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

Borders getting out of CDs?

A couple of Borders stores I have been into in the past week have been running massive CD sales. I have been told they are getting out of selling music. If correct, this is a major shift to the Borders model. Music has been a core category since the international retail brand began. When I first saw a Borders store in the US many years ago I marvelled at their approach – it was the same as magazines and books. You could try a whole album, for as long as you liked, before you bought.

Their apparent decision to quit music is probably a reflection of the maturity of the online music model. People can more easily buy songs than whole CD. Devices like the iPhone and iPad make buying easy and fast – no long retail queues, no packaging, no wastage.

Music retail has changed dramatically since the launch of the iPod. It appears that the changes are not over yet.

The factors which have impacted music retail are playing out for print. The tipping point for print products will prove to be the devices. Once they are right in the minds of consumers the mass exodos will begin.

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Media disruption

The Notebook closure was not planned

notebook-subscription.jpgBased on subscription promotion in the latest issue of Notebook magazine, out just last week, the closure must have been a last minute decision by the publisher.  The image shows a subscription ad from the latest issue.

I remain surprised at the decsision to close the title give others which fewer sales which continue to be published.

It will be interesting to see how the closure of the magazine affect sales of the Notebook diary – we received our usual supply.

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magazine subscriptions

Tips For a Successful Halloween Promotion in Your Newsagency

Halloween is a wonderful seasonal opportunity for newsagents. By embracing the season you can connect with the community spirit, the shared experience and achieve some excellent sales as a result.

Halloween is regarded by most as an American tradition.  Wikipedia suggests that it has its roots in a Celtic festival. Regardless, Halloween is growing in popularity in Australia.

Google keyword reports tell us that there is, on average, in excess of 140,000 Halloween related search in Australia each month. These bulk up around August through October.  While this is only 1.5% of global searches it is growing.

newsXpress has been promoting Halloween in newsagencies for five years.  Check out the newsXpress blog for a bunch of Halloween display photos.  You can get some good ideas from these photos.  Many stores are achieving double digit growth from good margin product.  This year, GNS entered the season with a range of products for all newsagents.  These moves indicate that it is a season newsagents ought consider.

Here are tips for a more successful Halloween season based on my own experience of what has worked:

  1. Connect with the community. Make it about more than selling product. Find a way to connect with the community. This could involve hosting an event, running a competition or somehow using your retail store to make Halloween more valuable for the community. A colouring competition is a good idea.
  2. Offer something for nothing. Find a way to add value to the Halloween experience. Maybe free recipes for a Halloween dinner party, tip sheets for a fun light out, ideas on how to dress your home or a collection of locally written scary stories. Find ways to not only add value to to embrace your community while doing this.
  3. Embrace theater in your store. Halloween is visual, use it as an opportunity for retail theater. From the front window to deep into the store, let Halloween own your space.
  4. Halloween is all about impulse. Place Halloween product in the best impulse purchase location. This is a great basket building season.
  5. Play music. Create a Halloween mix set and play this in store in the lead up to October 31. Music can help add to the theater you create in store.
  6. Consider a sale. Consider remaining open for the evening, this provides a safe place and somewhere parents can have some Halloween hospitality with you.
  7. Support a community group. Some kids may be challenged getting into Halloween because of tough circumstances. Offer free costumes and other support to help everyone in the community get into the Halloween spirit.
  8. Give your time. Offer to take kids who do not have parents out trick or treating. You could also visit a local retirement home or similar place with older folks to give them some Halloween fun.
  9. Educate. Take the opportunity to educate people about Halloween and where it started. This can add value to the experience.
  10. Host an event. Consider hosting a pre Halloween party with some special offers and drinks to celebrate scary deals – before the big night.
  11. Take the season down right away. Halloween is one of those seasons that once the night is over, people move on quickly.

Above all else with Halloween, have fun, inside and outside your newsagency.

Outside of the profitability and fund of the season, I like Halloween because it provides a nice segue into full-on Christmas.  I also like it because it has habit based elements and it fits with the model of being the go to seasonal retailer … something for the newsagency of the future model.

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Basket building

iPad title cheaper than print

Sports Illustrated in the US has published an iPad version of its popular Football Book for US$7.99. The print version costs US$29.99. This is a shift in iPad pricing and is bound to be watched carefully by other publishers.  min online has more details on this story.  The moves we will see for books, magazines and newspapers will mirror those of music just six years ago.

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Media disruption

Australia Post profit tumble spells more trouble for newsagents

Australia Post’s 66% decline in profit over the last year is bad news for newsagents.

