The Take 5 tips book sent with our magazines a week back is lost in traditional newsagency magazine fixturing. Since we do not have a regular book department there is nowhere else to put this one-off publication. We ought to be asked about specialist publications like this because sending them to many newsagents is a waste of money – I took it off the shelf after I took the photo.
Newsagents in the UK are understandably unhappy at the cut in cover price for Full House magazine as evidenced by this item from the NFRN website:
With magazine sales in serious decline, some might think it a bold move by Full House Magazine to be investing in a new look and re-launch from issue 18 (on sale April 23). That is until one looks at the new price of 50p, versus the existing price of 68p. This means that, at a retail margin of 25 per cent, gross profit on sale is reduced from 17p to just 12.5p per copy.
The retail flyer also suggests that retailers display “Full House” next to Real People (Cover price 70p and retail margin of 17.5p) and Chat (Retail Price 78p and retail margin of 19.5p). Why would retailers want to sell a title that offers them a lower profit?
Of course, whilst overall profit is derived from a combination of margin and volume, “Full House” must think that retailers are idiots and will not see the real purpose behind this move, which, of course is all about driving advertising revenue. Not only do retailers not see a penny of that advertising revenue but “Full House” is expecting retailers to pay for their “investment in volume sales” through a lower price and lower margin.
This is not the first time that a publisher has pulled this stunt. Retailers are alert to the tactic and will see that “Full House” is seeking to gain an advantage over their competitors at their expense, by reducing their income, whilst at the same time devaluing the market and making it more difficult for other titles to increase prices.
Not only is this a very high risk strategy (and it will be interesting to see whether “Full House” has found a winning formula or whether this move back-fires and loses them the game), but, unless publishers adopt a more responsible attitude towards prices and retail margins, they need to understand that they are likely to be hastening the day when retailers say, “enough is enough” and take the control of pricing into their own hands.
Well said. Retail costs rise significantly each year. Rent increases for many newsagents by 5%, labour by between 3% and 5% and general business costs by 5% or more.
I am not sure of how a UK newsagent says enough is enough. Here in Australia taking such action is a challenge with some magazine disributors.
Here is a draft of a second stimulus package we are making available for us. We have taken on board comments made to our earlier post and private comments sent to me.
Click here for a PDF copy of the poster.
The creative team at my newsagency software company, Tower Systems, is creating this collateral to provide newsagents with options for connecting with consumers around the stimulus payment.
The Financial Times reports that knitting and related magazines are performing well in the UK – with 2008 showing growth on 2007. While the craft segment did well here last year, the latest sales data I have seen for january through marhc 2009 suggests it has been affected in most newsagencies by economic conditions, as have all magazines. That said, I know from past promotions that craft titles respond well to marketing effort – better than many other categories. I suspect this is because they are not top of mind for some and an in-store promotion reminds this group.
As we do two or three times a year, we are featuring a range of knitting and sewing magazines right at the front of our newsagency this week – in a location where anyone passing-by can see them.
With school holidays over, we figured that shoppers may have time to purchase magazines for themselves.
Special interest magazines such as those covering knitting, sewing and crafts are the only point of difference many newsagents have so it makes sense we promote these outside our businesses.
The fixture we are using is an old card stand. It works well for this type of dispay and is easily moved in and out of the shop. We count the quantity we place in each pocket so we can track the success of this space over the regular location for titles we place here.
The launch issue of Universal Magazines’ Green Living went on sale yesterday. The product looks good. It strengthensour green magazine segment – an overdue move here in Australia. I’d expect several other titles to beenfit from this. I am frustrated that we were not provided marketing collateral with which to launch the new title in-store. While merchandisers are said to be on the road with this, it should have been provided when the stock arrived as that is when we allocate promotional space.
This long (two month) on-sale makes us a financial contributor to the launch. This happens all the time with new titles. It is part of what makes newsagents appealing to publishers – we fund them into our space.
One day, I hope, we will pay publishers only for what we sell at the end of the on-sale arrangement. Better still, we pay only for scanned sales – I’d be happy to pay weekly for this – publishers would get their cash for sales much faster than happens today.
