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

Gameinformer magazine misses again

gameinformer-fil.JPGWe returned all stock of Gameinformer magazine earlier this week after keeping it on the shelf for the full on-sale period.  As I mentioned in my blog post last month, this title is not working well for us yet Network Services increased our supply.  There was no justification in our sales numbers yet they decided to spend our money.  And magazine distributors wonder why newsagents get angry and why paying the bill on time is such a challenge.

What I want is a magazine distribution model where I can choose the titles I want and the quantity I want to receive.  I suspect that if I had this, my magazine sales would grow – I’d carry a wider range of titles and more stock of titles which work for me.

Instead we have a magazine distribution model which is not based on sales – despite what some on the disribution side say.

Smart publishers would try and tap into the growing pool of newsagents who want more control over magazine supply so that they can grow magazine sales.  We are out there people – come and find us because we can help you grow your business too.

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magazine distribution

Is there really a market for African American magazines in suburban Melbourne?

monarch-july2010.JPGWe received Monarch magazine at our Forest Hill store this week for the first time.  I was surprised since this is a magazine which according to the publishers: commemorates the lifestyle of affluent African American Professionals.  I have owned Forest Hill for fourteen years and cannot recall seeing that many African American customers shopping with us.  What would possess Gordon and Gotch to send us three copies?  Certainly nothing in our sales data for other titles. Supply to us was plain dumb!  It wasted my time and money.

Publishers with more relevant stock vying for time and attention in Australian newsagencies ought to be as frustrated as me by this story.

As a rule, I do not early return stock the day it arrives but I did with Monarch magazine.

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magazine distribution

Driving Moroccan cookbook sales by cooking delicious food

gympie-moroccan.JPGWarrick Hosking at newsXpress Gympie was at it again yesterday.  This time he was cooking Moroccan food from the ACP  Moroccan cookbook.  In Warrick’s own words, here is how the day went:

We had an absolute blast today and that came with great results. Cooked Tagine lamb and sweet prunes in the morning and Spicy prawns with tomato tagine in the arvo. The smell wofting out into the street put our cafe next door to shame.

Sold 18 AWW Moroccan and 11 or 12 AWW Slow Cookers. Even the food I cooked looked like in the pictures. This has never happened before. Handed out around 50 little plates out and our customers loved it.

This exercise may cost a few dollars but the consumer confidence and customer loyalty it builds is fantastic.

I would encourage everyone to try this, newsagents cant say it wont work because I have done it twice now with great results.

newsXpress Gympie is competing with seven other newsagencies in town.  Warrick understands about competition.

Not everyone can cook in-store.  In our Frankston store in the Bayside Shopping Centre we have some challenges with this.  It has not stopped the team selling more than 200 copies of the ACP Slow Cooker cookbook.  This amazing result has been driven by simple tactical placement of the product – in high traffic locations to drive impulse purchase.

So, whether it is an in-store cooking display or tactical placement of product to drive impulse purchases, there are excellent sales out there which newsagents can snare to extend the shopping basket.

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magazines

Cookbooks selling well

food-cookbooks.JPGOur display of cookbooks (in the photo on a re-purposed Darrell Lea stand) , strategically placed to confront shoppers heading to our main newspaper stand, is working very well.  What we have left is a fraction of the cookbook range we started with a few weeks ago.

This is the second location for these books.  As they sell down further they will move again.

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Book retailing

Driving sales by promoting food magazines

food-july2010.JPGGiven that the food segment is outperforming all other magazine segments, we are taking the opportunity to promote a range of food titles out the front of our store.  You can see from the photo that we are using well-known brands across the top of the display and the Annette Sym Symply Too Good titles down one side – to draw people to the display.

Thsi display is not about creating a pretty billboard.  rather, it is designed to drive impulse purchases – it is passed by the majority of our lottery customers.

By promoting range we are reinforcing our point of difference over other magazine retailers nearby.

We will leave the display up until Monday – unless there is demand for the space with Friday’s magazines.

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magazines

Promoting Better Homes & Gardens

bhg-july2010.JPGWe are promoting Better Homes & Gardens at the counter for the next few days – until Monday. The simple display is mounted on a piece of slat-wall covering one of our computers.  We also have a full waterfall in with home and living titles as well as two pockets atop our weekly magazines.  Better Homes & Gardens continues to be a stand-out title while many other titles are experiencing tough times.

