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

Poor reporting in Daily Telegraph on NSW bus ticket story

Today’s Daily Telegraph has a story about alleged rorts being perpetrated by newsagents and convenience stores against customers buying bus tickets.

The problems with NSW bus tickets started in 2004 when the State Government decided to go to a new ticketing system.  The commission earned by retailers was likely to be less than 1% of the ticket value.  During representations by newsagents made at the time, the Minister said that the Government understood that the lower margin presented a challenge but that the retailers could rely on the traffic to drive other sales.  I know because I was involved in one such discussion with the Government when on the Board of the ANF.

While retailers of tickets should not breach the agreements they signed, the real story here is the drop in margin forced on the retailers by the State Government and onerous conditions in a contract.  I’d suggest that the folks at the Daily Telegraph go back to the source of the problem and write about why we are at where we are at today.  Give us real information and not a poorly researched biased piece which tells the reader what to think without specific evidence.

The argument that retailers can make money selling other products to transport ticket customers is weak.  I have not seen any research other than my own as to the basket efficiency of transport tickets.  On average, 25% of transport ticket sales include another item.  While retailers play a role in this efficiency result, the nature of the product plays a role too.  Buying a ticket is part of a journey – they are not shopping, but travelling.

As for the comments in the article by the Transport Ministor, he ought to go back and look at his role and the role of the government in reducing retailer margin.

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Newsagency challenges

Promoting the $90 million Oz Lotto jackpot

90millionjackpot_a.jpgThis is the poster our creative team has put together to promote the $90 million Oz Lotto jackpot as our Tattersalls collateral will not arrive until Friday.

We have created A4, A3 and A6 sizes.  The A6 are flyers with our store details to be given to non lottery customers.

We are dressing the store cleverly at high traffic points to make the most of the opportunity.

We are also working in an A6 flyer to give every Oz Lotto customer to lure them back.  We are finalising those details overnight.

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Lotteries

OzLotto $90 million jackpot

A new record has been set with the announcement that first division in OzLotto is worth $90 million next Tuesday.  Our newsagency already has syndicates up and selling.  Our in-house creative people are developing collateral we can use to promote the unexpected $90 million prize.

Suppliers to newsagents need to understand that this next week will be challenging for everyone.  Don’t expect too much time spent on anything else as we all focus our attention on achieving as much as we can from the $90 million opportunity.   For other suppliers this is good news because we can leverage lottery traffic into other business.

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Lotteries

Driving impulse purchase of Australian Women’s Weekly

fhn_aww_jul09.JPGWe are promoting the July issue of Australian Women’s Weekly at our busiest and most successful (for magazines) counter position from today.  The free eating in mini cookbook and stunning looking cover are sure to drive good impulse purchases.

It was great to get good collateral with stock of AWW this morning – we have enough for our week 2 plan – a display in the front of our newsagency.

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magazines

Who pays the rent?

acp_basket_stand.jpgA representative of ACP Magazines visited our shop this week to ask us to remove the $50 million OzLotto posters from the side of the ACP Magazines basket builder stand. They did so because of the photos I posted here.

We had a representative of Tattersalls in our shop just over a week ago who asked us to remove all non Tattersalls product, including magazines from ACP Magazines, from our Tattersalls counter.

The ACP representative did not thank us for the additional coverage we are giving their titles outside their usual location.

The Tattersalls representative did not thank us for the additional coverage we are giving their products outside the Tattersalls dedicated area.

This is all very silly stuff – it gets in the way of newsagents being entrepreneurial.

The ACP stand still serves its purpose well – presenting impulse opportunities to people approaching our counter. The OzLotto message is only seen on the side.

The Tattersalls counter is easily navigated and the pitches for the various games quite clear.

Newsagencies are finely balanced businesses. A range of product categories and major suppliers need to work with each other. Their interests and the interests of newsagents would be better served if they imposed fewer rules and invested their policing budget instead on business building.  We provide access to our retail space, including premium counter space, free.  I have heard that magazine publishers pay 7-eleven in Australia hundreds of dollars a year per title on the counter.

I think that our use of the ACP basket builder stand is clever. I am told that it was not until they saw photos here that ACP realised how the back of the basket builder stand could be used for displaying and selling product.

UPDATE: (10:20am)  I have just spoken with a senior manager of ACP who has confirmed that the company is happy for the side of the basket builder to be used for rare promotions such as the OzLotto jackpot.  They would, understandably, not want it used to promote competitive titles.

