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

Small publishers ponder a direct relationship with newsagents

The question independent small publishers most often ask is what alternative do they have to the current magazine distribution model in Australia.  The reasons they give for wanting an alternative are:

  • A disconnect between them and their retail partners (newsagents).
  • Untimely sales data – they can wait months.
  • Cash flow challenges – i.e. when they get paid.
  • Fees – the various fees they pay for distribution and returns.
  • Product mix – where their products fit compared to others distributed by their magazine distributor.

It is interesting comparing their concerns with concerns often voiced by newsagents.  Newsagents and independent publishers could work more closely together.  There are some titles which would work well outside the traditional sale or return model as long as we establish appropriate processes between publishers and newsagents for their respective businesses to work.  This is why I have been meeting with independent publishers recently.

Publishers and newsagents make money from retail sales.  Magazine distributors do not make money from retail sales.  there are some titles where a direct publisher / newsagent relationship would benefit both sides far more than the tri-way relationship we have today.

We are moving closer to a publisher offering to supply newsagents direct.  I am all for this and would gladly participate in a well organised and managed trial.

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magazine distribution

Co-location strategy for AWW drives sales

fhn_aww_back_basil_dec09.JPGThe photo shows our use of the back of the ACP Magazines basket builder stand to promote Australian Women’s Weekly to shoppers as they leave the women’s magazine aisle.  This is the third location promoting AWW – the others are at the front of the shop and the with our weekly magazines. In many newsagencies, the back of the basket builder stand is dead space.  We have found it to be a most useful merchandising position even when we move the stand around.

All of this effort around AWW is paying off with good sales which, of course, is why we put in the effort and give up prime space.  The first week is when most sales are made.  Next week, we will pull back but still keep the title in the spotlight.

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magazines

Chelsea Lately and reinventing Australian newsagencies

chelsea_lately_australia1.jpgI was fortunate to be in the audience at Fox Television Studios in Sydney last night for the taping of Chelsea Lately, a hit US late night talk show. Star Chelsea Handler, and a team of comedians, writers and producers have been in Sydney for a week taping shows.  Last night’s was the last for this Australian trip.

Watching the show being produced was a hoot, an absolute guilty pleasure.  Yes, I am a fan, my photo with her is a trophy I’ll keep.

After the show I shared a cab back to the city with someone who had just been interviewed on a Sky Business Channel program and we got talking about newsagents, the challenges of print media – especially newspapers, competition, Australia Post and the economy.  It was a fascinating discussion with a business analyst who can look at the channel without the emotional and other overheads we often bring to a discussion about our future.  It reinforced the importance of us reinventing ourselves.

On the flight back to Melbourne I found myself thinking about Chelsea Lately taping and the discussion in the cab afterwards.

Chelsea Handler and her team have created a new and very successful genre of TV show out of the decades old tonight show format. Their reinvention has found a new audience while also bringing along some of the older audience for the ride.  We need to do the same thing.  We need to reinvent our model to find new customers while bringing older customers with us. We need to create a retail experience which is relevant to today’s audience.

While some newsagents and marketing groups are doing this, not enough of our channel is engaged.  Newsagents who do the same in 2010 that has been done in their businesses for decades will miss opportunities.  There is a new audience out there and we need to evolve our offer to find them. We start this by being business people and not acting as superannuation guardians.

Chelsea Handler takes risks with her show.  We should do the same with our newsagencies.  In among these risks lie ideas which will bring great success.

The Chelsea Lately show is on E! Network on Foxtel at 10:30pm weeknights.

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Newsagency opportunities

Is the ANF to announce a deal with Corporate Express?

I have heard from several sources over the last few weeks that the ANF is close to announcing a partnership relationship with Corporate Express – the company now owned by Staples, the US stationery retailer with 1,500 outlets. While I am certain that the ANF has been in negotiation with Corporate Express, I am not aware of how far they have got.

Newsagents own Group Newsagency Supplies (GNS) and the majority of Australian newsagents purchase their stationery from GNS. I would have thought that a closer relationship between the ANF and GNS would be good for the newsagency channel rather than working with a competitor.

