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

Do you want to sell out of magazines?

I want to sell out of magazines. I love it when it happens. Independent publishers I speak with love it too. A sell out is good. I it happens early enough in the on-sale I will order more stock. I’ve done that plenty of times.

The newsagent magazine distribution model is not designed for us to sell out. The distributors think that sell outs are bad. Many publishers think that sell outs are bad. One distributor representative told me that publishers don’t like sell outs. I can’t find evidence supporting that view. Publishers I have spoken with say they like sell outs when they occur at an appropriate time through the on-sale.

The kind of sell outs which I think are acceptable and for which I would not order additional stock are: weeklies – by day five or more; monthlies – by week three or more. I am not including anything beyond monthlies since I do not think that any title in a newsagency should have an on-sale of more than thirty days.

For this issue to be resolved, a publisher and a distributor need to make a start.  I hope this happens soon.

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magazine distribution

Featuring Better Homes and Gardens

mag-bhg-spatula.JPGWe have been promoting the latest issue Better Homes and Gardens in three locations since its release last Wednesday.  On the weekend, we added this simple display next to newspapers.  With the impressive free cooking brush and spatula, it made sense of make the most of the opportunity – especially given that we were the only retail outlet in the shopping centre with the offer.  It has performed very well for us, especially this newspaper location.

I like how Pacific Magazines attached the free gift to the cover yet made the magazine itself browser friendly.  Very smart.  Whoever decided to not bag the whole issue is to be congratulated.

I know that some newsagents will complain that they were not given this offer.  Various publishers choose to engage with various groups and sizes of newsagencies and other business in return for shop floor engagement.  I think that we will see more of this engagement as publishers realise that not all newsagents are the same.

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magazines

A $2,000 Tiger Tank – a challeneged part series launch

tigertank.JPGWe now have too many new partworks being launched at the same time.  The drought has turned into a flood with the launch last week of Build Your Own Tiger Tank.  We are doing our best to promote the new title but space is at a premium.  Also, the total cost of building the tank, in excess of $2,000, has already been mentioned by customers as a challenge.  That and the highly special interest nature of this title.  We have Build Your Own Tiger Tank on display behind the counter – space shared with another part series.

Publishers who really want engagement from newsagents on partworks will:

  • Fix the supply chain to ensure that we can satisfy customer orders.
  • Fix the problems with back orders.
  • Enable newsagents to offer the free gifts to lock customers in.
  • Help newsagents pre-order based on their assessment of the title.

Partworks can work well if better managed and if there was a more common sense approach to release schedules.

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partworks

Classic Children’s Birthday Cake Cookbook still selling well

The classic Children’s Birthday Cake Cookbook from ACP continues to sell up a storm.  Another fifteen copies on the last week.  No slowdown due to the Big W deal at $10.00.  We still have this displayed at the front of the store – resuing the I Love Magazines stand.  It will stay there as long as it is working at pulling customers into the store.

It is surprising the number of shoppers saying that other newsagents do not have this title.

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magazines

The space fight between Easter and Mother’s Day

Space is at a premium in newsagencies at the moment with the Easter and Mother’s Day seasons colliding in their requirements.  Add to this, a binge of partworks releases, the traditional (and large) Easter Book Sale, magazine features to promote and the regular day to day activity in a well run newsagency and, yes, space is in high demand.

We are complicating it is a couple of my stores with a Toy Sale which still has two weeks to run.  This has been our second successful Toy Sale in four months.

We are addressing the unusual demands on space over the next few weeks with a process of regular rotation for the two major seasons in play as well as regular rotation for the magazine promotions.  This is something we have always done but which is receiving even more attention right now.

As for the glut of partworks, they are not getting the attention we would like.  Poor planning on the part of all involved, flooding newsagents like this.

Don’t get me wrong, I am not complaining about the higher than usual demands on space.  As retailers we live for opportunities to have our stores full of stock and to show off.  I have two core issues: the glut of partworks and the lack of consideration by some suppliers around how much space we give them when we are so busy.  No matter, they will get over it.

