I was interested to read that Australia Post could close 27 government owned retail outlets by the end of this year. If I owned a newsagency nearby one of the closing outlets I’d be quietly cheering.
Given the challenges facing Australia Post and the disruption occuring in our channel, dialogue between the two retail channels would make sense. There is an opportunity here.
The distribution for the third time of the one shot title, Wellbeing Beauty, on Friday to many newsagents has caused a stir. Many who contacted me did not realise it was the third go around for this under-performing title until they read my blog post.
As I have said to those who have called me, what are you going to do about it? Complaining may provide some satisfaction, it does not move you forward on fixing the problem.
Newsagency associations are somewhat neutered on this issue as they want and need funding from publishers and distributors for awards, conferences and the like.
This matter of reissue of a poorly performing title and requesting, again, full copy return ought to receive urgent attention from associations in addition to individual newsagents. It is a test case.
One newsagent said they would pose the question I posed in another blog post about whether newsagents are obligated to return full copies of titles to their solicitor. I think this does need legal investigation. My understanding is that there is no contractual obligation. But I am not a lawyer and am not in a position to provide legal advice.
With returns costing between 1% and 2% of magazine sales we need to take action. It is too easy for publishers like Universal to send out a twice failed title with little risk – instead, expecting newsagents to carry the risk of theft, retail space, labour and return freight for them.
Newsagents not acting in the past is what enables Universal and others to continue their behaviour.
So, what are you going to do about this?
The latest issue of frankie has been on the shelves less than a week and already a couple of my newsagencies have sold out. We are urgently chasing more stock. What a hit this magazine is!
We place frankie at the edge of our weeklies, away from the major weeklies since it attracts a different customer. This is why we like it at the edge of a section. We give the title half a waterfall. The brilliant covers make it easy to spot amidst all the colour of other covers.
It is odd, give the oversupply of non performing titles, that here we have a magazine title which continues to sell well and we have to continue to chase stock.
At one of my stores yesterday the creative team promoted the Herald Sun Ashes giveaway with this simple display sitting right above the newspaper. This worked better than just handling the flat plastic thing to customers – they got to see what it looking like. It also promoted it to kids who could point it out to their parents. I liked this promotion because the giveaway connected with stories in the newspaper.
The federal government is to commence an inquiry into the performance off retail. The Productivity Commission inquiry will present opportunities for newsagents, and other retailers, to be heard on the state of retail. While a focus will be on the impact of online transactions from overseas which avoid GST, there will be opportunities for newsagents to present on the state of retail in our channel. Check out this from the press release yesterday:
The Commission will examine the current structure, performance and efficiency of the retail sector and the drivers of structural change in the industry, including globalisation, increasing household and business access to the digital economy, changing cost structures, employment issues and the exchange rate.
The Commission will also consider the broader issues posed by an increase in online purchasing by Australian consumers and the role online purchasing plays in providing consumers with greater choice, access and convenience. The sustainability and appropriateness of the current indirect tax arrangements in this environment will also be considered.
Newsagents ought to seize the opportunity to participate in this inquiry.
All Things Digital is reporting that the Daily, the iPad only newspaper from News Corp is set to launch in a month. This is a much anticipated product as it is expected to use a new billing facility from Apple which is like the current newspaper subscription model.
Like many newsagents I am sure, I received these rubber wrist bands yesterday as part of our magazine distribution. Ridiculous! I am not going to put this product at the counter when I can have items which deliver double and triple the margin. I never asked for the product. It is not magazine stock. It should never have been distributed to newsagents. When are we going to have the strength, commitment and unity to teach the magazine distributors a lesson over this behaviour? We are our own worst enemy.
A year ago we cancelled this porn title, 16 UP, with Gordon and Gotch. It wasn’t selling. Gotch, contrary to our advice and request, has decided to start sending the title again. So here I am forced to spend time processing a title which will not sell and which I don’t want. It is further proof of appalling behaviour by a magazine distributor. And the ACCC says they are not breaching the Trade Practices Act. Yes, I have early returned the title. I should not have to do this. The title should never have made it back into my store without my express permission.
Some customers buying The Age yesterday were angered by the price, $2.50. Some refused and walked out, leaving their intended purchase at the counter. Personally, I think it is wrong to have a bumper edition this weekend – Christmas is still a week away. based on the reaction, I’d say that many customers agree. Fairfax has done itself no favours in terms of customer service with this move.
Newsagents are receiving Wellbeing Beauty this morning, many for the third time.
This $19.95 title failed to achieve a reasonable sell through (40% or more) when first distributed in August last year. Newsagents were required to return unsold stock. The exact same issue was distributed again in March this year and again it failed to achieve reasonable sales. And, yes, we were requested to return unsold stock.