Once Better Homes comes off the counter display we will shift to an in-location display.  Then, we will move to a display with newspapers.  All of this movement generates excellent sales.

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magazines

Anyone want a beanie?

beanies-july2010.JPGIt is beanie season in newsagencies across Australian.  Right now we have four magazines bagged with a free beanie.  While I like a beanie as a gift, it is not so special when it is available with four different titles.  It would be good to see more creativity with gifts supplied with magazines.

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magazines

Selling Australian Good Taste magazine

good-tsate-july2010.JPGWe are ignoring the opportunity to be rewarded for a pretty display and instead are running with a tactical placement of the latest issue of Australian Good Taste at a busy counter point.  I expect this will work far better for us than a billboard type display elseweher in-store.  We are checking numbers so we know how many we sell from this counter position versus the stock in ur food section.

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magazines

Fairfax listening to stakeholders on magazines

I was fortunate to meet with Adam Gray, General Manager of Fairfax Media Publication Solutions and Damien Wouda, National Account Manager of FMPS, today to discuss the transition from NDD to Fairfax.  I did this as owner of Tower Systems, a Director of newsXpress and as a newsagent. They are meeting many people in the newsagency channel to canvass the best approach to further establishing their magazine distribution business.

I appreciated and enjoyed the questions they asked and the openness of the discussion.

Today’s meeting was not about conclusions.  I am not about to publish here the details of the discussions since it is the decisions they ultimately make which will matter.

I cannot recall a magazine distributor demonstrating the level of genuine interest in options that I experienced today.

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magazine distribution

Amazon sells more e-books than hardcover books

From a press release from Amazon yesterday…

the Kindle format has now overtaken the hardcover format. Amazon.com customers now purchase more Kindle books than hardcover books–astonishing when you consider that we’ve been selling hardcover books for 15 years, and Kindle books for 33 months.

While there is plenty of discussion online about the Amazon spin (See David Carnoy’s article at CNet for balance), there is no denying that they are experiencing healthy numbers.

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Media disruption

Promoting Women’s Health

whealth-july2010.JPGWe are using an in-location display to promote the latest issue of Women’s Health.  We also have a couple of pockets of the title above our women’s weeklies titles.  Women’s Health is the most recognisable title in this segment – the simple display not only promotes the magazine but also the broader segment – it is worth giving up four pockets for this.

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magazines

Promoting Cleo and lip gloss

cleo-july2010.JPGWe are promoting Cleo magazine at the entrance to our women’s magazine aisle.  This display uses the ACP basket builder stand – dressed especially for Cleo.  I am thinking that it is time we moved this stand from this location – it has been situated here for months.  While the displays look good, customers get used to an offer always being here.  Promotional displays work best when they disrupt traffic.

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magazines

What do magazine publishers want from newsagents?

slow-cooker-competition.jpgThe flyer from News Magazines seeking newsagent engagement in promoting the latest issue of Australian Good Taste represents what is wrong with many publisher promotions in my view.  It offers a reward for a great display which is left up for the longest time.  There is no reward sales achievement and no reward for being clever.

So what is the message I am to take away from this?  Of course it is do great displays.  Yep, billboards are what publishers want.  More so than sales.  More so than smart retailer engagement.  Oh, and they want the display up for a long time.  Yes, that makes sense.

It is unfair of me to single out News Magazines as most magazine publishers take the same approach.

If magazine publishers want newsagents to grow sales, they should stop offering prizes for great displays.  Great displays act as billboards in our high traffic businesses and probably help sales in other retail channels.

Magazine publishers should start rewarding newsagents for performance and clever engagement.

  • Reward the best incremental sales achieved. Sure achieving sales growth is harder than creating pretty display but retail is all about sales right?!
  • Reward smart tactical placement.  A clever placement of Australian Good Taste, for example with weekly magazines or in a simple counter display could be far more valuable than a pretty display.
  • Reward clever retail theatre.  Warrick Hosking cooked with his slow cooker live in store and sold 20 copies of the Slow Cooker cookbook.  This was a one day display but it sold out all remaining stock.  Our own Moroccan cookbook display is not the type of billboard display publishers like but I betit will sell more magazines.

