We have had Father’s Day cards up for a couple of weeks. Sales are good. This is being driven, in part, by the free Sat. Nav. (thanks Hallmark) we are giving away to one lucky customer. While Father’s Day is one of the weaker card seasons, it is very strong in several gift categories. Newsagents with a strong gift offer should be seeing good sales already. We have our Father’s Day gift offers in front of the card display.
We are promoting House and Garden at the entrance to our women’s magazine aisle this week. We continue to experiment with titles which work in this relatively new promotional location for us. Sales are the only measure which matter to us. Last week’s display of Good Health worked very well.
It is almost a year since we scaled back on big displays in favor of outcome focused displays – like we have done for House and Garden. This is a good for business move.
I met with a newsagent in Sydney tonight to talk about challenges faced by the business. Answers for the key challenges are in their business data. The biggest challenge is understanding that and then leveraging the data to guide a solution.
The newsagent is relatively new to our channel – less than a year. They came to us with a background of success in another retail channel. They made all the right moves including completing the required supplier specific training as well as the industry endorsed ANF training. None of this training equipped them for the newsagency specific challenges they face.
We let new newsagents down. Our training of new entrants is inadequate. The business management support infrastructure outside one or two marketing groups is almost non existent.
The newsagent found me through this blog. I have no other connection to their business. I am glad to help where I can. Indeed, each situation I encounter like the one I found tonight, is educational.
The key problem I saw tonight was a business making decisions on out of date data. Their accountant provides a P&L six monthly. The only guide as to how the business is travelling is their bank balance.
They buy stock based on what they see they need and based on what supplier reps order for them. They process magazine returns using distributor websites. No one is driving them to change their practices – suppliers have provided website work-arounds which bypass industry EDI standards.
We let ourselves down from the first new newsagent training session through to their early months.
An overhaul of how we bring new newsagents into our channel, how we educate them and how we support them through their early months is years overdue. We have too many relatively new newsagents falling behind, hurting their businesses and the channel more broadly.
This is an issue crying out for national attention.
As for the newsagent I met with tonight, they will quickly address what needs to be addressed. I am confident or a turnaround in the next three months – we are developing a plan which will improve the business and build their knowledge. I am blogging about the meeting and the training issue at their suggestion – they feel let down by the introductory processes.
We are using the latest issue of Men’s Health magazine to anchor a promotion of titles which appeal to men. We are focusing on physical and mental fitness in the selection of titles. We have deliberately resisted the urge for breast centric titles this time around. Men’s Health is a good title for us but we know we can increase sales further – hence this display out the front of our newsagency.
We are promoting Cleo magazine at the counter this week. The free nail polish and lip gloss make this an excellent impulse purchase opportunity. I like the way the gifts are displayed – in the sleeve next to the magazine.
Our plan is to move the magazine to a second location if we still have considerable stock by the weekend. This is easy thanks to the good mix of collateral we received.
newsXpress is hosting the National Newsagent Conference in Melbourne is October. Participation is open to all newsagents. This will be two days of great networking with newsagents and a conference agenda focused on growing stronger and more profitable newsagencies. Embracing change will be a theme of the world class speakers being brought in for the event. Click here for a registration of interest flyer. Click here for a copy of the conference registration form. Registrations are open now.
Disclosure: I am a Director of newsXpress.
PMP, the parent company of magazine distributor Gordon and Gotch, released their 2009 full year results to the ASX on Friday. The announcement was accompanied by a presentation with details on their trading for the past year and plans for the next. The key magazine distribution information in the presentation of relevance to newsagents is:
As these numbers show, newsagencies aren’t the only businesses in the magazine space with challenges.
Six years ago, Gordon and Gotch was the least popular magazine distributor supplying newsagents. Oversupply was rife, returns processing was problematic and internal policies around magazines were weak – meaning we would see unjustified reissues and other challenges.
Since 2004, Gordon and Gotch has transformed much of its magazine distribution business, lifting sell-through rates and introducing internal policies which see newsagents supplied on more equitable terms.
The operational changes cannot counter the impact of economic conditions nor the impact of disruption to the traditional print media model. These are challenges which we share with Gotch and which will drive the redefinition of both our business models.
One impact of the economic and disruption challenges I expect to see is a rationalisation in magazine distribution. While the magazine distributors are cutting costs internally, more significant savings would be achieved through maerging businesses.
Crikey.com.au has published two articles this week about Australia Post and the challenges they face in falling mail volumes as a result of increased online traffic. The other challenge to Australia Post is the push for increased competition in mail – open competition is considered best practice in the EU.