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Newsagency management

The Age newspaper masthead covered, newsagents shafted

ageapr2.JPGFairfax lumped a triple whammy against their brand and newsagents yesterday by attacking The Saturday Age.  The first issue is that they whacked a garish post it note type ad across the newspaper masthead.  This cheapens the brand.  They do it because these ads sell I guess.  The message, however, is that their brand does not matter all that much.  The second issue is that the ad was a subscription offer.  Why use my shop and goodwill to take customers away from me?  I make little enough of newspapers as it is.  This campaign offering a 65% discount is offensive.  The third issue is that they are promoting their newspaper a home delivery campaign which contradicts a campaign tthey have asked newsagents to promote, a campaign for which they provided distribution newsagents flyers for recently.

What a mix up.  Makes me wonder who is in charge, where they see their brand in 20 years and whether they really care about newsagents.

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Newsagency challenges

We get the Winning Post, finally

winningpost.JPGThanks to pressure from the publisher we are  being supplied the Winning Post.  This will make our customers happy.  It also encourages me that fractures in the supply model, where a small number of distribution newsagents refuse to supply some titles, can be fixed.  It also encourages me to go after more titles for which we are currently refused supply.

We are promoting the Winning Post in a good location to drive sales and provide that the fight to get the product in store was worth the hassle and effort.

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Newspapers

Retail Sector Issues Paper

On Thursday, the Productivity Commission Inquiry into the Structure and Performance of the Retail Industry – including international online trade, released the issues paper which will guide its review.

This is a paper well worth reading if you plan to be involved in retail in Australia in the future.  I have read it and see several opportunities for individual newsagents and group’s representing them to make a submission and have their individual and collective voices heard.

I am particularly to see retail tenancy issues are to be covered including:

Is there any evidence that owners of major retail complexes in Australia exert market power to command higher rental and occupancy costs than are experienced in many overseas markets?

Is it inevitable that Australian retailers must pay higher rental and occupancy costs as a proportion of sales than offshore counterparts? If so, why and what factors cause this? Does this mean that Australian retailers will have to charge higher prices to maintain reasonable levels of profitability?

I urge newsagents to click on the link and read the issues paper.  This is the type of opportunity where we will say what we should have done once the report has come out and our views have not been represented.

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Newsagency challenges

Trent Nathan improves the retail browsing experience

shirt.JPGBrowsing is important in any retail business but even more so when it comes to magazines.  The consumer research from publishers tells us how the consumer experience with magazines is tactile.  They are using this research to pitch the print experience in comparison to the digital experience.  I agree with the research. Customers in newsagencies demonstrate the tactile relationship they have with magazines every day.

A key reason I do not like bagged magazines is that they impede the browser experience. They deny the opportunity of the content driving the purchase.

The other issue with bagged magazines is that the bag itself becomes a turn off, as I blogged recently here.

So, I was interested to see how Trent Nathan gets around the need to bag products, men;s shirts, to provide the necessary tactile experience.  Check our the photo. See the touch me sticker? It is holding a swatch of fabric to the pack.  This is important as the fabric feels different to the usual shirt fabric.  It helps sell the shirt.

I wonder if the approach Trent Nathan is taking to shirts could be tried where magazines must be bagged.  If there a way to give the customers something on the bag or outside off the bag, which does not make merchandising the product any more difficult, and which reinforces the newsagency browsing experience.

While my preference is no bagged product in my newsagencies, I put this post out there to publishers to show how one company is going beyond the bag to help drive sales.

Being able to touch the fabric without having to open the package guided me to purchasing this shirt over another of a similar design.

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magazines

How often do you look at your Profit and Loss statement?

I get a Profit and Loss statement for my newsagencies within two weeks of the end of the month. This includes an assessment of the month against budget, year to date against budget and a rolling forecast a year out based on current trends.