Some magazine publishers moan that newsagents do not engage as business people.  That is because you don’t treat them as business people.

Stop offering cash rewards for good displays.  It sends the wrong message.

Treat me like a business person in every engagement and I am more likely to act like a business person.

What do magazine publishers want from newsagents?  Sales, I hope.

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magazines

Newsagents, beware of long term agreements

Newsagents who have been in their businesses for some years will know the risks associated with long term agreements.  Remember Bill Express?  This experience alone ought to be enough of a reason for newsagents to be wary of long term agreements with onerous penalty clauses.  If faced with a supplier demanding you sign a five year agreement, ask why it is that you need to lock yourself in for such a long period?

I know of newsagents who want to get out of marketing groups but can’t because of a five year agreement.  One I know has had to deal with lawyers over this.  It is easier to get out of a marriage.

Before you sign up to a long term agreement, ask why?  We know from Bill Express that there was a very good reason.

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Newsagency challenges

Preparing to promote Women’s Weekly Moroccan cookbook

moroccan-food.JPGOn Saturday I purchased some props and created a trial display for ACP’s new Women’s Weekly Moroccan Cookbook.  I say “trial” because our initial stock has sold well and I am waiting in replenishment stock before I go live with this display and other initiatives.

I bought the props from Kasbah Moroccan Imports in Melbourne.

I’d like to cook in-store but in a 330 sqm shop in a shopping centre there are some challenges.

Promoted well in-store at the right locations, I think the Moroccan cookbook has the potential to perform almost as well as the Slow Cooker cookbook.  Like Slow Cooker, the Moroccan cookbook will more often be purchased on impulse.  $12.95 is a nice extension to the shopping basket.

As I mentioned when I first wrote about this two weeks ago…

  • Moroccan cooking is the new foodie ‘thing’.
  • Tagines, used to create many of the dishes, are selling like hot cakes in homewares stores.
  • The keyword tagine is the subject of 110,000 searches a month currently in Australia using Google. That is a quarter of all global searches for the keyword.
  • The keyword moroccan is searched 368,000 times a month in Australia using Google.
  • Moroccan food is delicious!

The other point to note about this cookbook, as with Slow Cooker, is that it works as a gift for guys as well as girls.

This title is an excellent tactical opportunity for newsagents in my view.

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magazines

Driving crossword sales

crosswords.JPGAt our newsXpress Knox store we are still growing our magazine business, having been open just eight months.  Being a smaller format store, just 130 squatre metres, we have space limitations.  Our team created this terrific display promoting a good selection of crossword titles at the entrance to our main magazine aisle to attract customers and entice them into the aisle.

Each week the offer on this aisle end changes, we are cycling through major title categories to show off our magazine range – preferring to display categories over individual titles.

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magazines

Do Collingwood fans read?

collingwood.JPGGroan … Collingwood made it to the top of the AFL ladder so I am trying the Collingwood magazine, Black & While, in an acrylic unit above the Herald Sun for this week.  It should work, we should get some sales from fair-weather fans.  I placed this on Sunday. If we have not seen any sales by Wednesday I’ll kick the title back to our sports section.  We have to be ruthless with these premium spaces above newspapers.

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Tactical display

Traveling with a magazine lover

In a cab in Newcastle today I met a passionate magazine lover.  Unprompted and not knowing of my interest in magazines, my cab driver told me what she loves about Woman’s Day and New Idea, her two best friends as she calls them.

She buys one on Monday and the other on Tuesday, swapping the title she buys Monday week about.

For close to half an hour she talked about the magazines and the current stories she loves.  I was looking around for a camera thinking it may have been some setup.  No, she was genuine.

It was terrific to hear her passion and the joy she gets from her gossip fix.

As we neared Williamtown airport I asked where she bought her magazines.  “Anywhere” was her answer.  “Not the newsagent?” I asked.  “I don’t care love, as long as I get my fix”.

