not replaced newspaper traffic and have been surprised by the Fairfax announcement need to move quickly to rebuild relevance and to bring in new traffic.

I’ll gladly help any newsagent feeling challenged by what is happening.

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Media disruption

Brilliant promotion of Slow Cooker 2

Check out the display created by the team at one of my newsagencies to promote Slow Cooker 2 from ACP. This display cuts through visually, it makes the title the hero. I love the less is more approach. When I first saw it I felt wow!

While I love colourful posters for promoting magazines, I also like to see the use of collateral that frames and or underlines the product itself. That’s what has been achieved with this display for Slow Cooker 2.

I love that we regularly promote magazines in a non-corporate and more engaged way.

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magazines

Embracing the Inked magazine opportunity

We have taken care to place Inked and Inked Artists with each other to make the most of the common masthead. I’d encourage other newsagents to so the same thing.

Tattoo artists will seek this title out. Put both together and you’ve got a better chance of selling both in the one sale. Our care for tattoo titles has made us the go to newsagency in the area. Sales are up.

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magazines

Terrific InStyle offer

We have given the latest issue of InStyle magazine prime placement at the entrance to our women’s magazine aisle. The $92 worth of Model Co. make up gifts packed with this issue of InStyle make it a must buy title for shoppers, it deserves the best location.  This location made it easier for is to display the pack.

The marketing people at Pacific provided wonderful range of collateral provided.

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magazines

Promoting lunchbox cookbook

We are chasing sales of Woman’s Day Lunchboox cookbook with this tactical placement next to super food ideas, one of our top selling cookbooks. I made the decision for this placement, choosing a popular title which is purchased by someone who would be likely to be interested in the lunchbox cookbook. No sales yet but we’re only a couple of days in to this move.

Often it is the placement of a product which is more important than a display.

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magazines

Fairfax prepares for a digital only future. Are newsagents prepared?

Newspaper publisher Fairfax announced major changes to its operations today under the heading of FAIRFAX OF THE FUTURE.

The changes prepare the company for a digital only model.  Indeed, on page 17 of the investor briefing document, Fairfax acknowledges that the move to digital only is inevitable, tying remaining in print to revenue. With print revenues in steady decline for years, there can only be one end point, an exit from print.

Click on the image to see the point made on page 16 of the investor briefing. See the pie chart – 34% of the company’s cost base goes to production and distribution. The document notes these as: costs not required in a digital only model.

Every part of the announcement from Fairfax today prepares the company for a reduction and, possibly, ultimate complete retreat from print. The move of The Age and SMH to compact formats (great move and long overdue by the way), the introduction of digital subscriptions (somewhat overdue for their quality journalism offer), the closure of the Chullora and Tullamarine print sites and their digital-first editorial model make the end game clear for Fairfax … and for newsagents.

Fairfax has intensified its focus on cost cutting, targeting annualised savings of $235 million by 2015. It’s in a race again market forces as evidenced in the chart on page 12 of the investor briefing showing the Fairfax audience by media type … chilling stuff.

I suspect that market forces will impact this plan and see the company act on at least one or more of its daily mastheads either shedding some days from the print roster or move to a digital only platform before 2015. Circulation continues to decline for all but a couple of daily newspapers in Australia and this is putting pressure on advertising revenue. Page 17 of the investor briefing makes it clear Fairfax will move to a digital only model if print advertising and circulation revenue declines materially. I think this is happening.

A day by day analysis of the return achieved for The Age newspaper, for example, would, I suspect, reveal at least three days of the week to be loss making: Monday, Tuesday and Friday. I’d expect Wednesday to be doing okay because of classifieds (but only just as advertising is falling away rapidly), Thursday to be strong due to the Green Guide, Saturday to be strong due to advertising and Sunday to be strong due to a good weekend read.

If my assumptions (above) are right, we could (should) see The Age cut days. A number of seven day newspapers in the US have done this. Equally, Fairfax could switch from seven days to digital only of the cost savings of eliminating all production and distribution costs justified the move.  I think we are more likely to see days cut in advance of a complete move – but a switch to digital only is inevitable.

I’d note that the news itself will most likely result in fewer people reading the print products as it puts migration to digital more top of mind.

The Fairfax moves are focused solely on their share price. They should not come as a surprise to anyone, especially not to newsagents. However, I think there will be newsagents who are shocked by the Fairfax moves.

Some state based newsagent associations have spent and continue to spend more time and effort on print distribution issues and plans than on retail yet the future of our channel depends more on retail. I wonder when they will realise their mistake.

While there is value in distribution newsagents consolidating in pursuit of efficiencies, there is even greater value in developing a newsagency model in a world where most newspapers in Australia are replaced by digital only platforms. We know from Fairfax and News that distribution costs are a key focus. There is no up side for newsagents from this focus. What little control newsagents had to drive their distribution businesses is fading. But this is not news.  If only channel leaders realised this and engaged with their constituency more proactively. They should have been spending more time representing the whole channel and not just distribution.