I am lucky to have a CPA on staff who can do this.

Unfortunately, too many newsagents do not get a profit and loss more frequently than once a year. I am sure that this hurts business decisions.

A properly constructed P&L will guide good business decisions. While Point of Sale software can also do this, it can only go so far as you really need all the business expenses to get a whole of business view.

This is on my mind today because of a newsagent who is in trouble and who has not seen a P&L for their business for more than a year.

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Newsagency management

Q1 2011 Newsagent Sales Benchmark Study

I am looking for data from newsagents for my next Newsagent Sales Benchmark Study. While I am primarily interested in data from the 1,700 newsagents with newsagency software from Tower Systems, I’ll happily work with other newsagents on their data.

Participating is easy. Run your Monthly sales Comparison report with Jan 1, 2011 – March 31, 2011 on the left and Jan 1, 2011 – March 31, 2010 on the right. TICK THE CATEGORY BOX as this provides an excellent breakdown to allow more thorough analysis. Please do NOT tick the supplier box. Save the report as a PDF. Email this report to mark@towersystems.com.au.

I need the data by next Monday, April 4 as I’d like to publish top line results by Friday, April 8.

I have been doing these sales benchmark studies for years.  The results have been supported by audits and other studies produced by others.  The purpose of my benchmark study is to help newsagents sport trends and this this make better informed business decisions.

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newsagent software

Liberals join the EFTPOS fight

The Liberal Party has published an article on their website in support of the small business position on EFTPOS fees. While the article includes an ignorant party political shot at the end, it does include this useful call:

The Coalition calls on the big banks to reduce small business banking costs and fees by an amount equivalent to the new revenues created by ‘spinning off’ EFTPOS to ensure that the creation of the new business is not simply a ‘cost shift and double dip’.

I say ignorant about the last sentence because it was under the Howard government watch where the process started which has resulted in the current unfair EFTPOS regime.  No political party has good credentials when it comes to small business.

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EFTPOS fees

Home Brand products and supermarkets

Crikey is running an excellent series on home brand products in supermarkets.  I’d encourage newsagents to read this series as it looks at the strategy which some of our competitors are using to compete with us in the stationery space, a strategy which challenges us as a channel.

I remain committed to stationery brands as these brands invest into driving traffic to our channels. I think we are too disconnected as a channel for a channel wide house brand approach to work for us the same way it does for supermarkets.

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Stationery

Excellent Easter Book Sale

booksale-mar2011.JPGWe are enjoying a traffic spike thanks to our Easter Book Sale.  The four page A5 flyer is an excellent promotion tool for facilitating this traffic spike.  This, along with an appealing display and other activity is helping us make the most of the opportunity.

We try and run four book sales a year rather than a year round book department presence.  The four seasons which we find work for us are:Easter, Father’s Day, Christmas and one other – either mid year or Mother’s Day.

The book mix is vital – kids, food, self help, reasonably current fiction and weight loss.

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Book retailing

What are your Reader’s Digest sales?

Newsagents should heck through their sell-through rates for the Reader’s Digest magazine.  If the data I have seen is experienced by other newsagents, Reader’s Digest is delivering a sell through of around 25% to the newsagency channel.  This makes it loss making for us.

A magazine needs a sell through 60% to be break even in many newsagencies.

Why we continue to be supplied Reader’s Digest knowing that 70% or more of the scale out by Network Services will have to be counted packed up and returned is beyond me.  Actually, it is not beyond me. The magazine distribution model relies on the services for which distributors are paid (distribution and return processing)to be used.

Magazine distributors will say that we need to consider the overall picture, suggesting that the profits of the top selling titles support the lesser performing titles.  The same argument would be rejected by supermarkets so why apply it to newsagents.

For years now I have called for KPIs for magazines and financial compensation where a title does not meet the KPIs.

Reader’s Digest needs to be profitable for newsagents on its own.