This is the impact of pushing magazines into more retail outlets.  Customers will not connect their purchase with a retail shingle.  This impacts our businesses and the magazines outside the top sellers which rely on foot traffic to drive browsing and eventual purchase.

By facilitating and even encouraging other retail channels, magazine publishers and magazine distributors are harming the channel which has been so good to them.

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magazines

Geographic borders hold back the iPad

Just as the Internet is borderless, so should the iPad be … but it is not.  Here in Australia we do not have access to the books they have in the US yet.  We also cannot buy the same magazines.  If the iPad is to harness its full potential then publishers of content need to vieww the iPad community as a non geographic specific community.

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Media disruption

Cards, magazines, stationery suffer in newsagency sales downturn

Retail sales declined 4% in the Australian newsagency channel in the April through June 2010 quarter compared to the same period in 2009.

Magazines and greeting cards lead the decline with many newsagencies reporting a double-digit decline in sales in both key product categories.

The latest newsagent performance data is from the Tower Systems Sales Benchmark Study. Tower Systems undertakes these studies on behalf of newsagents. This Q2 2010 study is based on sales data from 120 newsagencies, trading under four different banners plus independents, businesses in capital city regional and rural situations.

Here are the headline numbers:

  • Overall sales. 71% of newsagencies reported a decline in sales for the quarter compared to the same period a year earlier. The average decline was 8%. Of the 29% reporting an increase in sales, the average increase was 2%.
  • Basket size. 42% of newsagents reported a decline in average shopping basket size, 26% reported no change and 32% reported an average increase of 1%. The average shopping basket size for the quarter is 1.48 items. Rural and regional newsagencies report a 20% deeper basket than capital city newsagencies.
  • Greeting cards. 76% of newsagents reported a decline in greeting card sales with the average decline 9%. On the 24% reporting an increase in greeting card sales, the average increase was 2%.
  • Stationery. 62% of newsagents reported a decline in stationery sales with the average decline 9%. On the 38% reporting an increase in stationery sales, the average increase was 3%.
  • Newspapers. 25% of newsagents reported a decline in newspaper sales with an average decline of just under 2%. 35% reported no change and 40% reported an increase of, on average, 1%.
  • Magazines. 75% of newsagents reported a decline in magazine sales with an average decline of 10%. The brunt of the decline appears to have been felt in special interest, teen, motoring and craft. Food was the stand out category with most newsagencies reporting growth – that is the Master Chef effect. Women’s weeklies reported a decline lower than the overall department average.

The key newsagent departments of magazines and newspapers are reporting concerning declines – especially on the back of declines in 2009 over 2008.

The green shoots which were evident in the last benchmark study are not reflected in this new data except in some stores. For example, I have seen excellent growth for ink, books and gifts in some stores, but not across the channel.

Suppliers and industry leaders who care about a healthy newsagency channel will engage on the issues reflected in these benchmark numbers.  Those who do not engage will ignore the challenges at their peril.

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.

Besides the decline in core product categories and the overall sales decline, I am most concerned about our inefficient basket size.  Our basket performance is worse than our competitors: petrol, convenience, supermarkets, Australia Post, stationery businesses … yet no one appears worried.

The benchmark analysis process is time-consuming.  History has shown it to be accurate. I collect data for all sales for the periods being compared and analyse these in terms of unit sales (magazines, cards and newspapers) and revenue. Only data from stores adhering to industry IT standards is used.

I will publish a more complete report in the next couple of days.

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Newsagency benchmark

What will this election means for newsagents and small business?

If the last fifteen years are anything to go by, the 2010 federal election is likely to produce little in the way of results for newsagents.

John Howard was the last party leader to talk up newsagents – he used to remind us how he like the sound of the morning newspaper landing on the doorstep – but he offered little support for newsagents.

Even in terms of small business, both sides of politics have done little to genuinely support Australia’s small businesses.  They tend to prefer to give auto manufacturers, mining companies and other big businesses more attention and truckloads of cash.

I think that small business owners and newsagents have every right to cynical about all politicians.  Sure, some local members do engage and genuinely listen, but what have they actually done?

