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Using every inch of space in retail

good_health_frankston.jpgClick on the image to see how our brilliant team at Frankston is using the back of the ACP Basket Builder stand to promote Good Health and Medicine magazine this month.  This placement gets Good Health and Medicine seen by customers in the aisle in the middle of our shop, an aisle away from where the title is usually situated.  Using the back of the stand in this way extends its value to us.  Sales results tell us that this space works – with the right title it drives sales.  This is great because it is found space, space which many newsagents do not use.

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magazines

Chocolate makes Delicious taste good

fhn_delicious.JPGWe are promoting Delicious at the counter for the weekend at Forest Hill.  While our display of Harpers Bazaar did okay, it was not enough to justify the space allocation for the weekend.  I suspect we will do much better out of Delicious as the title is a strong performer for us and the free block of Lindt chocolate makes it even more appealing.

Our experience with Delicious is that it responds well in an impulse situation- such as at the counter or placed with weekly magazines outside its usual category. Our focus on promoting it in several places in the on-sale week works for us and achieves an excellent sell-through for this title.

As a follow-up to a previous post, I note that the chocolate itself has come through the distribution system in surprisingly good shape.

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magazines

Improvising in a newsagency

who_weekly.JPGNewsagencies across the country improvise every day when things don’t go as planned.  Such improvisations range from the major to right down to the small – like this morning when The Age arrived in one of our stores without posters again.  We used this as an opportunity to pitch Who magazine with a poster in The Age poster slot and copies of Who above The Age and the Herald Sun.  While these seem like small moves, they illustrate the flexibility many of us demonstrate every day.  A challenge here becomes an opportunity elsewhere.

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Repositioning Top Gear and men’s lifestyle magazines

fhn_top_gear.JPGWe currently have Top Gear in print position in the cars segment of our magazine department.  Top Gear is pitched to advertisers more as a men’s lifestyle magazine from what I read than a car lovers magazine.

This is why we will experiment with a new Men’s Lifestyle area where we bring together a collection of titles which speak to the same target consumer – Top Gear, Popular Science, Ralph, FHM, Men’s Health, Men’s Fitness, GQ, Esquire, Inside Sport and a few others.

I’d try and leave them where they currently are and co-locating to a new feature area clearly branded as the Men’s Lifestyle area.  The goal of the change would be to get more than one of the titles purchased in each sale. leaving Top gear displayed only with car magazines hinders its sales as well as its ability to drive sales of other titles to many who purchase it.

There are bound to be some mistakes in creating this new area – we will learn from them.

There was a time when the Magazine Publishers of Australia organisation was involved in these layout discussions.  Unfortunately, we are more on our own today.  I’d be interested in how others group these cross traditional category men’s lifestyle titles.

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Draft unfair contract provisions of interest to newsagents

The Federal Government last week released for public consultation a consultation paper entitled The Australian Consumer Law: Consultation on draft provisions on unfair contract terms. The paper and submissions can be found here.  I urge every newsagent to download and read these and take an active interest in their passage through parliament.  As the consultation paper indicates, the changes include business to business contracts.

The draft provisions on unfair contract terms will apply to business-to-business transactions in the same way as other key provisions in the TPA do, such as those dealing with unconscionable conduct and misleading and deceptive conduct.

The draft national unfair contract terms provision includes that a term is deemed to be ‘unfair’ when it causes a significant imbalance in the parties’ rights and obligations arising under the contract and it is not reasonably necessary to protect the legitimate interests of the supplier – as noted in the press release issued by Chris Bowen, Minister for Competition Policy and Consumer Affairs.

The ramifications of the changes for newsagents could be considerable given the size of each of our businesses compared to the size of suppliers with which we find ourselves in contract disputes from time to time.

The timing of the changes will also be of interest to newsagents given the approaching new contracts for the distribution of newspapers and magazines.

While the deadline for submissions is tomorrow, there will be further opportunity through local members of parliament as the changes are debated.

