We are promoting the latest issue of Dolly magazine with this display facing the dance floor and capping the entrance to our main magazine aisle.
The free poster book which comes with this issue of Dolly is a good idea and the right time given the One Direction hysteria here in Australia right now.
Besides this prime display promotion the magazine we have an in-location waterfall display.
I have added a regional round to the Newsagency of the Future series. Starting next week I am getting out of the cities and into farther apart locations to talk with newsagents about the future. This next round will go further than the round just completed, benefiting from the discussions had already and feedback from newsagents. Click here for details and the booking form. You can also book online here. Here are there new dates.
Anyone is welcome including newsagent suppliers and publishers. Attendance is free.
I was concerned to hear from a newsagent who felt threatened by a publisher when they advised that they wanted to hand their newspaper home delivery run back.
While they were out of contract and faced no legal impediment to their move, it was made clear to them that there would be a challenge in their shop getting newspapers for retail sale.
It is not the first time I have heard of bullying like this and I doubt it will be the last.
I approached a publisher on behalf of a newsagent in this situation a couple of years and they denied knowledge of any threats. I can understand that … some publishing businesses are good at getting representatives to behave a certain way without it being documented company policy.
The thing is, newsagents are being threatened. My advice to newsagents is to make a note of who made the threat, when and what exactly they said. If you build up several instances over time, consider what action you could take. There are several forums through which newsagents could pursue any such threat.
Newsagents need to not put up with threats and intimidation. If you want to quit your newspaper home delivery run because it is uneconomic then do so.
Here is another example of magazine supply reduction by Gordon and Gotch which is not supported by the sales data. They have cut us from 11 to 3. Based on the sales history (click on the image) we should be at 5 or 6. But go back through the history and see how badly they have handled this title.
All I want is a fait magazine supply model which allows me to make money from magazines. It’s actions like those for this title which cause us to lose money. The Gotch magazine distribution process is a mystery. They can deny to others all they like about what I write here. Newsagents know how bad it is. Maybe we are approaching a time where all titles from Gotch suffer as a result.
Newsagency related mentions have spiked over the last week since the launch of the One Direction magazine. Fans are tweeting when and where they get the magazine and need good customer service experiences.
Outside of this spike in newsagency related tweets, a take-away from this traffic for me is that it is a timely reminder that Twitter turns word of mouth into a tidal wave.
Banks have changed their guidelines on what they will lend to people purchasing a newsagency. People coming into our channel are experiencing this change. It is only a matter of time before existing newsagents with considerable bank borrowings feel pressure from the change.
If your borrowings are more than 30% of the current market value of your newsagency you need to be ready to respond to your bank. Indeed, you need to be ahead of their call or letter.
The last thing you want is to have to reduce your debt level in a timetable not of your choosing.
Reducing business debt should be the highest priority in every newsagency in Australia in my view. Sadly, it is not. Indeed, some newsagents thanks to offers of cash from card companies and other sources, go way beyond maxing out bank borrowings, taking their businesses beyond crazy debt levels … and then some blame others when their debts are called in.
So, reducing debt should be the top priority of every newsagent. If you do not do this you risk someone else driving it for you and that could be unpleasant.
There are considerable benefits throughout the business from a debt reduction plan. Often, the business becomes more efficient and more commercially successful.
The best approach to debt reduction is to consider what you would do if you were given no option but to eliminate 50% of your current debt in a short time. Think about it. Your back is to the wall. The back has written to you and called. You have no option. Selling will not happen in time. You have to reduce debt and free cash right away.
The only option in this scenario is to convince the bank that you are able to improve cash flow and thereby pay down the debt in a reasonable time frame.
Here are some suggestions to get you thinking:
This last point is vital. Frugality is key to running a financially lean newsagency. Zero debt must be your goal. This will leave you with lower costs and a better return.
If your debt level feels hopeless do not let this debilitate you. Own the problem, face it and take small steps through the fog. Your small steps will stack up and get you close to the other side.
If you are facing massive debts and feel overwhelmed, feel free to email (mark@towersystems.com.au) or call (0418 321 338). I’d be happy to talk. You’re not alone.
We have experienced more unjustified cuts to magazines supply last week by Gordon and Gotch at one of my newsagencies. While they engage in crazy oversupply for many titles, they are playing at the other extreme by cutting supply where sales data does not indicate that such action is warranted. We know from our discussion with the Gotch call centre that their action is manual. My emails to senior management continues to go unanswered.
