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One day newsagent conference starts this week

If you are buying a newsagency or have an existing newsagency you want to run better then the newsXpress one day conference is an excellent opportunity to connect with proactive newsagents and helpful suppliers. In an outcome-focused agenda you will find practical ideas you can implement right away…

09.15am – Suppliers on site with great Back to School and exclusive deals – we recommend all stores arrive early and use this time to engage with the suppliers and take advantage of the HOT OFFERS
10:00am – Open and Introduction by Graham Randall
10:05am – Mark Fletcher – How to avoid calling the police to your store
10:10am – Mark Fletcher – An OCD Diagnosis is not all bad news
10:45am – Ron Thorpe – Taking Ownership of the Greeting Card Category & making more money
11:15am – Morning tea – SUPPLIER INTERACTION OPPORTUNITY
11:30am – Graham Randall – Buying and Selling a newsagency – The facts, the myths and the figures
12:00pm – My Stories – selected newsXpress members share their stories on what makes their store profitable
12:30pm – Ben Kay – Stalking Goliath – techniques for competing with the big end of town
13:00pm – Lunch & Networking – SUPPLIER INTERACTION OPPORTUNITY
14:00pm – Jason Skodt – How to make money from the phone card category – Tips and practical advice on making this category more profitable
14:30pm – Business Building Open Forum
15:00pm – newsXpress Members only meeting – 60 minutes
16:00pm – Close of day

Click here for a one page brochure and registration form.  Click here to book online.  Participation costs just $50 and includes lunch and breaks.

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Newsagency opportunities

Newsagents concerned about My News Plus

Newsagents have reported being approached to participate in My News Plus.  This is being promoted by a business called Commerx1.  The website is www.commerx1.com.au.  Ross Whitehead claims to be a principal of Commerx1 on his Linked In page, although the domain name was registered by a Ross Smart.

Read how they describe their business:

MyNewsPlus.com.au MNP is an on-line department store designed specifically for Newsagents. MyNewsPlus will be licensed and operated on behalf of more than 2,000 newsagents Australia wide. The business will be managed by MyNewsPlus Pty Limited, founded specifically to develop and manage the on-line sales and delivery infrastructure for MyNewsPlus.

Commerx1 has been tasked with the design, development and implementation of the MyNewsPlus technology and logistics infrastructre. Commerx1 is a consulting company which specialises in the development of e-commerce software and fullfillment solutions.

I would be interested to know how they will be licenced and by whom.

Newsagents considering getting involved in My News Plus ought to research Ross Whitehead. Click here to see what Queensland Fair Trading had to say about him.  Then click here to read a story from ZDNet from 2004.

Once you read the two reports above and look at the My News Plus website you can see a pattern.  While newsagents need to form their own view, when asked for my opinion I have said that I would stay away from My News Plus.

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Newsagency challenges

Newsagents being used as bankers again

weeknights-food.JPGWhile I am pleased that ACP reduced our supply for their latest Weeknights Fast & Fabulous cookbook, we still received around twice what we could reasonably expect to sell – even in today’s marketplace of strong interest in food titles.

For a company which demands on time settlement of accounts by newsagents and often pursues this with ignorant aggression, it is disappointing that the supply model remains unfair to newsagents.

This title has a three month on-sale so why not provide me with 33% of my expected sales and use the Sales Based Replenishment model to provide additional stock when sales show that this is necessary.  That would be fair in terms of demands on retail space and newsagent cash.

Better still, why not give newsagents absolute control over supply?  This makes sense given that we are responsible for paying for the stock. This is where the model is half pregnant and grossly unfair toward newsagents.

By supplying the stock up front as ACP has done for this title and its other long shelf life titles makes newsagents ACP’s banker in many respects. Sure we will ultimately be credited for unsold stock but in the meantime ACP has our cash and given their debt situation I am sure it comes in handy.

I would expect that somewhere within ACP the cash flowing from newsagents for this and similar long shelf life titles is reflected in their financial modelling.

Supplying more stock than we could reasonably expect to sell is effectively a request for us to provide a loan.  This is more true for ACP than other publishers since they own the distribution company and, I expect, have faster access to the cash newsagents pay for these long shelf life titles.

I like the look of Weeknights Fast & Fabulous but I do worry that it will struggle in the more competitive food space of today.  MasterChef is a monster of a title.  Delicious is improving.  Better Basics is hot! Donna Hay continues to cut through with stunning covers.  The bar is higher today than a year ago.  Food titles need to clear that higher bar if they are to at the very least achieve the sales they achieved previously.