While nothing has been announced, I’d expect to see Staples stores in Australia soon.  The model and brand is too strong in the US for it not to be tried here.  This would put Staples (Corporate Express) in direct shopfront competition with newsagents.  Maybe this is where the ANF discussions have got to.  I hope not.  If non marketing group newsagents are to sub-brand stationery they should do this working with GNS.

It will be interesting to see if an ANF / Corporate Express deal is announced and, if so, what form it takes.

I’d note that I am not in the ANF communications loop so they may have announced something in the last 24 hours of which I am not aware.

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Newsagency challenges

Dueling bathroom and kitchen titles

fhn_kitchbath_nov2509.JPGThe two kitchen and bathroom magazines in the photo look similar. Price is a key differentiator.  Melbourne Kitchen & Bathroom Design at $6.95 is a better price deal than Kitchens & Bathrooms Annual (Victorian Edition) at $9.95. The other differentiator is that Melbourne Kitchen & Bathroom Design is published by a Victorian  publisher. Our hope is that customers will buy both titles – this is why we have them next to each other.

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magazines

Double facing for Australian Women’s Weekly

fhn_aww_nov2509.JPGWe have given the Australian Women’s Weekly a double facing for the first week of the on-sale.  This gives the free bag with the magazine a better opportunity of driving sales from this regular location for the title.It also allows us to fit two titles per pocket.

We do this for magazine issues with a free gift which folds out in the same way.  It works better than hiding the gift.

We have AWW is three locations: in its usual spot (as per the photo), at the front of the shop and on a display for shoppers to see as the leave our women’s aisle.

early indications are that this issue of AWW will sell well for us.

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magazines

Too many the Picture titles?

picture_magazines.JPGI understand the strategy of brand extension but do wonder whether ACP magazines has taken it too far with picture magazine. We have three additional the Picture branded packs – on top of the regular weekly title. The latest Picture extension which went on sale yesterday was supplied in almost the same quantity as the main title. Besides challenges for sales, these extra titles are demanding space we do not have. To make space, given that we cannot early return ACP titles, we have had to cut titles from lower profile publishers.

I know some folks at ACP will be disappointed that I have published this blog post.  I’d ask them to take a look at the issue, consider the space, cash-flow and other challenges with three brand extensions in an already full segment.  They should ask if they would be happy if it was their space, labour and cash involved.  I’d be happy to take anyone through the numbers.

The key frustration is lack of control.  I cannot choose to be in or out not only with ACP brand extensions but with titles from from other publishers too.  I’d like more respect for my space, more control.  I’d like to choose whether to participate in brand extensions.  This would help me make decisions which could lead to sales elsewhere.

ACP has many excellent brand extensions which I often blog about here. Picture extensions are frustrating because of my low sales and space challenges in the segment.

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magazines

Lost sales for Burke’s Backyard

Our Burke’s Backyard stock went missing in transit and when we called Network Services early Monday morning we were told that they were out of stock. I pulled some strings and got a commitment for replacement stock. This was due to arrive yesterday. Hopefully it will turn up on Friday.

My frustration is that Burke’s sells well for us early in the on-sale. Not having stock is costing us business. Had I not pulled strings we would have lost the business this month. Our regulars would have had reason to try somewhere else.

I am not sure who is responsible for the last of floor stock to address shortages but someone needs to address this. There are shortages of every title somewhere in the system. Magazine distributors need to better handle these if they want the newsagency channel to remain their preferred retain channel.

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magazine distribution

Promoting Australian Women’s Weekly Christmas issue

dsc00457.JPGThe Christmas issue of the Australian Women’s Weekly went on sale this morning.  We are promoting the title in three locations including the front of store display shown in the photo.  The tote bag, while a gift done to death this year on other titles, has been well packaged with the title to make it look special.

Kudos to ACP for sending spare bags for use in displays.  This kind of detail in the VM pack is helpful.

I expect this issue of AWW to sell well.  The cover looks stunning.  By promoting in three locations we are chasing sales from passers-by, regulars and shoppers of other titles.

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magazines

The problem with some imported magazines

late_halloween_magazine.JPGThe Halloween magazine sent to newsagents today by Gordon and Gotch has arrived a month too late.  Their system ought to have stopped this $15.50 title being sent to newsagents.  I could have sold this title had it been supplied in August or September.  November 25 is way too late.  This is 2009, surely there is smart technology to stop this happening!

