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

News Limited columnist talks down retail

The Sunday Herald Sun today carries a column by Terry McCrann, Bleakest of views from the shopfronts, in which talks down retail off the back of some poor numbers from Woolworths and JB HiFi. McCrann’s column is ignorant.  It lacks attributable facts.

Okay, some sectors of retail are doing it tough. Some geographic areas too. Plus there are differences between high street and regional.  But there are plenty of retailers growing. McCrann ignore this. Maybe because it does not fit his style.

McCrann also makes them mistake of politicians and many media outlets – despite knowing that small business retail is the backbone of retail in this country he relies on big business experiences to support his opinions.

A smarter column from McCrann would have sought to understand the differences between the business which are growing and those which are not. It could be that there are decisions retailers can make to trade more successfully in the circumstances in which we find ourselves today. That’s what I think … that there are decisions we can take to improve our own situation.

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retail

Steady rain drives sales

Here in suburban Melbourne we have not had the floods of some parts of the country. The steady rain we have had has been a boon to shopping centre traffic. yesterday, for sample, sales jumped 25% on the back of a packed shopping mall. Most departments benefited from the traffic increase. It was a retailers delight!

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Newsagency management

Sunday Retail Marketing Tip: loving habits

Shoppers who shop based on habit are tremendously valuable to retail businesses. Likewise, shoppers who shop to satisfy habits (obsessions, hobbies and the like)  are tremendously valuable.

A habit based shopper to a newsagency would / could include any of the following:

  • The magazine shopper who visits for every issue of their favourite magazine(s).
  • The magazine shopper who browses the shop to satisfy interest in specialist topics like model railways.
  • A partworks collector.
  • The lottery customer who puts tickets on at least weekly.
  • The card shopper who gets cards for all (or most) card-giving occasions.
  • The tobacco product shopper.
  • The customer who purchases replacement ink cartridges and or printer paper.
  • The daily newspaper shopper.

Customers who shop with you out of habit are, as I have noted, tremendously valuable. They need to be encouraged, respected and loved.

Here is the marketing tip, or question, what are you doing to attract, keep and love your habit based shoppers? What is unique about your offer that gets them back and more of them back? Is it that good that they talk about it to their friends?

A good place to start in considering habit based retail is to make a list of the products and service you offer which fall into the habit based category. Get your team involved in this, listing every item which could meet habit based criteria.  Hopefully, as you create this list you will think of ways to better connect with and serve these valuable habit based shoppers.

While this idea may seem simple and almost of questionable value, I am certain that you will unlock ways to making more money from habit based shoppers – by looking at a type of shopper you may previously not have look at in this way before.

Love your habit based shoppers and they will love you back. You can bank on it!

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marketing tip

Beware the Magazine Vending

Magazine Vending (Vending Locations Australia Pty Ltd) is offering magazine businesses for sale based around selling magazines through a vending machine.  Their franchise opportunity marketing indicates a supply arrangement through ACP Magazines.   While their ad at Trading Post does not name ACP, they certainly hint a relationship.  However, I have been told that the supply contract associated with ACP titles has been terminated.

The ACCC has started asking questions about Magazine Vending.

I understand that at least one legal challenge against the business has been launched.

Anyone considering taking on a magazine vending franchise should undertake thorough due diligence into the business, their purported suppliers and their principals. The due diligence will get you further information including accessing a blog post with plenty of comments about magazine vending.

Anyone who has a complaint in relation to Magazine Vending should raise the matter immediately with the ACCC. The Enforcement Operations office out of Western Australia is handling the matter. Fax: 08 9325 5796.

For newsagents there is the other issue of why put magazines into a vending machine. Magazines are available more widely in Australia than any other country. Why dilute sales for retailers supporting the product?

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Ethics

Merchandisers acting as spies

Is it just me or are magazine publishers sending more merchandisers into our newsagencies to take photos of displays of competitor products? This is poor form in my view. If a supplier is paying for a resource to visit my shop it should be to add value too my business. Further, they should ask before they photograph something other than what they have done.

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Ugh!