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magazines

OzLotto jackpots, a great week begins

Nothing else will matter for newsgaents with lotteries over the next seven days with OzLotto not going off last night.  The first division prize pool has officially jackpotted to $60 million.  However, given that the first division pot for last night reached $59 million, I would not be surprised to see the pot reach $80 million by next Tuesday night.

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Lotteries

Australia Post set to launch magazine

aust_today_post.JPGAustralia Today is a new magazine being launched by Australia Post on June 29.  Priced at $3.50 per issue, the first issue will be free from Australia Post outlets.  Judging by the cover, Australia Today will have broad appeal: entertainment, food, lifestyle and travel.

This is an interesting move on a range of fronts including: magazines getting into Australia Post and the Government owned business pulling advertiser dollars from current magazines.

No matter how you view the launch, it is a disruptive move by this government owned operation.  It is another example of Australia Post using the protection of their monopoly to take revenue from other businesses.

Newsagents wanting to read advertising for Australia Today should turn to the back page of TV Week.

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Australia Post

Tour de France program selling well

fhn_tour_de.JPGThe official guide for the 2009 Tour de France is selling well.  We have this located next to our newspaper stand as well as with our sports magazines.  The newspaper stand location is working best – as one would expect.  While some have asked for the Guide, most customers purchase on impulse. Our goal is to sell out before the tour starts on July 4.

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magazines

Magazine cash-flow cost for newsagents

Click here for a copy of the magazine cash-flow study I first published in March 2006.  This outlines the cash-flow implications of the current magazine distribution. I am posting it here in response to an earlier comment.

We are soon to hear about the magazine publisher / distributor code of conduct which is being prepared in consultation with the ANF.  From what I have been told, this code of conduct will not address the core issues which cost us the most.

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magazine distribution

Rooted in the old world

My blog post about the Men’s Health iPhone app drew no comments yet a blog post yesterday afternoon about magazine subscriptions drew plenty.  Our thinking remains rooted in the old world, the world with which we are more familiar.

The Men’s Health iPhone app demonstrates a smart way for a masthead to engage with its community – and to do so without a traditional distribution channel.

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Media disruption

Publisher anger at Australia Post price hike

Publishers are rallying to vent anger at the price hike announced by the Government owned Australia Post for postage of newspapers and magazines.  Meadibiznet has more on this including a letter sent from D&D mailing Services on this matter.

In addition to lobbying Australia Post to reverse their decision, publishers could engage with newsagents on an alternative magazine distribution model.  I know that from a software perspective, newsagents could provide an infrastructure solution which results in the subscriber accessing their magazine in better condition than one might find from a letterbox.

Newsagents can compete with Australia Post on this. Based on work already done, we could have a trial running quickly.

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magazine subscriptions

One extra copy of a magazine is all it takes

fhn_renovate_extend_jul09.JPGAll it takes is one extra copy to make a magazine unprofitable in a newsagency. Publishers and distributors allocate based on what they think you need and this is done within the framework of what works for them. They do not understand the costs newsagents operate with, the challenges of even one extra copy nor the risks associated with this. If we complain about an increase in supply by one copy they will usually come back with disbelief that we would complain about one extra copy.

It’s not their money at risk, their retail real-estate, their labour managing the stock on the floor nor their obligation if the extra copy is stolen.

I can understand extra stock being sent if there is a promotion or some other activity by the publisher to drive sales.  Where there is no such activity and where the title is not within fair range of selling out, sending the extra copy is an abuse of newsagents – especially when you consider that enwsagents have to fund returning the magazine.

I cannot understand extra stock being sent when there is no justification in the sales data. Indeed, I am suspicious that I am again being used to act as a bank – providing cash-flow to an unfair magazine distribution system.

Last week we received one extra copy of Renovate & Extend from Universal magazines. There is no justification for this.

I am happy to take the extra stock if someone else carries the risk and funds the decision – if the business making the decision ensures a return for me. As it stands, I will lose more money on Renovate & Extend thanks to their decision.

The more often this happens, the sicker the magazine distribution model becomes.

Some publishers, distributors and the ANF are working on a magazine code of conduct. From what I understand of this, it will not address most of the distribution issues I write about here including this one.

