I like the different look for the cover of Zoo magazine with the current issue. When I first saw it I was tempted to place it next to our women’s weeklies – having Kim Kardashian at the top of the front cover would get the title browsed by people who usually would not consider it. In the end we left Zoo in its usual area but with the full cover on show.
I was disappointed to see Gerry Harvey on Lateline last night continuing his doom and gloom pitch about retail in Australia and the threat of online. While I agree with some of Gerry’s comments, especially around politicians being out of touch and not understanding business, his overall pitch of doom and gloom for retail and that small businesses in particular are struggling was not clear or pitched well.
Gerry Harvey does not speak for retailers. Sure he makes for good TV with his shrill voice and hand movements, but he does not serve our cause well. Retail businesses, large and small, need to deliver clear and consistent messages around the core opportunities for maximising government return from small and independent retailers:
For more ideas go to my Small Business Minister TO DO list from March 5.
Profitable small and independent retailers are more valuable to government. We are more likely to invest in our businesses.
I am told that News Limited Circulation Director Catherine Woodside has resigned from her role with the company. This will be a blow to newsagents who have been waiting for more than two years for an outcome from News’ review, led by Catherine, of newspaper home delivery arrangements.
It was Catherine who responded to the newsagent associations following my News Limited in crisis on newspaper home delivery post of last month. Besides denying there was a crisis she established yet another round of discussions to talk through home delivery plans for the future.
Catherine’s reported departure is on the back of series of leadership changes within News Limited since Kim Williams took over as Managing Director. Crikey yesterday carried a report from an anonymous writer from within News Limited about the staffing changes going inn in the organisation. It starts with:
“In the continuing saga of executive management cuts at News Ltd (Macourt, Baxter, Howard, Klose, Bulmer, Sligo, Eilert … and you haven’t yet reported on Evan Hannah or Michael Prain) there’s another indicator of the big changes in management approach and culture. The long-stated and cherished policy of honouring loyalty is out the door. It was a hallmark of former CEO John Hartigan’s reign, which he stated time and again that loyalty was to be acknowledged and rewarded.
And ends some paragraphs later with:
“These ‘redundancies’ have made many of us middle and senior managers very, very nervous. Doing your job well, and having years of solid service behind you, count for nothing in the new News. And what about the Boston Consulting boys now embedded in Macourt’s old office.”
I don’t know the story behind the departure of Catherine Woodside from News Limited. The concern for newsagents will be that their point person within News through the more than two years of consultation and analysis in pursuit of the newspaper distribution model of the future is no longer at the company.
While it is only speculation I do wonder if Catherine’s departure is in any way related to the apparent decision by News over a month ago to delay moving on the newspaper distribution model, thereby extending the period of uncertainty for distribution newsagents.
We have achieved a 71% sell through of the latest issue of Homespun magazine from Universal Magazines and we are only twelve daysd into the on-sale.
This sales success for Homespun reflects the success we have been enjoying for many of our quilting and craft related titles since we completed our full magazine relay in September last year. This relay project included creating a new location and better space allocation for quilting and craft magazine titles.
What is interesting is the basket analysis – we are getting quilting and craft titles into more baskets. We have increased customer traffic as well. This gives us a bonus … more traffic PLUS more sales to each customer.
There are newsagents who comment here about margin, saying they prefer to focus on better margin product. While I want better margin as much as the next person, I also embrace opportunities to grow the margin dollars I bank, this is what driving sales efficiency is all about. It’s what we have done with quilting and craft magazines and indeed all magazines since our complete relay last year.
Given that our magazine range is the only point of difference we have as a retail channel, I urge more newsagents to take more interest in magazines. Growth is achievable as we are seeing here.
We have giving the latest issue of TV Week and the One Direction ticket promotion prime positioning this week. Since we know the interest of shoppers in our area in One Direction this prime space allocation makes sense.
We have punched the collateral up a bit with something of our own to make the ticket offer clear … and hopefully drive sales of this issue of TV Week.
This is a smart promotion by TV Week as it taps into obvious interest in the group from the UK and connects this with the Logies marketing campaign for the magazine.
We are promoting the Cleo 50 Most Eligible Bachelors issue with this tall column based display which faces shoppers as they enter the business.
