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

Casual leasing by shopping centre landlords hurts small businesses

I have been in five shopping centres so far this week and in each one, just metres from a bookshop or a newsagency with a terrific range of books was an outpost offering cheap books.  In two instances when the newsagents affected approached the landlords all manner of excuses were given.  The fact is that the landlords did deals focused only on their revenue goals and not the financial health of their long-standing tenants.

Newsagents are especially vulnerable to damage by casual leasing as our categories of books, calendars and toys are often brought into centres on a casual basis.

I have encountered this a couple of times in recent years and thankfully the landlord responded and moved the casual leasing operation quite some distance from my newsagency.  In one instance the casual leasing booking was cut short.

Casual leasing operators are vultures in my view.  They do not financially or operationally support the long-term health of the shopping centre.  The often act as a barrier to good traffic flow.

I’d encourage newsagents who encounter casual leasing situated close to their business and with products which compete with their business to complain to the landlord.  If there is no joy there, look at alternatives for resolution.

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Book retailing

Here is the pain of a long on-sale magazine

Publishers should read about the impact a long on-sale for a poorly performing title can have on a newsagency.

We have had Summer Shape Up from Women’s Health & Fitness on sale in one of my newsagencies for two months.  We have not sold a copy.  The publisher wants us to keep the title for another four weeks.  Based on our rent, this title has already cost us $12.  Add to this a labour cost and a cost for the cash outlay.

This is a problem for newsagents.  It is why we do not like titles with a long on-sale and which are not covering their cost and generating profit for us.

In this newsagency I need to make $6 GP per magazine pocket per month just to cover rent.  If I am not getting that return from a magazine profit, the magazine in the pocket becomes loss making for me.

Now there are some who will say that I can’t look at it that way and that it is not fair to expect a single pocket to be profitable.  Hmm, tell that to Coles or Woolworths.  It’s how they assess the performance of products in their businesses.

Publishers who want to use my space for more than 30 days should back their request by financially covering me if their product fails to perform even at the most minima requirement level.

With various changes to be magazine distribution model being discussed and considered – margin, full copy returns versus covers, on-sale period, target sales efficiency – we need to ensure that all factors are considered in any discussion / negotiation for to make progress on one and not another could be a pyrrhic victory.

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magazine distribution

Promoting The Australian Women’s Health Diary

We are promoting The Australian Women’s Health Diary with our diary range as well as with this simple display above our women’s magazines.

The idea of this second location is to capture purchases by people who did not enter the newsagency to purchase a diary.  Diary shoppers will shop the diary department – stands to reason.

We use this space above magazines for a few related promotions like this.  It works a treat, driving sales and shopper efficiency.

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Diaries

Cats and dogs help sell boxed cards

Customers love these boxed Christmas cards with cats and dogs on the cover.  They are different to the usual Christmas care fare and so are easily noticed.  Put a cute cat or dog on just about anything in a newsagency and it will sell based on my experience.

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Greeting Cards

Schools cancelling school newspaper deliveries

I heard from a newsagent yesterday that two schools had cancelled their (substantial) newspaper deliveries from next year.  In one school, all students from year 8 and above (if I remember correctly) will have iPads.  In the other school the move is about cost cutting.

The newsagent involved will lose thousands of dollars a year in sales.

Parlay this move out to, say, 100 schools in one state and you will see a serious dent in newspaper circulation.

With governments trimming budgets I can see more schools cutting back.  With private schools chasing students, I can see them embracing iPads and similar devices more … for the hip factor.

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newspaper home delivery

What’s happening with Volt magazine?

Our supply of Volt magazine was increased from 2 copies to 3 copies with the latest issue.  We have received Volt three times including this latest issue.  In May 2010 we received 2 copies and sold both.  In May 2011 we received 2 copies and sold none.  Today we received three copies.  Okay so one extra copy is not a big deal.  However, there is no justification for the increase in the sales data.  If I have sold both copies from May this year then yes, increase supply.  If I had sold one of those copies maybe (but probably not).  But I sold none and the allocations system at Gordon and Gotch increases me by 50% – one copy.