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magazines

Making our own luck from the $20 million lottery superdraw

As a result of discussion here I have reviewed the financial benefit measured in my newsagency from last night’s $20 million lotto superdraw. I only looked at yesterday because this is when we saw the biggest increase in traffic driven by the $20 million on offer.

We prepared our business for the traffic with good-value impulse offers carefully placed at each counter and key traffic areas such as our newspaper stand and women’s weeklies magazine section. We also pitched the OzLotto $50 million prize at the counter and elsewhere in the business as achieving an impulse purchase of lottery product in a lottery sale is easy.

At the front of our shop we ran carefully considered offers associated with the newsXpress STOCKTAKE SALE – this shows off to new visitors that we have great deals and drives impulse business.

To assess the results I compared yesterday with an average Saturday. In determining an average Saturday I looked at a collection of Saturdays outside of major seasons and lottery superdraws.

Here are the numbers as reflected in revenue:

  • Art up 53%.
  • Cards up 23%.
  • Stationery up 9%.
  • Ink up 270%.
  • Confectionery up 21%
  • Trading cards up 50%.
  • Magazines up 4% – especially those targeted in our impulse strategy.

Many of these numbers are off good bases.  In overall measurement, we achieved considerable more from each customer than we usually achieve.

In addition to using the shop to drive impulse, we ensured that the traffic generated by the superdraw did not overly impede business – we were strong on queue management and over the counter service. We understand the importance of not having a line snaking out the shop and acting as a barrier to would-be shoppers.

As a pondered yesterday, maybe there are other factors which determine the efficiency of superdraws for newsagencies. It could be our demographic. That said, the numbers suggest that our preparation is a key factor to our success.

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Lotteries

Promoting Diabetic Living

fhn_diabetic_jul09.JPGWe had to re-think our weekend counter strategy yesterday with Who selling out from our counter display by lunchtime.  In its place we put Diabetic Living.

Diabetic Living is a successful title for us and while it does not come with a free gift (something we prefer for this premium location) we know it will sell well from here over the rest of the weekend.

We will not leave a display empty.  If it’s been successful and sold out, we are ready with a plan B right away – especially in a counter location.  We are anal in managing this part of our newsagency.

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magazines

Managing lottery syndicates

sat_synd.JPGIn response to queries here and privately, here is a quick overview of how we do Syndicates.  The photo (click for a larger version) shows the syndicate wall for tonight’s $20 million draw.  It is deliberately not too slick.  My view is that if it is too slick it loses the value of being fresh or immediate – a key factor in syndicates for our customers at least as we have people who watch our syndicate wall daily.

We start syndicates for superdraws two weeks out – we used to start them earlier but found two weeks works better for us.  We offer a range of prices from $10 through to $100.  We have tried higher values but they did not work so well.

The A4 sheets promoting each syndicate list the numbers – we found this to be very important.  The sheets are white for Saturday, blue for Thursday, Green for Tuesday and pink for Monday / Wednesday.

We played with naming the syndicates but found that our customers like a straightforward offer.  We number each and this is how customers ask for them.

We track sales in folders at the counter – customers provide their details on a master sheet for each syndicate.  Staff selling a share sign on the sale.  Customers sign for winnings when they collect.

We got into syndicates around seven years ago.  Significant growth came once one of our syndicates won $11 million two years ago.

There are others who are far more professional and sophisticated at syndicates than we are.  The key is to start slow, be careful and talk to your customers about what they would like.

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Lotteries

Are lottery jackpots good for business?

oz50m.jpgI was talking to a colleague about the OzLotto $50 million jackpto earlier this week who said that his experience was that in weeks with major lottery jackpots, sales were significantly down in other departments of newspapers, magazines, stationery and cards. This has not been my my experience.  I see growth in key departments as a result of the additional traffic.  I had not considered that jackpots may have a negative effect.

Through the course of the week I asked other newsagents.  Some see growth in other departments as a result of jackpot traffic while others do not.

I’d be interest to hear the experiences of others.  I’d like to see if there is a pattern around those newsagencies which experience growth in other departments as a result of a lottery jackpot and those which do not.

I’d also welcome speculation as to a reason for the difference.

For what its worth, in my own newsagency we work hard at driving lottery sales as an add-on to other departments.  We are equally focused on driving add-on sales of magazines, newspapers, confectionery and other items on a lottery sale.  We d this through product placement, traffic management and across the counter pitch.