As the organisation battles a decline in the use of its traditional mail services, it is turning to other revenue opportunities, leveraging off its ubiquitous brand.

These other opportunities will include pursuing growth in retail.  As Coles supermarkets are finding, there is money to be made in targeting key newsagency  categories in their corporate stores.

Australia Post has been half assed in their pursuit of greeting cards, too expensive on ink and haphazard on stationery.  These are three key areas where I would expect to see significant change in the next year.

While I see such activity as outside the spirit of the legislation under which Australia Post operates, politicians of all sides have demonstrated a lack of appetite to address this and stop the government protected monopoly from competing against family owned businesses which are near their corporate stores.  Newsagents have not pressed their case well.  This must change.

John Durie writing at The Australian today has an interesting perspective on the Australia Post situation.

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Australia Post

The Better Homes weekend

betterhomes-saturday.JPGBeing the first weekend for the latest issue of Better Homes and Gardens, we have a stack placed between newspapers at each of my stores from Friday through Sunday.  This is in addition to stock on the display stand and the usual locations for the title with our women’s weeklies as well as in the home and living section.  This obsessive co-location drives good sales, especially Friday through Sunday.  Early indications for this Christmas themed issue are good.

Now if only magazine publishers would recognise this valuable support from newsagents. While supermarkets are reinventing their magazine offer, their charges and rebates make them a more expensive retail proposition than a newsagency.

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magazines

Magazine cash flow crunch

I was talking with a newsagent today who is facing combined Gotch and Network charges for September of $35,932.00.  Total magazine revenue for the same month was $38,965.78.  The real estate occupied by magazines cost the business $7,920.00 for the month.  The management of magazines cost the business $1,500.00 for the month.

The cash flow shortage of $6,386 was created by Gotch and Network yet they will accept no responsibility for this.

Had this business been supplied n a sell through model of 65% they would have been cash flow positive.

The cash flow crisis being faced by this newsagent is not unique to their business.  One only has to look at the year on year decline in magazine sales and then look at the year on year billing for magazine stock to understand that newsagents are carrying a considerably higher financial burden for the magazine distribution network today than two years ago.

The reports in the newsagency software show the blatant cash grab in broad daylight.  Listing magazine sell through rates by title, newsagents can see gross misbehaviour by both distributors.  While they both have excuses, none are legitimate in my view. They cannot and should not try and justify why they consistently supply on a model which is cash flow negative for most of the year.

No wonder we have seen record newsagency closures this year.

The only reliable mechanism newsagents have to control their magazine cash flow situation is to early return stock but this has costs which are unreasonable.  I suspect that many newsagents will be looking at their shelves over the next few days to claw back some cash of next month’s bill.

The alternative, a magazine account payment strike by newsagents, would be illegal.

There is so much good news in newsagencies, new traffic and high margin good news, that it is frustrating that these old departments can be so harmful to our businesses.  It is even more frustrating that we are not given reasonable business levels with which to control these parts of our businesses.  This makes dilutes our competitiveness.

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magazines

ACCC investigation into Network take over of NDD titles still active

The informal review being conducted into the take over of the distribution of magazine titles by Network Services from NDD which I blogged about here on October 9 is still accepting submissions from what I understand. This is contrary to the indicative timeline on the ACCC website.

Newsagents with an opinion or concerns about the switch of titles from NDD to Network ought to follow the contact details on the ACCC website if they wish to be heard.

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magazine distribution

Blackhawk gift card sales take off in newsagencies

blackhawk-giftcards-art1.jpgI am seeing excellent sales numbers for the Blackhawk gift cards with iTunes gift cards leading the pack followed by Sanity, Jay Jays, Mitre 10, Dymocks, Super Cheap Auto and Angus and Robertson.

The gift cards are being sold with a greeting card more than 75% of the time, meaning a nice margin add-on for an already high margin sale.

While newsagents cannot build their future off the sales of gift cards, they can quickly and easily bank a higher margin from existing traffic today.  This is the important next step to navigating to the future – building a better business today off of the traffic we have today.

the number of newsagents selling gift cards has quadrupled in the last few months and I expect that to grow considerably over the next few weeks as we head into the prime gift card season.

The latest extension to the gift card range further leverages existing newsagent traffic even further.  The smartbox range offers experiences in a unique format for newsagencies. The price point provides another excellent margin building opportunity for newsagents.

