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

Kidnappers and newspaper sales.

A ton of ink has been spent over the last couple of weeks in Australia and overseas talking up newspapers.   It makes business sense that publishers publish good stories about their medium.  The AWL has a sobering perspective for the US marketplace – be sure to check out their graph.

While I am concerned for newsagents about the future on newspaper generated traffic, I do see this as more of a medium term than a short term problem for us.  So, there is enough time for a laugh in the meantime.  This is where kidnappers come into consideration – check out The Onion for their hilarious take on the current commentary about newspaper sales performance.

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Newspapers

Bookstore set to dominate e-reader sales

US bookstore chain Barnes & Noble is positioning itself to dominate e-reader sales with the announcement overnight of a deal to sell the new Que proReader device from Plastic Logic.  this will sit on the shelf next to their own device, the nook, announced last this week.

Newsagents ought to be watching these moves carefully.  The book distribution channel is changing.  Some say this is a new channel in addition to print.  Others say print is dead.  The future is probably somewhere in the middle.

These moves will impact, in one way or another, on newspapers and magazines.

We are in the middle of the most disruptive era for print ever.

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Media disruption

The all natural Sarah Murdoch AWW cover

fhn_sww_oct2809.JPGWe are promoting the latest issue of Australian Women’s Weekly with Sarah Murdoch on the cover sans make-up.  The display is at the entrance to our busiest magazine aisle.

The cover looks is brilliant – the best for Australian Women’s Weekly this year in my view.  The visual impact on the shelf is stunning and the reader connection very strong thanks to the natural look.

I am surprised that AWW a feature magazine for the ACP Connections marketing program this week – meaning we did not receive any additional collateral with which to promote the title.

The first on-sale week is vitally important to the sales of AWW.  Good collateral is essential to successful in-store promotion in enwsagencies.  lack of collateral means no special attention in most newsagencies.

It makes no sense to me that AWW is not the feature title in every newsagency in Australia this week.

Lack of collateral notwithstanding, we are promoting the Sarah Murdoch issue of AWW  as shown in the photo and at two other locations in-store.  I want us to get early sales as opposed to the supermarkets and other major retailers in my centre with this title.

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magazines

Promoting Girlfriend Twilight issue

fhn_girlfriend_oct2809.JPGWe are promoting the new issue of Girlfriend magazine, out today, at the front of our newsagency.  The Twilight features in the magazine make this issue appealing to a broader than usual demographic – hence promotion out the front of the shop rather than our usual location.

There appears to be no slowing of the appeal of Twilight based on interest in the calendar and Twilight covers on other magazines.

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magazines

US magazine subscriptions worse than Australia

Newsagents often complain about subcription offers in magazines, saying they undermine retail sales. I see subscriptions as a necessary part of the magazine supply model – as long the offer is not agressively pitched against newsagents.

Over the weekend I compared subscription offers for several Australian titles with US titles.  While our average subscriber discount is between 25% and 28%, in the US publications I looked at it ranges between 35% and 45%.

The one local exception of which I am aware is The Week – their subs discount is 60% off cover price.  I’d be concerned if larger Australian publishers discounted at this level.

While I am on subscriptions – I’d like publishers to offer a hybrid subscription which newsagents could sell – based on an upfront commitmenet for an in-store collection.  Using our putaway services we get to benefit from locked-in traffic and sell an overall higher priced item.

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magazines

Photography and camera magazines back in favour

fhn_photography_mags.JPGPhotography and camera magazines are performing better for us this year than I expected they would.  Our small range ticks over quite well.  It is also a very popular browser destination.

While there is some junk in the mix – not in the photo because I culled before I took this – overall performance is strong.  Our experience is that photography is one subject area where shoppers are more likely to purchase two titles at a time.

As the photo shows, we use mastheads to draw attention to the segment.  We also usually place digital photography titles next to digital camera titles.  This is a key factor in driving a better basket.

Memo to distributors reading this: don’t take this blog post as an invitation to supply more photography and camera titles.

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magazines

What’s with Michael Jackson calendar discounting?

michael-jackson-2010-calendar.jpgI am shocked at the number of retailers, newsagents included, who are discounting premium calendars already.  We are not discounting in my newsagencies and are on track to excellent sales growth this season.

Take the Michael Jackson calendar – I have this in all six of my stores at full price and it is selling well.  This is in addition to the excellent pre release sales we achieved. Why a newsagent would want to discount this by 25% is beyond me.  There is no sense in giving away margin unnecessarily.

The Michael Jackson is a premium item, the market has not been flooded.  I can’t see any reason for the 25% off other than poor management.

There are plenty of newsagents making good money from calendars selling at full price.  These operators usually have an excellent value proposition around service and range. They rely on business-based points of difference as opposed to price.

Discounting calendars now is lazy.  While shoppers may like the saving, it does little for the long term health of the business.

Don’t get me wrong, discounting has a place in retail, especially for calendars. For me, this is after the New Year.  It takes guts to hold this line. As I have seen in my stores over recent years, the reward is worth it.

