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

Kindle books outsell print books

Amazon has announced that they sold more Kindle books than physical books on Christmas Day.  That’s amazing!  Those who said the Kindle would not take off here in Australia will be eating their words soon – there are now 390,000 books available for the Kindle.  On top of that, the new platform makes it easier for authors to get their work published.

Once Australians get the taste for e-reading and as new generation devices are released physical retailers will feel an impact.

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Book retailing

Pre-Christmas magazine rush

mags_christmas.jpgWe experienced a greater pre-Christmas magazine sales spike in the four days before Christmas this year than in previous years.  Magazines for men were particularly popular as gifts as were special interest titles.

Compared to a regular week, the pre-Christmas lift we see in the week prior is traditionaly around 50% – more this year.

We facilitated growth in the pre-Christmas magazine sales with a merchandising strategy which included well thought out displays as well as co-location of titles which we thought would work well as Christmas gifts.

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magazines

Organisers sold well this Christmas

organisers.JPGOrganisers have sold well this Christmas.  Birthday card organisers, gardening organisers, recipe organisers.  We brought in the K TWO range late in the Christmas season and sold most of the stock in just over a week.  We thought the higher price point might be a barrier in our newsagencies (we have the same range in our gift shops where price is less of an issue).  Price was not an issue in our newsagencies.  The experience is a reminder that we can sell a broader range of product and higher price point product than we expect in newsagencies.

We played with plenty of new products this Christmas.  Most worked, some did not.  It’s all part of the experience not only of newsagencies but retail in general – we must keep evolving our businesses.  The best change is that which we drive for ourselves.

A common question I get from visitors to this blog is where can newsagents find these new products.  Go to the gift fairs.  Join the GHA – $200 a year connects you with a whole new world of suppliers.   It is only by trying new items that you can see how far you can push the boundaries of products sold in your newsagency.

The success with the K TWO organisers shows that we can carry higher priced social stationery type items, especially for gift giving seasons.  They worked in diverse locations such as Frankston and Forest Hill as well as in the heart of Melbourne.

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Gifts

Newspaper publisher offers free iPhone app

UK newspaper publisher KOS Media announced a Christmas gift yesterday with the launch of a free Apple iPhone app accessing their newspapers via the iPhone.  They claim this is a world first.

Christmas Day, and we hope you’re all having the best possible time with friends, family and loved ones.

But here’s some fantastic news – your day has just got even better. KOS Media has developed its own app for the amazing Apple iPhone.

With the Kent News App, you can read all of our news, reviews, features and sport in the palm of you hand, watch our videos and hunt for a new job, look for a new house and find cars for sale.

This is a world first and means you can see all of our newspapers exactly as they are printed direct to your iPhone or iPod Touch – and it costs you nothing.

Pages turn, just like a traditional newspaper and you can zoom in on stories.

This is the bigger challenge for newsagents, that publishers will find the right device / payment channel which works better for them than print.  I don’t think it’s the iPhone but every reader they migrate is someone else on the journey with them to whatever the mobile digital future is.

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Newspapers

Where is Australia Post on Christmas trade?

One of our landlords wrote to all retailers in major centre yesterday reminding us that we need to stay open until 10pm.  Their note talked about how traffic this Christmas is up on last Christmas.

The government owned Australia Post shop opposite my newsasgency closed at 5pm as usual.  Their lack of support fellow retailers is appalling.

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Australia Post

Christmas ornament market strong

ornaments.JPGWe were fortunate to pick up some Hallmark Christmas Ornaments last week.  These are usually sold at Target stores.  The reaction from customers has been amazing.  What has been most interesting is the strong word of mouth.  Within a day of us putting up our display we had customers coming on asking for the ornaments – having been told about the range by a friend.  Most sales involve at least two ornaments and several other items.

The trial this year encourages us to build a strong collectible ornament story for Christmas 2010.

I like ornaments as a category because they are habit based.  They fit with calendars, diaries and many other items we sell in our newsagencies.

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Gifts

Christmas greeting is appreciated

christmas_message.jpg The simple Christmas greeting in receipts printed by our Point of Sale software has been geting a good response from our customers.

We are also using the message / coupon facility to promote magazine putaways to magazine customers and a diary reminder (for next year) for diary customers.

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retail

Women’s Weekly sells well

fhn_aww_dec2309.JPGWe are promoting the latest issue of Australian Women’s Weekly in the front of the newsagency.  In the first day of sale, yesterday, we achieved a double digit lift on last year. We will leave this display up until early next week.  It is good to have collateral with which to promote a title so close to Christmas.  Most other publishers seem to think that we don’t need material with which to promote their titles this time of the year.

