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

Selling $80 gifts in a newsagency

We are playing with the boundaries of what we sell in our evolving gift department. This iPhome controlled helicopter, appCopter, is the latest addition. Indeed, it is part of a range of similar products we have started carrying under the same brand … they all make for a good range story in store.

This move is as much about price points as it is about the types of gifts we sell. I know of some newsagents who have no trouble selling gifts valued at hundreds of dollars and others who cannot sell anything over twenty dollars.  I am experimenting, through a range of products, to find what our level is.

I also like the appCopter as it connects with the shopper we attract for event tickets and many of the types of magazines we sell. It will also appeal to the parents of these shoppers.

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Gifts

New ATO benchmarks for newsagency businesses still wrong

The latest performance benchmarks for newsagency businesses issued by the ATO a few weeks ago are wrong in my view and will most likely result in more newsagents having their business records audited.

While the new benchmarks are an improvement on what the ATO published last year, the remain ignorant of the facts. For example, they say the average cost of sales is 70%. I know many newsagency businesses where this is not the case. The considerable variation is a testament to the diverse nature of the businesses which trade under the newsagency shingle.

 

Having had one of my newsagencies audited because of faulty benchmarks, I am concerned that the new benchmarks have not adequately addressed the situation.

The ATO benchmarks should accurately reflect newsagency trading situations as they are used by the ATO to determine if a newsagency business should be audited. This happens when the business results fall outside or near the borders of the benchmark.

Newsagents should click on the link and read all the ATO numbers and what they say about them. If you are trading outside the benchmarks, get ready for a call from the ATO.

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Newsagency management

Brilliant Apple-themed display in Bairnsdale

Check out a brilliant Apple-themed display created by the team at newsXpress Bairnsdale.

By bringing together a range of products for the Apple iPhone, Apple iPad and Apple iPod, they have created a wonderful retail story – unlike what shoppers would expect to see in a traditional newsagency.

I love the inclusion of the Apple iTunes cards in the display both from a visual perspective and that they fit nicely in with all the other Apple products.

This is the type of display we all need to develop in our newsagency businesses to leverage magazine traffic and to drive magazine sales to people purchasing other items – in this case the Steve Jobs books.

I’d expect suppliers of the various products in the display to be very happy at their inclusion. Even magazine publishers who may prefer a big display of just their title would be happy, I think, to be part of a stronger visual story.

This is one of the best commercially-focussed displays I have seen in the last year.

I’d be happy to receive photos from other newsagencies for publishing here.

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magazines

Promoting the marie claire 200th

We are thrilled to be promoting the 200th edition of marie claire magazine.

The new look (and size) marie claire looks stunning. The supporting collateral is excellent. I love that some of the posters included copies of pages from the magazine – this makes it easier to take the browser into the title. See the posters above the magazines on the shelf – I’d like to see more posters do this.

The main collateral has excellent visual cut through, just stunning, as does the magazine itself in our regular magazine shelving.

On the back of the look of marie claire we yesterday ordered 100% of our initial order. We’re confident we will sell all of this stock.  It’s a collectors item as well as a magazine shoppers will want to read.

The marketing around the 200th issue has been excellent, we had customers asking abut the title before it went on sale.

Special magazines issues like this present newsagents with an excellent opportunity to stake our claim as the magazine specialists.

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magazines

Excellent Dolly promotion

The promotion with the latest issue of Dolly magazine, out yesterday, is sure to drive sales. We have given the display prime position in-store, facing on to the dance floor.

The collateral for the Dolly promotion is particularly good – offering excellent visual cut through.

We ordered extra stock as we are certain to sell out. We sold out of the last issue of Dolly with a few days of the on-sale period to go.

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magazines

Customers loving the Pacific Magazines promotion

We are seeing an excellent response from customers to the latest Pacific Magazines promotion which offers $10,000 in cash prizes. We are promoting the opportunity at each of my newsagencies with displays facing into the shopping mall to attract shoppers and show off a point of difference for us in each of the shopping centres.

I particularly like the campaign because it has hit at a good time of the year – after Back to School, before easter really kicks in and at a between season time for many retail businesses in shopping centres. It’s a campaign that helps us stand out and that’s important in retail.

The promotion gives participating newsagents a reason to put the related titles under the spotlight. It also gives shoppers a reason to consider purchasing the titles.