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Calendars

When you can’t hand back your newspaper delivery run

I am concerned about reports of newsagent requests to hand back newspaper home delivery runs being blocked by a publisher.  How can a publisher force a newsagent to continue offering a loss making service?

Publishers control most business levers in the newspaper home delivery service: cover price, the delivery fee charged by newsagents, additional revenue opportunities with the newspaper home delivery and cash flow. Publishers, on the other hand, make most of their money from advertising revenue.

I am aware of newsagents with runs which lose in excess of $200 a week.  This is not a new problem.  Indeed, publishers have been talking about this with newsagent associations for most of this decade.  To date, there has been little real progress from a newsagent perspective.

I am guessing that publishers block the handing back of some runs because they do not want to carry the loss.  Yes, let’s rely on the contract we have with these families and force them carry the loss.  They did sign the contract after all.

For the health of newspaper home delivery, something must give – especially in regional areas where merging home delivery runs is not practical. One solutions which I put to publishers years ago is to ensure fair compensation for the service offered. Newspaper subscribers have shown that they are prepared to pay a higher price for the newspaper on their doorstep yet publishers refuse to permit newsagents to do this.

Blocking newsagents from charging a fair price for an excellent service is a factor in some good newsagents exiting our channel.

Unless the issue of fair compensation for newspaper home delivery is resolved in the next few months, the world’s best newspaper home delivery model will break up.

Politicians played a role in creating the current situation, maybe they could play a role in helping thousands of families across the country achieve an equitable outcome.

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Newsagency challenges

Grazia and the Spring Racing Carnival

fhn_grazia_oct2609.JPGWe are promoting Grazia magazine with other products connected with the Spring Racing Carnival such as newspapers.  The copy in the photo is placed above The Age on our main newspaper stand.  We don’t have any addditional collateral so our work is all abourr product placement.  This week would have been an ideal opportunity for Grazia to promote pre Melbourne Cup Fashion.

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magazines

New Women’s Weekly Cookbook signage

fhn_acp_cookbooks.JPGWe are trialling new signage from ACP for their Women’s Weekly Cookbooks.  While I like the look, I was concerned that it may block sightlines to aisles behind the cookbooks, as seen from the counter. Now that it is in place, I don’t see this as much of a concern.

The bold signage draws attention to the cook the cookbook offer and reinforces the connection with the Women’s Weekly brand.  It cuts through the sea of colour which confronts shoppers in the magazine aisle.

The plan is to leave this signage in place until the New Year at least.

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magazines

Promoting New idea and free Ribena

fhn_ni_oct2609.JPGWe are promoting New Idea at the counter this week.  The free Ribena drink with every copy is a compelling offer and warrants this high value space. I like that the Ribena is provided separate to New Idea – this keeps the magazine in-tact and helps us create a better display.  I’d expect this promotion to work well for New Idea.

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magazines

Moving Andre Rieu

fhn_limelight_oct2609.JPGWe have moved Limelight magazine featuring Andre Rieu on the cover to the front of our shop as we needed the counter space for another display. While not big news, I am blogging about this to show how we are transition a title from one promotional location to another.  We only do this when we are certain that there are sales to be made from giving a title more time in the spotlight when space is tight.

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magazines

Newspaper freebie fails

fhn_papers_freebies_oct10.JPGThe gifts offered with newsapapers on Saturday (Herald Sun – free Intralot lottery scratch ticket and The Age – free Ferrero chocolate) didn’t work as intended in our newsagencies.  No measurable kick in sales and no strong interest by customers in the freebies.  I am surprised by this – for the lottery ticket especially.

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Newspaper marketing

Reject Shop not so cheap for Christmas cards

When comparing Halloween at the Reject Shop on Saturday (we are cheaper by between 5% and 25%!) I noticed their large Christmas card range.  Borowsing their Christmas cards, I soon discovered that the Reject Shop is not as cheap as they portray.

They had a large display single Christmas cards priced at $3.95.  Cheap designs and cheap production quality – expensive for what you get.  You are better off buying their dirt cheap Christmas cards – around $1.00 each – if you must buy from the Reject Shop.

What the Reject Shop does well is pitch themselves as cheap.  Shoppers ought to shop around because as I saw the value proposition is not always as it seems.

Shortly after my visit, I saw one Reject Shop customer looking at our Halloween stock.  Buying from us would have saved money she told me.  We had a chat about it and how they suck you in with the appearance of being cheap.  We also talked about Christmas cards as that will be her focus after Halloween.  I pointed out our various ranges which compete with the Reject Shop on quality and our boxed card range which competes on price.

A good way for us to educate shoppers about the value for money we offer is to talk with them.

Hopefully, Saturday’s conversation will facilitate word of mouth that our local newsagency often beats the Reject Shop.

