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

The $70.00 card sale

At one of our Melbourne Central Sophie Randall store on Monday I served a customer who spent more than $70.00 purchasing eight cards. In conversation, the customer explained that she would spend this much on cards at least once a month. She loves giving cards and always buys up when she discovers cards she likes and has not seen before.

We have a wall of unique feature cards, on full face display, as well as an excellent range of everyday cards. While we are trying to appeal to a broad range of card buyers, it is the unique cards which attract the deeper shopping basket.

The card shoppers we encounter in our specialist card and gift shops is quite different to the card shopper we see in our newsagencies. Newsagency card customers buy fewer cards each visit based on the sales data we see. There is also a difference in captions. This is why card companies often supply different ranges to newsagencies versus card and gift shops.

As newsagents move more into gifts and become a hybrid somewhere between a newsagency and a gift shop, care will need to be taken on the management of the card range.

Now if only I could easily attract $70.00 card sales to my newsagencies.

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Greeting Cards

Promoting the Prevention magazine launch

prevention_flyer.jpgPacific Magazines has put together a flyer for newsagents to want to promote Prevention magazine ahead of the launch next week. Click here for a copy of the flyer in Microsoft Word format for local customisation.  Click here for a PDF of a sexier PDF version we did at the office.

I like the idea of promotion in advance of the launch as it positions us well for when the TV and other media campaigns kick into high gear. We are enjoying success with our pre launch promotion of the Michael Jackson calendar.  This is encouraging us to use a similar approach with other new products – such as Prevention.

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magazines

XChangeIT update for Sept. 1

XChangeIT successfully completed a server upgrade today to address recent issues. Network & NDD files for tomorrow have been sent successfully. Gordon & Gotch has advised that there server is down (unrelated to other XChangeIT problems over the last week) and that every available resource has been pursuing a resolution.

UPDATE: I am told that this is fixed but at the time of poting am yet to have  this confirmed.

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newsagent software

More on who leads NSW newsagents

Further to my post last month about NSW Lotteries, there is more media coverage today on the disagreement between the ANF and NANA on the preferred approach on the privatisation.  While this disagreement does make us look like a disorganised rabble, the difference offers newsagents a means of comparing the ANF with NANA.

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Lotteries

XChangeIT slows roll out

The rollout of the new XChangeIT Link platform to newsagents has been slowed following a series of issues which were experienced by newsagents and suppliers last week.  this is a welcome move as it allows everyone to focus on sorting out platform related issues without needing to help newssagents migrate.

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newsagent software

New sound card range popular

hallmark_sound_cards.JPGWe are promoting the new range of Hallmark sound cards in each of our stores.  Even though they have only been up a week, sales are strong – I have seen customers buy two at a time.  What I especially like about this range is the depth of occasion coverage – this is key to driving more than single card sales.  I have had a couple of customers comment positively about the price point too – this should generate good word of mouth.

This is like a major magazine launch for us – exciting and an opportunity for us to refresh our offer and our commitment to the category.  It changes gear for our card department and shows us moving with the times.

While I have seen sound cards from others and indeed sold them, this new range from Hallmark is genuinely fresh.

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Greeting Cards

Father’s Day season starts

dads_bags.JPGFather’s Day season shopping is always quite last minute.  This year is no different.  While we have achieved some sales, good business did not start until yesterday.  It will get busier through the week and peak on Saturday.  The best indicator of Father’s Day kicking in is when Darrell Lea Dad’s Bags take off – this started yesterday.  They are a great gift, easy to sell and easy to merchandise.

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newsagency marketing

New photocopier improves return

fhn_copies_toshiba.JPGWe have replaced our old Konica copier with a new unit from Toshiba. In addition to a considerably faster operation, we have been able to cut our per copy cost and introduce new services such as scanning and emailing. We did look at a Konica unit but leant to the Toshiba based on a better deal.

In our own case, we do $15,000 a year in colour and black and white copying. Cutting our per copy operating costs by 20% significantly improves the return we achieve from this traffic generating service.

I am not blogging to say go with Toshiba over other brands but, rather, to highlight that there are good copier deals out there which can cut operating costs and therefore improve margin on copying and other services.

The key to finding the best deals are: prepare – know what copying demand you have in your store, shop around, don’t take the first price offered, and understand the features available and assess their value to your customers.

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Newsagency opportunities

Gordon & Gotch NZ expands

TVNZ reported yesterday that Gordon & Gotch NZ has entered into an agreement to purchase key NZ competitor, Independent Magazine Distributors.

My view is that we are in a period of change in the magazine distribution model.  The change will reach beyond the distributors themselves and into other businesses which serve the category.

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magazine distribution

Covering the newspaper masthead

age_aug3109.JPGIt has been two months since The Age has a post-it type ad stuck across the newspaper masthead.  Today’s ad, for the Royal Melbourne Hospital Home Lottery, is like all the others – peel it off as they ask and you tear the front page of the newspaper.  It is disappointing to see a respected brand treated in this way.