Click on the image to see what Gotch has done to our supply of Country Homes & Interiors magazine. My take on our sales data is that we should be at 3 copies, maybe 2. To be cut from 4 to 1 is nuts. And it appears that Gotch does not want to explain why.
It is pathetic that we can’t get supply of what we are certain to sell yet get too much of what does not sell. This is not a business model, not one which is fair to newsagents at least.
Country Home Spring sells in the US for US$12.99. Magazine distributor Gordon and Gotch prices this title at AU$32.50. This does not make sense at all, especially when you consider the current exchange rate between the Australian dollar and the US dollar. Even allowing for shipping cost, this title should be selling for around AU$15.00 here.
So, who is making the money? Is this a magazine which Gotch purchases in bulk, by weight, and sets an Australian price to meet financial requirements in the company? We will never know because Gotch management is not transparent about this.
Why should Gotch be transparent with newsagents? Simple, because this title makes newsagents look expensive. Shoppers are not stupid. They can see the US price. Some will ask newsagents about the price difference, others will form an opinion and leave without sharing it.
If sales of the parent title, Country Home and Interiors, are not great this special edition could be a target for early returning. I’d look at this sales data and consider the risk of theft of which a high-priced title.
That said, maybe the best way for us to make our point would be for every newsagent to early return this title, today. I bet it would get their attention.
Gotch should have to get my permission to send me a title with a cover price above, say, $20.00. Since it is my money at risk they should ask first. They will say it is too hard. I’d respond with – nonsense!
But back to my point, why is this title priced do high? What gives Gotch?
Footnote: it seems that the conversion rate for the parent title is different to that used for this special issue.
We have been fortunate to get more stock of the One Direction magazine for our newsagency … meaning many more happy shoppers over the next few days. We are maintaining our display of the One Direction magazine at the front of the newsagency … and loving the traffic this is drawing.
I checked on Twitter yesterday and sure enough the Twitterverse is alight with girls talking about the magazine – where they got it, the articles, the photos. It was instructive to read, to better understand the appeal of One Direction and magazines which cover the band.
I checked on eBay and there magazine does not appear to be there yet – it’s only a matter of time given the worldwide popularity of this group.
FYI New Idea today has a 1D story. Offer this across the counter to people purchasing the 1D magazine or draw attention to this in some other way. Pacific Magazines is using social media to promote this story.
Check out how one newsagent is saving money on labels by printing them on plain paper and stick-taping them to the cover of the magazine. I am not so sure about the saving once you cost in the additional labour and the tape required for this approach to work. The result is not as professional and could therefore impact on sales. My sense is that on a number of fronts this is false economy – but maybe I don’t have all the details..
Seeing this cheap approach to magazine labelling, it made me wonder of other measures newsagents take to save money and whether they provide genuine savings or not.
I had an aunt who used to ‘iron’ handkerchiefs by hanging them on the side of the refrigerator using magnets. Given the way hankies were used way back then I guess there was a saving.
I also know of a newsagent who costed out plastic wrap per paper delivered and chased savings of fractions of a cent, toting up the value of this for a year.
Oh, and there was the newsagent who would select a birthday card for his wife, take it home, show it to her and then return it to the newsagency the next day so that it could be sold.
Newsagents in shopping centres often have no choice but to open every Sunday, either working themselves or paying crazy penalty rates. The government owned Australia Post outlets in the same centres get dispensation from centre rules and are usually closed for the day. This is further evidence of the abuse of government protection for these retail businesses which continue to aggressively chase small business newsagency business.
We have been selling reading glasses in-store for a year now and they are working a treat. We move the stand around to combat store blindness but always keeping it reasonably close to our magazine and card departments. People will think of glasses when they are reading text on a page.
Through the reading connection we are able to sell a product line that a few years ago you would not have expected to see in a newsagency.
We need to do more of this in our newsagencies, bringing in products that fit with existing products without sucking the life out of them.
There is a risk and that is filling your newsagency with too many leech products, products that do not generate traffic on their own and rely on traffic generators like newspapers, magazines, cards and stationery to achieve sales.
I like to limit the number of leech products I carry. My preference is to grow the traffic generating products and every so often bring in a leech product that is understood by our shoppers and easily added to the purchase of destination items.