Driving Better Homes and Gardens sales

We are promoting the latest issue of Better Homes and Gardens magazine with this display on a column facing shoppers as they enter the newsagency. This is one of three promotional initiatives for this issue of the top selling title. We have a stack of copies with newspapers.  We also have a bold in-location display.

We’re confident that our three initiatives will help us drive incremental sales for the title, especially over this first weekend.  Indeed, sales of the issue are already good and this will only get better over the weekend.

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magazines

Promoting The People’s Friend brand

We have all three current titles under The People’s Friend brand stripped across at the front of a chest-level magazine display. Of course, we are chasing purchases of all three. This is one time I don’t mind that a Christmas title arrives in-store so late as I expect it to sell well. Australian lovers of The People’s Friend brand are used to season shifting in my experience.

One newsagent asked my why I’d give up prime space to a low price point title … the price of a single copy of The People’s Friend is not the issue for me, it is that they are habit based shoppers and their value over the course of the year is vitally important to the health of my newsagency.

I think some newsagents neglect to see customers through the the prism of value over a year.

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magazines

US print advertising collapse

The Atlantic published a report, The Collapse of Print Advertising in 1 Graph, on Wednesday which included this graph. Talk about a picture telling the story. The report has been widely reported online. It pulls no punches:

You sometimes hear it said that newspapers are dead. Now, $20 billion is the kind of “dead” most people would trade their lives for. You never hear anybody say “bars and nightclubs are dead!” when in fact that industry’s current revenue amounts to an identical $20 billion.

Pile the figures from the US on top of the figures released last week for local newspaper publisher Fairfax and you start to get a sense that it’s game on for the future of newspapers as we know them.

Regulars here will know that I have had doubts about the viability of newspapers for some years, certainly the viability in the context of mass distribution through newsagents. Publishers have addressed the viability question by holding the cover price down and causing newsagents to be fa4 worse off today in real terms than ten years ago. They have also addressed viability in terms of home delivery by not allowing newsagents to charge a delivery fee which addresses the real costs of landing a newspaper in a subscribers yard.

The share price of newspaper publishers, especially those earning the majority of their revenue from print, reflects the challenges of print.

All of this is important for newsagents to consider as they wait for News Limited to talk with them abut their plans for the future in terms of newspaper distribution.

I liked this paragraph from a report at Business Insider about The Atlantic report:

The good news is, contrary to the fears of some doomsayers (also generally people who worked for newspapers), the world has never been better informed. Thanks to blogs, Twitter, Facebook, Google, two billion online fact-checkers, and some amazing online news sites—including some run by newspapers—we now know more faster than at any time in history, by a mile.

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newspaper home delivery

Where do you place your Country magazines?

I place Country titles with Home and Living titles – in fact, at the start of this section and next to our popular UK and TV magazines section. This prime placement makes sense to me. That said, I know of plenty of newsagents who think they are better situated with Craft magazines.

Our own sales of Country titles are up by more than 10%. This tells me our placement strategy is right.

I was talking with Mark Darton, Circulation Director of Universal Magazines about this recently and this is some of what he had to say:

The Country genre sits in the” home” category and the latest ABC  audit figures highlight the year on year growth of the other competitor titles in the category. Below is an excerpt from Network Services Audit analysis as always it’s important to look at the numbers as well as the % change by title. By way of comparison we have seen a similar growth but aligned to the issues under the new editor.

The message to newsagents is the Country titles should be displayed in the home category and not Craft. Grouped together and they can compete from there. This sub category is in growth and worth some attention to capitalise on that growth.

Universal is investing in this category as we expect it to be strong over the next 12 months.

In the latest circulation audit, home declined by -1% but this masks what was actually a good period for the category. Country Home Ideas (+13%) was the third fastest growing title in the Audit, whilst Belle (+6%), Aust Home Beautiful (+5%), Real Living (+5%), Aust House & Garden (+4%), and Country Style (+3%) also recorded gains.  Three titles recorded a loss in sales; Aust Handyman (-19%), Inside Out (-10%) and Vogue Living (-1%).  Better Homes & Gardens remains the category leader with total sales of 378,048 (a fall of 2% this Audit).

Click here to see a sales alert from Universal Magazines about Australian Country Collections.