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magazine distribution

Following in the iPod footsteps

Just as the iPod led the way in how we consume music and cleared the way for a range of competitive devices, the iPad is now being joined by more tablet computers.  The Samsung Galaxy Tab is the latest.  While Adam Turner at the SMH is not a fan – read his review here – having another device in this space will extend the migration of news and information consumption from print to digital.

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magazines

Double Saturday lottery opportunity

We have the $20 million superdraw this Saturday and a jackpot the following Saturday since last Saturday’s division did not go off.  This gives us two weeks of bonus Saturday lottery traffic.

This Saturday’s draw is now $24 million giving is one week of bonus traffic and not two as appeared to be the case earlier in the day.

Superdraw sales are already very good.  The unusual nature of the following Saturday’s jackpot gives us an opportunity for some additional retail fun.

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Lotteries

Fat Prevention challenges fixtures

prevention-sep2010.JPGThe excellent fixtures provided by Pacific Magazines for Prevention magazine don’t work with the latest issue out today.

The free Avon eye cream bagged with the magazine makes the package challenging to display.  We have opted for a dump bin approach – as shown in the photo.  Look next to the dump bin and see how the magazine looks in the Pacific stand sent last month for their health titles.

Who was not doing their job when considering the production of the latest issue?  While I like the idea of a gift to drive sales, I do not like that it does not work with the display units created for the title now traditional magazine fixturing.

When supermarkets are sent bulky magazines packaged with free gifts they are sent display units … why not newsagents?  Because we are treated poorly compared to supermarkets – by most publishers!

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magazine distribution

August newsagent trading shows slight improvement

August appeared to be a better month for newsagents if the data I have seen from a number of stores is anything to go by. While magazines reported a decline, the decline was not as significant as in the previous six months. Greeting card sales, too, fared better as did stationery.

I expect that the average results for the month will be:

Magazines. Down 4%. Food is still the stand out reporting more double digit revenue growth. Weeklies reported an average decline of 3%.  What is concerning is the data I have seen is a further decline in special interest titles – these are a key point of difference for newsagents.

Cards. Down 1%. While I am seeing some growth in everyday, lifestyle appears to have some challenges.

Stationery. Down 2%. This is not quite accurate since ink is in this number in many newsagencies. Stores strong in ink are reporting double digit growth.

Newspapers. Down 3%.

The numbers noted above are based on a same store comarison of August 2010 compared to August 2009.

In two of my stores, books are delivering excellent growth – double digit in fact. We use books on the dance floor as the basket builder. Shoppers do not come to us, usually, for books. They add books to the basket on impulse.

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Newsagency benchmark

The cash flow drain of long shelf life magazines

smallpuzzlemags.JPGThe small puzzle magazines which are published by Pacific and ACP under the That’s Life and Take 5 brands respectively are not performing as well as they need to in shopping centre newsagencies.  Each magazine pocket needs to return $8.00 a month and above just to break even.

The minimum gross profit per pocket per month is higher this year than last since most newsagents in shopping centres face an annual rental increase of 5% or more and an annual labour cost increase of 4% and more.

The long shelf life and the volume of stock received brings these small puzzle titles into focus when assessing magazine performance based on a cash flow measure.  They are cash flow negative in stores for which I have data.  We cannot afford them to be cash flow negative.

I would prefer to see the publishers use a sales based replenishment process for supplying newsagents.  Send the average sales volume for the last three issues and top up through the on-sale as required.  This stops newsagency businesses being the bankers to the publishers.

While ACP has rolled our SBR for some of its titles, this initiative needs to be more widely adopted across the channel.

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crosswords

Amazing Father’s Day card sales

dads-day.JPGAs is the case with the Father’s Day season, the last few days were the big sale days according to the stores from which I have seen data.  Yesterday was excellent with card sales ranging from $1,500 through to $2,700 for the one day.

I worked in three different stores across the day and was fascinated to find that in two, most sales were single cards whereas in the third, many sales were three and four Father’s Day cards.  I am planning a more analysis thorough on card purchasing patterns.

Driving multiple card purchases in a single sale without giving away margin and outside of key seasons has to be a core goal of newsagents given the extraordinary margin from card sales.