I am not saying that our experience is solely due to our effort.  I am not that arrogant.  I think that demographic plays a role as does store location.  Demographic because of the discretionary funds available.  Location because of traffic – our traffic is quite steady through the day.  I can see that if we were in a better location we would have lines snaking out the door and that would put people off.

What are your experiences?

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Lotteries

Men’s Health launches iPhone app

Men’s Health magazine in the US has launched an Apple iPhone app to guide work outs.  This is a new way for a magazine to engage with readers.  While some will want to read about how to workout, others will like that the more engaged partnership this app brings.  The AdAge report says Apple says this app is a first for a magazine.

This is a smart move.  It reflects the kind of thinking we need to bring to our businesses.

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magazines

Reader’s Digest cuts issues

Reader’s Digest announced in the US overnight that it will cut issues from next year and only publish 12 issues of the print publication while expanding its digital products.  By digital they could mean online, Kindle, iPhone, digital magazines and other platform opportunities outside of print.  MediaPost has a good report covering the moves including this quote from Eva Dillon, president of the Reader’s Digest Community:

“As one of the world’s largest producers of original content, we will continue our transformation into an innovative multimedia brand by delivering content to users whenever and by whatever means they want, through expanded digital and print investments and the development of new mobile, video, and multimedia applications…”

There it is, the one issue newsagents need to research, debate and develop a strategy to cope with.  We face no other issue which will impact like this. What we think today are other issues from suppliers are usually framed by this issue.

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Media disruption

Promoting ACP cookbooks

fhn_acp_cook.JPGWe are promoting the new range of ACP cookbooks along with a couple of older titles at the entry to our busiest magazine aisle.  Nothing too special about the display – it is premium space and that people approaching our main sales counter from our newpaper stand will tent to see this display.

Food titles are having a tough year based on the sales data I see from a range of newsagencies.  We’re happy to take steps like providing premium space to try and help lift sales.  Our experience is that the ACP cookbook titles respond well to this.

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magazines

Great product, wrong location

Nici pencil cases did not sell at our newsagencies like we thought they would.  After almost a year in stock and few sales we moved them to one of our gift shops in the heart of Melbourne.  They started selling immediately.  It turns out that we had a good product in the wrong location.  The same thing can happen in-store.  Sometimes we have to chase customers.

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Gifts

Promoting Who and the free root booster

fhn_who_jun19.JPGWe are promoting Who magazine at the counter this weekend thanks to the free hair product gift and the coverage of the Rove McManus wedding.  The photo shows how our counter display sits in context with the rest of the counter – our busiest non-lottery counter is to the right and our two lottery counters to the left.  We’d expect Who to sell very well from here – it is an easy impulse purchase.

You learn something every day – who knew that there was a category of product called root booster.  It gave us a laugh this morning.

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magazines

DVD hire a hit at Bingara newsagency

Bingara Newsagency is enjoying tremendous success with DVD hire.  I saw this recently when reviewing business performance numbers for Rod king, the owner of Bingara Newsagency.

The sales data shows DVD hire as one of the most efficient product categories in the newsagency.  More DVD hire customers are likely to purchase another product, in addition to a DVD hire, than purchases of products from any other category.

Product efficiency is a challenge for newsagencies.  Around 60% of newspapers are sold alone, for cards the number is 49% and for lotteries the number is 65%.  These single item sales are inefficient.

The DVD numbers at Bingara are at the other end of the scale – less than 10% of the time they are sold (or rented) alone.  Great for efficiency and great for driving other categories in-store.

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Newsagency opportunities

Poster to promote crosswords in newsagencies

puzzle.jpgThis is a first draft of a poster to promote crossword magazines which we are developing in-house at Tower Systems to provide to newsagents through this blog without cost.  I’d apprecaite feedback either here or direct by email.  Ignore the actual titles – we will drop in current titles representing several publishers before we are done.

In developing the brief, I wanted to pick up on the health benefits of crosswords without being too in-your-face – we miss this opportunity too often

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crosswords

Picture packs present a challenge

fhn_picture_packages.JPGIn addition to Picture magazine we have a couple of Picture ‘packs’ on the shelves at the moment.  Space is limited and expensive – especially given that we do not want to put more than one title per pocket.  Recycled content, like these packs, are a challenge for us – especially as we adjust the space we allocate to magazines.  Adult titles account for less than 2% of our magazine sales.  I don’t see a reason to expand the space allocated.

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magazines
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