I appreciate that at the low volume level of supply, four copies or less, it is challenging to get the scale out right, especially ifhistoric sales have been volatile.  With only two issues of sales data to go off and the results noted, Gotch could play the volatility card.  I’d disagree.  Based on limited sales history and for a low volume title, the rule should be to be more cautious in favour of newsagents.  The opposite appears to be the case, shifting the obligation and risk to me.

There are people at Gotch who will spin this blog post and have a reason for the increase in supply.  They will complain that I have not come to them before writing about it here.

There is no justification for sending me an extra copy of Volt other than them needing to place it somewhere other than at their warehouse.  I should not have to go to Gotch.  Their system should be better than to increase supply based on the data they have for the previous two issues I have received.

Every increase in supply needs to be justified in the sales data.  It must have at least a 75% chance of selling.  Otherwise it is just a cash grab, focusing newsagents to provide cash-flow for others.

I am not on a vendetta with this type of post as has been put to me.  The data speaks for itself.  Had the increase not been done, I would have not been able to write what I have.

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magazine distribution

Advent calendar sell out

We have sold out of our 2011 Advent calendars in good time.  We positioned them at the front of the newsagency and used the traffic they generated to drive sales of other Christmas related items.  It’s worked a treat … selling our of the Advent calendar and delivering excellent sales of nearby items – making for more valuable shopping baskets.

Having the Cadbury brand Advent calendar helped sales as it make customers more confident about the quality than what they get from businesses which sell generic brand Advent calendars.  It fits with our commitment to brands in-store.

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confectionary

Making the most of the TV commercials for Feast magazine

With the current issue of Feast magazine being promoted on SBS and commercial TV and with newsagents being tagged as where the title can be purchased, we have made sure that Feast is in two good locations and is easily seen.  The TVC shows off the cover, making displaying the full cover very important.  I’d encourage newsagents to check out where they have Feast positioned and whether they are showing the full cover.

It’s terrific that Pacific Magazines continues to promote newsagents as a destination for magazines in TV commercials promoting their titles.

If you have missed it, here is the Feast TVC.

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magazines

Promoting The Australian Women’s Weekly

We are promoting the heck out of the latest issue of The Australian Women’s Weekly.  Besides this display with our daily newspapers, we have a waterfall in the usual location, placement in our ACP impulse stand and an impulse purchase unit in a second location in our busiest magazine aisle – away from the main display of the title.  This first week of the on-sale is key … hence all of our activity.

On the magazine itself, the Sarah Murdoch cover continues the focus on a younger reader for the title.  It is a pity that the full cover is covered by a cookbook stuck on the bottom half – the impact of the cover shot is lost in my view.

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magazines

Promoting Street Machine

We are promoting the latest issue of Street Machine with this display on an aisle end in the reading area of our newsagency.  It faces into all the men’s magazines area.  This is where guys congregate and where they are most likely to notice what we promote.  As I have mentioned previously, guys tens to talk in blind to anything until they get to their destination in-store.  Our car magazine sales are performing significantly better than the industry average so we must be doing something right.

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magazines

Facebook key to Playboy marketing plans

Check out the article at Folio about how Playboy is using Facebook to promote the title.  Playboy has 5 million followers, more than any other magazine, almost twice more than the next popular title on Facebook.  Facebook is giving Playboy an excellent, low cost, platform through which to cultivate new followers of the brand.

While I think that Facebook can plan an important role in marketing any business, I am not relying on it because, as I have noted previously, the owners of Facebook can make a decision which could quickly eliminate the value of building Facebook followers.

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Media disruption

Magazines and the Power of Print

Check out a video published a year and a half ago featuring magazine executives explaining why magazines in print have a future.