This morning, many newsagents discover that Universal Magazines has convinced Network Services to send the title out for a third time! While the publisher will think they are helping newsagents by offering the title with delayed billing, newsagents know better.
But wait, there could be more. Universal has requested a full copy return. They may have plans for a fourth go around. Weighing half a kilo, the freight costs for newsagents in full copy returns is significant.
What a rip off of newsagents this title has been. Shame on NDD and Network Services for their participation in ripping off newsagents. Of course, magazine distributors want to keep their trucks full, that is a key plank of their business model. I bet they carry no risk with this title. No, the risk is left with newsagents.
The behaviour of Network in distributing this title for a third time is proof that newsagents are right to be sceptical every time a Network employee says they have the interests of newsagents at heart. If they did, this title would not have been delivered by them to newsagents today.
This is an excellent example of a sick magazine distribution model which preys on the weak.
Think about this for a moment … how much time and money have we invested in this title already putting it on our shelves, taking it off, returning it and going through all that again?
And the folks at Universal Magazines say that I pick on them. No, they abuse newsagents. What they are doing with this title is a perfect example.
I would not be surprised if newsagents sent back the cover only of Wellbeing Beauty this time around.
Shame on Network Services for allowing newsagents to be abused in this way. Shame on Universal Magazines for wasting newsagent time and money on what is clearly a dud title.
My view is that what Universal and Network are doing with Wellbeing Beauty is unconscionable. However, the toothless ACCC will most likely take a different view.
In 2007 I called for a magazine czar. The associations did nothing. Newsagents did nothing. Unless we take control of our channel this type of behaviour will continue and we will suffer economically. Serves us right. We need to stop Universal and Network and others from this behaviour.
Footnote: I did not receive Wellbeing Beauty in my stores. I suspect this is because Universal did not want me writing about their appalling treatment of newsagents.
We sold out of the decks of cards in this display a few days ago. It has been a terrific little basket builder for Christmas. We placed the display unit in a high traffic location and let it do it’s job. And it did. When I saw the display I was dubious about the products. The quick success serves as a reminder – I am not my customer. In building Christmas this year we have paid equal attention to bigger ticket items, traditional items (cards and wrap) as well as an excellent range of impulse purchase items like these cards.
The Hallmark The Night Before Christmas recordable storybook is continuing to sell very well for us, across all of our stores. It is going particularly well in a store I have in Toorak. We are a destination for some while others buy on impulse when they notice our high profile display. The TV coverage by Hallmark has been a key factor in sales success as has the oversize book and the demo copy which we have out in the mall. It’s nice when a customer spends $29.95 on impulse in addition to their destination purchases.
The Register Citizen newspaper in Torrington Connecticut is engaging with its readers in a unique way to deal with falling print sales and to capture more online business and shore up its future. Readers are invited to the daily news conference which sets priorities. They can also visit the newsroom and talk with reporters. This project represents and openness which takes the masthead back to its roots as a newspaper. It could be a good model for local newspapers.
Magazine distributor Gordon and Gotch sent our an email to newsagents saying pay your bill on time and, at the bottom, thanks for your business and have a good Christmas.
Their wish for success for newsagents for the New Year depends on their actions in managing magazine distribution.
Look at this year, magazine sales are down year on year but Gotch billings are not down by a commensurate amount, even allowing for the closure of NDD.
The best way for Gotch to be paid on time is to supply to a model which is cash flow positive for newsagents and which delivers margin with which newsagents can pay for stock, rent, labour and have something left for the owners.
Personally, I thought the Christmas email from Gotch was clumsy.
The Chicago Tribune has published an interesting report on the state of Christmas card sales in the US. It reports some bad news on sales trends.
If it seems like you’re getting fewer holiday cards this year, don’t worry. Chances are it has nothing to do with your popularity.
The practice of sending Christmas cards is fading, collateral damage of the digital age.
After experiencing slowing growth since 2005, Christmas card sales declined in 2009. While the drop was slight, 0.4 percent, according to research firm Mintel International Group, evidence is building that the next generation of correspondents is unlikely to carry on the tradition with the same devotion as their parents.
While cards have had a rough 2010 in the newsagency channel in Australia, sales overall are good – for Christmas especially.
On 3AW earlier this week I heard a talkback segment discussing Christmas cards. It was split 50 / 50 between people cutting back on cards and those continuing with the tradition.
We have an obligation to remind customers at every opportunity about the value of cards over an email or a text message.
We certainly promote cards over text messages and e-cards in our customer newsletters. It is an easier pitch for us because of the average age of our customers.
Through Christmas cards, and indeed all greeting cards, we help our customers express themselves in a unique and personal way and via a medium which can be cherished for decades – without the need for batteries.