You can’t miss this display, it grabs your attention from outside the newsagency which is terrific since we are not giving up and window or other space – this display draws them in.
With the booklet attached to the front cover, this is the type of magazine issue where the entire cover needs to be on show – this protects the booklet and it shows the bonus content with this issue.
Newsagency supplier Steve Parish Publishing is in liquidation following the failure to overcome challenges brought on by the Queensland floods last year. Outside of the losses to the company and suppliers, retailers like newsagents will miss the unique products. SmartCompany has more.
It’s the kind of Tweet you don’t want to see but it reflects the challenge faced by newspaper publishers the world over … a Courier Mail home delivery customer cancelling their subscription having migrated to the digital offer.
Newspaper publishers spent too much of the last seven years in denial about this migration. This kept the challenge off the radar of many newsagents.
The challenge for the newsagency channel today is that many newsagents remain in denial.
For no reason at all the ‘magazine experts’ at Gordon and Gotch have increased our supply of Hair magazine. Barely a week ago I noted here that the sale of hair magazines was declining. Instead of the four copies of Hair we should receive – based on our sales – the Gotch experts increased our supply from four copies four issues ago to seven copies of the latest issue. Click on the image to see the evidence.
Te senior managers at Gotch can spin their behaviour all they like, this increase in supply of Hair is another example of appalling unfair behaviour. It is the type of behaviour which leads newsagents to early return other titles.
If you are a magazine publisher and have been told by Gotch that they treat newsagents fairly, click on the magazine oversupply link on the right to see more stories like this. Newsagents around the country see supply increased without justification. This appalling behaviour is, in my view, one of the biggest threats to the future of magazines in newsagencies.
The cover design for the Australian House & Garden Bathroom Book is a missed opportunity. If you put the title into the type of filtering in most newsagencies you miss that it is the Bathroom Book.
We are lucky in that we can place the title at the front of our bathroom section and show the full cover. Many newsagents would not have this opportunity. Some probably didn’t even notice the specialist nature of this title … I wouldn’t blame them.
If sales do not meet expectations it could be due to this oversight.
While I am no design expert, there must be a way to show the bathroom connection in the top third of the cover.
Publishers need to get this stuff right if they maximise sales opportunities. It seems to me that some simple traditional newsagency like magazine fixturing in the design studio could help deliver better covers.
I was looking for some different magazines to promote with newspapers for a few days to change things up a bit. When I saw the cover of Food Network Magazine and Wine Companion the decision was easy. Chocolate and wine are favourites with many people … aren’t they?
I think it is important to give lower volume titles time in the spotlight. Besides being good for the titles, it is good for us as it shows products which customers may not know we carry and may not go looking for.
We make moves like this for one reason only – to drive sales. We try and leverage key traffic drivers, like newspapers, to achieve sales of other products, like these two magazines this week.
Dick Smith stores have been running a 25% off sale. When your prices are high to start with you can afford 25% off. Like most major retailers, Dick Smith is expensive when it comes to ink. Ink is usually cheaper at a newsagency.
Here are ten free to implement ways newsagents can drive sales in their business:
This list is by no means complete. Hopefully, reading it will help you one up with your own ideas which are appropriate to your needs.
Gerry Harvey was a guest on Radio National’s Saturday Extra program this morning. You can listen to the interview and read feedback comments here. Harvey was preaching his usual message: that the $1,000 GST free threshold on imports is hurting retail in this country and that overseas retailers facilitate fraud by allowing Australians to purchase expensive items and get a receipt which is under the $1,000 threshold.
Host Geraldine Doogue did not challenge Harvey as she should have.
In London earlier this week, I heard some major retailers openly talk about Australia as being a hot and lucrative market for them. One fashion retailer talked about the $1,000 tax free threshold and the high Australian dollar as providing them with “extraordinary” sales.
While I think the federal government should address the $1,000 threshold on imported consumer purchases, I don’t see this as the cause of Gerry Harvey’s problems. Retail has changed, especially in the area of higher ticket price goods such as those sold in the Harvey Norman stores. Consumers are better informed today, they have more options. From a shop floor they can price compare and purchase from a competitor for next day delivery.