Fairfax is doing what it needs to do for its survival. Its needs do not match the needs of newsagents. Newsagents need to act on what is right for them. In my case, the decision to get out of distribution years ago feels more right every day.

Are newsagents focused on their future? Some are but not enough of them. Hopefully, today’s announcement from Fairfax will be a wake-up call for those with their heads in the sand.

While I feel for the 1,900 jobs Fairfax will shed, many more will be shed in newsagencies as digital replaces print for new consumption. This is a moment of fundamental restructuring which cannot be blamed on anyone. We have seen it coming for a while. Maybe some of those losing their jobs will not engage with more flexible and content driven online platforms.

News Limited is next up to the microphone with their announcement.

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newsagency of the future

Now you can like a comment here

A like button has been added to the comments facility here enabling readers to like a comment without having to make a comment themselves. To like a comment just click the button, you don’t need an email address or anything.

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Blogging

Be wary for card reps who say they can do better

I heard about a card rep who makes regular visits a newsagency that does not stock their cards. The rep is wearing the newsagent down with baseless criticisms about the cards in the business and the performance of the incumbent supplier.

This card rep is clever using comments and cheap shots to undermine what was, until the visits started, a healthy and successful relationship between the newsagent and the card supplier.

The visitor card rep was so successful that the newsagent started to doubt the rep for the incumbent card company. This led to some decisions which hurt sales, playing into the plans of the visitor rep to win the account.

If it were up to me the card rep would be told not to return. Some newsagents are too nice, they put up with and sometimes believe the salesperson’s shtick.

If you are being hunted by a card rep who wants your business tell them to win it with facts and not BS about their competitor. Tell them you want sales data, not sell-in data from the card company but sales data from newsagents from before and after they switched a newsagent over.

Anyone can say they can do better, few take the time to prove it.

No, I am not going to name the card rep or the newsagent. There is no point. I hope I have written enough to get newsagents to be wary of the BS.

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Greeting Cards

Display unit drives sales of That’s Life Puzzler on the go

The placement of the pocket displays unit holding That’s Life Puzzler on the go in front of That’s Life is working brilliantly. We will sell out in three weeks. Nice.

We were concerned that this unit might hurt sales of That’s Life.  It hasn’t. That said, we will not leave it here for the long term. We have taken care of the display unit and will use it elsewhere in the store.

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magazines

Selling the Tour de France program

Sales of the official guide to the 2012 Tour de France have been terrific from this counter display – so much so that we ordered extra stock over the weekend. We will sell out of our initial allocation by mid week.  We have the guide here at the counter as well as with our sports titles. It’s this counter location which is working a treat for us. There is no doubt that early sales are being helped by our own Cadel Evans being the current champion.

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magazines

My Weekly sells with newspapers

Our placement of My Weekly with the Queen’s jubilee cover story with newspapers has worked a treat with extra copies sold to people who would not look for this in the british magazine section. Often times tactical placement works bette than a great big display. That’s what has happened here. It’s nice when you get someone who came in for a newspaper purchasing something extra.

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magazines

Promoting Dolly magazine

We have been promoting the latest issue of Dolly magazine since it’s on-sale with this display at the entrance to the women’s magazine aisle. We also have a double half waterfall at eye level in the usual location for Dolly – half way down our women’s magazine aisle.

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magazines

Sunday Marketing Tip: How to develop your Unique Selling Proposition

In the last round of Newsagency of the Future workshops I urged newsagents to develop their Unique Selling Proposition as I saw (and see) this as vital to the future of any individual business.  I subsequently wrote an article published in the latest issue of National Newsagent magazine.

Here is the article. I urge newsagents and those who work in newsagencies to read this and develop a USP for their business:

Developing the Unique Selling Proposition (USP) for a newsagency is one of the most important steps you can take in business.

A good USP will frame every decision you make. It will also define why you are in business for it goes to the heart of your passion. It feeds from your mission, your reason for existing.

Yes, a USP must reflect passion for this is what drives your love of your business … and you do love your small retail business don’t you?!  This is where small retailers like newsagents are different to big retailers. Where they get lost in KPIs, share price and other metrics, small business retailers think in personal terms, often with emotion.

So how do you create your USP?  Here are some tips I have found useful when working with newsagents on developing a USP…

1. Take your time. You will be done when you are done. Getting your USP right is more important than meeting a deadline.

2. Think. Try and get time away from the business to think about your USP. A good location I have found works is siting on a seat across from the entrance to your retail business, watching your customers.

3. Love. Work out what you love about your business and / or what you want to love about your business. Next, think about what you want your customers to love so much that they will tell their friends.

4. Differentiate. Think about what’s special in your area or marketplace about your business.

5. What do you stand for? If someone says who are you? you will probably answer with the facts. If they say, no, I want more, what makes you special? you will probably, hopefully, take them inside what makes you tick. So, you need to know, what does your business stand for?

6. Define. Try and put into words your passion and what is special about your business.  Brainstorm ideas in ten words or less. Get as many down on paper as you can.