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Gifts

Network Services update on XchangeIT issues

Network Services just issued the following update about the XchangeIT service gateway outage today:

We’re back up now, new files coming through are being processed as expected. As for the backlog of files, we’ve move these into a temporary folder and will push these through in batches so to not create another back log, preference will be given to Returns Files which we hope to push through tonight and then sales files over the next few days.

Hopefully newsagents will get the files they need for tomorrow’s magazines.

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magazine distribution

VANA election update

Click here to see a copy of a communication from VANA Board candidate Trevor Mason to Victorian newsagents yesterday.

I am left wondering if Trevor wants $100,000 of VANA’s finds for his project or the four or five times that amount which I understand he originally sought from  VANA.

If Trevor wants to engage in the commercial structure and operation of newsagents he ought to do that through the commercial structure he has established already. If the riches which he says he can unlock for newsagents are so real then the numbers will stack up and newsagents will support him, commercially.

To try and support this business venture VANA, as appears may be the agenda with this election, would be an abuse of the resources VANA and its members have built up over many years.

I am all for change in the newsagency channel and in newsagencies themselves and write about it here often.  However, that change must be driven and controlled by the shareholders and not an industry association which is a servant of its members.

I see data from many newsagencies.  There are some excellent success stories out there of people reinventing their newsagencies, building customer traffic and profitability. Unfortunately, too many newsagents will realise too late that they should have been doing this. This is their problem and not the problem of the associations.

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Newsagent representation

Newsagents: checkout your local Coles

supermarket-mags.JPGIn October last year I wrote here about work being done by Coles supermarkets in experimenting with and developing an in-store newsagency model.  I had seen the first such model at Bayswater in Victoria.

Today, a year later, Coles continues to experiment.  From what I have seen, their work on this project is paying off.  They are delivering browser friendly newsagency like experiences inside supermarkets.

Whereas in the past a magazine purchase was often on impulse at the counter, now, in one of their new style stores, you can see people browsing just as they would in a local newsagency.

Look at the photo from a suburban Coles supermarket I visited last week.  They have an excellent layout, presenting over 400 magazine pockets. Plenty of these are full face.  The professional signage makes navigation easy.

I expect that Coles is looking to deliver a similar look and feel to greeting cards and that cards and magazines will be next to, near or opposite each other in a wider than usual (for a supermarket) aisle.

While Woolworths is not as advanced as Coles is with its ‘newsagency’ project, they will follow. This is what supermarkets in the UK have done with terrific success. Coles has people from the UK working with them on this project.

Newsagents can respond to this challenge, many are. But we can’t wait.  We must act today on our businesses otherwise we will wake up a couple of years down the track and wonder where our customers have gone.

Australian shoppers are not as loyal to newsagencies as we would like to think.  The Coles offer is better than that of many newsagencies and once shoppers enjoy satisfaction from the experience I would expect them to return.

While we can complain about the power of the big two supermarkets, nothing has stopped us reinventing our retail model. Sure, some newsagents have, but not enough.

The one key barrier to us reinventing ourselves in the magazine space is the lack of control we have over range and supply volume.  The relationships between magazine distributors and newsagents dilutes our opportunity to be competitive with the two big supermarkets.  However, that is a topic for another day.

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Newsagency challenges

Great Christmas display stand for Better Homes

bhg-christmasstand.JPGPacific Magazines continue to create excellent impulse purchase stands for their magazines.  They are strong. They carry plenty of stock and often multiple titles.  They look good too.

The stand we received yesterday for Better Homes and Gardens is no exception.

I appreciate these stands more now than ever – in our temporary 97 sq m newsagency at Forest Hill. This stand is flexible and helps us promote these titles in a way which would otherwise not have been possible or practical in our tiny space.

Now before people shoot off comments, I know that not everyone gets these stands – they go to high volume stores.  Those who did not get the stands could look at the slimline model and maybe have something made.  This way, you control the titles in this impulse unit.

Note to other publishers creating stands for newsagents. Check out the pocket holding Prevention.  Pacific even provided an insert to snugly hold this smaller format title.  That is good attention to detail.

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magazines

Ecopolitan cards very popular

ecopolitan.JPGThe new ecopolitan range of cards from Hallmark is proving to be very popular with customers.

Printed with a soy / vegetable based ink on 100% recycled paper, customers get the environmental message and love the cool designs of these cards.  The designs are from a US card company called Sunrise Greetings which Hallmark acquired in 1998.

The recent federal election shows the growth in interest in Green matters among voters so it stands to reason that newsagents make a conscious decision to carry a broader range of green products – like these cards from Hallmark. This is why we are promoting the range in-store.