If I could control what the next government would deliver for Australian newsagency businesses, the families which rely on them for an income and the communities in which they serve, here is what I would like to see:

  • A Productivity Commission review of the impact of deregulation of newspaper and magazine distribution and sales facilitated by the Howard government in 1999.  It is appropriate that government holds its economic restructuring decisions up to the light to assess the impact and whether consumers have benefited as was expected and to assess the cost of the restructure on thousands of family businesses.  When government policy led to pharmacy closures, the government paid compensation.  Maybe compensation should have been offered for what was taken away in 1999.
  • An independent review into the retail business of the government owned Australia Post outlets and an assessment of their operation against current world best practice.  Australia Post continues to use its government ownership to unfairly compete through its government owned stores against family run newsagencies.  Family newsagencies would be stronger if the government owned retail outlets were not competing using a government protected monopoly brand.
  • An independent review of the Fair Work Act and the impact on small businesses.  There are too many stories of hardship for them to be made up.  I am not saying scrap it, just work harder at getting it right.
  • A thorough review of the magazine distribution system by the ACCC with individual newsagents given the opportunity to provide magazine sell through, cash-flow and other data to demonstrate the economic impact of the current model as it relates to newsagents compared to other magazine retailers – with a view to the ACCC extracting undertakings from magazine distributors.
  • The introduction of national retail lease standards and dispute resolutions processes for small businesses.  The differences between the states are considerable.
  • Regulatory(and legislative if necessary) support for the impact of changes to the newsagency channel as a result of disruption.  We will see considerable change in our businesses in the term of the next government.  Some of us have shop leases which will not permit us adjust our businesses sufficiently thorough the changes.

What newsagents, and small businesses generally, do not need from political candidates is platitudes.  We have had enough of those over the last fifteen years or so.

We keep hearing that small business is the backbone of the country.  It is time for politicians to demonstrate this.

The Small Business Minister ought to be one of the brightest and best ministers available, a fighter who can represent the constituency with passion and strength at the cabinet table.

Any small business advisory group should be made up of real small business people and not those who are politically connected.

A small business development plan needs to be created to encourage existing small businesses and to support entrepreneurship.

I would love small business issues to be front and centre in this campaign.  Somehow, I suspect we will be a footnote on the biggest personality content this country has ever seen.

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Newsagency challenges

Promoting MOJO magazine at the counter

mojo-magazine.JPGWe are promoting MOJO music magazine at the counter this weekend.  I figured that the AC/DC cover and accompanying CD might attract impulse purchases from our weekend shoppers.  It is a simple display – I am letting the magazine cover do all the work.  We put MOJO on the counter Friday and will cahnge the display Monday morning.

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magazines

Weekend retail and visual merchandising

There are many weekend specific opportunities in newsagencies given the difference in customer mix on Saturdays and Sundays compared to weekdays.

From my own experience, these include opportunities to promote at the counter, newspaper stand and other peak traffic locations:

  • Better Homes & Gardens, Notebook and Real Living.  Better Homes is the real stand out from this list, I have seen Friday through Sunday sales account for 75% of business in a month.
  • Sports titles.  With some newsagencies seeing more male shoppers buying newspapers on the weekends than weekdays, sports titles displayed with newspapers can work a treat.
  • Ink.  An ink promotion at the counter or in the window can open your ink offer to a completely different customer mix.
  • Kids gifts.  With kids shopping with parents, the weekend is an ideal time to have gifts at impulse locations for parents to ‘reward’ their shopping companions.
  • Lottery upsell.  With many weekend only shoppers, the weekend is an opportunity to bring forward purchases shoppers may have made elsewhere during the week.

The weekend shopper mix is quite different in many newsagencies.  It is smart for us to leverage this by ensuring that we have appropriate impulse purchase opportunities at the counter and high traffic locations and create fresh visual merchandising displays just for the weekend.

Newsagencies which are open seven days have an opportunity to grow weekend business by understanding the difference in the weekend shopper mix.

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Newsagency opportunities

Fairfax consults on magazine distribution

It is terrific to see that the folks at Fairfax Media Publication Solutions are consulting widely on how to handle their growing magazine portfolio with the takeover of some titles from NDD.  They are asking good questions and listening to the responses.

While commission will floow the existing Fairfax Media agreements, they are researching the implications of this for the long term.

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magazine distribution