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magazines

Success with special interest BSA motorcycle magazine

scrapbook_bsa_magazine.JPGThe Scrapbook Series: BSA demonstrates the importance of special interest titles to our businesses.  We have achieved a 66% sell-through in three weeks.  For a $20 title this is good.  I knew it would sell well based on sales of classic motorcycle titles.  The challenge is getting the right special interest titles which fit with successful categories.  the scale out algorithms used by magazine distributors don’t always work.  I am sure there are titles in their mix which I could sell and which their systems don’t flag for us.  There needs to be a way I can easily select new titles without running the risk of  opening the floodgates for titles which will not sell.

This is a problem with the push magazine distribution system.  Those of us newsagents who want to be magazine specialists cannot create the businesses we want.

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magazines

Does Michelle Obama have that much pull?

mindfood_dec09.JPGLast month’s Mindfood magazine had Michelle Obama on the cover.  We were sent four times usual supply.  The latest issue came out yesterday and supply has been adjusted back.  Sales of the Michelle Obama issue were double usual sales.  Michelle does have pull when it comes to selling magazines.

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magazines

NANA and QNF respond for newsagents on unconscionable conduct

The federal government established an expert panel to consider issues arising out of the Government response to the Senate Economics Committee inquiry into unconscionable conduct.  The QNF and NANA made a submission to this panel.  Click here to see a copy of their submission.

In the submission, they list conduct which newsagents regularly experience.  This list will resonate with newsagents:

  • Refusal to collectively negotiate – which seriously disadvantages individual newsagents
  • Take it or leave it contracts.
  • ‘Lock in’ which prevents newsagents suffering unanticipated economic deterioration (circulation decline) from exiting
  • No proper recognition of specific costs factors escalation which can obviously adversely impact on ‘locked in’ newsagents
  • Newsagents getting less advantageous terms than big players like supermarkets
  • Newsagents supplied and charged for products that they do not want.
  • Unilateral variation of contracts.

Newsagents should read the submission in full and see first-hand the work of associations robustly representing newsagents.

Avenues we and other small businesses can take are determined by legislation.  This expert panel is advising a Senate Committee on matters which have the potential to impact our future.  The work by NANA and QNF is most useful for newsagents and other small businesses.

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magazines

new moon board game selling well

new_moon_game.JPGThe new moon board game based on the movie from the Twilight series has been selling very well.  This is a new category for us and we wondered if it would work – especially with the major retailers going so hard on this product.  We have done well by having the game in a good location and supported by professional merchandising and external marketing.  We were tempted to discount to match the K-Mart price but have found that this is not necessary.  Not all of our customers shop at K-Mart.

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Newsagency opportunities

100+ US newspapers close this year

Click on Paper Cuts Out of Print and see the daily newspapers in the US which closed down this year.  Each black dot on the map is a newspaper which closed.  Now, un-tick the 2009 box at the bottom of the map and click on 2008 and then 2007.  See the trend.

Alan Mutter (a veteran media executive) has written an insightful blog post about the closures and the state of play of newspapers in the US.  I urge you to read this.

While there are differences in our newspaper model here in Australia compared to the US, the fundamental challenges are the same.

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Media disruption

SA newsagents angry at ANF negotiations

The Australian Newsagents’ Federation (ANF) issued a bulletin last night about the meeting in Adelaide on Friday organised by two proactive newsagents to discuss the new News Limited contracts.  Click here to see a copy.

The ANF bulletin does not reasonably represent the debate around the representation of newsagents on the new contracts.  The state ANF representative talked with pride about the good relationship between the ANF and News Limited.  He said that the increase in delivery fees for country newsagents was a good outcome negotiated by the ANF.

Several newsagents challenged the ANF view of the increased delivery fees.  They asked if the ANF had put various scenarios in the negotiations – including what happens when someone moves from a two day delivery to a heavily discounted seven day delivery.  The ANF acknowledged that it had not explored this in the negotiations.  The anger in the room was palpable.

While around two thirds of newsagents indicated they were ANF members, the vote which should have been taken is whether the newsagents at the meeting were happy with the ANF handling of the negotiations.  I am told that a close to unanimous vote of NO would have been delivered.

This is a problem for the ANF.  SA newsagents are most unhappy and demonstrated this by organising their own meeting and attending in unprecedented numbers.  This unhappiness goes back to early ANF endorsement of the home delivery customer migration project – a News Limited initiative which seeks to shift management of home delivery accounts from newsagents to News Limited – risking traffic in retail newsagencies and driving a reduction in home delivery penetration.  The ANF endorsed migration without consultation with the newsagents set to be affected.

The ANF bulletin reiterates that they have authorisation to negotiate on behalf of newsagents.  Any properly consitiuted body can achieve authorisation.  The key for newsagents is that they are represented by people who listen to their situation and negotiate robustly on their behalf.

Click here to see my report of the meeting of SA newsagents last Friday.