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Greeting Cards

Having fun with the Art of Crochet

crochet-magazine.JPGCheck out the behind the counter display promoting The Art of Crochet created by the team at newsXpress Knox, a store in which I have a 50% interest.  It is a fun engagement with the title – terrific visual merchandising.  Customers are commenting on the display and buying part one of the series.

Too often we just put a title on the shelf or in a display bin.  Going the extra step and engaging with the title is which can drive real incremental business.  It also shows off the newsagent difference.  You will never see engagement like this in supermarket, petrol or convenience channels.

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partworks

Father’s Day book sale a winner

fathers-day-booksale.JPGOur Father’s Day book sale is working a treat with new traffic generated as well as excellent impulse business from existing customers.

The sale has been promoted with catalogues delivered to several thousand homes around the centre – to drive traffic.  In store, we have the sale spread across two tables in prime position on the dance floor – to drive impulse business. This front of store placement of the stock also attracts people walking past in the shopping mall.

While it is pitched as a Father’s Day sale, more than half the books are for other occasions.  The children’s books especially – we will sell out.

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Book retailing

Fun with Julia Gillard and Tony Abbott

Our Julia Gillard lottery syndicate sold out early today while the Tony Abbott syndicate is slowly selling.  Customers have been enjoying the fun and making some good comments.  Using people or news topics for syndicates is an interesting way of engaging with customers. I like it.

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Lotteries

When your lease gets in the way of growing your business

cufflinks.JPGThese cufflinks are an ideal add-on to a card purchase.  The pair on the left are an ideal graduation gift for a male while the pair on the right make a nice Father’s Day gift.  Some newsagents in major shopping centres are facing a challenge from their landlord when they try and add items like cufflinks to their gift range since their leases do not explicitly state that they can sell gifts.

All it takes is a complaint from another tenant to get the landlord interested.  In my experience, the landlord tends to side with the more valuable tenant.

I have see situations where the extent of gifts is the store is explicitly limited to a percentage of turnover or floor space.  I have seen the same restriction on confectionery and even books – all traditional lines for newsagents.

A permitted use clause which states that you can carry traditional newsagency lines could be problematic at some point as it is open to interpretation as to what constitutes traditional newsagency lines.  In one case recently, the landlord said that books were not a traditional newsagency line.  The cost of mounting a case to prove otherwise was considerable.

In today’s rapidly changing marketplace, newsagents need to negotiate an appropriately flexible permitted use clause in their lease.  That said, landlords need to be fairer in managing permitted use.  I bet Australia Post did not have greeting cards, gifts, books and even BBQ sets covered in their permitted use clauses yet there was probably no push back.

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Gifts

Another magazine fails the bagged test

wealth-magazine.JPGThe latest issue of Wealth magazine offers up more evidence against the publisher argument that bagging a current issue of a magazine with an old issue boosts sales.  Yesterday, after more than a month with zero sales, I took Wealth off the shelves and returned all stock.  Clearly, the pitch of BONUS MAGAZINE INSIDE did nothing to drive sales.

Until I see irrefutable proof I will not accept that bagging an old issue of a magazine with a current issue drives a sales boost.

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magazines

Lack of faith in the Minogue sisters

monthly-sep2010.JPGI was surprised to see a significant dip in our supply for the latest issue of The Monthly.  While our sales data indicates a cut is warranted, the extent of the cut is odd, especially when considering that this month features Melbourne’s own Minogue sisters.  They alone should help drive additional sales.

Despite the cutback, we are promoting The Monthly with an in-location display placed so that everyone entering men’s magazine aisle, where The Monthly usually rests, sees the title as well as around 50% of women entering the women’s magazine aisle. With Kylie and Dannii Minogue on the cover the magazine has significantly broader appeal this month.  Someone appears to have missed that.

Hopefully, we sell out and make a point to someone about a missed opportunity.

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magazine distribution

Fairfax election day newspaper offer

fairfax-election-offer.jpgClick on the image to see a copy of a fax sent to a school by Fairfax inviting them to sell The Sydney Morning Herald on election day last month as a fundraiser. While I am not sure, I expect that other schools which were polling places received similar faxes.

The local newsagent was not party to the offer and only found it about it from the school.  There was no plan regarding compensation for sales.  As they note shows, they were expected to pick up unsold stock.

The more newspaper publishers promote sales outside the newsagency channel the greater the opportunity newsagencies fade as the go to retail outlet for newspapers. While the election day is a one off offer, I would have preferred to see Fairfax work with newsagents on a joint election day promotion.