I hope Green Living is a success. We need to build a stronger green magazine segment.
Australian Pure Fruits is pursuing a newsagent who took on a drinks fridge as part of their Bill Express arrangements. I would be interested to hear from other newsagents being similarly pursued about the fridge.
Australian Pure Fruits is the company which originally floated Bill Express on the ASX. They claim to have purchased the fridges from Capital Finance. Capital provided lease finance to OnQ, the company through which the fridges were supplied to newsagents as part of Bill Express arrangements. Yes, it all sounds very messy.
I’d want to see proof that they purchased rights associated with the fridge as well as the lease over the fridge before I agree to anything. The rights were part of a relationship with Bill Express and OnQ and I am not aware of any rights in relation to those businesses being sold or transferred.
The Australian Pure Fruits correspondence I have seen aims to ensure that 80% of compliant product is displayed – that is, products supplied by Australian Pure Fruits.
The Complete Aussie Guide to 4WDs has been a dud title for us – zero sales in eight weeks. Rather than persevere in an over-serviced category, we are returning 100% of what we received early. We have carried the cost of this stock, funded the real-estate and labour and now will cover the freight cost of shipping the failed stock back to the distributor.
This title is not alone in delivering such a poor result nor is my newsagency alone in experiencing this. I suspect that at any point in time the newsagency channel has millions of dollars of magazine titles on our shelves for which a single copy will never be sold.
I want to control what I receive. I can with Gordon and Gotch and it works well for me, for Gotch and for their magazine publishers. The control gives us a stake in the outcome. If they offer me a 4WD title I need to be sure since all of our available space is allocated and given that the category performs at a less than average rate. I make decisions on the whole category and not just on what one distributor sends me.
Tower Systems, my software company (yes, this is a shameless plug), has put together a package offer for newsagents who are yet to install a computer system. This offer ties in with the new magazine distributor IT standards. By installing this package, newsagents will be able to replace manual processes with online magazine returns processing. They will also have point of sale software and a bunch of other facilities which are detailed in the marketing material.
An average newsagency should save at least $10,000 a year in time saved, mistakes eliminated, better quality business decisions by partnering with Tower Systems.
The $7,995 price includes: current standard brand-new hardware, point of sale and magazine management software, training in your newsagency, starter stock files, updates and support for a year, free access to follow-up group training and free access to at least 60 online training workshops over the next year. A chunk of the cost is eligible under the federal government’s 30% tax break – this expires June 30.
While I am biased, any comparison will show this to be a good-value package – especially given that it connects you with the Tower Newsagent community of 1,600 newsagents and given you access to the Tower Advantage TM. There are about 1,000 newsagents using any of six other newsagency software packages.
We have tried to make introducing technology in a newsagency as simple and painless as possible – hence the extensive after sales training options available for no extra cost. We have found it important that all staff are training including new staff. This is where our online training works very well.
What I thought was a cordial discussion with our landlord about their new tax on us opening at 7am three days a week got legal yesterday when their company solicitor wrote pointing to where in our lease they have the right to charge this fee and the basis on which they can levy it retrospectively. Their claim for interest, if I do not pay this tax or delay payment, is a gem:
Please note that if you fail to pay these amounts in accordance with the lease, the landlord will have no other alternative but to charge you 2% interest on the outstanding amounts for every day, or part of every day that the amounts remain outstanding in accordance with clause 11.1.3 of your lease.
While the landlord may have a legal justification in the lease – I am no lawyer and cannot be sure – in today’s retail climate this tax is, in my view, an appalling imposition on a service business like a newsagency. At 7am we are a service in our centre – for other businesses in the centre, for security staff and for customers. Indeed, when I first took on this location in 1996 the landlord back then wanted to ensure that we would be open early.
While I know I could make a complaint to the Office of the Small Business Commissioner in Victoria, I have no faith in their ‘balls’ to robustly represent the interests of small business.
Since our ‘discussion’ with the landlord started, they have stopped opening the entrance doors to the centre – directly outside our shop – as they used to. Now, they open them at 8am, greatly inconveniencing other tenants and early regular shoppers. They are driving our customers away.