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magazines

Luxury Travel oversupply by Gordon and Gotch fails

Two months ago I wrote about the unjustified increase in supply of Luxury Travel magazine by magazine distributor Gordon and Gotch. The title has failed to work, it did not sell. It has spent the two months on the shelf, taking up a pocket, not selling a single copy. And, yes, we gave it time in the best spot in travel titles.

While the magazine geniuses at Gordon and Gotch will no doubt say that there is a reason they increased my supply from 2 copies to 5 and that I am wrong to complain here, they will have no evidence to support their position. They made the wrong decision to increase my supply. Indeed, it looks to me like a cash grab – they had spare stock and had to place it somewhere since I suspect they make more money shipping magazines out than holding them in the warehouse.

Magazine publishers wondering why newsagents early return their stock need look no further than this blog post. It is this type of unjustified magazine oversupply which causes some newsagents to struck back, early returning product without looking at sales data.

Fix whatever caused the unjustified oversupply of Luxury Travel and you take a good step toward fixing magazine oversupply.

Let’s look at the consequences of the Gotch behaviour with this title. They increased my supply from 2 to 5. They supplied on the last trading day of December.  They got their distribution fee and they will get their return fee. They also got my cash for the extra 3 copies for a while. There are some newsagents who think this is the key game of magazine distributors – cash management.

All I know is that Gotch has failed yet again and no amount of spin from the top of the company can excuse this appalling and on-going behaviour. The evidence speaks for itself.

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magazine distribution

Promoting Google magazines

We are promoting these two Google related titles together and at the front of our technology section.  I expect they will sell well – especially positioned next to each other like this.

Sales of technology titles are up, especially titles about devices such as the iPad, iPhone and Android phones. Sales of traditional computer titles continue to fall. I am surprised that they some are still published given the low sell-though.

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magazines

Tap into media coverage for Australian Property Investor

Newsagents should take action tomorrow morning with Australian Property Investor.  Their metallic red flagship Hot 100 issue will be receiving extensive press coverage across national, metro and regional newspapers, radio and TV this month. The media coverage kicks off tonight with a story on Channel 7’s Today Tonight.  The Australian Property Investor Hot 100 suburbs list has become an institution among business and investor consumers. It’s an easy issue to sell to those who do not usually purchase this magazine

I urge newsagents to act on this title.  Place it in a high traffic location … make the most of the excellent media coverage.

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magazines

Gerry Harvey needs to own his situation

Gerry Harvey’s business has a tough time and he’s like the school kid in trouble trying to get you to look at the other kids rather than focus on him.

You are now seeing more retailers go broke and out of business than I have ever seen in my life.

That’s a quote from Gerry Harvey published yesterday by the ABC. He’s more extensively quoted in The Age this morning.

Gerry Harvey needs to stop talking down retail and news outlets need to stop letting him get away with this.

Harvey Norman’s poor figures are theirs to own. They need to accept the situation and address it and not suck up space and air time talking about other retailers.

Okay, retail is tough. But there are plenty of good stories, stories of same store year on year growth. Especially in the small and independent retail area where the owner of the store runs the store and where there owner of the store lives and breathes essential customer service knowing that the buck stops with them.

The Harvey Norman stores are from an old retail model where customers were treated like mugs and they got away with it. His shrill advertisements made it sound like his prices were great when they really weren’t. He pitched interest free finance but was it really?

I don’t remember Gerry Harvey every spruiking a point of difference which he could own. Anyone can win on price. Anyone could negotiate with a finance company for ‘interest free’ financing. Today’s shopper armed with the ability to easily compare price can see that Harvey Norman is not as cheap as their ads make out.

Price is not a valuable differentiating factor for a retailer.

Had Gerry invested in genuinely good customer service and relationships which were embedded with the local community he might have had goodwill on which he could rely.  But, no, he thought it was about price (even though his prices were not that good).

The lesson from the Harvey Norman problems is that customer service is king in retail. It drives repeat traffic and with repeat traffic you drive cash flow and cash really is king.

Retail is in the middle of the most significant paradigm shift in decades. Gerry Harvey’s model is struggling to navigate this.