We are moving from retail model built on labour intensive distributed warehouses with high overheads to a model of fewer warehouses and lower overheads. However, this is not a point A to point B shift. It is evolutionary. This is why retailers are talking about omni-channel retail today. This is a transition model because, frankly, they do not know where we will end up. This is not an end game – from the day the first retail business opened the model has been in play.
Gerry Harvey’s challenge is that he has built a business almost completely around a price perception. His route to market was relentless advertising. Advertising is working less today. People have smart mobile devices and other means through which they can discover price options. Had Gerry built his business around a value proposition which it could genuinely own then they could have taken their loyal shoppers with them. Gerry is now learning that price does not drive loyalty. His millions of dollars in advertising has not been an investment in the future.
So, what does all this mean for newsagents? We will be as challenged as any other retailer. We have the opportunities of other retailers too … opportunities to adjust our business model. Many of us have customers who are loyal because of unique and appreciated customer service or because of a unique range of products. We need to develop business plans to evolve with our customers as their approach to shopping evolves. The biggest mistake we could make right now would be to stand still.
We are confronted with more opportunities than ever before. Now is the time for us to embrace these, leveraging our existing good and quite unique traffic from our core products and building our own businesses for the next generation.
I will explore these and related ideas in the Newsagency of the Future workshop which starts in Perth on March 26.
In the meantime, listen to Gerry Harvey because his message today will be a topic of analysis by retail experts in the future.
Footnote: Gerry Harvey sooked about how people react to what he says. He needs to understand that he has done nothing in his business to develop loyalty. Price is not a unique selling proposition.
One of my team members put together this effective display at one of our sales counters promoting Apple related magazine titles along with the appRacer, appCopter, appWheel and appBlaster – all fun toys which you operate through your iPhone or other Apple device.
The magazines sell the toys and the toys sell the magazines. The two types of products together like this pitches us beyond a more traditional magazine outlet.
I like it a lot and was thrilled to see it in-store.
Okay so we are selling toys priced at close to $80, some of them at least. I am confident they will sell. I know that right now we are the only retailer in Knox City with these … and we have the best display of the ASpple related magazines here too.
This display to me is also about embracing the magazine opportunity, seeing beyond the 25% and focussing on banking margin dollars from impulse purchases.
This is the main Frankie / Smith Journal display in one of my newsagencies. It faces shoppers as they walk through the store. I say ‘main’ because we have more than one. Each title is located in two other places.
The photo does not do display justice as it looks more washed, faded, than in real life.
I like that we are educating shoppers here about the two titles being somehow related.
Elsewhere in the newsagency, Frankie and Smith Journal are not located together … we have them in the more usual locations for each title to catch sales to those who will regularly purchase them. We’re tracking sales, chasing growth on the previous issue of each.
I know I go on about these magazines but I cannot stress their importance enough. Frankie and Smith Journal are loved by and connect with an age group which is vitally important to our businesses. The more we show these younger shoppers that they can rely on us for magazine entertainment the brighter our future.
I know there is a risk with this post in that it might attract a few natters (on both sides) but here goes… We sold out of the Collingwood Beanie Kid collectors item in a few days – way ahead of any other team. We;’re chasing more stock as we don’t want to turn away the collectors now that we are known for our range of Beanie kids at Knox City.
So, for me this is not so much about AFL allegiances. No, it’s about serving collectors and making sure that we provide them with the products and services they need to satisfy their desire to collect. The repeat business is excellent – not only from the AFl range but the broader beanie Kid range we carry.
With the AFL collection, while there is the occasional AFL team nutter they’re usually fun … and that’s terrific in retail.
Footnote: seen my earlier post about Beanie Kids.
The Geelong Advertiser had a report about the potential impact of the carbon tax on retail tenancy costs. Landlord have been good at passing on all additional costs for decades. Related: I note that there are reports today that Myer will pull out of centres where it does not get better rent deals.
I have been fortunate in recent years to be able to negotiate rent abatement in under performing centres, 33% in one case.
Venues have been confirmed for the Newsagency of the Future workshops which start in ten days. Anyone is welcome to attend. The event is free. But bookings are essential. Click here for the booking form.