Newsagents need to have a structured approach to quitting stock left over from seasons or specially purchased offers, so that shelves do not become cluttered with remnants.
Once a range is done, because it does not sell or because it has run its race, we put it through a four-week cycle:
Four weeks and we are done. There is no point keeping old stock hanging around. It wastes space, provides a conflicting message and can be frustrating when you walk past it.
Your newsagency software should be able to help you with all this.
I’d encourage newsagents to document their markdown and exit strategy and train all employees in this so that they can follow the policy without having to refer it to you. Building this into the operational structure of the business will provide certainty and free you to concentrate on more important business matters than stressing over when to quit a range which is at the end of its useful life in your business.
The more consistent we are on these things the better for our business and those who work in it.
I’d be interested to read what other newsagents do about this.
I feel for Australian magazine publishers who see a title achieve a sell through of 80% in newsagencies where there have been no early returns yet have seen more than 47% of stock early returned either the day of on-sale or within the first week or so in other newsagencies.
A decent chunk of the 47% of stock early returned would have sold had it been left on newsagency shelves.
Some newsagents are using poor settings on their computer systems to drive early returns while others run businesses with processes that permit poor shop floor early return decisions.
The data I have just been shown is irrefutable proof that some newsagents collectively cut themselves out of more than $15,000 in revenue. These same newsagents are probably complaining about declining magazine sales. Well, magazine sales will decline if you make ill-informed decisions about early returning.
I’d note that my concern here is early returns the day of on-sale or within the first week for a monthly or two weeks for a title with an on-sale of eight weeks.
I pulled several titles off early on the weekend. In each case they had been on the shelves for more than 75% of the on-sale. My decisions were based on the sell-through to that point and demand for space.
I don’t early return using settings in my computer system. I prefer to make a decision based on more factors than a computer system can allow for.
I pay special attention to Australian titles and titles supported with strong mastheads and publishing houses which add value to our businesses.
That’s Easter for another year and what a terrific Easter it has been. Excellent sales, terrific year on year growth. Bold displays packed with compelling product sells. The hero product for us was the Beanie Kids … just brilliant! Double digit year on year growth feels good. Now it’s time to make the most of school holidays.
For those following the training being professional Visual Merchandising training undertaken by Renee, the manager of one of my newsagencies here is the latest project completed in class. This is called a line display … for obvious reasons.
I love the simple approach of using colours to make a product like tubes of pain such a hero.
Canson would have to love this display.
Click on the image to see a larger version.
Not only has the Girlfirend branded One Direction one shot sold its socks off over the last two days, the Total Fanzine One Direction poster distributed through Network Services sold out in a day.
While most customers have been the teen and tween girls who are the target of the marketing experts behind the by band, customers have included their parents and grandparents as they know what their girls like and right now it is One Direction.
Beyond the sales of One Direction related product is the additional sales to the new traffic generated by this phenomenon. We are certainly seeing it with half the people attracted to the 1D display purchasing other items.
Who knows how long this will last? They’re a boy band with a massive marketing army behind them. Maybe they will last as long as their current fans are into boy bands so I figure we have a few years of opportunities – as have been the case with Justin Bieber products.
The point of all this is that our businesses are well positioned to become 1D destinations. Right now is the time for us to decide this and chase all the 1D product we can. This is what smart retailers would do. We should not be sitting around waiting for suppliers to send product to us.
The Metcash story in all the newspapers yesterday, that they are culling 400 jobs and closing a bunch of Campbell’s cash and carry outlets is a further wake up all to Australian newsagents along with all independent retailers.
While Metcash fingers the fight between Coles and Woolworths as the reason for a decline in business from independent retailers, like milk bars, and therefore the need to slash their operation, it is important to look at what is behind the Coles and Woolworths battle.
Retail has fundamentally changed. Coles and Woolworths get this. Indeed, they got it before most retailers in this country.
Whereas in the past we saw them as supermarkets duking it out in a traditional rivalry, the fight is not being waged from the milking shed to the smallest high street and even rural shopping situation.
Beyond the retail trading brands we know today, the two major supermarkets have their eyes firmly set on a greater proportion of retail purchases in Australia. It is the early stages of this causing pain for the traditional Metcash customer and what should be of interest to newsagents.
I’d urge newsagents to go back to yesterday’s newspapers to read the Metcash story carefully, especially the coverage in The Australian Financial Review as this provides the analysis which I think will interest newsagents the most.