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Newsagency opportunities

Men’s Health sells well with newspapers

fhn_mhealth22.JPGIn the first six days of on-sale of the latest issue of Men’s Health, we sold five copies more than the two we usually sell in the first on-sale week for the magazine.

As I blogged on Monday, we created a small display next to our main newspaper stand.  This is the location from which we have sold most of the copies, turning a newspaper sale into a newspaper plus Men’s Health sale.

While we cannot place every magazine next to the newspaper stand, it is great to find a title which works well in this location. The success this week tells us that at Forest Hill, we ought to place Men’s Health here for at least the first week of each new issue.

I’d encourage other newsagents to try this and share their feedback.  There is no risk and only a small time cost.  The potential gain is sales and who doesn’t want that?  Imaging the value if we find that this works for Men’s Health across the board?

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magazines

Using lighting in visual merchandising

mc_halloween09a1.jpgThe team at our Sophie Randall store in Melbourne Central has used a lighting trick to wash the boxed window with orange for great effect for our small Halloween display.  The photo shows the contrast of the display window and the general lighting in the shop.  They placed a colour gel on front of the light for the window – a small and inexpensive trick which has delivered a high impact. The impact is evident in the number of customers who stop and look and the sales.

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visual merchandising

Is the nook a game changing e-reader?

nook.jpgnook, the e-reader introduced by US book retailer Barnes & Noble this week in the US could be a game changer in the e-reader marketplace thanks to the lending ability it offers and the ability to pick up reading a book started on the nook on an iPhone or your Mac.  While the lending feature has limits – only to one other person and only for 14 days – that the facility is out there is enough to put this feature in play for others.

In addition to offering access to books on the nook, Barnes & Noble is offering magazines and newspapers.

The image is from Information Week.  Their story on the nook can be found here.

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Media disruption

Book wars in the US

The Book war which erupted in the US last week is set to get more serious with the Booksellers Association seeking Department of Justice intervention.  The argument is that Aamzon.com, Wal-Mart and Target are using predatory pricing.  The discount on top selling new release books is close to 70% off the cover price.

This battle started when Wal-Mart and Amazon engaged in a tit-for-tat price war close to two weeks ago. Walmart.com was offering the books for US$8.99 with free shipping; Amazon had the same books for US$9.  Target soon joined in.

While the three retail giants slug it out, smaller booksellers are left floundering in their wake and publishers are wondering whether there will be a long term shift in new hardcover pricing and, if so, what the implications will be for their model.

This is all happening on the backdrop of continuing significant moves on e-reader device sales and digital content promotion.

The recent US experience is relevant to us because it reflects another impact of disruptive technology and the lengths to which major retailers will go to drive their businesses in a tough retail climate.

One way or another, the US book war will impact on book retailing here in Australia.  We will have to wait and see the size of the ripples.

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Newsagency challenges

Driving impulse purchases with photocopying

fhn_copies_cover.JPGOur team at Forest Hill has refreshed the product offers located around our photocopier.  This makes more rewarding use of our retail space and offers compelling impulse opportunities to photocopying customers without impeding  easy access to the copier.

The basket data I have seen for newsagencies shows that copying remains one of the least efficient sales.

On average, more than 70% of copy sales are for copying and nothing else.  While those customers may purchase other items on other visits, the copy visit itself is inefficient – hence the importance of refreshing the impulse offers around the copier.

The O’Bon pencils, pens, journals and folders (on the left in the photo) and made from recycled newspapers and sugar cane pulp work particularly well in this location.

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Newsagency opportunities

Free lottery ticket with the Herald Sun

fhn_freescratchie.JPGThe Herald Sun today has a coupon which can be redeemed for a free Intralot instant scratch ticket.  While I like the idea of the promotion, I am concerned about the time which may be spent checking tickets.  Scratch ticket customers are notorious for having tickets checked even if they are certain they have not won.  This would be okay if the Intralot hardware was faster.  We will encourage those wanting their ticket checked to use the self service terminal if we are busy with other customers.

For this promotion to work it needs to drive Herald Sun  and Intralot sales. Where I expect it to work the best is in newsagencies with Intralot and without a second Intralot a few metres away.

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Lotteries

What’s the price deal with Model Engineers’ Workshop

fhn_model_eng.JPGTwo issues ago, the front of Model Engineers’ Workshop announced a new low price – A$10.90.  The latest issue, out yesterday, is priced at A$13.50.  I can’t see any reason for this – the UK price for each issue is the same.  Why increase the price here?

The UK price on the latest issue is hidden under a barcode on the plastic bag.  Some customers will discover that the UK price has not changed and ask why.

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magazines

Great poster for The Age

theage_oct2309.JPGThe Age today has a poster which is certain to drive sales – reflecting the sad news of the passing of Don Lane.  I mention this because I have written previously about newspaper posters and that they rarely drive sales.   While on Don Lane, I am surprised that the Herald Sun did not make this their cover story today – any newspaper or magazine with prominent Don Lane coverage will sell well for the next week or so.

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Newspapers