Newsagents are experiencing increased competition from Australia Post in the retail front. The government owned and protected 850 corporate stores use their mail services to pull traffic for a lower cost, extract better landlord deals. These benefits of government protection are used to help fund loss leaders which target newsagents and some other retailers.
Australia Post senior management are on incentives (huge I am told) to drive these moves against private enterprise. Government policy, from successive governments, permits Australia Post to pit this government business against small independent retailers, to use the protection to specifically target businesses like newsagencies.
Economists ought to look at the net cost to the economy of the government owned Australia Post taking business from the private sector in this way. I suspect they would find the cost higher than if the post office was taken back to the past of offering only postal services.
Sure the government likes the hundreds of millions of dollars of dividends they receive. Imaging what they could achieve in taxes from more efficient and profitable private enterprises.
Australia Post has no role in selling office stationery, printer ink refills, greeting cards, calendars, magazines, books, phone recharge, mobile phones, picnic sets, games and gifts.
Life beyond mail for Australia Post? One thing is for certain, it will involve poor customer service and long queues.
Newspaper publisher Fairfax used the business pages of The Age and the Sydney Morning Herald yesterday to raise the profile of the challenge Google resents to newspaper publishers and other traditional (older) advertising mediums. While the article starts out presenting a balanced view of the Google challenge, it occasionally takes a reds under the bed approach in making a case against Google – by fanning fear about its size and unknowns about its internal workings.
The article is relevant to newsagents in that it brings into focus the concerns of newspaper publishers with the expanding Google take of advertising revenue here in Australia.
Here is the proof of the popularity of the Ben Cousins cover story on GQ magazine this month. At our newsXpress Forest Hill store we sold our initial allocation and quickly pulled extra stock from one of our other newsagencies until additional stock arrived from the distributor. The Ben Cousins GQ blog post I published here achieved 80 hits in 24 hours.
The placement of GQ above the Herald Sun on our newspaper stand has been a smart move. It is great to see a Herald Sun sale turn into a Herald Sun and GQ sale.
We need to seize opportunities like this, look at magazine covers and place according to what we know about our customers. We can bank the results.
This is a photo of the new Newslink newsagency at Cairns airport. I saw it on Tuesday. It’s a good looking shop. Overall traditional Newslink – well segmented, easy to naviagte. My understanding is that they have won an award for this particular shop.
Click on the image to see a larger version.
Shopfits are a challenge for newsagents. Too many continue to be the traditional look and feel. Of all the designers serving newsagents only two or three really get the changes we need to make and help newsagents create businesses which can cope with these changes.
I have received the following update from parties familiar with the court case relating to Bill Express:
The ACCC case was heard in the Federal Court in Melbourne last week,The only real respondent left standing is Bank of New York. The other respondents, Bill Express, TBI and Mobius are all in liquidation.
The Judge reserved her decision. The decision is expected within 6 weeks,
Once the decision has been handed down we will update the group and report on any consequences for the group ,and newsagents generally, of the decision.
NANA and the QNF led on the Bill Express issue while the ANF provided contradictory advice to newsagents which, if followed, meant some newsagents paid equipment leases longer than those who followed the NANA and QNF legal advice.
We are having good success with our lottery ticket menus. We started this with the OzLotto jackpots and then with Powerball. now, we list all games of the week this way, as a mat, at our lottery counters.
This is an easy way to guide new customers to the options for tickets. It makes inviting an impulse purchase easy. We have the menus on display at both main lottery counters.
We are promoting Health and Fitness magazine at the counter this weekend. The free Betty Baxter meal replacement giveaway makes it worth pitching at this impulse purchase location. That’s Life which was in this space has sold well so we had to make a quick decision on using the space for the next two days. Health and Fitness would rarely get spotlight treatment. Our sales suggest the move is a gamble. Hopefully it works for us.
I am told that management of NDD, the magazine distribution business owned by IPMG, management announced to staff yesterday that the company was exploring sale options following approaches from parties interested in the business.
Magazine distribution is a slim margin business. The key is volume of top selling titles. NDD is the smaller of three magazine distributors in Australia.
While the last year has been challenging for magazine publishers, distributors and retailers, there are signs of growth in the category.
It will be interesting to see in the reports of movement around the ownership of NDD are true and, if so, the impact on newsagents.
Click here to see a promotional video put together to celebrate the success of ACP’s Women’s lifestyle titles as recorded in the audit figures released today.
