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

Author ditches publisher for software co

The Wall Street Journal has an excellent story about author Ryu Murakami’s move to Apple’s iPad platform.

The digital package will include video content and set to music composed by Academy Award winning composer Ryuichi Sakamoto, according to the Japanese business daily Nikkei. The newspaper reports the e-book will cost 1,500 yen ($17) and will be ready to download pending Apple’s approval.

It will only be a matter of time before writers and others collaborate to publish what might have been a magazine in the print world direct to the iPad and, like Murakami, cut out the traditional publisher altogether.

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magazines

Hearst sells 10,000 copies of Popular Mechanics for iPad in 5 days

popular_mechanics.JPGFive days after launching its Popular Mechanics iPad app, US publisher Hearst has reported that it has sold 10,000 copies at US$1.99 apiece. Make that 10,001.  This is a nice app and nicely priced.  For magazine titles to sell on the iPad, they need to be priced lower than the print edition.  While I have only had half an hour so far with the Popular Mechanics issue, I like it.  The interactivity is terrific.  The 3D is excellent.

There is a 3D model embedded within a DIY Home story. You can interact with this in a way which shows off the iPad.  There is a live update of an earthquake map that will continue to feed live data long after the next issue is released. Popular Mechanics is closer to showing the difference between a paper and iPad reading experience.

I especially like that I could buy the app and latest issue from Australia.  Some publishers are managing content as they did across physical borders.

Paid Content has more details along with news that Hearst plans to release another dozen iPad apps by the end of the year.

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Media disruption

Australian Model Engineering – the putaway model

aust-model-engeneering.JPGWe receive 10 copies of each issue of Australian Model Engineering and 5 are putaway orders.  That is, we have standing orders from customers for them.  Special labels are printed with customer names and these copies are filed alphabetically behind the counter.  When customers collect then, we scan the customer specific barcode and record that they have collected their copy of the magazine.  We let customers know when each issue comes in by sending them a text message – our computer system does this automatically for us.  Plenty of other newsagents offer this premium putaway service.

I mention it today because more publishers are visiting this place and I suspect that they did not know about the premium putaway service newsagents offer.

I am using Australian Model Engineering magazine as my example because I love this magazine.  Not so much the subject matter,  it is above my knowledge and patience, but its sales efficiency.  50% sell through from putaways and usually another 30% to 50% from over  the counter sales.  If only every magazine could perform this well.  It pays for its space, more so than some titles inside the top 200 in terms of sales volume.

I hear of newsagents cutting magazine space and this worries me because titles like Australian Model Engineering will be cut.  As magazine specialists we need to carry this title and many like it.  Otherwise, we become glorified convenience stores when it comes to magazines.

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magazine distribution

Using weekly magazine traffic to sell other titles

weeklies_july2010.JPGFor years now we have used space above our weekly titles to promote other magazines.  The mix changes at least one a week and sometimes more often.  We start the week using the top two pockets for monthly titles and tack more space as the week unfolds.  Click on the photo to see a larger version of how we were using this space Wednesday afternoon.

Our strategy here is to extend sales which include one of the major weeklies.  The titles which we find respond best in this space are: Notebook, Real Living, Better Homes & Gardens,  Diabetic Living, Good Health, Women’s Health, Gardening Australia and Master Chef.

We obsess about basket size and seize every opportunity available to us, at high traffic locations, to attract impulse purchase decisions.  These few pockets above the weeklies are highly valuable to us, especially on the weekends.

My question for other newsagents is: how are you using this space above high-volume weeklies?   What we are doing is simple.  Iw ould note, however, that this is not a task to delegate. Think about the titles you have and your customers.  You want to put in front of them titles theyare likely to buy.

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magazines

Newsagent Facebook training a hit

It was a full house for the industry’s first ever group training on how to setup a Facebook page this morning – hosted by my software company Tower Systems.  In the hour-long session a new Facebook account and business page were established, photos loaded and other Facebook facilities engaged.

While Tower will continue to offer free online Facebook training, we are also producing a training video as much of what is needed can be better covered in this medium.