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Newsagency challenges

Prepaid Visa business growing

visa_prepaid.JPGThe small display supporting prepaid Visa at the edge of our lottery counter is generating good sales of prepaid Visa cards and attracting good top-up business.  For a bit of passive marketing it is doing very well.  The growth over the last few months has been excellent. We are finding former BOPO customers happy with the offer and others who might otherwise not get a bank backed credit card.  One of the products is an alternative to Western Union money transfers.

I am told that originating business like this is important for us because customers are more likely to recharge where they purchase their card.  Building return business is important for for the future health of the newsagency channel.

Disclosure:  The prepaid Visa product is sold through the Tower Systems software.

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Bill Express

On newsagencies and post offices

BUYING a paper’s getting tough. It’s not the cost or walk to the newsagent that’s the problem, it’s the waiting that kills; having to line up behind all those Lotto jockeys snaking to the counter in front of you to lodge their mortgage-busting dreams, the Powerball, Pools and Motza Megapick numbers.

If they’re not lodging, they’re handing over fistfuls of crumpled tickets to be scanned by the GamblerTron. They then stuff about studying the forest of instant scratchies displayed under the counter.

From the Heckler column in today’s Sydney Morning Herald.  Read the whole thing as he turns his attention to the post office.

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Ugh!

Supporting Red Nose Day

sids_fund_raising.JPGWe are proudly supporting sids and their Red Nose Day – Friday June 26, 2009 – campaign at our counter through the sale of a range of merchandise.  Red Nose Day is a popular charity which is supported by a good mix of national retailers including newsXpress.  It is good to be part of something which has been managed in terms of locations involved and which our customers easily recognise.

We spread our charity support between national campaigns such as sids and local organisations.  Like many newsagents, we are often asked for donations for charity auctions and for goods to use in schools and community groups.  We gladly participate in these – the local community connection is very important.

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Social responsibility

The cost of launching Australian Ink

australian_ink_projection.jpgNewsagents are collectively investing a considerable sum on money in the launch of Australian Ink, a new tattoo magazine which features Pink on the front cover.

The table to the left shows the projected impact (if my assumptions are right) on the cash-flow in one of my newsagencies based on what I expect to sell of Australian Ink, the cost of retail real-estate, the cost of labour and the timing of paying for stock and receiving a credit for returns.

I’d appreciate feedback from others on whether they think my calculations areb right.

While I am using Australian Ink as an example (as I did Cosmos magazine in my March 16, 2006 post), I could easily present numbers for other new titles launched through the newsagency channel. Like other independent publishers before them, I would expect the publishers of Australian Ink to say that they cannot afford to offer delayed billing, payment based on scanned sales or bonus margin for the launch issue.

I appreciate that it takes considerable financial resources to launch a new title.

Newsagencies are slim margin businesses. Every launch has costs as detailed in the table. Collectively, we invest millions of dollars of our money each year in supporting publishers and their title launches. We do this usually without control over new titles sent nor the volume sent.

I’d note that the payment by newsagents for the title in August as shows in the table is not, as I understand it, paid to the publisher until after the issue goes off sale.  Certainly this is the case for some titles according to publishers I have spoken with.

I like magazine launches – if the launch is backed by an advertising campaign which drives traffic to my business. I am not so keen on launches which rely on newsagency foot traffic to find sales.

Popular Science was launched in more of a partnership approach last year – better margin, excellent out of store marketing support and excellent collateral for in-store promotion. The campaign has been on-going, beyond issue one.

Here is a list of what I would like to see offered by publishers for magazines launched through the newsagency channel:

  • A minimum agreed level of external marketing.
  • Better margin for initial issues.
  • Opt in process for taking on a title and the quantity.
  • Payment for any premium activity – our space costs money.
  • Delayed billing until after the first issue is off sale.
  • Promotion of newsagencies on the magazine website.

This is an topic which should have been on the table during the discussions around a magazine distribution code of conduct. I suspect those representing newsagents missed the opportunity.

As for Australian Ink, we are promoting it boldly with good location and excellent merchandising.

For more information, see my cashflow report from a few years ago.  This was presented to newsagents, magazine publishers and magazine distributors.