The other aspect of the campaign is that it’s simple … it’s about a cash prize.

I am seeing a sales lift of as much as 40% for some titles and, curiously, at no impact to competitor titles.

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magazines

Talking about the future of quality newspapers

LaTrobe University in Melbourne yesterday hosted a discussion on the future of quality newspapers. Included in the panel were Eric Beecher, Chairman of the company which owns Crikey, Paul range, Editor of The Age, Prof. Robert Manne and Dr. Mary Debrett.  Click here to see some tweets posted during the event. While I can’t find a video of the event to share with newsagents, I figured it would be worth at least sharing details of the event.

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Media disruption

Book now for a free Newsagency of the Future workshop

The Newsagency of the Future workshop series starts at the end of this month. Anyone is welcome to attend, newsagents, newsagency employees, would be newsagents and newsagency suppliers. You can book by faxing in a booking form or registering through the online booking facility on the Tower Systems website.

At this workshop I will share the very latest retail trends based on what I saw at the National Retail Federation Retail conference in New York last month and will see at the Retail Week conference in London next week.

I will also share my thoughts on the factors we need to consider in planning our future – migration to digital, online shopping, competition from supermarkets and others, the growing cost of labour and retail real-estate and changes in attention from core newsagency suppliers.

The last time I ran such a workshop was mid 2010.  So much has changed since then. Many new challenges have emerged and many new opportunities are before us.

I don’t profess to have the answers. That said, I certainly see plenty of options for us.  My sense is that newsagents want to discover and understand their options.

If you can’t make one of the capital city events I do plan to consider regional events if the interest is there in this series first.  I’ll keep you posted.

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newsagency of the future

Federal government move on red tape welcome

Like a long line of governments before it, the current federal government has announced plans to cut business red tape. The plans this time look more thought out and designed for action than announcements in the past. I hope it works. Cutting red tape was on the wish list for the Minister of Small Business which I published on the weekend.

I like the idea of business people meeting with state and federal leaders prior to COAG meetings. I am concerned, however, about the limited small business representation. There are so many small businesses in Australia, over a million according to the ABS, and to distill the needs of these to one, maybe two, representatives feels to me as unworkable. The other challenge is that small businesses are to be represented by COSBOA which, while the peak small business group in Australia, does not represent the majority of small businesses which do not belong to or support industry associations.

I’d love to see COSBOA engage with member associations, like the ANF, to ensure that red tape ideas and issues are canvassed as close as possible to the grassroots and filtered up, as appropriate to ensure that those representing small business at the pre COAG meeting are properly informed to represent their constituency.

The government needs a workable group if it is to make progress on red tape and I am sure this has informed the size of the group they are putting together. We in the small business trenches need to make sure that bodies representing us through the channels to COSBOA are informed of specific red tape reduction ideas we have.

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Newsagency challenges

Tapping into loyal AFL fans with Beanie Kids

We have placed our display unit packed with AFL Beanie Kids products on the lease line facing into the mall. It’s the perfect place to drawn traffic. That’s the guiding factor for all displays facing into the mall – will the draw traffic to the newsagency? If so, they go there.  If we are not sure we give them a run and measure the results. The AFL beanie Kids display had been ump less than a day and it was already generating traffic for us.

I love AFL fans who are loyal to their club and I love this Beanie Kids range. This range reinforces the importance of brands in driving traffic, on several levels. Try and copy this with cheap China product and you have no hope.

People will pay a premium because of the loyalty they have with the brand and the emotional connection this engenders. This is what brands can achieve for our businesses. It’s why I prefer to stock brand name products in my newsagencies.  Retail psychologists say that people who purchase to satisfy an emotion will pay more. I have seen research which backs this up.

I am confident this range will sell out. It’s a welcome addition to our AFL story and the stock has gone on sale at the perfect time.

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Gifts

Do you chase extra magazine product?

We sold out of the latest issue of The Essential Guide to iPad and chased extra stock and have this on the shelf now thanks to Network Services. I am curious about how often newsagents chase extra stock.  If you don’t chase it, is this because you don’t are or are tired of there never being any stock?

If it’s a title we know we will sell we don’t accept an out of stock response. Most times we do this and chase harder we get the stock. Sales grow as a result.