Click here for updated advice on how to promote your newsagency using Facebook.  I first published this a month ago and have just updated it.

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Newsagency opportunities

Magazine sales plummet in newsagencies

Magazine unit sales fell in 72% of newsagencies in the second quarter of 2010 compared to the same period in 2009 according to data from the latest Newsagent Sales Benchmark Study.  Of the 72% of newsagencies reporting a decline (from a study pool of 120), 59% experienced a decline of 10% or more.

This steep decline is on the back of a significant decline in the same quarter a year earlier.  It continues the trend of a 7% decline reported in the first quarter of 2010.  Magazines, a key traffic generator for newsagencies, are in trouble.

Curiously, the decline for women’s weeklies titles (New Idea, Woman’s Day, Famous, NW, OK!, That’s Life and Take 5), was lower than the overall average for the category.

In almost every newsagency reporting decline, sales in the food segment increased.  This is the Master Chef, and for many, ACP Women’s Weekly Slow Cooker impact.

So why such a steep decline in magazine sales in newsagencies?  Outside of leakage from newsagencies to convenience, I put the decline down to economic conditions – more so than the impact of the Internet or mobile technology. Money is tight.  You see it the way people shop.  We see fewer sales today with two and three magazines.

I expect the decline to get worse before it gets better.

Outside of the loss of sales, the impact is magnified for newsagents as they continue to receive volume for most titles at 2009 levels.  The cash-flow drain is unsustainable for some newsagents.  This is compounded by shop rental increases of 5% and more year on year, labour cost increases of 10% and general operating cost increases of 10%.

I would like to see magazine publishers, magazine distributors and newsagents respond to the magazine sales crisis by meeting to discuss the situation and possible solutions.  Something has to give, and very soon!  Publishers and magazine distributors need newsagency businesses to be strong.  Another few months of this and the channel will start to shrink

The Newsagent Sales Benchmark Study relies on accurate sales data from a pool of 120 newsagencies spread across shopping centre, high street, regional and rural situations.  I have been conducting the study for years and the results have been borne out in audit and other results released.

I will publish the full results of the latest Sales Benchmark Study on Monday.

The 1,700 Newsagents using the Tower Systems newsagency software can easily check their own year on year performance using the Monthly Sales Comparison Report.

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magazines

Are magazine cover mounts losing their value?

dolly_watch.JPGOur sales for the last issue of Dolly magazine which went off sale yesterday morning matched our average for the title.  This is despite a $49.95 watch being mounted to the cover of the magazine.  I expected at least some sales bump.

Are magazine cover mounts losing value?  Is suspect they are given the frequency of use of them over the last couple of years.  There are only so many bags, scarves, beanies, journals or t-shirts a customer will collect before realising that the bonus has become the norm.

Cover mounts are like a drug for some titles.  The challenge will be to withdraw safely.

From a newsagent’s perspective, the occasional cover mount for a title is great, it is seen as a genuine bonus and it gives us a reason to really push that issue.

Titles which have more than a couple of cover mounts a year are no longer that special.  They also demand more space than usual and this significantly increases the cost to the retailer.  With each magazine pocket costing $1.90 a week in rent, a title with a wide cover mount costs $3.80 a week in rent.  I need $15.20 a week in sales per double pocket to pay for the space.

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magazines

Promoting That’s Life and free candy

thats_life_jul2010.JPGWe are promoting the That’s Life at our newspaper stand this week thanks to the free pack of Werther’s Original candy with each magazine.  Sales in the first day have been excellent, a noticeable lift.  This is an example of a good gift with a magazine – see the next blog post about to go up.  That’s Life rarely has cover mounts and when they do they are very popular.

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magazines

Macquarie adviser jailed for Bill Express scheme

Newton Chan, fomerly of Macquarie Equities, has been jailed after pleading guilty to eight counts of market manipulation of the share price of Bill Express.  Mark hawthorne writing at The Sydney Morning Herald has more on this story including this:

He will serve just four months after co-operating with ASIC’s investigation, including handing over a memory stick that he told the court contained a scripted story given to him by Bill Express chief executive Ian Christiansen. ”Your career is in ruins,” said Justice Terence Forrest in sentencing Chan. ”I consider that it is only by the imposition of such a sentence … that others considering manipulating the market in some way will pause to think about the potential consequences of their actions.”