I see more newsagents and other independent small business retailers embracing more change every month than Gerry and his business achieve in a year. That’s because our livelihood in small businesses is on the line every day. With Gerry and probably the directors of his company the food on the table is covered by other investments and assets. They are not acting like they are fighting their their business. They have become lazy.

That’s why Gerry complains so much about online and GST on imports. He wants other people to own what is really his problem.

Many small and independent retailers have just the one core asset, their business. No wonder they are smarter.

I’ll delve more into this issue at the Newsagency of the Future Workshop series next month.

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Newsagency opportunities

One Direction set to take Friday

One Direction tickets go on sale this Friday and since we’re a Ticketek outlet we are set to have a shop full of girls for ,ugh of the morning. We have been selling tickets for quite a while and never have we had so many calls of visits about a ticket on-sale. And these girls are relentless in wanting to know stuff. The make AFL finals customers seem tame by comparison. We’ll make the most of the opportunity with up-sells targeting the One Direction demographic.

As an aside, tickets are $72 each. People have money for things they love.

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Newsagency opportunities

Promoting That’s Life and the Maggi Tender range

The latest issue of That’s Life needs nothing more than being placed in front of shoppers. We are fortunate enough to have the title bagged with a pack from the Maggi Tender range. We are making the most of the opportunity by placing the title at the counter and on an impulse display on the lease line facing into the shopping mall.  We want to sell out by the weekend and introduce (or re-introduce) more of our shoppers to That’s Life.  That’s Life is the kind of title which is not often browsed so I am not that concerned that it is bagged.

Now before some newsagents say they did not get this promotion. Yes, this happens from time to time. Publishers add value to divergent channels and parts of a channel from time to time – go check out the fantastic bag which comes with the latest AWW in Woolworths at the moment.

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magazines

Playing the Meryl Streep win

We have Lovatts Christine’s BIG Crossword title in prime position with our crossword titles and with our women’s weeklies titles (New Idea, Woman’s Day, That’s Life and Take 5 etc) to make the move of the Meryl Streep cover. Meryl won the Best Actress Academy Award on Monday night our time and so will be recognised by more shoppers. It is a very timely cover and should help drive browsing of the title.

I hope other newsagents noticed the opportunity with this cover and have placed Christine’s BIG Crossword in a prominent position. It is the sort of cover you use to achieve sales growth – so long as shoppers can see the whole cover.

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magazines

Excellent impulse unit from Pacific Magazines

We have the terrific display unit from Pacific Magazines at the front of the newsagency facing into the shopping mall driving traffic and impulse purchases. Pacific gets these units right and has done for years. The display units are strong, easy to setup and well designed to tell a story and attract eyeballs.

We move the display unit to different locations to combat store blindness from regular shoppers and ourselves.  So, right now it is out the front.  We moved it there from next to our main newspaper display.

This type of limited life impulse purchase unit works well as it looks fresh.  Plus it’s clear to the team members what titles go in the unit.

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magazines

Why it’s important for newsagents to get on Twitter

Further to my post last week calling for newsagents to join the Twitter Army, I have been asked why this is important.  Here’s my explanation…

Twitter is like a street corner from decades ago where someone on a soapbox could speak about anything and get some sort of audience. It is a place for you to have your say.  It is also a place where you can get a message directly to someone. Along the way, anyone on Twitter can see what you say. You can also respond to the tweets of others – I’ve responded a few times to @RupertMurdoch.

You can see my tweets here.

I think that Twitter offers Australian newsagents an excellent opportunity to get attention on issues important to us as a channel. Hence my call for newsagents to sign up to Twitter and to email me at mark@towersystems.com.au their details.

I plan to occasionally email all newsagents with a Twitter account with a suggestion to tweet on a topic using a common hashtag. A hashtag is a way of connecting tweets from multiple people. Whether people actually tweet is up to them.

Each tweet is seen by those who follow you. It also comes up when people search tweets of just read recent tweets.

Your followers will be people who are interested in what you have to say. Most of your followers will be people you have never met. If they like a tweet they may re-tweet this to their followers. See the snowball effect.

Think about the Bill Shorten whack against newsagents a couple of weeks ago.  A hundred or more newsagents tweeting about this could have got us on the top tweets at the time and this could have got the story on the radar of reporters and they could have confronted Shorten.