I like the new Tatts software, espeically the new facilities for creating and selling syndicates. There is an immediate cash flow benefit, especially for superdraws like the draw on December 31. While some customers are frustrated that their favourite quick pick options are no longer available, the enhancements with the new software far outweigh these. We expect the software changes to drive an increase in syndicate sales in 2011.
We are promoting the latest issue of Diabetic Living (out yesterday) with a regular half waterfall display with our health titles plus a second tactical display in with weekly magazines. It is this second location which sells the most copies for us. I’d urge other newsagents to do the same. Place it just above Woman’s Day or New Idea. The other impulse location where it works is at the counter but right now, counter space is at a premium.
Investing time in finding space for this title is worth it because it is a nice basket builder.
We have moved our Blackhawk gift card stand and placed it facing shoppers as they enter our store. We check the stand regularly to ensure that the iTunes cards are facing out. They are the most popular cards we have available.
I’d encourage all newsagents with a Blackhawk stand to ensure that it is in an excellent high-traffic location for the next ten days. The gift cards can be an ideal purchase for last minute shoppers.
Check out the front page of the two copies of yesterday’s edition of The Age newspaper from in the photo. One is a newspaper as I’d expect it to be. The other is an ad with a half a front cover showing.
Which cover sells the newspaper? I reckon it’s the one showing the front cover without the advertising cover-up.
I feel for the journalists and editorial people who are now having their work covered up in this way.
Newsagents are spending between 1% and 2% of magazine sales revenue to return stock which has failed to sell.
With around 90% of the returns freight cost relating to full copy returns, it would be appropriate for newsagents to research whether they are contractually obliged to return full product.
Take the Network Services / ACP relationship with newsagents. The ACP contract outlines our returns obligations for ACP titles. I am not aware of any such obligation for the return of non ACP product to Network Services.
It appears to me that newsagents could return non ACP product which has failed to sell as topped. Such a move would dramatically cut the cost of returns freight. For Network alone, some newsagents could save between $1,500 and $2,000 a year.
I am not advocating this. Newsagents need to do their own research, make up their own minds. Given that the cost of returns is such a contentious issue I would have thought that at least one of the newsagent associations would already have legal advice for newsagents on this.
The alternative is that newsagents are paid a fee for handling full copy returns. A fair fee would be in the range of twenty cents to forty cents per copy. Magazine distributors charge such a fee to publishers for full copy returns so why not newsagents?
As it is, we pay to return magazines which have failed to sell and sometimes find these same failed titles being sent to us again. And again!
So, Gotch, Network and magazine publishers, what is it?
It is time for those who control magazine allocations to take a fair share of the risk.
In the meantime, newsagents need to consider whether they check their contracts and act on the high cost of full copy returns.
A couple of days ago I was contacted by The Australian to discuss Christmas newspaper pricing plans. They wanted to make sure that their plans fitted in with what newsagents could handle with their software. Not all publishers think about the impact on newsagents of their pricing an supply decisions so kudos to the folks at The Australian for their initiative.
With advance knowledge, the team at my newsagency software company, Tower Systems, is better able to help newsagents who want assistance in dealing with the one-off changes.
Folia is reporting a small net increase in magazines in the US in 2010. 193 launches and 176 closures. Australian newsagents who are not vigilant with magazine supply would find a more significant increase in range in 2010 than this. Magazine distributors want full trucks and more product is good for their business.
This stand of Christmas party goods is selling well. We have it in several of my stores, placed near the entrance – leading to good impulse purchase business.
I like packages like this which provide access to a range of related products in a merchandise unit which makes floor display easy. We have used them for several seasons with terrific success.
While we have more premium products elsewhere in the stores, this range is designed for the price conscious shopper buying at the last minute.
ACP has ignored our advice about the temporary downsizing some months ago of our Forest Hill store due to construction and increased supply of The Australian Women’s Weekly Puzzle Book. The frustration is that their zero tolerance on late payment of monthly accounts is not reciprocated with zero tolerance of supply errors or over supply. No amount of early warning or clear communication appears to be able to stop mistakes like this being made and costing newsagents. They need a better internal system for handling issues like this.
Network Services has sent the following communication out to newsagents:
As you are aware Network Services have experienced some issues with their server over the last few business days. This has resulted in a large backlog of files requiring processing and delays in clearing this backlog.
In the interest of clearing the backlog of files, we ask that all agents take the following actions:
1) Hold off from submitting returns information for the next 24-48hours.
2) Agents who are yet to receive confirmations for forms already submitted should not ship their returns yet, please wait until the confirmation has been received.
Thanking you for your cooperation.
This latest Network IT challenge has come at a very busy time for newsagents.