And then this:

Between May 3, 2006, and March 28, 2008, Chan used trading accounts to purchase more than 34 million Bill Express shares worth $6.1 million via 904 transactions. These transactions created an artificial price for Bill Express shares, and helped company directors avoid margin calls.

During his plea hearing, Chan said he performed the transactions on the orders of Mr Christiansen, company accountant Peter Couper and employee Enzo DiDonato.

He said he met the three at a Balwyn coffee shop just weeks before the collapse of Bill Express. Asked if the meeting was ”to get your stories together so that you could each tell the same story to ASIC”, Chan replied ”yes”.

And all the while this share price manipulation was going on, newsagents were suffering still paying off loans taken out to pump tens of millions into Bill Express in 2003.

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Bill Express

Surge in gift card uptake in newsagencies

gift-cards.jpgThe latest Blackhawk gift card package being promoted to newsagents through Tower Systems is driving extraordinary results.    They make an excellent add-on to greeting card sales and the commissions make selling the cards considerably more valuable than selling bus, train or tram tickets.  While gift cards, like those from Blackhawk, have been around for some time, it is only in the last week that a professional marketing campaign has been aimed at newsagents.  Click here for the application form.

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Newsagency opportunities

Newsagents, make every day your pay day

Newsagents often consider the day the sell their business as their pay day, the day they get the return they want for all their work.   This is why there is such a focus on goodwill in setting the sale price of newsagencies.

It is unrealistic to look on a retail business as a bank accruing interest which is repaid in the form of goodwill when the business is sold. However, this is how many do view their business. So much so in fact that they lose focus on the profitability of the business on a day to day basis.

Newsagents who focus on every day as their pay day focus on driving new traffic, nurturing sales efficiency and managing for a better margin.  These newsagents are more likely to be achieving a higher profit than those who operate as if the day they sell is their pay day.

Of course, higher profit does result in a higher sale price.  More importantly however, it puts more money in your pocket from the business every day.

By looking at your business on a day by day basis you will take more notice of employee costs, sales efficiency and other more micro factors and drivers in the business.

You are more likely to make changes if you view sales and profitability data on a daily perspective rather than for a longer period such as quarterly or annually.

Did you make enough yesterday to pay for the rent, employee costs, cost of goods sold, marketing and utility costs as well as to pay yourself? If not, what can you do to change this? If so, did you make enough? By looking at your business as if every day is your pay day, you are more likely to look more closely at your business than if you are focused on the day you sell as your pay day.

If you don’t know how you are doing daily or weekly, you need to put in place manual or computer based systems which enable you to track and report on this. Good or bad, it is information you need to make better business decisions.

So, how did you do today or this week? Make enough to pay all your bills, your employees and yourself? Look on and work on every day as your pay day.

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Newsagency opportunities

Prince CD giveaway boosts Mirror sales by 334,000

The Daily Mirror in London last Saturday came with a copy of the new Prince CD, 2oTEN.  According to Roy Greenslade writing at The Guardian, sales increased by 334,000.  While the bump is huge, as Greenslade writes, it would be surprising if any of the 334,000 stick.

It will be interesting to see if newspapers are used as promotional tools here for music releases.  We have not followed the UK trend of weekly giveaways of movies, family history software and otherfreebies.

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Newspapers

Promoting Homespun with newspapers

homespun-christmas.JPGWe are promoting the Christmas issue of Homespun with newspapers this week.  This is a left-field idea since it is not a title I would usually promote with newspapers.  I figured that the Christmas theme might be enough to get intermittent purchasers of Homespun to pick up the title.  I’ll try anything to make newspaper sales more efficient.

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magazines

Tactical placement drives sales of Mandela book

mandela-book.JPGI noticed A Prisoner in the Garden, Photos, letters and notes from Nelson Mandela’s 27 years in prison,  on one of our book sale tables on Saturday and figured that it would sell better if we took it from the mass of books and placed it at the counter.  Between noon on Saturday and when we opened yesterday morning we had sold four copies of the book.  We sold the last three copies yesterday, Monday.  Given the counter placement, all of these copies would have been impulse purchases – $9.95 is an excellent extension of any basket, and even more so at the margin for this book.