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newspaper masthead desecration

Newspaper gifts opportunity missed

With more newsagencies operating as retail-only businesses, newspaper publishers need to review how they handle distribution of giveaways designed to drive sales.  Some distribution newsagents refuse to provide retail-only newsagents with suffiicient stock while others provide plenty.

By sufficient stock, I mean enough of the gifts for their own newspapers as well as for supermarket customers who will visit the newsagency and ask for the giveaway.

I have seen a situation where the distribution newsagent operates in competition to the retail-only newsagent and  restricts supply of the gifts in a way which stops the retail-only newsagent providing the level of customer service the newspaper publisher would want to see.  Such restriction defeats the purpose of the gifts.

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Newspapers

Pitching Burke’s Backyard and heritage tomato seeds

fhn_burkes_sep09_2.jpgWe are promoting Burke’s Backyard to shoppers leaving our busiest maagzine aisle this week.  While not the prettiest display from a visual merchandising perspective, the display will work well as it is placed next to the waterfall display of the Burke’s Backyard magazine. We will leave this display up for at least a week – longer if sales and supplies warrant.

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magazines

Promoting 30 days of fashion

fhn_30daysfashion.JPGWe are promoting ACP Magazines’ 30 DAYS OF FASHION at the front of our newsagency this week.  This is more a billboard positioning for than a display to sell off – although we are hoping to raise sales for Grazia from its positioning.  We are a bit soft on this promotion because it is really about engaging with opportunities outside newsagencies.

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magazines

Who has the guts to break the system?

I have been talking to some magazine publishers recently about different sales models, in pursuit of more economic terms for newsagents than the current sale or return system controlled by Australia’s three magazine distributors.

The contact usually comes in the form of a question: which magazine distributor is recommended by newsagents?

This question is more complex than it sounds and is not one I am comfortable answering without knowing more about what the publisher wants to achieve by getting their magazine in to newsagencies.  Some publishers want to be in front of browsers in newsagencies.  Others want sales to drive subscription uptake.  Others want real sales and to develop a long-term mutually beneficial relationship with newsagents.

It is this third category of publisher I am most interested in as they are more likely to invest in the newsagency channel and reward our investment in their titles.

It is clear that there are some independent publishers looking for an alternative which provides them with more direct to newsagent contact.  They are usually open to a direct supply relationship on a sale or return basis for a better than usual margin a firm sale arrangement for an even better margin.

That some independent publishers are looking for alternatives which better suit their business model is good for newsagents.  Our goals and the goals of publishers ought to be more closely aligned than the goals of the magazine distributors.  This is not a criticism, just an acknowledgement of the services they are paid to provide.

Reducing the supply chain will cut costs and leave more money on the table for newsagents and publishers.

The question is whether an independent publisher is willing to break the system and try a evolve a direct to newsagent model. I am certain there are newsagents who would be willing to try this.

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magazine distribution

Deterring retail theft

screen_cuts_theft.JPGOne of our stores has been hit by a co-ordinated team stealing items of value. Our camera system caught the evidence and while we have reported this, we have also introduced two new in-store screens to show that we are filming. One new screen is above the door –showing that we film people as they enter and leave. The second screen is above the counter as we know that the professionals look at the counter.

Theft prevention experts say that the risk of capture is key to reducing theft activity. Hence our investment in two screens in high profile locations.

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theft

Father’s Day Book Sale a hit

fhn_fday_books.JPGOur Father’s Day Book Sale is going very well with strong sales every day since we put the new stock out. This is our third year of regular book sales here and we are known for these – thanks to good word of mouth.  Customers often ask when our next sale is.

Our approach is simple – books out and arranged by subject on trestle tables inside our shop.   They are clearly priced with bright discount price stickers.  Even though the books are discounted, our margin is very healthy – significantly better then magazines.

I’d note that we did try an outpost for our book sales but found the return better withut the rent and labout cost of an outpost for us.

We know from our book supplier friends that right now is one of three good Book Sale times of the year.  While we call this a Father’s Day sale, customers are buying for a range of occasions including early Christmas gifts.  We’re happy to take any business but to also use the sale collateral to strengthen our Father’s Day pitch.

From a sales efficiency perspective, books work well with cards and wrap.  Postitioning them on the dance floor, near the counter, also helps them work as an impulse purchase when a customer has visited to buy something else.

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Book retailing

Growing green magazine interest

gmags.JPGA few months ago I wrote about our placement of green related magazines between garden and home and living titles. This small segment is working well for us in part because of the use of hero products on either side to draw attention to the green titles and in part because it is near the exit of the aisle which attracts most of our customers. It look us a while to find this place and make it work for us.

We are looking for titles we can range to expand our offer because we know from reports overseas that this is a growing segment.