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magazines

News Corp moves on online contact gain traction

The position put by News Corp a couple of weeks ago that it may pull access to its content from search engines like Google is gaining traction.  Read what Robert MacMillan has published overnight at his MediaFile blog at Reuters.  He has moved from being a skeptic to seeing possible sense in the idea.

The debate is fascinating as newspapers struggle to find ways to monetise content online as they have done in print with classified advertising.  Once they achieve this and can deliver content through a game changing device line the iPod was for music, the scale tips for online and away from the more expensive print.

The debate is even more interesting as Australian newsagents contemplate what the future of newspapers may be for them.

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Media disruption

Top Christmas stationery items for 2009

Check out Staples’ Top Christmas Products list for 2009.  It provides an excellent insight into the US stationery market throught Staples and their 1,500 retail outlets.  Staples owns Corporate express Australia.

The list is about trusted brands, technology products and products for busy families.  While many of the items would work here, most are not among those we will promote in newsagencies this Christmas.

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Newsagency opportunities

The front of the newsagency

fhn_zones.JPGThe photo shows the offer across the front of our newsagency. Customers enter between the zones: boxed Christmas cards, calendars and Darrell Lea Christmas candy. We move categories around but always present the offers in a defined space and right at the entrance. The result of attention to this part of the newsagency is that sales of these categories so far this year for the season are up on last year.

While I am sure that there are far more attractive displays out there, we have found that our approach works well for us. The keys are: daily refresh, moving stock and having a good range in each of the categories.

Two of the three categories at the front of our newsagency are the best margin products we sell.

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Newsagency opportunities

Cookbook holders popular

fhn_acp_cookholder.JPGThe free cookbook holders provided by ACP Magazines to drive sales of their cookbooks are working well. We have noticed a sales lift. Unlike some gift offers with magazines, customers want these – they bring them to the counter with their cookbook. The offer is well timed since we have a number of new ACP cookbooks in stock.  I like the offer since it sits with the magazines on the shelves and passively (and successfully) pitches the sale.

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magazines

Oz Lotto hits $30 million

Oz Lotto did not go off tonight meaning that it hits $30 million next week.  This is great news.  The $30 million jackpot will drive extra traffic for newsagencies and better sales from regular traffic.  This jackpot is happening at a good time in the Christmas sales cycle.  It gives us an excellent opportunity to get good margin business: calendars, boxed Christmas cards, end of school year gifts, graduation gifts, diaries as well as more regular products such as magazines, newspapers and stationery.

We plan to make the most of the opportunity, promoting the $30 million prize and placing carefully considered impulse items in the area of our lottery counters.

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Lotteries

Newsagents put their customers first

The decisions of good newsagents reflect of their community – in terms or customer service, range and visual merchandising. It is visual merchandising which has been on my mind this weekend.

Comments I have published here about not pushing some titles because of concerns for my customers have led to a couple of calls telling me that it is a privilege to sell certain products and that I must honour this by promoting the titles as I am told.

I can’t do every display how and where I am told for to do this would upset my customers.

My customers come first.

This means no feature display if the title being promoted relies on breasts on the cover to attract interest. I’ll display it somewhere, just not where every customer sees the display.

Publishers and visual merchandising representatives need to understand that our customers come first. This commitment is good for us and our suppliers.
If we do as told, and promote titles which may not speak to our customers, we risk turning people away and no one benefits from that.

I wish newsagents were served by more suppliers who trusted us to make good business decisions for our businesses and the businesses of our suppliers. Treating us like robots is disrespectful of us and our customers.  Thankfully, not all suppliers do this.

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Newsagency challenges

Promoting Men’s Health with newspapers

fhn_menshealth_nov09.JPGWe are pitching the latest issue of Men’s Health next to our newspapers having discovered last month that it works well for us in this location.  We’re using the side of a Duracell battery stand for the posters.  Magazines are an easier impulse purchase with newspapers than batteries – well, the right magazines at least. Men’s Health is that it is a title which would not usually be given front of store space.  My goal is to educate customers to look for it regularly in our shop.