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magazine distribution

Expanding ink

fhn_ink_expand.JPGWe have expanded our ink range at Forest Hill on the back of good growth for the category.  Regulars here will know that our sales were knocked out a bit when the new Dick Smith store opened opposite us.  Regular promotions, keen pricing (supported by professional shelf talkers) and excellent customer service helped quickly recover and get us back on track for growth.  The expansion of range has been driven by the growth we are seeing.  We often make more each week from this small space and stock commitment than we do from our entire stationery department.  This is interesting because we have more competitors with exactly the same range of ink in our centre than we have competitors offering stationery.

The photo shows the expanded space.  The next step is to dress it corporately.

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newsagency marketing

See, books are popular

bookseat_table.JPGThe Book Seat is selling well for us again this year – demonstrating that there is good business in book related sales.  We are promoting it along with our book sale – our demographic is ideal.  The book seat is a mini bean-bag on which books rest while you tead them.

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Book retailing

Pay per article discussion hots up

The big discussion overseas among publishers (newspaper and magazine) this month is around micropayments – payment by consumers for individual articles.  This topic was put on the radar earlier this year when raised by the publisher of Time magazine.  Editors weblog has a good wrap up of the story as does Mediaweek.  Eric Auchard writing at The Guardian weighs in with good points too.

This discussion is of interest to newsagents because it is about a more direct publisher consumer relationship, one based on a new, digital, supply chain and one where consumers pay for what they read (articles) rather than a package (whole newspapers and magazines).

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Media disruption

NDD lawyers pursue this blog

I received further correspondence from NDD’s lawyers today.  They are say that my blog post yesterday compounds damage against NDD. They also say that NDD did not lose the Best Bets and Winning Post distribution accounts.  My answer to this is that they don’t have the accounts any more so they are ‘lost’ to the business.

They claim that through this blog I demonstrate malice toward NDD.  What I want from NDD is what I want from all magazine distributors – fair and equitable magazine supply arrangements for all newsagents.  I publish more examples of NDD oversupply because I see more from them than other distributors.  If NDD and their lawyers had their way I would not publish examples of repeated gross over supply.

The lawyers have also claim that NDD closed 68 accounts and not the 600 I reported.  I have heard from several sources that it was 600 but since NDD through their lawyers say it was 68 I have to accept that.

Rather than using lawyers to pursue this blog, NDD would be better advised to host meetings of newsagents and seek their views on the matters canvassed here.  They would soon see that examples I document reflect experiences of others.

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magazine distribution

Promoting Delicious and chocolate

delicious_magazine_june.JPGDelicious magazine sells well for us.  The block of chocolate should help sales of the issue out today.  Given display space pressures elsewhere, we have placed some of our Delicious stock in among our weekly magazines.  We have been experimenting with one or two pockets with our weeklies this year and sales from this location are good.  This is why we expect the flat stack and three pocket display to work well for us.

For the benefit of NDD and their lawyers I’d note that our supplies of Delicious are good – certainly not oversupplied.

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magazines

Promoting crosswords with lottery products

crosswords_tattersalls.JPGWe are promoting a range of crossword titles next to our main lottery counter this week.  We are featuring top selling crossword titles from Lovatts, Puzzler, Woman’s Day, That’s Life and Mr Wisdom.

As the photo shows, we have been careful to display most of the cover – this is important since we are chasing sales to people who may not be regular crossword purchasers and the covers are more appealing than mastheads.

We track quantities in each pocket so as to determine sales from this location compared to others.  We also use our software to track sales with lottery products this week compared to past weeks.

Like all good promotions, if it works it is repeated and if it does not work we focus on other opportunities.  Past experience shows that crosswords should see a lift as result of this promotion.

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magazines

We don’t need more copies of Kitchen Trends

kitchen_trends.JPGWe received more stock of Kitchen Trends from NDD today.  This is a reissue of the issue of Kitchen Trends which we still have on the shelves from two months ago.  NDD has our sales data and would know that we still have stock, limited but stock nevertheless, and that the reissue is not needed.  While I am sure that representatives of NDD will have reasons for sending additional stock, I would prefer to have not received additional stock.