With the move of Top Gear to the front of the shop (see earlier post), we have placed Rolling Stone to at the exit of iur main men’s magazine aisle. This is a quick and dirty display for the weekend. Rolling Store is untried here so it will be ineterstingg to see how it goes – and whether the Jackson cover story works for us here.
This is another weekend-only display we have invested in. The display took a minute to setup and who knows, we could find unexpected sales.
Top Gear has not performed as well this month as we hoped so we have moved from an in-store display to a display at the front of the shop – leading to our main Tattersalls counter. This space became available because New Idea has performed well for us in this location this week. We have seen Top Gear work well over the weekend previously so we are hoping to interest similar weekend shoppers.
It may seem a time consuming to move a display for the weekend. Our view is that this is what magazine spscialists do to chase business.
My software company, Tower Systems, tested a promotion for the GNS Market Fair in Melbourne this past weekend. Anyone buying a system from Tower at the fair received a $1,000 credit to their GNS account. We have decided to run this promotion for the Sydney GNS Market Fair this coming weekend.
With so many suppliers investing in electronic business gateways for newsagents, we wanted to offer a cash incentive which compliments the time and money saving incentive for newsagents installing Tower Systems’ software for newsagents.
How software companies are handling the latest XchangeIT and other changes brings the choice of software into focus. We figured this would be a good time to offer an incentive on top of the Tower Advantage TM. It is also designed to help drive traffic to the GNS Market Fair – we promoted the offer this week to newsagents by fax.
Tower Systems currently serves in excess of 600 newsagents in NSW, more than all other software companies combined. This penetration earns the company the right to call itself the industry standard software solution.
The 50th anniversary isseu of Vogue is a sellout in each my my newsagencies and many others based on the calls and emails I have received. Indeed, given how soon this special issue sold out in the on-sale, I suspect that News Magazines could have sold at least 20% more copies.
The Vogue anniversary issue is an excellent example where the Sales Based Replenishment program from ACP Magazines would have helped the title achieve its true potential. With SBR, sales dictate where additional stock is sent based on a clever predictive model.
I am pleased with the success of Vogue but frustrated that extra stock is not readily available to satisfy demand.
I am often contacted by newsagents and would-be newsagents through this blog asking how to create the displays I write about. The most common question relates to the counter displays and that newsagencies don’t have this space.
The photo to the left shows the display currently on-show at our Frankston newsagency. This is a space we created. Previously we had a gum display here. Now we have a smaller gum display to the side – without any negative impact on sales.
The backing for the display is a small board of MDF resting in front of the register. This could easily be a small piece of slatwall. The MDF board gives us the backing necessary to create a display our customers will see when approaching the counter.
In terms of collateral for this space, we can use material supplied by publishers – posters and cover run-ons – or create our own by copying covers.
The display materials are not as important as title selection. It is crucial that the title promoted works with your customers as an impulse purchase. It took us several months of trial and error at Forest Hill to get the title selection right. We are still fining our way at Frankston.
While I like most about this premium counter space is that it is mine. No supplier paid for it. No supplier can demand access to the space. I can use this to build the performance of my business.
Any newsagent can create this space in their newsagency. This bit of MDF is more useful, with the right title, than a more professional (and expensive) piece of fixturing.
Telstra has advised customers that if they wish to pay their bill at Australia Post or at a Telstra shop they will apply a $2.20 “payment administration fee”. I wonder if they would have done this had the Bill Express bill payment network not collapsed?
I wouldn’t mind $2.20 to process a bill.
Newsagents price their services too cheaply if these rates are anything to go by. How many days of newspaper delivery services do you get for $2.20?
Maybe Telstra and Australia Post are just too greedy.
I have been asked by several newsagents to publish a photo showing the situation of displays I have talked about here recently. Click on the photo for a larger version. To the right is the back of the ACP Basket Builder stand which we now use regularly to promote feature titles. Too the left is our fixed aisle end display. Further up on the left, next to our Darrell Lea stand, is a new feature display we have put in place – we use both sides of this.
These displays all change on at least a weekly cycle.
With promotion and premium display space remaining at a all used up, we have shuffled home and living magazines around to find space to open Home Beautiful out so that customers can see the free gift which comes with the latest issue. We will leave this for a week or two. The alternative was to leave the title in single face pockets and thereby hide the premium gift.
Newsagents in Far North Queensland have had been permitted to return unsold magazines topped for almost a year. Talking to some of the newsagents involved earlier this week it was no surprise to discover that returns have dropped. Returning un-solds in a topped form makes publishers and magazine distributors more accountable since they cannot re-circulate unsold stock. Newsagents benefit through a considerable reduction in freight and labour costs.