News Limited is using its free daily newspaper, mX, to promote sales of the Herald Sun here in Melbourne. All this week, mX is publishing a coupon which entitles the bearer to redeem the Saturday Herald Sun for $1.00 this Satruday, May 30. I like this offer and the use of the free newspaper to drive sales of the paid product. Newsagents are being reimbursed at full value by the publisher.
I have been contacted by HK Consultants and asked to comment about Negotiating Your Payrise, a 2 CD Audio Course they have on offer. They would like to place it in newsagencies for sale. It’s RRP is $19.95. Of the $18.14 (ex GST), HK will bill the newsagency $9.06 ex GST, leaving with $9.08 (ex GST) for each unit sold. Click here for a flyer.
I advised that I was not sure how the Negotiating Your Payrise would go in newsagencies in that it would need to be at the counter given the price and given that it would not easily fit into any department in a newsagency. I can see it working well in some newsagencies and not so well in others. This is why distribution through a magazine distributor would not be ideal.
I suggested I blog about it here so that newsagents could provide direct feedback. The folks at HK agreed. I am pleased for the blog to be used in this way – for suppliers to ask about whether newsagents are interested in a product.
Supply enquiries should be directed to Drew Okawa email: drew@hkconsultants.com.au.
Disclosure: I have no commercial arrangement with this company.
A colleague was shocked to see the hand-written returns coding on magazines on the shelves of a newsagency he visited last week. The image is from the cover of Computer Music. It shows it as a Week 25 return and having a price of $19.95. Imagine the time this business must be wasting on hand writing details on magazines and hand processing returns. They have no stock control as sales are rung up on a cash register. Talk about living in the dark ages. I am disappointed that the magazine distributors let them get away with this.
At our newsXpress Watergardens store the team takes a different, more corporate, approach to magazine displays. There isn’t the usual space in-store for the traditional magazine displays. The photo shows their treatment of Family Circle which went on-sale yesterday. This is a warmer, more professional, display than what I published here yesterday. Given its location, at the front of the shop and on view to all who pass by the business, it is appropriate for drawing people not inside the shop to consider purchasing the title. Magazine sales are growing at Watergardens thanks, in part, to these creative displays and their appeal to shoppers.
We are not good with upselling across the counter in newsagencies. For whatever reason, we don’t offer a couple of chocolate bars as they do in petrol outlets. I think that our reluctance has to do with newsagents themselves feeling uncomfortable in making such a pitch and therefore not being prepared to ask employees to do this.
I was talking with someone last week who worked in a petrol outlet. The requirement was not negotiable. While he did not enjoy it, his view was that it was good for business and that was good for his job. His most interesting perspective was to do with product selection. Petrol outlets focus on guilty pleasures and small personal items – easy decisions to make.
We have excellent traffic in our stores that we are not leveraging to maximum value. In addition to passive impulse offers at the counter, we need to develop a consistent approach to pitching an offer, measuing the success and revising this accordingly. The extra revenue is better off in our business than a petrol outlet.
While the display in the photo (click the image for a larger version) is not ideal, it is a start at promoting men’s lifestyle titles outside of their usual separate locations in the newsagency. I blogged about our broader plans last week. Our thinking behind placing them in this display with TV Week and two columns of women’s weeklies is that they draw the eyeballs which will hopefully wander to the men’s titles and result in add-on sales. It’s a start.
We are promoting the Winter edition of Family Circle at the counter this week. It earns this place based on the sales performance of the last two issues in this same location. We also have Family Circle with our weeklies and in our food section.
The $5.95 price point makes it an easy impulse purchase decision.
We have high expectations for this counter position. Delicious in this same location was not as successful as we had hoped – hence the decision to replace it this morning with Family Circle.
It is interesting to see the mix of newspapers now available on the Amazon Kindle reader, especially the overseas titles. When the Kindle, or something like it, does arrive here, the impact will be felt faster than in the US because we will go straight to third or fourth generation technology.
We have our Financial Year Diaries on sale on our dance floor, toward the front of the shop – between our newspaper stand and our counter. While we have regular customers who deliver good Financial Year Diary business, we are chasing the customer who has not come in with a Financial Year Diary purchase as their goal for the day. Our range, while not extensive, is good in terms of our demographic and what our sales history shows as working for us. We will move this display as we get closer to the end of June and depending on sales.
We have brought in a range of pencils, notebooks and other items with excellent green credentials. The pencils are made using recycled newspapers. The paper in the notebooks is made from sugarcane pulp. The manufacturer uses wasted pulp, a by product of sugarcane, to produce the paper in the notebooks.
The design of each item is stunning – making them visually appealing – there are themes to the designs. The wildlife pencils are especially appealing for kids. There are plenty of designs which appeal to adults.
These products fit an important space in which newsagents ought to have more of a presence.
