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

Frustrating McDonalds promotion

The Herald Sun McDonalds promotion is frustrating.  While I am aware of it, a distribution agent handling one of my stores had not made arrangements so our Sunday team were left scrambling to sort out what to do.  My understanding that that there is to be a settling up of collection coupons at the end of the promotion. My view is that if I am giving away a free newspaper today then I ought to have the full cover price credit showing on the account this week.

As I have noted here before, I think this McDonalds promotion does no favours to the newsagency channel. Publishers should work harder  with us on building newspaper sales in our businesses.

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Newspaper marketing

Newsagent magazine cash flow study announced

A week ago today I wrote to all 1,700 Tower Newsagents to invite their participation in a vitally important study into the cash flow implications of the magazine supply model.

Here is what I wrote to newsagents:

I am conducting new research into the cash flow implications of the magazine supply model on newsagencies and write to invite you to participate. I last did this in 2006 – a copy of the resulting report is attached.

This time I am not planning on writing a report. Rather, I am looking for data which can be used to get attention of regulators like the ACCC on issues with the magazine distribution model.

In one store for which I have data, they have experienced nine months out of the last twelve where magazine cash flow has been negative. In another store, their magazine bills have been more than magazine revenue for six months out of the last twelve. This is a not a sustainable business model.

There is a bit of work involved for us to get to an accurate understanding of your situation. However, once done, you can see the cash flow by distributor for your business. Plus you can easily run the report in the future without the one-off work.

To participate I need you to run the Magazine Cash Flow Report. I have attached an advice sheet which guide you on how to do this.

Here are my tips for creating an accurate report:

1. Enter your total rent cost including marketing and other levies.
2. Enter an accurate count of total floor space allocated to magazines in your store.
3. Take your time to get your pocket settings right.
4. Once you have completed the settings, take time to check them all again before running the report.

Once you have the report on the screen, save it as a PDF and email it to me at mark@towersystems….

I will review every report. My expectation is that I will see a pattern of behaviour which could form the basis of a submission to the ACCC and other potentially interested parties on the magazine supply model.

While our software has excellent facilities for managing supply, I remain of the view that newsagents should not have to do this – the magazine companies should supply on a fairer basis and based on sales data.

Mark Fletcher
M: 0418 321 338

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magazine distribution

Redeveloping the Bike magazine segment

bikes-health.JPGWith the Tour de France over for another year we have taken the opportunity to refresh the bikes and general men’s health segment of our men’s magazine aisle.  We have shuffled titles and reallocated space and created a fresh look designed to encourage browsers to purchase multiple titles.  Click on the image to see a larger version of the photo.

We have implemented beacon branding principles to draw attention to the various areas of interest and to showcase top selling titles.

I know a bit about the bike marketplace since my software company has been selling software to specialist bike retailers for ten years.  Bike buyers happily spend money on their passion.  The opportunity for us is selling two or three bike magazines to each shopper with this interest.  This is one of the reasons I am happy to spend time refreshing the offer.

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marketing

Time strikes deal on free iPad magazines

Time Inc has struck a deal enabling subscribers of People magazine to access the People iPad app for free.  This is an important more for publishers as it provides a lower cost bridge across which they could invite migration of subscribers from print to digital.   Arts technica has more on this.

To attract new customers to the iPad and other tablet platforms, publishers will need to introduce more competitive pricing or risk losing eyeballs to start-ups.

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Media disruption

Moving the newsagency

fhn-construction.JPG

For several months now we have been dealing with the prospect of moving our newsXpress Forest Hill newsagency temporarily to accommodate major construction works at Forest Hill Chase.

Yesterday, the final piece of the proposed temporary move fell into place and it is set to become a reality.

In two or three weeks we will downsize our 330 sq meter newsXpress Forest Hill store into a 95 sq metre store for between four and six months while our current location plays a key role in a major extension to level three of the centre.

Frankly, I am glad to finally have certainty of the move plans.  It has been time consuming and challenging navigating the considerable complexity of even the possibility of a temporary move of this size.  In addition to our own needs, we have had to work in with the needs of our landlord and other key stakeholders.

The change is also coming at a time of management change in the business with our long term manager deciding to take on another role in the business.

We are looking forward to the challenge and opportunity of taking our larger format newsagency business and condensing it for our time in our temporary location.  In addition to temporarily downsizing, we are moving from level 2 to level 1.  We expect to learn a lot about the business and come out the other side, when we relocate to our new permanent home, with a fresh offer for the folks at Forest Hill Chase Shopping Centre.

I’ll blog here about the journey from time to time, using the moving shop category.

Some product categories will be rested while we are in our temporary location.   Broadly speaking, however, we will cut magazine range by 25%, stationery by 60%, social stationery by 50%, gifts by 50% and cards by 5%. We are finalising this list at the moment and will start to speak with suppliers this coming week.