As a retail newsagent I would like proactive engagement from publishers and fair business rewards for achieving incremental business. The current approach offers no incentive to grow newspaper sales.  They appear to be investing little attention into driving newsagency over the counter sales.

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Newspaper marketing

Newsagents who ignore the value of partworks lose money

I know of some newsagents who early returned issue 1 of the Art of Crochet part series, deciding to not sell this title. Some soon realised the mistake they made once customers came in asking for the title.

Art of Crochet is delivering excellent traffic to newsagencies – thanks to the TV campaign. In our own case, we are finding that many customers also purchase other items.

Indeed, my newsagency shopping basket research shows that partworks customers are 33% more likely to purchase something in addition to the partwork when they visit the store than a regular magazine customer. 33% more likely! That is a bankable statistic. It is one reason I love partworks.

Some newsagents have said that they didn’t know it would be so successful and this is why they returned the stock. While the distributor and importer did a lousy job presenting the opportunity to newsagents I think that newsagents ought to have been more proactive in researching the title. It would have been easy to do some quick research before deciding to early return the stock.

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magazines

Why I prefer Star Trader over Trader Tag

While both Star Trader and Trader Tag are similar publications my preference is for Star Trader because it is supplied direct to my business and this provides me with a double the margin compared with that for Trader Tag. Being in a shopping centre you have to focus on margin.  Unless a title is generating considerably more foot traffic than another title, margin is the most important factor.

The only way to fix this for retail only newsagents is to look at an alternative distribution channel.

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Newsagency opportunities

Merchandising Vogue Australia

vogue-inloc.JPGWhile I complained about the packaging of the latest issue of Vogue yesterday, we did manage to create a waterfall display which actually looks quite compelling.  The large bag just fits into a magazine pocket.  Stacked in as column, as we have them, the display breaks up the women’s magazine aisle quite nicely – it is noticeable from the entrance to the aisle.

Most of our stock is in a dump bin on the dance floor as we feel that this issue will appeal to people who are infrequent purchasers of the title.

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magazines

Newsagency fixtures available

We move out of our current location at Forest Hill Chase Shopping Centre on September 13 and the shop will be gutted the next day to make way for construction by the landlord as part of the extension of the shopping centre. If anyone wants newsagency fixtures they would be welcome to take whatever they want the next day. However, you would need to arrange this with us in advance.

We are moving to a temporary location for six months before building a new shop in the centre.

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Newsagency opportunities

Magazine subscription promotion in newsagencies

Newsagents are being invited by the ANF to participate in a trial selling magazine subscriptions.  I am told they are trying to get in before Australia Post rolls out iSubscribe subscriptions in Post Offices.

I am frustrated that ACP Magazines and Pacific Magazines have been slow to engage with newsagents on the subscription opportunity.  We should have had this running five years ago or more.  The technology was ready then without the need for middlemen.

Any offer ought to be generous and either based on a chunky payment for a one year sub or slightly lower if we opt to participate in trail.  I really like the idea of tail revenue.

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magazine subscriptions

M2 magazine cover-up

m2-blocked.JPGWARNING: The last time I wrote about this topic a merchandiser responsible for the placement of a backing card unfairly got into trouble. This blog post is not about merchandisers. It is about deals magazine distributors do selling access to my space without compensating me.

The distributor for M2 magazine arranged Iand probably paid) for this header card to be placed behind the stock for M2. I doubt that the magazine distributors are organising this for free. If I am right then I ought to be paid a fee for allowing this to be done in my store.

Publishers need to realise that while they pay distributors a fee to place header cards, create displays and use newsagent space in a range of ways, newsagents are not compensated.

While some will say that our compensation comes in the form of sales, this is not always the case.

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magazines

Promoting the latest Better Basics

better-basics-aug2010.JPGWe are promoting Better Basics with an in-location display above the Australian Women’s Weekly in the busiest location of our magazine department.  We also have it located in with our food tiles plus one pocket of the title in the column of food titles in with our other weeklies.

We plan a weekend counter promotion from Friday as well. Better Basics is very popular, especially after a push on the Better Homes & Gardens TV show – which I hope they do this week!

Better Basics is a perfect impulse item for newsagents since it is not as frequent as most magazines – we know that it responds well to our co-location strategy and from allocating prime counter space for the weekend.

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magazines
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