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magazine distribution

Fat magazines challenge space allocation

I am not happy with the adventure pack sent out by ACP Magazines yesterday.  Our caravan section was full already so we had to find room. With each pack containing three magazines we can only fit two per pocket. This means a three pocket allocation or we store stock somewhere and remember to replenish. Either way there is a cost.

Given the Sales based Replenishment program at ACP / Network Services and given that we do send accurate sales data on time, I would have preferred to receive less stock and sales based top ups. Instead, I am made to be the warehouse. To fit the title in we have had to reduce space to a title from another publisher. I am not happy about that.

There are magazines which are regularly bagged and I have come around to accepting and understanding that based on the customer research by the publishers involved and the sales data I have seen. My concern here is that this is not usual for this title – certainly I don’t recall it as being usual or regular.

This is not a unique challenge presented to us by ACP. There are other publishers who chase sales with occasional bagging or one shot bagging. They all need to understand that our stores have a finite amount of space. Send a new title or a much bigger package and there are consequences for us.

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magazines

Messy magazine stand

Check out one of the magazine displays at a Newslink store at an airport yesterday. Two magazines, Woman’s Day and OK! on the top row are upside down While NW has an insert left in front of the cover. While one could argue that this was unusual I see this regularly at airport outlets and supermarkets. It would not take much to ensure that all stock is placed right side up from the outset and to regularly check the stand so that all titles look good.

These corporate outlets appear to not care as much about how magazines are presented as we do in newsagencies. Their shops are usually staffed to have just enough to run the counter let alone take care of the shop floor through the trading day. If I was ACP I’d not be happy about how my products look in the photo.

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magazines

Promoting Bride to Be magazine titles

We have been promoting the two Bride to Be titles next to each other. It’s how we approach all magazines published under a common banner where appropriate in terms of display segmentation. I find this drive purchases of both titles. I mention this because I noticed one newsagency this week with these two Bride to Be titles separated. It’s not rocket science that we do this. Indeed, it is this type of placement which shows our care about magazine placement.

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magazines

Tesco shows that customer service is vital

Giant UK supermarket group Tesco has announced overnight the creation of 20,000 new jobs. The Tesco announcement is evidence that major retailers understand that customer services is a valuable differentiating factor.

Here is part of what Tesco UK CEO Richard Brasher said:

At the core of this investment is our determination to deliver the best shopping experience for our customers, bar none.  We will invest in more staff on the sales floor at busy times, greater expertise and help in the crucial areas of fresh food, and enhanced quality and service across our stores at all times.

Our takeaway must be: how are we resourcing our newsagencies? Are we staffing for the optimum customer service experience. We like to think that customer service is a differentiating factor for us. Is it really?

This ties back to my previous post this morning about us being retailers of the moment.

Footnote: watch for Coles or Woolworths or both to make a similar announcement to that from Tesco.

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Customer Service

The challenge to be a retailer of the moment

Further to my post last week about Gerry Harvey talking down retail, I was interested to read Eli Greenblat’s piece in The Age on Saturday. Greenblat took a more considered view of the situation and recorded the disappointment aired by some about Harvey’s comments.

My concern about the retail commentary is that it continues to focus on overall numbers without delving into then success stories. Consumer confidence is driven, in part, by the negative stories.

Our job as retailers is to give shoppers what they want. We need to pursue this relentlessly. But we need to be smart.  It is too easy to say that shoppers want value and that value means cheaper prices. There are many ways to deliver value, price is but one.

Newsagents are lucky in that we have a core group of habit based products which will drive shoppers through our doors: magazines, lottery products (for some at least), greeting cards, newspapers and photocopying. While we can argue about challenges for each of these, today, at least, there is good regular traffic off of which we can build growing newsagenices.

The question is – are we leveraging this existing good traffic to our advantage?  Are we being smart in giving shoppers what they want? I worry that too many newsagents are too busy complaining about factors outside their businesses and ignoring that they should be fixing what they can within their businesses.

This is our biggest challenge – to be retailers of the moment.

Our future is up to us just as the future of Harvey Norman is up to gerry Harvey and his management team. We each have to own our respective situations.

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Newsagency management

This blog being preserved by the National Library

This blog in being preserved as part of the PANDORA project by the National Library. The National Library made the request some considerable time ago in recognition of the cultural value of what is published here.  Here’s an explanation of PANDORA from the website:

PANDORA, Australia’s Web Archive, is a growing collection of Australian online publications, established initially by the National Library of Australia in 1996, and now built in collaboration with nine other Australian libraries and cultural collecting organisations.