I did more that place the book at the counter.  I tricked-up an old display unit, copied part of the cover promoting the Nelson Mandela Foundation and placed the display where it could be easily seen.

We are doing better with tactical placement of books and magazines at the counter than selling candy.  The keys, based on experience, are:

  • Choose the product carefully – it must be easily understood.
  • Play to your demographic.
  • Create open space around the offer.
  • Track sales and kill the offer if it is not working.
  • Change the offer at least weekly.

Our counters can be a goldmine if we clean them up and promote to our customers.  Too often, newsagency counters are cluttered, the messages confused and customers not guided to extend their baskets.  This is in part due to supplier demands.  We should stand our ground – we pay the rent after all.

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Book retailing

Using fear to sell a magazine

fear-cover.JPGGiven the sales success of Paranormal, Fortean Times, New Dawn, Uncensored and similar titles, I know that a magazine cover with a suggestion of fear sells well.  This is why I put the latest issue of Scientific American on our main newspaper stand.  While the cover story is not the  kind of story you would see in more tabloid magazines, the cover illustration taps into a fear of what may happen in the future.  Yes, it is a long shot!  I am hoping that the cover image is enough to get people picking up the title who would otherwise not have noticed it.  We have to try these things – we are magazine specialists after all.

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magazines

Promoting Home Beautiful

home-beautiful-jul2010.jpgWe are promoting the latest issue of Home Beautiful with an in-location display in a prime position close to the entrance to our busiest magazine aisle.  It is the only magazine being promoted with a poster on this side of the aisle – it stands out. We will supplement this promotion later this week with co-location with our weeklies.  Why?  Because Home Beautiful responds well to being placed in a couple of pockets above New Idea or Woman’s Day.

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magazines

New World War II Eyewitness Experience partwork

wwii-partwork.JPGWe are promoting the new World War II Eyewitness Experience partwork at the front of the store as well as with partworks and with our combat magazines.  I expect this title to do well given our customer mix – hence the space commitment we have given. As with most partworks, half our sales will be on impulse and the other half planned as a result of advertising.

2010 has been a lean year for partworks.

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partworks

Promoting Good Food and slow cooking

good-food-jul2010.JPGWe are promoting Good Food magazine at the counter.  The slow cooked comfort food covered in this issue should see it pique interest from our customers – given the tremendous success we have had with the Slow Cooker cookbook.

This display looks good if I do say so myself.  It has been designed for maximum impulse purchase impact.  This was easy for us thanks to the flexible collateral provided by ACP for the title.

While I continue be disappointed that each issue of the magazine is bagged, and therefore unable to be browsed, it looks good for shoppers who will buy based on the cover alone.

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magazines

Promoting NW magazine

nw-july122010.JPGWe are promoting NW magazine at the entrance to our women’s magazine aisle this week.  While the display is not as big as ACP would probably like from us, it is more than one would expect for NW sales in our store.

I have taken the opportunity to promote three other key ACP titles as well – to pull more eyeballs to the display.  We will adjust these titles through the week – Take 5 on Wednesday for example.

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magazines

NDD move update

The Australian this morning has an update on the NDD situation – reporting that Network Services will be taking around 80% of the NDD business.  They are also taking on 15 of the NDD staff.

Sally Jackson’s article also reports that Fairfax Media Publication Solutions is picking up between 40 and 80 magazines from NDD.  Fairfax will need to review their distribution as retail only outlets like mine are likely to not want these titles unless at least 25% margin can be achieved for the retailer.

Plenty of newsagents I have spoken with are aggressively early-returning NDD product out of fear of not getting credits.  This is unnecessary.  NDD is going through a structured winding down of its business.  I am confident that it has the capacity to process and pay for all returns sent according to the timing of the distribution of titles.

I see no reason to early-return out of fear for the cash at risk.  Why cut yourself out of a sale just because of fear?

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magazine distribution
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