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

Local US newspaper connects with readers

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.

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Media disruption

Christmas cheer from Gordon and Gotch

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.

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magazine distribution

Christmas cards declining in the US – newsagents need to engage

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.

  • You can’t put a text message on the mantelpiece.
  • You can’t keep a text message or e-card in a box for reminiscing later.
  • You can’t replicate the emotion expressed through your own handwriting on paper with pixels on a screen.
  • The card is the thing – you don’t need a device to read the greeting or a power source.
  • A card is not just about the immediate greeting, it is also about giving a keepsake, a reminder of how you feel.

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.

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Greeting Cards

Enjoying new Tatts software

tatts-syndicates.JPGI 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.

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Lotteries

Promoting Diabetic Living

diabeticliving-dec15.JPGWe 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.

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magazines

Grabbing the gift card sale

itunes-dec15.JPGWe 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.

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Newsagency opportunities

Covering the front page of the newspaper

age-dec15.JPGCheck 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.

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newspaper masthead desecration

Maybe newsagents should stop full copy magazine returns

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?

  1. Pay a fee to newsagents for full copy returns.
  2. Accept top only returns for product which has failed to sell.

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.

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magazine distribution

Kudos for The Australian

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.

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newspaper home delivery

Christmas party goods selling well

christmas-tableset.JPGThis 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.

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Newsagency opportunities

Too much puzzle book stock

aww-puzzlebook.JPGACP 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.

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magazines

Network IT problems impact newsagents

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.

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magazine distribution

November newsagent sales benchmark study results

Sales were flat in newsagencies in November.

40% of stores reported slight growth, 60% reported a decline in revenue. Magazines continued to be the product category of most concern.

The latest newsagent performance data is from the Tower Systems Sales Benchmark Study. My newsagency software company Tower Systems undertakes these studies on behalf of newsagents. This one month study is based on sales data from 103 newsagencies, trading under four different banners plus independents, businesses in capital city regional and rural situations.

Here are the headline numbers:

  • Magazines. 80% of newsagents reported a decline in magazine sales (numbers of magazines sold) with an average decline of 8%. While the decline is reported across the board, the women’s weeklies category has again suffered.
  • Greeting cards. 55% of newsagents reported a decline in greeting card revenue with the average decline 4.5% year on year. Of those reporting an increase, the average increase was just under 2%.
  • Stationery. 40% of newsagents reported a decline in stationery sales with the average decline 1%. Of the newsagencies reporting an increase in stationery sales, the average increase was 3%.
  • Gifts. 75% of the stores in the study have a gift department. 85% of these reported sales increase in gifts.
  • Calendars.  70% of stores reported growth in calendar revenue – the average was 2%.
  • Newspapers. 80% of participants reported newspaper sales of within .5% of last year’s numbers.
  • Overall sales. 60% of newsagencies reported a decline in sales for November 2010 over November 2009. Of those reporting an increase, the average increase was 2%.
  • Basket size. 37% of newsagents reported a decline in the number of items in the basket. This suggests that people are seeking out lower priced items.

Newsagents need to consider their space allocation for magazines. Giving the same space today to the department as, say, two years ago would be disadvantaging the business.

Suppliers and industry leaders who care about a healthy newsagency channel will engage on the issues reflected in these benchmark numbers.

The performance of the channel and the tough trading conditions many are experiencing ought to be the top priority topic at any conference, meeting or other newsagent channel gathering. The issues reflected in the numbers I have been looking at for the past week go to the heart of the future of the channel.

As previous studies have shown, newsagencies in rural and regional situations fared better than their city counterparts.

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Newsagency benchmark

What do you do if you are missing stock?

We missed a couple of bulks of a weekly title yesterday. We had enough stock to last an hour or so.  While we waited to find out when we would get replacement stock, we went to the local supermarket and bought enough stock to last a few hours.

While this approach will affect the accuracy of our XchangeIT data, it is more important to me to have stock on the shelves than to provide accurate sales data.

I would be interested to hear if other newsagents buy stock from supermarkets or elsewhere when deliveries go missing.

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magazine distribution

Promoting magazines as Christmas gifts

christmas-mags.JPGCheck out the terrific display promoting magazines as Christmas gifts created by the team at my newsXpress Knox store.  The sales counter display shows off one of our Christmas stockings and a range of titles which easily fit into the stocking.

I like the use of food related titles as the category is performing so well and they are a popular Christmas gift.

Newsagents can show off their difference to other retail channels selling magazines with displays like this. Publishers ought to take notice.

I didn’t ask for this display to be created.   I love the initiative!

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magazines

Beware of predatory pricing from banks

National Australia Bank is engaged in what I’d call predatory pricing for tap and go payment units.  The deal sounds real sweet.  For some it has less than half the cost of a current arrangement.  It reminds me of the deals banks put to try and get people to switch credit cards and other accounts.

Under the surface, the deal is not so good.  There are IT infrastructure costs which they neglect to tell you about. Also, they want you to use a platform which is cumbersome to establish and is, in my view, poorly supported.