7. Would you be missed? It is said that people often define their view of themselves by wondering if they would be missed. Think about your small retail business in this way. Would you be missed? If so, how and why?

It might take a few goes, working through these ideas. The result should be something close to a USP for your business.

Your USP needs to be succinct, passionate and unique, something that explains why your business is different and why people should shop with you.

A big challenge for newsagents is the diversity of the typical business. A USP is unique yet so much of what newsagents sell is not unique. So, a USP may start with one part of the business, getting you known for that.

If you think you are close, test it with your employees and family. Test it with yourself too by asking what you would change in the business with this USP in place, what decisions would be different?

A good USP will guide business decisions and provide a framework through which you navigate change in the business. But most important of all, it defines why you are in business.

Change is inevitable. Yes, your USP can and will change as the business evolved.

So, get started. To help you along, here are three ideas that focus on passion and evoke emotion:

1. Gifts you’ll be proud to give

2. Cards people love

3. Where customers are friends

You can discuss your USP ideas with Mark Fletcher on 09418 32 1338 or at mark@towersystems.com.au.

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marketing tip

Page one newspaper story covered with stuck on ad

The Australian Financial Review weekend edition covered a page on news story with an ad for one of its magazines. It was the story about James Ashby and the allegation of a conspiracy to damage the reputation of the speaker, an important story.

Why do I keep posting about this? There are college students in the US and high school students in Australia who ask me about this as they study changes in newspapers. The appreciate the photos.

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newspaper masthead desecration

Promoting Donna Hay

Here is how one of my newsagencies is promoting the latest issue of Donna Hay magazine.

The column-based display is facing the mall and can be seen by shoppers as they pass by the business. You can click on the image if you want to see a larger version of the display.

I love the professional look of the display and the use of height.

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magazines

M2 magazine cuts cover price by 68%

Check out the subscription promotion for M2 magazine on living social. They are selling an annual subscription at 68% off the cover price and they are copping the cost of postage on top of that.

While I understand the need for subscription in the mix for publishers, I do not understand why they need to discount at this level and create a dual speed supply proposition for people who could engage with their title.

Nuts.

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magazine subscriptions

Successful NZ stationery model

In New Zealand this week I checked out Warehouse Stationery, part of The Warehouse group. Their stationery offer is excellent, better than Officeworks. Their website offer is event better.  They have been in business for twenty years and operate from 50 stores up and down the country.

Any  Australian newsagents visiting NZ should visit several Warehouse Stationery outlets to see competition up close. You will see and excellent operation showing how to do stationery professionally.

Stationery is one of the most challenged categories in our channel yet it is a category over which we have the most control. We fail to take a more commercial approach with stationery at our peril.

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Stationery

Smart newspaper stand

I was back in Auckland yesterday and took a photo of a newspaper stand I have often admired. I like that it’s promoting magazines, drinks, candy and newspapers. It’s something now being used in most corporate transit newsagency situations in Australia.  I though some non-transit newsagents might find it interesting.

I am not planning on this stand for any only my newsagencies – I prefer more flexibility with what I place with newspapers. Also, I have my newspapers deeper into the store rather than on the lease line as shown in the photo. This works well for us.

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marketing

Promoting subscriptions for The Age

Regulars here will be surprised to read that I didn’t mind the ad stuck on the masthead of The Age newspaper on Thursday. Okay, it as covering promotion of an AFL Hall of Fame story. However, that it was promoting the newspaper itself and the colour – it was not as distracting a many of the stuck on ads are. While I don’t like that they use shelf space in my shop to take sales from me, I can understand why they do it. It’s the world we’re in. I am not fighting to retain major newspaper sales, I am more interested ingrowing foreign language newspaper sales.

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newspaper masthead desecration

Four new partworks coming

It’s good to see four new partworks heading for newsagents:

  • Agatha Christie Books –  on sale Mon 18th June. Part 1 – $3.95.
  • Marvel Graphic Novel – on sale  Mon 2nd July. Part 1 – $7.95.
  • Art Of Quilting – on sale  Mon 9th July. Part 1 – $2.95.
  • Dora The Explorer – Little Cooks Collection – on sale 6th August. Part 1 – $2.99.

All are being distributed by Gordon & Gotch. All will be supported with TV campaigns.  Allocations have been done by Gotch on the basis of sales of similar titles.  Stock will be sent with A2 posters. There will be limited floor stock for newsagencies sending sales data through XchangeIT.

Based on the UK experience, Dora The Explorer – Little Cooks Collection is expected to be the top seller. It’s hitting at a good time with food continuing in popularity on TV and in print.

Each of these partworks is a terrific opportunity fore newsagents as the TV advertising and other marketing will focus on driving traffic to our shops. Yes there will be some who wonder about whether this is about driving subscriptions. Maybe, maybe not. The reality is the TV will drive traffic just for us. It’s not often we see that.  This is an opportunity to embrace.

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partworks
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