It has been a thrill to participate in the Retail Week Conference 2012 in London over the last couple of days. More than 1,000 retailers participated, large and small. This on top of the Retail Business and Technology Expo earlier in the week – a separate event.
Both events are better informing my presentations for the upcoming Newsagency of the Future workshop series.
Most of the retail challenges and opportunities discussed in many of the sessions are not dissimilar to challenges and opportunities we face in Australia. Some of the solutions discussed are fresh.
What was most interesting was the discussion about the future of the High Street. This has been a hot topic in the UK for years and while there has not been much progress that they are at least discussing the migration from the High Street to the out of town centre puts them ahead of Australia.
The topics covered which are borderless include: challenged retail business turnaround strategies, omni-channel retail, High Street reinvention, being smart with technology, economic challenges, technology led disruption, employee engagement and big versus small retailers.
With the growth in sales of digital photography titles we regularly refresh the layout of this section of our magazine department, ensuring that titles we want to promote are presented with the full cover on display. The range is small enough and the space allocation good enough for us to give all titles fair time in the full cover spotlight.
Each week we review this section to ensure it is fresh and to place titles next to each other in a way which we think will drive the purchase of more than one title in a shopping trip.
The result we are seeing is good sales growth.
The May issue of FHM will be the last reports Mumbrella. This not unexpected (due to declining sales) move further thins the men’s shelves.
Maybe we are in an era of more cerebral contact given the challenges for titles with sexy content compared to the success of titles with smart content. I suspect this is the case across all magazines. readers want value in the form of smart content. I think this is a reason for the success of Frankie for example and will probably be the reason for success of Smith Journal as it extends its journey.
Vale FHM, it’s the end of an era.
I have been able to visit a number of Ryman the Stationery stores in London. While each is different in size, they are all similar – the typical footprint I have seen in London is small, the aisles narrow and the range of stationery considerable.
They offer known brand stationery and their own brand. Given the Ryman retail footprint their own brand would carry considerable respect from consumers I suspect. Certainly their house branded products look like good quality – not like some of the cheap and nasty house brands back in Australia.
What really strikes me about the Ryman stores is what they fit into a smaller footprint. I was in one store of no more than fifty square metres. I be they had more than twice the stationery than a large newsagency allocating twice the amount of space.
In each of the Ryman businesses you get the feeling that they know stationery. They must, of course, as it is their bread and butter – get this wrong and they fail.
Maybe this is why newsagents are challenged with stationery … it is not our bread and butter. We don’t know the category as we should. We need to fix this if we are to grow stationery sales.
I have some thoughts on this and will share these at the Newsagency of the Future workshops in a couple of weeks.
Over the last few days I have been able to visit more than thirty independent newsagency businesses in and around London. I saw this sign in only one. No one was browsing the magazine range – this is probably more to do with the time of day than the sign. To be fair, there was limited space and even one person browsing would certainly disrupt customer access. That said, this barrier to browsing is not a point of difference I’d want.
One of the points of difference we newsagents offer is easy shopper access to magazine range. Browsing is key to this. If we push back against browsing there is no doubt it will hurt sales.
Beyond browsing, the diversity between newsagency businesses I have seen is considerable. It’s been three years since I last looked at newsagencies in London and my feeling is that there are better businesses today.
Sure there are convenience store type operations which dabble in a range of categories. However, I have seen more newsagencies focused on one or two core product categories and owning these as their point of difference.
More than half of the newsagencies I visited looked good and presented well on the high street.
Like in Australia however, the overall differences between these businesses with a common shingle is considerable.
There are plenty of bulk magazine deals – where publishers put 2, 3 and even 4 current issues of weeklies together in a bag and offer these for a lower price – in London.
While I am sure that publishers engaged in the practice will disagree, retailers I have spoken with here say that they don’t notice a sales lift. One retailer said was quite frustrated because he is certain his revenue is down as a result.
Regulars here would know that I am not a fan of the deals as I think they educate shoppers to not pay full price.
I’d prefer people to purchase a title for the content rather than the discount off cover price. Okay, use price rarely to reconnect with shoppers who have stopped buying but not too often and this is what educated people.