By organising ourselves in this way we create a digital megaphone for newsagents.

I think that newsagency businesses are relevant to Australia not only for the local and community service we provide but also for the our role in the Australian narrative. Our businesses are quintessentially Australian. We need to reflect this by talking more about ourselves and what we think as a channel.

If we have a strong enough collecting voice on Twitter we could possibly influence on issues on which we might otherwise not be heard.

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Newsagency management

Why I think the Herald Sun paywall will fail

I currently go to the Herald Sun website once a day, sometimes more, to check their take on news stories.  I am far less likely to go to the Herald Sun website once they erect their paywall next month. Why? because I don’t view the Herald Sun as a go-to news source. Plenty of the content reflects opinion and I don’t want to pay for opinion, not when the slant is so predictable.

There are plenty of free news sources covering Australian and international news. I don’t see the value in paying to access content when less slanted versions of the same stories are available elsewhere and for free. I’ll pass my time elsewhere.

The problem with the paywall model is that it’s an all or nothing model. You have to pay for access beyond the wall. The thing is, occasionally I might want to get to the other side of the paywall for a story which interests me and which I trust. Publishers should let me access this story without having to sign up for the rest of their bundle and for a time based commitment which does not suit my needs.

Let me pay a few cents to access a single story. Gee, I bet newspaper publishers could make more money from this approach than their current old and out of date subscription model.

Publishers need  to think of their single copy over the counter customer. This customer is vital and valuable in the print world. The current newspaper paywall models ignore this customer. This doesn’t make sense given their tremendous value to publishers over the years.

So there are two challenges for the Herald Sun – that it more an opinion publication than a newspaper and that the paywall is based on an out of date subscription model.  Maybe I will be wrong but I don’t see the paywall providing the level of revenue they will need as people migrate from ink to pixels.

In terms of news access, the vote on the Labor leadership is a good example. Journalists on Twitter provided me not only with up to the minute news coverage, they also provided links to free stories offering analysis.  I do not need to pay to see what Andrew Bolt or other Herald Sun columnists think – they are so predictable. I might read a Bolt column when I have the paper in my hand but it’s not a reason to pay to get to the other side of the paywall.

The Herald Sun invests considerable ink in telling people what to think.

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Media disruption

Promoting Coach magazine

We are promoting the latest issue of Coach magazine on the aisle end as shown in the photo as well in the middle, in prime position, with men’s health and fitness titles. Coach is an excellent new title in this segment.  It taps into the interest in personal training and fitness. Since I have newsagencies near gymnasiums it is especially working well for us.

Coach is a title newsagents need to train shoppers about. Many shoppers who may be interested in the title will not know it exists. Last year we promoted it with newspapers and achieved good sales from that impulse purchase location.  We have also had success at the sales counter.  Later this year it is a title we will have in our Father’s Day promotion.

I’d like to see publishers work harder at finding a way to cut through the daily noise newsagents receive to educate the channel on how to drive greater success from titles like Coach. That’s a big ask I know – we receive notices, faxes, emails and the like every day telling us why to promote this title or that. There has to be a way for the good information about good titles to get through.

I’d urge newsagents to check out where they have Coach. Be sure to give it some time in the spotlight.

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magazines

Expanding the watch magazine range

We have now started stocking Watchtime magazine as part of our expansion of our range of watch related titles.

As I have mentioned previously, the interest in watches in very strong and growing so it makes sense to me that watch magazine interest should be growing too. Indeed, we are looking at selling watches in store as part of our gift department.

We are still working out where to place the watch titles. At the moment we’re going with men’s magazines but that will probably change as we try new locations.

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magazines

Promoting the Australia vs US issue of Unique Cars

We are promoting the latest issue of Unique Cars by tapping into the Australia versus US theme. The flag based display at the counter is bold and easily noticed by shoppers as they approach.  It is an excellent second-bite opportunity to drive sales. The first-bite is in the cars magazine section where we have the title front and centre.

I love the way the creative team is using initiative for the counter display, going beyond the traditional magazine promotion display.

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magazines
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