There will be more tap and go options released next year which are more competitive and which do not have IT hurdles.

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Newsagency challenges

If newspaper publishers don’t care why should newsagents?

age_dec13.JPGNewspaper publishers require newsagents with direct accounts to place newspaper toward the front of the store, in a high traffic (high value) location.  This is how it has been for decades.  Included in their demand is that the full front page of the newspaper is on display.

The front page of The Age newspaper today gives newsagents another reason to ignore the demands of publishers.  Covering the lead news item of the day with a half page ad demonstrates that showing the front page of the newspaper is not that important.  Unless of course people will buy the newspaper to read the Deakin University ad.  I think not.

I guess that news is not regarded as not all that important in selling newspapers by the folks at Fairfax.

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newspaper masthead desecration

Freebies weigh down magazines

weight-mags.JPGThe latest issues of Better Homes and Gardens and The Australian Women’s Weekly are being weighed down by the free booklets stuck on the back cover.

The booklet in each case is printed on light paper and looks damaged once the magazine has been lifted out of the magazine and put back a few times.  The glue line attaching the booklet to the back cover is set in from the spine of the booklet, this enables it to bend forward – the result is more easily seen with Better Homes and Gardens in the photo although it is happening with both titles.

The production process with these booklets, for a range of titles and not just the two I list aboce, leads to easily damaged stock.

While I am no printer, the problems could possibly be solved by attaching booklets which run down to the bottom of the magazine (rather than starting a couple of centimetres from the bottom) and which are glued closer to the spine of the booklet.

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magazines

Customers prefer charity boxed Christmas cards

Boxed Christmas card which support a charity are easily outselling boxed Christmas cards which do not support a charity based on what I am seeing in my stores this Christmas.  You know you are on a winner if a customer asks for a specific item and only wants that item.  This is what we are finding with charity Christmas cards.

I was with a couple of customers yesterday who wanted to buy eight boxes of cards. We did not have enough stock supporting a charity so they will be back in today or tomorrow once our next shipment arrives.  They passed up the opportunity to buy and excellent range of boxed cards we had on display, not even looking at the designs. They were adamant that they would only buy Christmas cards which support a charity.  They came to us because of our history of carrying a good range of charity Christmas cards.

While I have no research to back this, it feels to me as if Social Conscience Shopping is on the increase.

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Greeting Cards

Customers helping customers – the Christmas spirit in a newsagency

A customer asked for help in choosing a car magazine as a gift in my newsXpress Forest Hill store last week.  She didn’t know much about cars and wanted to make sure she purchased a gift which would be liked.

Another customer offered to help as he was a car magazine enthusiast.

The two customers talked for ten minutes about cars and the car magazines we had on offer.  They worked together to make the selection for the Christmas gift.  They were a delight to watch.

We were most appreciative of the knowledgable assistance given by the customer who stepped into help.  He was glad to have the opportunity.

This true story is not unique. I bet it happens many times each day across the newsagency channel.  People come to newsagencies for magazines because we are the specialists – like the lady looking for a gift. People with special interests come to newsagencies because of our range, our browser friendly attitude and because the environment is personal.

This difference – range, customer comfort and personal service – is vital to our entire channel.  We owe it to each other to do our best in these areas as they reflect our point of difference.

We rely on the two customers in my story – the lady looking for a magazine as a gift and the guy who shops in newsagencies because of the range and the browser friendliness.  We need to do more to attract and keep them.

The Christmas spirit is on show in many newsagencies right across Australia.

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Customer Service

Using the lottery counter for impulse purchases

counter-opp.jpgI saw this in another newsagency this week and share it here for others – placing roll wrap and giftwrap tape just below the lottery serving counter.  Click on the image to see a larger version of the photo.  While doing this is probably against lottery company rules, I’d expect many of their representatives to turn a blind eye for Christmas – especially if you are promoting their lottery products outside the usual area in a reciprocal move.

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giftwrap

Talking about magazines

I recorded a podcast for mediaweek magazine late yesterday, looking back at magazine performance from this year, the impact of the iPad and some other issues of interest to newsagents from 2010.

Click here to access the podcast – it’s free.

Brenden Wood (moderator), James Manning (Editor of mediaweek magazine) and I had a good conversation.  It was an other opportunity to talk about the difference between the newsagency channel and other channels when it comes to selling and supporting magazines.

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magazines

Not happy to sell this book

fat-book.JPGNetwork Services sent out this book, Losing the last 5kg by Susie Burrell, to newsagents yesterday.  It’s a book!  With a magazine margin!  With display challenges!  Unlike my previous blog post, I an NOT HAPPY to sell this book.  It has no local community, no newspaper or magazine connection.  There is no reason for it to be sent to us other than for Network Services to make money.   We rely in magazine distributors to be fair in their dealings with newsagents.  The distribution of this book is, in my view, grossly unfair.  It is an abuse of the trust newsagents place in Network Services.

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Book retailing
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