While some of what they say is what you would expect, it’s good to watch, good to see their passion for the medium.

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magazines

APN closes two regional newspapers

Plenty was written yesterday about the decision by APN to close two newspapers and to cut another newspaper from publishing a print edition six days a week to one day a week.

While the APN move, the first from a major newspaper publisher in Australia,  has been reported by some as a shock, it is an example of newspaper publishing catching up with some other parts of the world.  In the US, for example, the daily Seattle Post Intelligencier, the newspaper of record for the city, moved from print to a digital only platform in March 2009 – for pretty much the same reasons put by APN.

We will see more moves like this.  The sky is not falling.  These closures are all part of disruption brought on by a changing news cycle and by easier and cheaper access to digital content.

Check out what APN Australian Regional Media chief executive Warren Bright told APN employees in an email according to a report in The Australian yesterday.

I am determined that we will be innovative and flexible as a company and not be caught standing as the world passes us by.

The newsagency business model needs to be a model which does not rely on newspapers to deliver traffic.  We all need to be developing other traffic generators – as I have written here many times previously.  We need to be innovative and flexible.

Newspaper publishers owe newsagents nothing as they face the challenge of digital and the structural decisions being driven by the new delivery platform.  We need to understand that and make our own success focused solely on our own needs.

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newspaper home delivery

Making room for more food titles

Food magazines account for 5.5% of all magazines we sell in one of my newsagencies.  Our food magazine sales are up 81% year on year.  We are chasing more sales by carefully expanding the range.  We have allocated another 14 pockets to the segment.  This is allowing us to better display existing top selling titles and titles carry some selected additional titles.

Magazine distributors need to make it easier for smart newsagents to expand their range.  Their website and other processes act as a barrier to newsagents working on expanding their range based on local knowledge.

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magazines

New home for quilting and craft magazines

The other tweak of our recent magazine relay which we completed on the weekend was moving quilting, cross-stitch, craft and card making magazines to a new location, at the entrance to our women’s magazine aisle, directly opposite our women’s weeklies – New Idea, Woman’s day and the like.

We have been trialling a selection of these titles near the weeklies and sales were up as a result. I figured that moving all the titles to this high-traffic location was worth trying.

Sales of craft and hobby titles are up 80% or a moderate base.  The currently only account for 4.5% of all magazine sales.  I’d like to see that increased.  Hence the better position for the full range.

We are ensuring that popular Australian titles are given the best position in the display.  This is our preference – to promote Australian titles ahead of imported titles.

This move freed up space further in the aisle which have used to improve the display of other categories.

I plan to track the performance of the quilting / craft titles over the next month before making a decision on their long-term positioning.

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magazines

Are magazine cover mounts / tip-ons being handled better?

Looking back at some of my blog posts from 2007/ 2008 we went through a purple patch with magazine cover mounts, tip-ons as some call them – the freebies which publishers stick to covers to help sell their titles.

It seems to me that they are less of a problem today.  Or am I blind to them?

Checking one of my newsagencies yesterday, there weren’t that many and those which I did find were professionally done.  Take Madison, the free nail polish was handled well.

I’d be interested to know what other newsagents think.  Are freebies with magazines less of an issue today.

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magazines

Promoting Hot Boys of TV

We have been promoting the Hot Boys on TV one-shot with this aisle end display.  While not a runaway success, sales are ticking along … here and overseas.  I received an email from someone in the UK overnight wanting me to mail them four copies.  They got to me through a Google search for the title.  It’s not out in the UK.  They’re paying full cover price and air mail.  I’m happy to oblige.

 

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magazines

The future of (magazine) publishing

Check out this video from Dorling and Kindersley UK.  While it was produced to inspire those in book publishing, it is just as relevant to everyone involved in magazine publishing.

Publishers, distributors, newsagents watch the whole thing…

Yes, those of us who rely on print in our businesses face challenges. It we believe that these challenges are a death spiral then it probably will be. The alternative is for us to read the script a different way, to create our own successes.