There are bound to be road blocks and speed humps along the way.  There are also bound to be valuable discoveries.  We are keen to embrace all of the challenges because we are certain that we will be better retailers as a result.

Footnote: the photo at this post is of the perimeter of the construction zone outside our entrance.  It is a thrill to see the newsXpress logo there next to the logos of  other key retailers in our current part of the centre.  The landlord decided on this list!

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moving shop

Jules Lund DVD drives Outdoor magazine sales

outdoor-aug2010.JPGOur promotion of Australian Geographic’s Outdoor magazine on our main newspaper stand is working for us as I figured it would … delivering impulse purchases!  The free Jules Lund DVD included with the magazine helps broaden the appeal of this issue – hence the tactical placement with newspapers.  We also have the title in its usual place with our outdoor magazines.  I am expecting Outdoor to remain in the newspaper location for a week.

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magazines

1970s Collect it cover should work a treat

collectit-aug2010.JPGAs a 70s fan I couldn’t help but put the latest issue of Collect it on display in our newspaper stand.  While I am not a regular reader of the magazine, the 70s theme got me browsing the title.  This is why I decided to give it a high traffic area placement rather than leave Collect it in its usual place where only those interested in collectibles would look for it.  This is a perfect example of making a placement decision solely based on the cover.  Hopefully I am right and impulse purchases flow.

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magazines

Why calendar publishers should not use magazine distributors

family-planner-calendar.JPGI have no interest in selling a calendar with a margin of 25% to 35% when I can sell a very similar calendar with a margin of 60%.  Take the Family Planner 2011 Calendar which we received this morning from Network Services.  We returned 88% of what we received last year yet Network still sent close to what they sent last year.  I didn’t want this title at all, not at the margin they supply it for.  It does not pay its way.  So, we early returned the stock this morning – as we will do with most magazine distributor supplied calendars.

Calendar publishers who want to supply newsagents need to find alternative routes to market which respect the value of the retail channel by delivering a better margin.

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Calendars

Making your own fresh election newspaper

paperli-ausvotes.jpgIn a few seconds I created two new ‘newspapers’.  The first, a newspaper based on tweets about the Australian Federal Election, aggregates content based on Twitter content published with the #ausvotes hashtag. 

Talk about citizen journalism – well, in short form at least.  Using paper.li it took just a couple of minutes to create.  Click on the image to see a larger version of this morning’s ‘edition’. Down in the bottom right corner is a tweet of mine from just before I created the ‘newspaper’.  I’d note that I created this edition this morning at around 6am.  There was not much Twitter activity except from tweets from the parties.  For those who enjoy comment from a diverse pool, check out the feed as the day unfolds.  Last night election related tweets were flowing at up to 50 a minute.

paperli-mark.jpgI also created a Mark Fletcher newspaper based on Twitter users I follow.   This is pretty cool as it draws content from a range of sources which interest me.  Anyone can do this based on Twitter or Facebook feeds. 

Paper.li is a very nice way of aggregating content from a range of sources through an interesting platform. It is when you look at tools like paper.li that you can start to make sense and use of the flood of tweets on a particular topic.

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Media disruption

Election outcome could close a newsagency

A defence department decision to decommission 395 houses at the RAAF base in Winnellie in the Northern Territory rocked the owners of Winnellie News and other retailers nearby.  That the decision appears to have been made five years ago but not discovered until just a few months ago means that they have invested in the future of their business without the full knowledge which out to have been available to them.

The outcome of the election is important since the Coalition has said that they would turn the houses into a new suburb.  This is not only important economically but also socially driven the chronic shortage of homes in Darwin.  I understand that at this stage, the Labor party does not plan to retain the housing.

When I heard about this issue yesterday my heart went out to the newsagent.  I wish we had heard about it earlier in the campaign.  I am sure that other newsagents would have wanted to support a fellow newsagent facing the loss of their business in these circumstances.

I am surprised that the ANF did not take up this issue as it goes to the core of the community of newsagents, regardless of membership status.

For more on this story, check out the Winnellie News blog.

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Newsagency challenges

Herald and Weekly Times adjust campaign

The Herald and Weekly Times yesterday announced some adjustments to its problematic Herald Sun subscription campaign.

They have pushed out the start date, changed engagement processes to better suit newsagents and offered payment for additional administrative work.

Unfortunately, they have not backed away from moving customers to credit card payment arrangements.  I see this as a risk to newsagents.  Outside of paying the newspaper account, every other product and service offered by a newsagent is available in countless other businesses.

My software company, Tower Systems, yesterday published advice for Victorian newsagents on handling this Herald Sun promotion.

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Newsagency challenges

Herald Sun promotion diverts traffic from newsagencies

The folks at the Herald Sun have launched a marketing campaign designed to switch newspaper home delivery customers to a full subscription service.  The  commercial risk for newsagents of this campaign, if I understand the campaign correctly, is that it drives existing customers from paying in the newsagency to paying the publisher direct by credit card.