The question for us is: how do we respond? We respond by leading our businesses, owning our situation and making our own success. Yes, this is possible. Indeed, I am seeing it in the data newsagents are providing the latest Tower Systems newsagency sales benchmark data I am gathering.
My concern is that not enough newsagents are pursuing their own success.
I talk about this in my Newsagency of the Future series.
Gotch earlier this week released cookbooks to newsagents which, in my view, could be early returned. These titles have no brand connection for us and are overpriced compared to similar titles in our newsagencies. The titles, Healthy Switch and Soups, Sauces & Marinades add nothing to our magazine shelves. We have a full suite of food titles, even in these niches, so why add more stock to us? Gotch would know that we are full yet they send the stock anyway.
So, for me, these two titles are a good example of the few titles which could be legitimately early returned right away.
The better approach would be to ask if we want the titles.
When it comes to niche food and other titles I look for an existing masthead connection for relevance or for some other evidence of support for the newsagency channel through collateral, advertising or some other activity to drive traffic. These very generic titles from Gotch have none of that.
What frustrates me more is that I can go to the cheap book outpost near my newsagency and see almost identical titles for under $5.00.
I appreciate that some people will read this as a confusing message about early returning. It’s not for the reasons I explained above.
We sold 40 copies of the One Direction title released yesterday by Pacific Magazines. While we have two thirds of our stock left we expect this will only last until early next week so we’re chasing more already, to be on the safe side.
This title is an excellent example of the perfect one-shot. Perfectly targeted at an audience which will spend on what it loves. the execution is excellent too, giving the fans exactly what they were looking for.
The photo is the display which has already worked so well. With just two posters supporting the title, the team made the rest of the collateral and placed it right at the front of the newsagency, failing into the shopping mall.
I think a key to the success of the display is the placement by the team of it in a location by itself, without any other products pulling focus.
With school holidays in full swing we are chasing a sell out in a few days … and loving it!
Mad magazine has been launched for the Apple iPad continuing the stream of titles being released for this rapidly expanding network. I think this is a title which could grow readership on the tech platform compared to print given its demographic focus.
There is no doubt that retro is popular across a range of retail businesses. In our newsagency we have had terrific success with retro tea towels, mugs, coasters and magnets. Now we are enjoying retro activity books, like these invisible ink books. It’s the parents and grandparents who see them as retro items and this is generating the best sales. The success of these and out other recent retro items has us looking for more.
Retro is a product theme newsagents can do well. I think it fits with the nature of our business and the shoppers we attract. There are plenty of suppliers offering retro products.
The One Direction one shot arrived in-store today, under the Girlfriend masthead. I’d urge newsagents to NOT early return this title. Place it at the counter as this is a title which will be purchased on impulse. Treated well within the store it should sell out. That is our plan. Indeed, we are ordering more stock based on what we think we can achieve with the title based on sales of Justin Bieber titles.
One Direction is a UK boy band that has teen and tween girls in Australia going nuts. If you have these shoppers in your shop or can attract them or those who buy for them, here is a great chance for you to make some good money. Contract Gotch, check your supply numbers, make sure you are getting enough stock.
I have added more dates to the Newsagency of the Future series, this time in regional centres.
It will be good to get to Townsville, Geelong, Newcastle, Albury, Launceston and the Gold Coast. Click Click here to download the flyer with details.
There is no cost to attend and anyone is welcome- newsagents, would-be newsagents and suppliers.
It is vitally important that newsagents engage in a discussion about the future and consider an action plan to step into the future. This is why I am offering more of these sessions. The first round has gone well judging by the follow up calls and emails I have received.
These are 100% educational sessions … no sales pitch. Take time from your business and work on it by considering the future with me.
I have been approached by newsagents over the last couple of weeks about an apparent increase on pressure from News Limited to get the newsagents to convert newsagent-won home delivery customers to direct with News Limited subscribers.
In one case, a newsagent claimed that they would lose money as more than one hundred direct home delivery customers switched to the cheaper and lower margin News Limited subscription packages.
Other than pressure from News why would a newsagent switch a customer from a long term arrangement to another which provided a lower margin?
I can understand the News mission, they think that every newspaper home delivery customers is owned by them and they would therefore want a direct relationship. This is what gives them flexibility for the future. If the newsagent controls the customer relationship they have less flexibility.