The name, PANDORA, is an acronym that encapsulates our mission: Preserving and Accessing Networked Documentary Resources of Australia.

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Blogging

Tapping into Cadbury national advertising

We have on display as part of our Easter offer. I was therefore thrilled to see the full page advertising being undertaken by cadbury promoting this product. It was in Who a week back.  They have also setup a Facebook page which has attracted 4,000 followers.

One reason I love supporting nation brands is for their advertising spend which can drive traffic and or impulse purchases. People who have seen the advertising more quickly ‘get’ a product when they see it in-store.

This is our first completely Cadbury easter and we’re thrilled with how it is playing for us so far. I love the mix of products and that they have tapped into fun and are supporting this advertising and social media engagement.

By the way, we have kept eggs to a minimum … Easter for us is about plush, collectibles (Beanie Kids), cards and fun Cadbury items.

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confectionary

Meat and newspapers?

Check out the promotion being run by Woolworths and the Adelaide Advertiser. To get the $10 discount off meat you have to purchase the newspaper. An interesting deal which at first glance seems an odd fit.

It feels like News Limited newspapers and supermarkets are been running more of these promotions – buy the newspaper and get a ‘deal’ at the supermarket.

After yesterday’s story in The Age about Coke and supermarkets I wonder why any supplier would want to deal with Coles or Woolworths. They’re like a spider, luring you into their web and they slowly kill you.

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Newspapers

Free gift with Harpers Bazaar damages the look of a quality magazine

The folks at ACP magazines would be disappointed to see the damage to our stock of Harper’s Bazaar today. file the magazine itself is in tact, the card holding the free gift is crumpled and ripped in many cases. This damages the product in the eyes of the shopper.

I like the gift with but not the way it has been packaged with Harper’s Bazaar. A quality magazine does not look so good on our shelves.  I have seen in the past that such damage can be a turn off to shoppers and dilute the sales bump the publisher is seeking by providing the free gift.

After I took the photo we adjusted the stock to place the less damaged copies at the front of the display.

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magazines

Tapping into Modern Family interest

The latest issue of Mad magazine has a cover story (well, not so much a story but a spoof in Mad tradition) on the popular Modern family TV show. We are tapping into the opportunity by placing the full cover on display. This makes sense since we’re serving an area where we suspect the show would be quite popular.

Mad is picked up by people interested in the target of a cover story, I’ve seen this happen several times. The key is to get the magazine in front of those people. Hence the need to consider where the title will work best.

For this issue of Mad I am thinking with TV Week for some copies at least. Sometimes a tactical placement can work better than a flashy display. Eyeballs is all you need and it’s what you place a magazine or a product next to which can work a treat.

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magazines

Good to see Minister for Small Business in Cabinet

It is good to see the federal government elevate the position of Minister for Small Business to Cabinet. This move is long overdue. Hopefully Brendan O’Connor, the new Minister for Small Business, uses the higher profile for the benefit for the small business constituency.

Start up smart has good coverage of the appointment.

I would prefer the Minister for Small Business to have had small business experience. O’Connor’s website indicates he is a lawyer with a trade union background. I think there should be a cap on the number of lawyers who can be parliamentarians. I’d set the cap at 10% for each major party.

Time will tell what kind of Minister for Small Business Brendan O’Connor will be.  Here is what I would like to see him push on behalf of small businesses:

  1. An urgent review of Fair Work with a view to eliminating casual employee penalty rates in roles sought out by people not looking for full time work. This could cut labour costs for newsagents on Sundays in half.
  2. A genuine reduction in government red tape. Successive governments have promised this. None has delivered.
  3. Strengthening laws and processes for ACCC in dealing with unconscionable conduct and unfair treatment of a big business over a small business.
  4. A government wide campaign to purchase everyday office items from local businesses. Yes, selfish but we should try! We should match with a national pricing offer.
  5. The introduction of an annual pool of funding for small business start ups with generous tax concessions. They fund films to attract spending here why not businesses?
  6. Establishment of fixed interest working capital funding for small businesses.
  7. Development of portable bank accounts and capping loan exit fees – to make switching banks easier.
  8. Ensuring genuine small business representation at government events, discussions and roundtables – too often politicians of all sides suck up only to the big end of town.
  9. Focussing on IT by way of tax concessions for 100% Australian owned companies under $10M in annual revenue creating intellectual property in Australia which aids business productivity. Yes this is a selfish idea (I own and IT company) but it is also smart. A stronger IT industry will bring money to our shores, reduce the brain drain and boost business productivity. Get this right and we could deliver more benefits for the economy than mining.
  10. And to kick start small business and businesses which provide them with equipment and services: a once-off investment allowance in any productivity improving investment such as plant and equipment, knowledge or people.