We have this new range on display at the corner of our counter for the first couple of weeks.
This is a range introduced to us through newsXpress.
The story of the week about the future of newspapers is that of an interview with Eric Schmidt, Chairman and CEO of Google published by the Financial Times. It is referenced in more than 500 news entries listed at Google. Schmidt explains that Google looked at investing in newspapers and decided against this. While at FT.com you need to pay to read the interview, The Guardian provides free access to its report containing key quotes from Schmidt like:
“The reality is that news gathering and the profitability model was always an uncomfortable relationship because it’s very difficult to make money from a story about a tragedy or murder or so forth – and yet it’s enormously valuable. So the structure of newspapers that evolved, where the majority of the revenue came from classifieds and these big, untargeted print ads, the content was fascinating but they were not connected to… it was ultimately destined to be challenged by technology and that’s indeed what happened.”
It says something about the concern of the future of newspapers that this is such a story.
From a newsagent perspective, this story and its broad coverage overseas and even here in Australia provides further encouragement for us to look outside traditional categories for future growth and sales.
From the 1800s until the 1980s newsagents stood for being the go to retail and distribution businesses for newspapers and magazines. Since the 1980s this point of difference has eroded. What do we stand for today? As a channel – nothing. Individually – some of us have clear and exciting points of difference.
The Google story, like many I reference here, is a reminder that the clock is ticking – the time for us to engage proactively in our businesses is now.
The folks at the Kinglake Relief Centre had let us know that they are in need of warm blankets and good quality weather proof jackets. This is the centre to which we sent spare calendars, diaries and stationery items following a call from them for these. Click here for the latest Murrindindi Shire Council Bushfire newsletter with contact details.
I am concerned at reports that the Royal Australian Mint is planning to scrap the 5 cent coin. I don’t want the 5 cent coin scrapped. I like that I can price items at 5 cents under a round dollar amount. The 5 cent price break is a service to consumers. The arguments put for scrapping this iconic coin are spurious.
A newsagent in rural Australia reached agreement with a newspaper publisher around six months ago to hand back their newspaper home delivery run. The publisher was unable to find anyone prepared to take on the run and has demanded the newsagent continue with the financially unviable run. The newsagent feels helpless in the face of legal threats by the publisher.
The newsagent does not control the margin on products sold nor the delivery charges to customers for the service. They also have little control over the costs of the business – labour, fuel and other costs. The only part of the business they can influence is the number of customers to which they deliver. However, the geography of the area means that additional customers would increase their losses.
I am sure this newsagent I have spoken with is not the only one in this situation. The problem lies in the contracts where the publisher controls both sides of the transaction and does not provide the small business newsagent with the ability to operate in a business like way. This is why my post from yesterday is important for newsagents.
News the swine flu diagnosis for a student of a school located very close to a centre in which I have a shop spread through the centre like, well, an epidemic. Fellow retailers are bracing for a very quiet weekend as people stay away from the area.
The Pew Center in the US released a report overnight which shows how the free online classified advertising opportunities such as Craigslist, are impacting paid claissified advertising in newspapers.
The number of online adults who have used online classified ads has more than doubled in the past four years. Almost half (49%) of internet users say they have ever used online classified sites, compared with 22% of online adults who had done so in 2005.
The age of those using Craigslist is important for us to note. This shows where the generation we want to attract to newsagencies is going for classifieds.
Free online classifieds sites like Craigslist are tremendously popular with young adults moving to new cities, looking for jobs, or trying to find inexpensive goods or roommates. Internet users ages 25-44 are significantly more likely than any other age group — including 18-24 year-olds — to use online classified ads. Fully 62% of online 25-34 year olds and 57% of 35-44 year-olds use online classified ads, compared with 49% of online 18-24 year olds and 48% of online 45-54 year olds.
While yet to gain critical mass, Craigslist does have free online classifieds sites here in Australia for all capital cities.
We will look back and say that online classifieds were an opportunity missed by newsagents.
The team at our Frankston store are promoting men’s lifestyle titles using aisle end display space. We do not have the space here to create a separate more permanent area for multiple titles as I discussed yesterday. The latest issue of Men’s Health is benefiting from this display focus as the photo shows.
I am often asked why we give over premium space for display like this when supermarkets charge. My view is that the time to fight that fight was many years ago. Today, magazine range is one of the few points of difference newsagents have. Displays like this make us valuable to publishers. I am happy to invest the space and time with a view to this facilitating publisher interest in other projects.
I also like great in-store displays because they can bring a fresh feel to the business without spending any money.
The key is to drive sales. This is why every display has a shelf or stand off of which the product being promoted can be purchased. Otherwise, they are merely a billboard.
Click 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.
We 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.
Newsagencies 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.
We 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.
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.
The 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.
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.
We 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.