The potential loss of customer foot traffic is considerable, especially in rural and regional newsagencies.

Paying the newspaper home delivery account has been a key traffic generator for newsagencies, important to other sales and an important factor in assessing business goodwill.

Publishers ought to be driving newsagency foot traffic and not implementing offers which put it at risk.

The Australian retail newsagency channel is unique in the world.  It is a full service offer, excellent at driving sales for publishers and committed to brand building promotions.  Keep chipping away at the channel and one day you will find it has all but disappeared.  This comment right here is amied at ALL publishers, magazine and newspaper, large and small.

This Herald Sun promotion was announced to newsagents on Monday of this week.  Outside of the issues noted above, it is, in my view, time consuming and complex for distribution newsagents to manage.  The publisher could have made life much easier for newsagents had they engaged with the newsagency software companies in advance of their announcement.  Their poor organisation has caused considerable stress for newsagents and generated extraordinary calls traffic to newsagent software companies.

A bit of professional planning and consideration for newsagents could have saved countless hours being wasted over the last couple of days.

I know that what I have written will annoy / anger /frustrate the folks at H&WT.  Cop it on the chin guys and learn, once and for all, that you have to consider and consult with others before you announce any home delivery offer.

I am all for growing newsagency businesses – but not with a rushed campaign which appears, from where I sit, to have not been thought through.

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Newsagency challenges

Promoting Moroccan cooking at the counter

moroccan-aug2010.JPGOne of our team members created this counter display for the Women’s Weekly Moroccan cookbook at the counter earlier this week.   Our expectation is that we can drive some good impulse purchase business with this counter promotion – hence the prime space allocation.  We currently plan to keep this display in place until next Monday.  As I blogged a few weeks ago, Moroccan food is popular at the moment.  I hope this translates into good cookbook sales.

I like the ACP cookbooks as they are great for use in basket building tactics – like this counter display.

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magazines

Chasing early sales of Diabetic Living

diabetic-living-aug2010.JPGWe are promoting the latest issue of Diabetic Living with an in-location display.  I know, I am a cracked record with these displays – because they work, not only for me but also plenty of other newsagents judging by the calls and emails I have received.    The best titles I have found they work for are those I regularly write about here – including Diabetic Living – this is why we will leave the display up for a full week.

I give in-location displays three days to deliver measureable sales before evaluating its future.

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magazines

No room at the inn for Renovate

renovate-aug2010.JPGWe didn’t have any spare room for Renovate which arrived in-store yesterday.  With no spare space at all and the bagged package quite thick I made the decision to early return all stock.   Despite what publishers say, shoppers I speak with prefer magazines they can browse.  So, bagged titles are given priority when I am considering whether to early return due to lack of available shelf space.  Yes we will miss some sales – it’s a choice I had to make taking into account the titles which would have had to come down to make room for the weighty Renovate.

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magazine distribution

Promoting Better Homes and Gardens

better-homes-aug18.JPGWe are trying a fresh approach in promoting the latest issue of Better Homes and Gardens, out today, with this display in with our women’s weeklies titles.  We also have Better Homes in prime position in its usual location.  We will supplement this activity with weekend coverage at the counter and or with our main newspaper stand.  Last month’s issue sold exceptionally well.

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magazines

Ralph magazine lives on, well the girls at least

ralph_ressurection.JPGRalph magazine closed in June.  I thought that was the end of it.  This morning we received Girls of Ralph. My hunch is that it will not sell – partly because they are leveraging a title which shoppers were not supporting and partly because we are saturated with girls of repurposed content.  I hope that I am wrong and that I do make money out of this new title – I’m not holding my breath.

This title is a perfect example of why we need publishers to take on more of the risk of distributing titles to us.  If did not achieve at least a 50% sell through, we should be paid for space and labour.  An alternative model is that we pay based on scanned based sales – that is, after we have made a sale.  There are other alternatives too where publishers take on a fairer responsibility for the stock they send us.

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magazine distribution

Promoting alternative newspaper channels

mcdonaldsad.JPGIt is disappointing to see newspaper publishers actively engaging with alternative retail channels as we have seen in Victoria over the last few weeks with the Coles promotion and now the McDonald’s breakfast promotion – both with the Herald Sun.

Newsagencies remain the best retail outlet for newspapers.  We are full service, efficient, friendly, local and support brand building promotions.

A smart publisher would engage with newsagents to drive retail sales.  I have pitched many ideas over the years and while none have been taken up, I am sure that not every idea was worthless.

Coles and McDonalds promote newspapers as an add-on to their core offer.  Newsagents will promote newspapers as a core offer, unless we have reason to look elsewhere for a key traffic generator.