While I am sure there are some newsagencies achieving a profitable sell through with Reader’s Digest, I suspect that the majority are not.  Somewhere between the publisher and the distributor there appears to be a lack of will to resolve this. In the meantime, newsagents act as the financier to both.

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magazine distribution

Happy to be promoting Better Homes and Gardens

mag-bhg-apr11.JPGWe are promoting the latest issue of Better Homes and Gardens (out yesterday) with this feature display on our busiest aisle end near our weekly titles, a small footprint impulse stand next to our photocopier as well as a terrific waterfall display in the usual location for the title in the magazine department.

Better Homes and Gardens warrants this  triple location approach.  Our reward is sales, especially after the TV show airs on Friday night.

As I blogged recently, even well into the on-sale the title performs well on weekends – better than you see for other high volume monthlies which experience a steep sales decay after the end of the first week. I;d encourage other newsagents to try this approach of locating an impulse display next to their photocopies.

This is a title we are happy to move around the store through the four weeks.

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magazines

100 Things To Do Before You Die

mag-traveller.JPGWe are promoting the latest issue of Australian Traveller magazine at the counter, in a successful impulse location for us.  Even though this issue has been on sale for one day, we ordered more stock as we expect it to sell very well thanks to the TV campaign and the theme of 100 Things To Do Before You Die. We also need the extra stock to promote the title with our weekly women’s magazines – a location from where this title sells well.

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magazines

Leveraging Magda Szubanski cover girl

mag-aww-apr11.JPGWe are promoting the latest issue of the Australian Women’s Weekly with this aisle end display facing onto the dance floor.  Hopefully, Magda Szubanski can do what Anna Bligh did not for AWW. I expected a good lift in sales from the Anna Bligh cover story last month but it did not materialise – certainly not in my stores. Magda’s story is popular and will hopefully resonate with customers.

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magazines

Australian Traveller supports newsagents

at.jpgThe latest issue of Australian Traveller magazine, on sale today, is being promoted with a TV campaign which is a call to action in support of newsagents.  Newsagents should support this with a display promoting Australian Traveller in a high profile location.

This issue features 100 things to do in Australia before you die, the ultimate bucket list of Australian experiences everyone should do in their lifetime, as voted by a panel of celebrities including George Negus, Catriona Rowntree, Dick Smith and The Today Show’s Lisa Wilkinson.

Panelists who have participated in the issue will be talking about the 100 list on TV and radio.

The TV campaign starts today. This is a 30% margin title – so extra effort is well worth it.

Australian Traveller’s annual “100 list” is always a big seller, and this year thanks to the TV coverage, it’s bound to be bigger and better than ever.

I urge newsagents to support this issue.  Prove that we appreciate publishers who invest in our channel by running TV campaigns promoting that their title is available at newsagencies.

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magazines

Lame response to a newsagent from federal MP on EFTPOS issue

Check out the letter a newsagent in South Australia received from their local federal member of parliament in response to a letter on the EFTPOS issue.  It is lame yet typical of the letters and ‘assistance’ newsagents have received for as long as I can remember. I love how they try and sell themselves and take a swipe at the other side.

Both sides of politics have played a role in the EFTPOS situation we face today.

Here is the full text of the letter:

Thank you for your emailed letter advising me of your concerns regarding the recent changes to the EFTPOS system in Australia that will come into effect in October this year. As I am sure you are aware in recent days EFTPOS Australia have announced specific details of the new fee structure. The details of the announcement can be found on; www.eftpospayments.com.au.

The Coalition has always stood up for small business, ensuring that a level playing field between all businesses exists in order to promote competition.

You will have heard our Shadow Treasurer, Joe Hockey voice his concerns with the lack of competition in the banking and payments sectors has allowed banks and financial institutions to increase fees without increasing the quality of service.

However in this case, EFTPOS has said that they need to upgrade their network so they can compete with the likes of the Visa and Mastercard payment systems. I have been told that EFTPOS conducted a significant stakeholder consultation and agreed that the fee structure would ensure both stability and competition in the industry. Significantly the changes have been welcomed by “Choice”.