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magazine distribution

Racetrack magazine oversupplied

racetrack_magazine.JPGRacetrack magazine does not sell in our shop. We are lucky to sell one copy yet we receive three and four times this.  It is as if NDD does not take into account our sales numbers when allocating stock.  We feature Racetrack around important race occasions without success.  I’d like to cancel the title but have had trouble with that aaction in the past.

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magazine distribution

More Oprah than I can sell

o_oprah_magazine.JPGO, The Oprah Magazine does not sell well in our shop.  Its sell-through is below 50%, often as low as 20%.  The low sell-through rate is not reflecting on supply numbers determined by NDD.  As the current supply numbers stand for O, this is a cash-flow negative title for us – I am funding Oprah in my shop.

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magazine distribution

Promoting favourite winter recipes

winter_warmers_fhn.JPGWe are promoting ACP Magazines’ Winter Favourites cook book at the front of our newsagency, in front of our busiest Tattersalls counter.  We will leave this display in place for seven days, longer is sales are strong and justify the prime space.  I love the ACP cookbook range, the regular flow of new titles, the high quality of the product and the consumer trust in the brand.  I don’t love so much the volume of stock which is sometimes sent.  In my own newsagencies, for some titles, I could be sent 75% less, not lose any sales and not have as much cash-flow pressure.

By shipping the volumes they do, ACP shifts financial burden from their balance sheet to the balance sheets of thousands of newsagents.  They are not the only publisher doing this.  Indeed, many other publishers are worse because of poor sell-through rates.

While publishers have their defence of the magazine distribution practices I describe, I see the financial impact on newsagents and the helplessness they feel when trying to negotiate equitable terms for the supply of magazines.

Years ago, I called for the Productivity Commission to investigate the magazine model as a post deregulation review.  I still think such an independent review is appropriate for all parties – in today’s marketplace more than even in fact.

My concerns are not stopping me promoting ACP’s Winter Favourites.  On the contrary, I hope our display in a high traffic area helps it sell well, and quickly.

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magazine distribution

NDD calls in the lawyers

I received a letter from lawyers representing NDD today claiming that my post on Monday contains false, misleading and deceptive statements.  I have reread the blog post and don’t see how they can reach this conclusion.

I wish NDD were as attentive to calls for more equitable supply arrangements with newsagents as they appear to be in worrying how they look to others because of a blog post here.

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Blogging

Read the contract carefully

Newsagents need to take care before signing documents in the course of running their businesses.  One former newsagent I have been working with for the last few weeks has found a contract come back and bite.  The new owner has advised he will not continue a supplier relationship.  The supplier has gone back to the original newsagent to seek financial compensation for this.  It looks set to take a large proportion of goodwill.

What looked like a good deal two years ago with bucketloads of cash up front is now expensive for the former newsagent.

Despite the sales pitch of some, there is no such thing as free money.  Up front payments by a supplier used to win business are usually clawed back over time in a contract.

If you don’t plan on owning the business for the full term of the agreement then either don’t take the cash or don’t sign with the supplier.  Otherwise you could find yourself in the same position as my friend – facing the prospect of legal action or paying compensation for the decision of the new owner.

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Newsagency challenges

Lessons from Take 5 and That’s Life

Take 5 and That’s Life are heroes of the high volume weekly magazines.  While circulation declines for each in the latest numbers out last week, their respective declines (-1.53% and -1.92% respectively) are a fraction of the declines of the higher profile weeklies.  I see Take 5 and That’s Life as bread and butter magazines for newsagencies.  They deliver loyal mid week traffic off of which smart newsagents build other sales.  We treat them well with co-location, active promotion and other support.  They return the favour with good numbers for us.

My special interest in Take 5 and That’s Life relates to loyalty.  I first noticed this when we introduced Australia’s first magazine loyalty program in my newsagency in 2004.  We still run the program today and Take 5 and That’s Life customers remain the most loyal to us and in the use of our magazine loyalty program.

The circulation numbers reinforce my interest in these titles.  They demonstrate a resilience which ought to be respected in this marketplace.

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