Once we have a few more magazines in this segment, we will run displays at the weekend near newspapers as I suspect this is when we are more likely to achieve browser based sales.

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magazines

The value of Michael Jackson’s death to magazines

BNET reports that in death Michael Jackson will be worth between US$55 million nad US$67 million to the magazine industry.  Based on Michael Jackson related magazine sales and pre-orders for the official Jackson calendar I’d suggest that it is too early to preduct the number.  With each turn in the story a new opportunity opens plus I expect there is a variety of retrospctive angles yet to be covered.

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magazines

Twilight inspired magazine display

fhn_twilight_disp.JPGOne of our team members at newsXpress Forest Hill created this magazine display around coverage of the Twilight film and cleverly brought together several magazine titles. This is on display at the front of our shop – in addition to the display we have for Dolly at the counter. We are seeing customers interested in Twilight picking up additional titles to fuel this interest.

The current magazine coverage of the books and movie is an excellent opportunity for newsagents as other magazine retailers would not make this cross-title connection.

My only frustration is that the display combining titles from two publishers would not be publicly acknowledged and embraced by publishers as good strategy.  They tend to like only their own titles in a display.  This display in the photo is very healthy for the whole category as well as for newsagents as magazine specialists.

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magazines

DVD kiosks entering US supermarkets

blockbuster_express.jpgI was interested to read that Blockbuster branded DBVD kiosks are entering supermarkets in the New England region of the US.  Called Blockbuster Express, the kiosk is an NCR self serve vending unit.  Each kiosk houses more than 800 DVDs.  They plan to have 10,000 of these kiosks installed by mid 2010.  The retailer gets a share of the US$1.00 a night rental fee.  What is interesting is that you can rent from one location and return at another.

Photo creditL Endgadget.

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Newsagency opportunities

Missing the impulse opportunity

impulsesales.JPGThese magic trick packs were on the Gibson stand at the GNS market fair in Melbourne a few weeks ago. The price was 15% off their usual wholesale price. They were not popular with Market fair attendees. We bought them for our newsagencies as we felt they would be a good impulse product. We have had the stock out for a couple of weeks and they are selling well. They are being bought as birthday gifts for boys as well as for early Christmas stocking fillers.

While they may not be the most attractive product or generate hundreds of dollars of profit, we will sell through all the stock quickly – pickling up sales we would otherwise not have achieved.

We need to look at trade shows like the Market Fair for even the smallest opportunity to extend each shopping basket. That means magic tricks today and who knows what tomorrow.

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Newsagency opportunities

Award moves welcome

It was good to read yesterday of the change in approach by the federal government to the introduction of the Modern Award. By seeking to take the full five year implementation period, the government has slowed the introduction of higher costs for many retailers including newsagents.

The cost of labour is a challenge for newsagents because of the proportion of what we sell which is fixed margin business. The challenge is compounded by falling margins is some areas – mobile phone recharge is one recent example of this. The other compounding factor is falling margin in real terms for newspapers and other products where retail price changes are rare – where the price of the product does not adequately reflect a real cost of the item.

Smart newsagents are expanding their range to rely less on products over which they have inadequate control – such as gifts, stationery and in-store services.

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Newsagency challenges

Update on XchangeIT file problems

There are two new high impact issues with the new XchangeIT link:

  • The distributors are creating are files which are not being received by newsagents sometimes.
  • Blank files are being delivered – this is affecting all magazine companies.

These problems are being experienced by newsagents regardless of the newagency software they run.

The incident team from my software company, Tower Systems, has been working directly with Network Services to understand the problem and develop a resolution. We were fortunate to be able to discuss this with senior Network Services representatives face to face yesterday at the Connections conference in Cairns. The discussions have continued today by phone.

The fix for both problems will come from the supplier and XchangeIT side and not the software companies. I mention this because of the huge spike in support call traffic from newsagents seeking an answer to the problems.

No one wants these problems and all on the supplier side I have spoken with certainly understand the impact on newsagents.

I don’t see these two problems as damaging XchangeIT in the long term. They are part of settling in new software and back office processes.

UPDATE (5:28PM) We have just received this communication:

Given the number of issues we experienced this week with missing DD2 files, Network Services has opted to resend files as a back up to XChangeIT Link members only. This will result in many agents getting duplicate files, which they will need to be aware of. XChangeIT will send out a headline informing agents that we are sending out the DD2 files again and advising agents to not download them if already received.

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newsagent software

Two fashion magazines growing

new_fashion_mags.JPGSales of RUSSH and frankie have been growing steadily over time in my newsagencies. They are now important titles in our magazine mix, titles which we can use to signpost their particular segment. It is terrific to notice this growth and have more titles we can use to support broader magazine sales growth. What I especially like about RUSSH and frankie is that I don’t see them in supermarkets, convenience stores and petrol outlets. They support our positioning as magazine specialists.

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magazines
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