I note that there were several changes foreshadowed in the article that were not contained in the final plan released on the 8th March. I have been told that this is in response to the stakeholder consultation undertaken by EFTPOS payments Australia.

The only real way to ensure better rates and products in our banking and payments sector is to facilitate more competition in the sector. The Coalition released its Nine Point Plan to encourage competition in October last year. Sadly, the government’s response did not include any positive initiatives to help small business.

You quite rightly raise the issue of predatory pricing. Like many I have been disappointed the ACCC seems reluctant to become involved with actions to eliminate or reduce unfair practices.

Therefore the current debate surrounding milk becomes an important case for many other industries in Australia.

Thank you for taking the time to write to me. I always appreciate hearing your views .
Sincerely

ROWAN RAMSEY

I would rather Rowan have said that he would do something specific like make representations to the RBA on this matter.

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EFTPOS fees

Magazines gaining popularity as premium gifts?

agemar2611b.JPGIs it just me or are magazines more popular than ever as the bonus gift with purchase.  Check out the advertisement which appeared in The Sunday Age.  Buy a phone and you get six or twelve issues of one of the magazines on show, delivered to your home.  A pretty nice gift for a phone which is not all that expensive.

This is the second promotion I have seen in a week where a magazine subscription was the free gift with purchase.  While I am no marketing expert I wonder if this devalues magazines in the eyes of consumers?  I certainly tend to look on free gifts as not having as much value as the promoters would have us believe.

While I don’t like to see products I sell being given away so easily, I don’t begrudge magazine publishers participating in promotions like this.  I just wish they wouldn’t do it.

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magazines

Promoting Easter cards and eggs together

eastercards.JPGWe have our Easter cards stands located next to our Easter Egg display, at the front of the newsagency facing out into the shopping mall.  For Easter more so than any other season this is important.  It is one of the smallest greeting card seasons so we need to chase any opportunity to guide purchases.  Hence the placement of our card stands next to our Easter egg display.

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Greeting Cards

Promoting UFC magazine

mag-uifc-apr11.JPGWe are promoting the latest issue of UFC magazine with this display on the dance floor near the sales counter.

I like the blue there of the cover.  This, coupled with the cutout which we kept from the launch issue, makes the display stand out amid the sea of colours in the newsagency.

We also have a waterfall display of UFC in our men’s magazine aisle – more for destination purchases.  The display on the dance floor is for impulse purchases.

Issue 1 of UFC sold well, easily justifying the promotional effort.  We’re hoping issue two will be strong.

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magazines

Promoting Burke’s Backyard

mag-burkes-apr11.JPGWe are promoting the latest issue of Burke’s Backyard with this display on one of our aisle ends – facing onto the dance floor.  Following a week in this position, we will migrate the title to an in-location display for the second week of the on sale.  We are starting to look at feature displays like this based on return.  We need at least five sales in a week to justify the space and labour commitment.  This minimum sales target will put some previously promoted titles out of contention for prime space promotion.

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magazines

COSBOA fights new EFTPOS fee regime

COSBOA, The Council of Small Business of Australia has joined the fight against the new and unfair to small business EFTPOS fee regime.  They have issued a stinging press release which includes:

COSBOA believes that the Reserve Bank of Australia (RBA) has once again failed small business and given big retailers and banks a leg up that they don’t need.

The RBA has made a decision to allow for increased costs to the users of EFTPOS facilities. Woolworths and Coles, who were members of the EFTPOS board have already made agreement with the banks, who were also members of the EFTPOS Board , that they will not receive any fee increase which means small business owners will have to pay for this decision. The banks and the big retailers will increase their profits and small business owners will have to pay for it out of their family income.

I hope that newsagents are acting on the engagement opportunities which I blogged about here previously.

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EFTPOS fees
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