I wish Brendan O’Connor well. I hope he goes into the portfolio with a small business focused agenda and that he is a man of action. The sector certainly needs this.

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Newsagency management

Why the increase in Your Trading Edge magazine?

Check out our sales and return data for Your Trading Edge magazine.  Click on the image for the details.

We should be getting four copies of Your Trading Edge based on sales data. The geniuses at Gordon and Gotch disagree.  They or their systems increased us from form to eight and then to nine. There is no justification for this.  I looked through the latest issue to see if it was special in any way, if it could generate extra sales. I found nothing out of the usual.

So why the increase in supply?  All I can put it down to is Gotch having extra stock and needing to put it somewhere. Gotch people will deny they di this. They have denied such behavior to me in the past. I don’t believe them. The only alternative is that their allocations system is stuffed and I think that is more unlikely than them deliberately sending stock they know I have no hope of selling.

Magazine publishers should look at this data. Newsagents have this detail available at their fingertips at their sales counters.

Click on the image and see the detail for our newsagency. You will see why newsagents make irrational early return decisions. They will see oversupply like this situation and strike back without thinking. They will strike back for cash flow reasons and to punish Gotch – they will often not care which publisher they hit.

This is why there are so many irrational early returns.

If you publish titles distributed through Gotch you need to ask them how they respond to irrefutable evidence like this.  Publishers tell me that early returns are killing the newsagency channel for them. I agreed with that.  However, I do not agree that all early returns are the fault of the newsagent. There are many titles oversupplied like this example of Your Trading Edge. A newsagent with 50 or 100 of these unjustified oversupply situations a month is sure to strike back. It wears you down. Especially when you get spin and lack of concern from the distributor.

If you wonder why newsagents are angry, the answer is here.

If you wonder why newsagents early return any title without thinking, the answer is here.

If you wonder why newsagents are reducing magazine space, the answer is here.

If you wonder why newsagents leave the channel, the answer is here.

Fix this problem and you strengthen the newsagency and channel and, maybe, sell more magazines. Seriously!

There are people at Gotch who think I have an obsession about their business and criticize it unfairly. I’d welcome an opportunity to engage in a public fact-based debate on any Gotch related issue I raise here.

Footnote: based on the latest issue of the title I’d accept a supply increase to five. However, Gotch would not have used that data for the latest issue’s allocations.

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magazine distribution

Are they rationing The Monthly?

We received way too many copies of The Monthly summer edition and returned almost all. The latest issue with a Kevin Rudd cover we received a quarter of the summer allocation and will sell out. We are chasing more stock and hopefully will get this. It is frustrating to be oversupplied for the long on-sale issue and cut back too far for the regular monthly issue.

The Monthly is one of those magazines where our sales very much depend on the cover story. If we had had enough stock from day one we could have sold four times the allocation.

To those in publishing businesses who throw their arms up at this – a newsagent saying they don’t get enough of this an too much of that – it happens. Walk in our shoes for a month and you will soon see the craziness of the magazine distribution model which causes us such frustration.

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magazine distribution

Tapping into David Bowie fans

We have plenty of baby boomers shopping with us so it makes sense to promote the latest issue of Rolling Stone magazine with a double pocket display. The David Bowie cover is stunning – it has excellent visual cut through.

This is a good example of when showing the whole cover is vital to achieving the sales potential of a magazine. Sure you get a feel for the Bowie theme if you can only see the top third but the whole cover … now that’s a different story.

We will be giving this issue of Rolling Stone some time with newspapers – to get it in front of Bowie fans who may not browse our music titles.

I’d urge all newsagents with a good baby boomer population to give this issue of Rolling Stone time in the spotlight.

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magazines