At some point in the future, magazine and newspaper publishers will wonder whether chasing sales outside the newsagency channel was good for their business.

It is not too late to engage with retail newsagents and develop mutually beneficial business building ideas.

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Newsagency challenges

UK digital book price war

There is a book price war being waged in the UK between Amazon UK and W H Smith over the price of digital books.  Top selling books are now available for as much as 66% less.  Digital readers are also considerably cheaper thanks to price cuts.

The new low entry cost and low content cost will bring more people to the digital channel and further impact print.

Think back to what happened with musicjust five or six years ago.

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Book retailing

How to merchandise in your newsagency

Merchandising is the process of displaying products in a retail store to achieve maximum sales. There are experts who make careers out of providing merchandising advice to national retail chains. There are consultants who provide merchandising advice to independent retailers.

Smaller independent retailers (like newsagents) don’t have the luxury of hiring experts. Many have not had the opportunity to access professional merchandising training. What they do is learn on the job, as they go. This is not a bad thing.

Some of the best merchandising I have seen has been by people who are self taught and more time poor than the professional merchandisers.

In reality, merchandising comes down to some simple principles which, when followed, deliver excellent business results.

Tell a story. Good merchandising is about showing a product in context, in a way that a browser in a retail shop gets what the product is, how they can use and why then need to have it. This is conveyed in a good display by taking a creative approach.

Look at the example of a great cookbook. One store may have a wonderful display of the cookbook looking all very professional and attractive. Hey may even open a copy on a page showing a delicious recipe.

Another store may have the cookbook displayed on a small table dressed for dinner with cutlery and glasses. Such a tale display would look out of place in a bookshop, or special. This will get it noticed and shoppers will see the cookbook displayed on the table and get a warmth from this that the basic book display will not convey.

So, tell a story, a compelling story.

Get my attention. A merchandising display has to stand out. Many shoppers are store blind. Combat this with a compelling display.

Remember the pyramid. Treat displays based around product volume as a pyramid with a peak at the top and a wide base at the bottom. Build the display with balance and pyramids on your mind.

Have fun. Use the merchandising display to demonstrate the character of the business. By having some fun you can make browsing the store more enjoyable.

Retail is theater. There is no avoiding this. Many people shop for something to do. Boring product displays can leave them not enjoying the show. A terrific merchandising display commands attention and entertains.

Change. Don’t leave merchandising displays up for too long. Change is good in retail, good for customers and good for employees.

Good merchandising is all about speaking to your customers. Embrace it, learn as you go and have some fun.

FOOTNOTE: I was approached to write this article a few months ago.  It has gone on to be republished in a few places.  I publish here as a resource for newsagents who wonder about the importance of visual merchandising and how to get started.

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visual merchandising

Do you have too many kitchen and bathroom magazines?

kitchen-bathroom.jpgFurther to my blog post of five days ago about space challenges in the backyard space and my blog post of August 9 on the number of quilting titles, check out the photo taken yesterday in a Queensland newsagency. Based on return on shelf space and other criteria, I would expect your average newsagency to have no more than nine pockets of kitchen and bathroom titles.  In the photo you can see five titles from one publisher, Universal Magazines in the category.

Only the newsagent, reviewing their sales data, could know if five kitchen and bathroom titles from Universal Magazines is too many for their business.

In my own newsagencies I would consider it at least two titles too many.

The current newsagency magazine distribution system does not provide newsagents with adequate tools to block the use of our retail space in this way.  Our competitors – supermarkets, convenience stores and petrol outlets – all control access to their space.

In a shopping centre newsagency, each pocket needs to deliver a gross profit of at least $7 per month and usually more just to pay for the space.  This is a tough ask if you have too many titles in a category all competing for the same interest.  Hence my concerns about inefficient assortment of range.

As I have noted here before, I would like to see:

  1. Compensation for titles which do not achieve a minimum agreed sell through rate – I’d suggest 50% is a reasonable performance benchmark.
  2. A base fee paid for access to our real-estate and labour for titles outside the top 200.
  3. Better range control tools for newsagents and a guarantee from magazine distributors that there will be no knock-on consequences for cutting supply.
  4. The introduction of a magazine czar who has to approve any new title before it gains access to the newsagency channel.

I’d like to see more than these three points, especially relating to a retail real-estate land grab by one publisher to reduce space opportunities for another.

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magazine distribution

Great stand from Pacific Magazines

pacificimpulse-aug2010.JPGI like the basket builder stand from Pacific Magazines promoting Men’s Health, Women’s Health and Prevention which we received this morning.

I especially like the small footprint – meaning we can move the stand around based on space availability and traffic needs.  Our current plan is to start the week with the stand next to the newspaper stand and them to place it closer to the counter for the weekend.

Like all of the stands we receive from Pacific, this new unit strong.  It will easily withstand the robust treatment it will receive on the shop floor.

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Basket building
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