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Environment

Man Bites Murdoch – a book for newsagents

guthriebook.jpgI wonder how many newsagents will buy Man Bites Murdoch by former Herald Sun Editor Bruce Guthrie when it goes on sale today.  I plan to.  Interviews I have heard and seen so far suggest that it will be of considerable interest to media watchers and newsagents alike.  I will be particularly interested to compare Guthrie’s book with Michael Wolff’s book, The Man Who Owns The News, which I read earlier this year.

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Newspapers

Wal-Mart to sell the iPad

Wal-Mart confirmed yesterday that it is to start selling Apple’s iPad from October 15.  The Wall Street Journal has the story.  This is an extraordinary move by both companies.

The cynic in me wonders if this move has been co-ordinated with Opwah Winfrey’s recent comments about the iPad.

When I started writing about the new Apple device long ago people said that it would be a fad and not impact print media.  Wal-Mart’s endorsement is further evidence that the iPad journey is far from over.

There is still no information from Apple about it expanding its retail coverage here in Australia.

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Media disruption

Having fun with calendars

fun-calendars-2010.JPGWe are having fun with calendars like LIFE IS CRAP by placing them where they will be noticed – to drive impulse purchases of calendars.  While people with a special interest will seek out calendars for dog breeds, trains, volcanos and other interests covered by our calendar range it is the fun quirky calendars which we can sell on impulse just by placing the calendar tactically.  This is why we seek out these quirky calendars and give them a couple of days in a high profile location.  Already this season we have achieved some excellent impulse business.

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Calendars

VANA election statements

Click here to see a copy of the statements issued by VANA on behalf of the two candidates for the one vacancy on the board.

Based on the statements from the candidates it is clear that there is a considerable difference between the two.  Robert Wade proposes that VANA act as an association, serving the needs of newsagents.  Trevor Mason appears to prefer commercial activity through VANA.

As I understand it, if Mason is elected, a block of Directors would support his agenda.  I’d welcome comment from and Board member to confirm or deny this.

If I was a VANA member I would not be supporting Mason.  I know a bit about his model based on my own discussions with him.  I do not believe that he has a plan other than to take care of himself. He is an excellent salesman without a track record of relevance to the needs of newsagents and the newsagency channel in my view.

This all matters to newsagents around the country as VANA has more resources than any other newsagent association – thanks to astute property moves started in the 1990s when the association was pulling itself out of a mess left by a former CEO.

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Newsagent representation

Greener newsagents saving paper

runlist.JPGMore an more newsagents are eliminating paper from their businesses by using devices such as the iPhone, Android based phones and even Apple’s iPad for tasks which would previously have been done using paper.  The Samsung phone in the photo is being used as an electronic newspaper home delivery run list.  This list is generated by newsagency software and dropped onto the phone in a matter of seconds.

I know of some newsagencies which have eliminated up to fifty pages of printing a day by providing access to delivery runlists to drivers electronically.

This is a good green story for the newsagency channel. Add to it the move away from paper printed monthly accounts to electronic accounts sent by email and the viewing of newsagency management reports electronically rather than in print and you can see smart businesses cutting printing costs, cutting carbon emissions and reducing paper usage.

Now if only we could reduce paper wastage from magazine returns.

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Environment

Covering magazine cover art with a price sticker

paranormal-coverup.jpgThe new low price sticker on the cover of Paranormal which went on sale yesterday obscures a key image on the magazine cover.  While I can understand Gotch wanting to pitch ‘new low price’ I think they covered an important element of the cover artwork – is it the face of Jesus?  Now before anyone gets het up, I think it’s a bit of a laugh.  Personally, I don’t take this magazine too seriously.

While I am on about these new low price stickers though, I have seen them on several issues of imported titles in a row, indicating that the price is not so new.  Indeed, this was pointed out to me by a customer on the weekend.  They said it was false advertising.

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magazines

Promoting the covers of Harpers Bazaar

frank-bazaar.JPGOur Frankston store has done a terrific display promoting the two covers of Harpers Bazaar.  This issue cashes in on the confusion over the announcement of the winner of Australia’s Next Top Model.  The column covered with the display (click on the image for a larger version) is covered on all four sides – each promoting a different magazine.  The Bazaar display is what customers see as they enter the store and head to the magazine department.  It is also next to our main newspaper stand.

At my Forest Hill store, all bar one copy of Bazaar came with the Amanda cover.

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magazines
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