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magazines

Refreshing the Twilight new moon display

fhn_acp_nov2309.JPGWe refreshed our Twilight new moon themed display yesterday by adding TV Week into the mix this week.  The free unauthorised calendar free with the latest issue makes it eligible.  We should sell out of Dolly, also in the display, by the end this week (we will have achieved excellent growth on our usual sales) meaning it will be time to move on from new moon for the moment.  Twilight is proving to be an amazing franchise for retailers – I am glad we have had an opportunity to participate not only through magazines but also with calendars, the board game and other merchandise.

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magazines

Famous at the counter

fhn_famous_nov23.JPGWe are pitching Famous magazine in primt position between our two busiest sales points this week for two key reasons: it is achieving excellent sales growth and this week has a good value giveaway.  The audited sales growth reported a couple of weeks ago was excellent.  It certainly responds well to in-store promotions.  We will leave this display up until Wednesday by which time we’d expect to have moved almost all stock.

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magazines

Mater Chef magazine to launch next year

News magazines is launching a magazine based on the Master Chef brand next year.  While food titles are strong, my sense is that we are close to saturation in this segment.  Given the representation of Master Chef on TV, the magazine would be mid range or above.  It will be competing with Delicious, Australian Traveller and Good Food.  All well established titles.  Good Food is the most recent launch and it has established its place well.

My ‘sense’ aside, any new magazine launch tied to a successful TV show will be welcome – as long as they embrace the newsagency channel in their launch strategy.

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magazines

Covering the whole front page of a newspaper

age_nov2309.JPGThe Age and the Sydney Morning Herald newspapers are covered today with a translucent paper on which is printed an ad for the new Toyota Prado.  Customers are confused when they see the newspaper, thinking they have the wrong product – I witnessed this several times.  While an advertiser may like this disruption, the consumer is more likely to be frustrated.

I photographed the newspaper as it presents on the left with the Business Day insert out on the right to highlight the difference.

I am shocked that a publisher is happy to cover up the entire front page of  their newspaper in this way.  It is further proof that ads are more important than stories.  However, without stories, ads have no medium around which to pitch.

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newspaper masthead desecration

Counter sales opportunities in newsagencies

US research firm Dechert-Hampe & Company recently completed a study of front-end performance at more than 300 stores in the grocery sector. Magazines, confectionary and beverages, made up the “power” group of top performers at checkout. Click here for a summary.

While one might expect this result from a study funded by Mars, Coca-Cola and Time-Warner, the results are interesting and useful to newsagents.  They reinforce the importance supermarkets place on national brands to shoppers as well as the value of focus on the front of the shop.

The summary of the report offers good advice:

While the study was conducted in grocery stores, it is believed that most of the key findings apply to other types of store outlets as well. For example, the concept that consumers re most likely to buy products at the checkout that ave high household penetration, are purchased frequently, and are impulse driven, applies equally to any retail outlet regardless of format.

Newsagents tend to be less focused on national brands.  While there are favourites, it is not uncommon to see three or four brands of essentially the same product in a newsagency.  One is the hero of the segment and the others are there probably because they are represented by good sales people.

We also pay too little attention to our counters and the front of the shop.  If this first few metres is so important, why do we let it fill with clutter which will push  more people away than attract them?  Why do we confuse our customers with counter offers rather than focus on what will sell easily?

The stat in the study which is most compelling is that on a typical day, 18% of shoppers make a purchase from the counter.  This is a stat we should gather in our newsagencies and  seek to improve through better counter management and operation.  I know that in my own situation we are nowhere near 18%.

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Newsagency opportunities

Hunting for the free wrap

bhg_wrap.JPGI noticed a customer yesterday rifling through copies of the latest issue of Better Homes and Gardens. On offering to help I found out that she was looking at the colours of the free wrapping paper with the magazine.  She wanted the purple, a colour in short supply in our shop.  SI helped her, going through a stack of BHG she had not seen.

While we were looking for the paper, she told me that she liked newsagencies because they were how shops should be.  She likes personal service, friendliness and great magazine range.  She specifically said that she would not be able to look for the wrapping paper she likes at a supermarket.

We found the purple paper.  She was happy and I was happy to have shared the experience.  I also gave here a couple of spare wrapping paper sheets we had.

The experience reinforced for me the value of engaging with customers.   The amount we made from the single magazine sales is not that much but the personal enjoyment was considerable.

I saw the lady around ten minutes later and she made a point of saying goodbye.  She told me again how much she loves the shop. Her smile stayed with me all day.

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magazines
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