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Media disruption

The frustration of magazine undersupply

Based on our sales of People’s Friend magazine, I expect that we could have sold at least five copies of The People’s Friend 2012 Annual. We received two copies last week and both have sold.  While we are chasing more stock from Gordon and Gotch, it is frustrating that we were not supplied sufficiently to satisfy demand.

I understand that the problem may be at the publisher end in the UK.  If this is the case I hope that Gotch has taken them to task as it is disrespectful to the weekly purchasers of their product to not have access to sufficient stock of the annual.

If the problem is within Gotch then they need to look more carefully at these types of add-on items and place them where they do sell.  I’d be frustrated if I can’t get more stock and they end up with considerable returns from other newsagencies.

While this is a book size title, we were able to sell it by placing it at the front of the magazine fixturing, with the magazine.  I mention this in case readers remember my criticism of The Friendship Book 2012 recently and how the size makes it a challenge to display.  At least with The People’s Friend 2012 Annual we are able to locate it with the magazine and reach the target shopper perfectly.

More generally on the issue of magazine undersupply, magazine distributors can report to publishers on lost days.  They know the quantity they supply per store, they know sales and especially the date and time of sale of the last copy.  This enables them to calculate the on-sale days for which each store did not have stock of any issue of a magazine.  I wonder if distributors provide this data to publishers.

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magazine distribution

Moving gardening magazines

We have started work on expanding our offering of gardening magazines.   The first step was to move the segment to just below our weeklies.  We did this on the weekend.  While customers have to reach down to purchase these titles, we think they will.  The titles will certainly be noticed because the weeklies are located above – out of shot in the photo.

We are working on our range of gardening magazines by ordering titles we want.  Any magazine distributor people reading this – this post is NOT your cue to sign us up for whatever you think.  We will do with this category what we have done for food – the results of our work over several months there speak for themselves.  Brilliant … unit sales are up 100% year on year – well ahead of the channel trend.

I was asked last week by a newsagent why we spend so much time working on magazines if they are a declining category in the business. Our work on magazines is focused on sales today and in the short to medium term.  I think that well run newsagencies with a professionally managed magazine offer have an opportunity to grow sales.  So, there is a financial return for this attention.  I am seeing this and this is what drives my attention.

Newsagents who treat magazines poorly and delegate responsibility to someone with little of no skin on the sales outcome will see sales respond to this.

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magazine distribution

A Sunday marketing/management tip for newsagents: act like a successful retailer

Check your prejudices, biases and other baggage at the door and think about the retail business which you consider to be the BEST.

Think about why you consider them to be the best.  Break down their business in your head.  In doing this, look for opportunities to mirror what they do.  Their success often comes down to relentless pursuit of their core business principles / values.

The Reject Shop – value; David Jones – aspirational, quality; Boost Juice – healthy; Zara – cheap fashion; Smiggle – fashion stationery.

This tip is another way of saying spend time pursuing your Unique Selling Proposition.  Being a general retailer without an obvious and valuable USP is not good for any business.

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marketing tip

A must read report on the success on products on the Apple newsstand

Paid Content has published a report about the success of the publishers who were the early adopters of the new Apple digital newsstand platform.  Newsagents should read this.

The success of the newsstand platform, even though it is only in its early days, will draw attention from more publishers.

This is what we need to watch and be aware of as it will impact our longer term business plans.  We need to be aware of any moves to digital of products which we sell in our businesses … as I’ve written here for years.

There are two key contexts of concern: how magazine distributors deal with us through the transition and what we bring to our businesses to respond to the challenge of digital.

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Media disruption

Newspaper move does not affect sales

Further to my post last week about moving newspapers away fro the counter and further into the newsagency, we have not seen a decline in newspaper sales as a result.  If anything, we are experiencing an increase in sales.  We’re two weeks in and will continue to monitor the impact.

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Newspapers
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