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Newsagent representation

200 newsagents risk not receiving magazine invoices

Around 200 newsagents are yet to migrate to the new XchangeIT Link EDI platform.  These newsagents face not receiving electronic invoices from January 1.  They also facxe slower returns credits and other operational challenges.  With more than 2,500 newsagents already migrated, getting these remaining few would be good for the channel.

Newsagents who have migrated are set to have access to some excellent business initiatives in 2010.

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newsagent software

Books masquerading as magazines

magbook.JPGI received two titles yesterday from Gordon & Gotch which should not be sent to newsagents unless explicitly requested.  Body Art 3 and It Happened to Me are fringe titles.  They are expensive – $24.95, have a long on-sale and deliver magazine margin for book products.  Gotch should know better.  If distributors want to use my shelves in this way then they need to develop a different model which takes all the risk.  Let me pay on scanned sales only.  Give me free returns freight.  Oh, and pay me for the use of my shelves.

There is bound to be an excuse, there always is.   In the meantime, from the moment the titles land on my doorstep, I am responsible.  No wonder newsagents get angry.

Magazine distributors often say that newsagents complain, make mistakes and are late at getting things done.  If we did not have to put up with stuff like this maybe we’d have more time to work on our business.

I expect better from Gordon & Gotch.

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magazine distribution

The easy chocolate upsell

hilliers.JPGThe Christmas tree shaped visual merchandise unit from Ernest Hillier has worked a treat this Christmas.  I have it in several of my stores are we will sell out of all stock by Christmas Day.  The unit is easily moved – enabling us to try several locations over the last few weeks.

The best location in one of my stores has been at our main entrance – in front of the supermarket.  In another store it has worked very well at the counter – extending the basket beyond the destination purchase.

A newsagent friend questioned why I’d get into the Hillier range given that it is in other major retail outlets.  For me the answer was simple: Ernest Hillier is a known and trusted brand, the Christmas range is packaged for impulse purchase, they have good merchandise units I can easily play with the merchandise units and thereby have more opportunities to drive sales.

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confectionary

mania magazine car crash

mania_magazine_trash.JPGThe plastic car which came bagged with the latest issue of mania magazine was trashed yesterday.  Indeed, the cars in every issue we received were trashed.  Rather than give the kids a broken car, we removed it.  The alternative was to early return the whole issue.  Publishers and distributors need to take more care when packaging cheap plastic trinkets.

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magazines

Schapelle Corby sells magazines

fhn_ni_dec2109.JPGWe are promoting New Idea at our counter – between our two busiest sales points – this week.  We felt the Schapelle Corby cover story would resonate and rive sales.  It’s working well – sales are strong.  New Idea has had an excellent few months in our newsagencies – this display leverages off that growth. Our plan is to take the display down on Wednesday.

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magazines

News offers 20 to 50 cent newspaper delivery fee increase

Click here to see a copy of the notice issued late Thursday night by Advertiser Newspapers in South Australia announcing a highly conditional 20 cent to 50 cent per customer per week newspaper delivery fee increase.  This announcement was the next step by News in a protracted dispute over the new contracts and the News  Ltd migration project which seens to take control of customers won by newsagents through local marketing efforts.

The offer expires at the same time by which SA newsagents are required to have submitted signed new agreements with News.

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newspaper home delivery

New concept ‘newsagency’ in Victoria

nx_knox2.JPGLast Thursday, newsXpress opened a new concept corporate store at Knox City Shopping Centre in Melbourne.  While not yet fully stocked and with some adjustments to be made, the first four days of trade have been most encouraging. Click here to see a video walk-through of the store.

This store is different to the traditional newsagency because of the floor space, product mix, flexible layout and the strong corporate image.   This is a 130 sq m store, small for a shopping centre newsagency.  The layout is designed to drive a greater per square metre return and customer contact efficiency than you would achieve with a traditional newsagency layout.

But there is more to this store that you’ll see from walking through.  There are back end processes and in-store strategy which drive margin.

Is this the newsagency of the future?  I doubt it because there is no end point to retail innovation.  That said, this store reflects a considerable advancement on traditional newsagency layout, range and floor space efficiency.

Thanks to the design and build work by Interfit and their flexible and efficient space management system, we have a store which is completely flexible and which redefines a ‘newsagency’.

Disclosure: I am a 50% shareholder in this new concept store.

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newsagency of the future

Encouraging product sampling

sampling_pencils.JPGWe are encouraging shoppers to sample the O’BON pencils we have which are made from recycled newspaper.  By having test pencils and a sharpener, they can see the newsprint tightly rolled to make up the pencils.  This small piece of retail theatre makes the pencils a good performer.  It demonstrates the authenticity of the product as well as our trust in the product.  Putting a product on the shelf may sell, showing off the unique selling proposition is what can drive excellent sales.

Newsagents can own this green stationery space.  It fits with our businesses being local and community connected.

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Environment