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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

What’s going on at Gordon and Gotch?

As I noted recently, PMP, the parent of magazine distributor Gordon and Gotch is doing it tough, having just announced a profit downgrade.

We know that Gotch has embarked on another round of trimming staff.

Add to this an apparent retreat from engagement with newsagents. Two years ago the company had an excellent reputation of working with newsagents in pursuit of fairer supply. Last year while some in the company maintained a façade of engagement, actions did not match the words. This year, from what I can see, even the words are in retreat.

While Network Services is investing in systems to improve service, Gotch is still using old systems which fail the company if you look at some recent events.  Network has a Sales Based Replenishment program in place, Gotch has nothing despite claiming that they would have SBR running by now.

One thing Gotch is good at is spin from the highest levels of the company. They spin to publishers and get them under a spell that comments I make here and complaints from other newsagents are wrong or a mis understanding. Hmm, no, no misunderstanding. Gotch is in trouble and this is affecting magazine sales.

From a newsagents perspective, we let Gotch get away with a sub standard service.  We complain but don’t act on the complaints. This just serves to weaken the company.

Something has to give. The current situation leaves magazine publishers and newsagents very poorly served.

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magazine distribution

Queensland Newspapers promotion frustrates some newsagents

A couple of newsagents have complained to me about the latest Queensland Newspapers promotion to lapsed home delivery customers. They are frustrated that they have not been offered the promotion to offer themselves across the counter.

I understand their frustration. Too often publishers build promotions which focus on them and the subscriber, ignoring the newsagent who is key to the transaction.

That said, this is a good offer. I like that they are rewarding shoppers with something to spend in a newsagency – a $25 voucher.

But back to the core point, I do wish that newsagents could promote this themselves across the counter.  The newsagents I have spoken with are certain they could drive terrific sales growth.

Slightly off topic, I’d also like to see publishers engage with newsagents in driving single copy retail sales. I think this is a massive missed opportunity.

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Newspapers

How newsagents should handle gross magazine oversupply

Following my post about Spearfishing Downunder, some newsagents contacted me to advise of gross oversupply. They were angry at the magazine. Something had gone wrong in the switch of the title from IPS to Gotch. Talking with the publisher and seeing their approach, it is clear to me than newsagents should go direct to the publisher in any situation of oversupply.

Gotch told one newsagent to top and trash the 28 excess copies of Spearfishing Downunder they received by mistake. Besides the waste of the small print run title, this is no way to mix an oversupply based on a genuine mistake. They should have picked up the extra stock. The publisher could sell it. Telling a newsagent to throw away 28 copies and claim a credit is, in my view, like theft against the publisher.

By telling the publisher about an oversupply situation, the newsagent could well be advising the publisher about a situation of which they were unaware. A good publisher will engage and get to the bottom of what happened. This could work for everyone. If we don’t go to the publisher then mistakes and poor behaviour may continue.

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magazine distribution

Promoting everyday food titles together

We make sure that we promote these everyday food titles together. They have common appeal, or at least I think they do, so it makes sense to us to put them together in this way.

It’s not brain surgery. Simple adjacency decisions like this can drive sales of magazines. Every extra sale we achieve from existing traffic is bonus margin dollars we get to bank.

In this type of display we try and give each title time at the front of the display where the full cover is featured. Yeah, extra work, but hey we’re magazine specialists.

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magazines

Clever Top Gear magazine display

I love the Top Gear magazine display created at one of my stores this week. The display wraps around a column which is always a challenge to embrace for the business.

What I love about the display is that it catches people as they walk near or past our business from both sides. You can’t miss it.  It represents the magazine in an exciting and unique way. This should reflect in sales growth for this issue … that is the goal of every retail display we create.

The other reason for boldly promoting this issue of Top Gear magazine is the return of the TV show. A TV show tie-in drives sales.

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magazines

Newsagency of the Future workshop series for newsagents

I have finalised plans for a Newsagency of the Future workshop series for the end of March. Anyone is welcome to attend, newsagents, newsagency employees, would be newsagents and newsagency suppliers.

Attendance is free. 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 in under two weeks time.

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.

I will look at what is happening in the newsagency channel, the consolidation in some areas and decisions we face – not just around circulation and print products but in other areas such as stationery, lotteries and agency product.

There will also be some time devoted to recent events such as newspaper contracts, decisions by publishers on newspaper distribution, magazine distribution challenges and how we as a channel need to respond to these.

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.

If you want practical ideas you can implement today in pursuit of growth then you should find this session of value. If you want insights into and even guidance on the longer term challenges and opportunities then I you too will find the session valuable.

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.

I hope to see you at one of the sessions.

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 management

Promoting the new ACP pizza title

We are promoting the new ACP cookbook, Pizza Pizzazz, with this display at the main sales counter.  This high-profile display is in addition to a half waterfall display in with our main display of ACP cookbooks.  I have faith in this title. I think it should sell well on impulse … hence the promotion at the sales counter. We plan to leave this display up for two weeks.

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magazines

Promoting kitchen and bathroom magazines

We have lifted this three-pocket display of kitchen and bathroom magazines to easy to see, browse and shop eye level in our home and living magazine section.

I have no doubt we will see a sales increase as a result. Indeed, I expect people will purchase two titles given the placement – i.e. they don’t have to hunt for them.

Regulars here would know that we often feature kitchen and bathroom titles in good locations and report a sales lift as a result. I mention it today as we have just received these three titles in and they go well together.

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Uncategorized

Selling out of Frankie magazine

We sold our entire initial allocation of the latest issue of Frankie magazine in just over a week.  We got more store and expect to sell that within another week so we have a third order on the way.  This title is hot and we are masking sure that we get enough sock so we can reach our full potential.

Frankie was a major success story in the last audit. Sales growth we have seen and continue to see proves this to us. Frankie attracts new shoppers and that’s a real success story not only for the magazine but for our newsagency as well.

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magazines
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