What I want is for commonsense to prevail. Landlords and tenants need each other. They rely on a successful newsagency to provide a service in the centre and do its fair share of lifting when it comes to attracting customers. By chasing charges such as a penalty for opening at 7am when it does not add to their costs – they say it does but I disagree – disrespects the bigger picture in play here.
US Sentaor John Kerry will hold a series of hearings in Washington next month to examine the future of the struggling US newspaper industry. More at the Guardian. I’d have thought that a spotlight on the future would have been more useful.
About 18 months from now, 80 percent of newspapers will be gone.
A quote from Media columnist Michael Wolff made at a recent industry panel discussion and published at paidContent.
Traffic to the Seattle Post Intelligencier site dropped dramatically following the closure of the newspaper – demonstrating the importance of a link between print and online for online traffic. Editor and Publisher has more.
I was talking with a distribution newsagent yesterday who said the problem of overweight newspapers was fading. He reminded me of a blog post I published in November 2006 about a study into OH&S issues surrouning heavy newspapers. The Nery Report, named after its author, David Nery, raised a range of concerns about the weight of newspapers and their handing by those involved in wrapping and delivering these to homes. My key concern at the time was that newsagents were not informed of the report recommendations and therefore did not have an opportunity to address what were clearly OH&S breaches in their businesses.
While there are still some editions of some newspapers which are ‘heavy’, the newsagent I was speaking with yesterday says that they are getting lighter with time. This may be why the Nery Report was never widely circulated among distribution newsagents.
Sitting on the floor, cross-legged and tucked into the magazine fixture, this browser worked her way through a range of women’s magazines for more than half an hour. I don’t mind browsers (I do actually but I am usually able to remind myself that browsers can be customers if you give them time) – I have never put up signs saying this is not a library or told customers to move on for browsing for too long. What I saw last week went too far, it made it difficult for others looking at magazines in the same area, especially some of our otlder customers in walking frames.
Years ago, we briefly contemplated putting in some easy chairs, like you see at Borders, for our browsers. We realised that they would need to be in the aisles, near the magazines and we didn’t have the room for this.
I’d be interested in how other newsagents handle the power browser, someone who sits in front of the magazines like in the photo or, worse still, someone who sits on the flat stack.
We are promoting the latest issue of Men’s Health at our lottery counter – in addition to our usual location for the title. Around 33% of customers presenting at this counter do not shop further in-store in visit – they may venture deeper in another visit. The lottery counter location works for magazines for us. Good Food is the most recent title we promoted in this location with an extra three of four sales we probably would not have otherwise achieved. I think the space works because it is free of the visual noise of the more traditional magazine fixturing.
Our focus is about trying to drive a better return from lottery customers. Just as we try and drive a lottery result from more traditional newsagency item customers. There is balance being pursued in all of these small moves. It is what we have to do in newsagencies.
Book and Magazine Week is under way in British Columbia, Canada this week. While magazine focus is not as strong as I would like to see, any attention has to be good.
Related link: Magazine Week in the UK.
Following the discussion last week about free newsapeprs, I have been contacted by several newsagents about the role they play in distributing newspapers which are given away at local events or during certain seasons.
These are promotional opportunities pursued by publishers, sometimes in association with a commercial partner – to cover audit requirements.
In each case the newsagent was happy with the arrangement as they received what they considered fair compensation for the effort involved and did not have to worry about returning unsold stock.
Tom Zeller, writing at The New York Times compares the environmental impact of print newspapers versus accessing the same content online.
We have Cleo at our prime counter position this week because of the free tote bag. While we are over tote bags as gifts with magaznes, this one, from Kookai, looks good on the display. ACP has provided useful marketing collateral. Hopefully, this will result in good sales.
In this same counter position on the weekend we sold out of Who magazine. A week earlier we sold 60% of our allocation of Weight Watchers Magazine.
This counter location works, it drives impulse purchases – the key appears to be the value of the offer.
The free Skin Minerals for Men from Giorgio Armani with the latest issue of Men’s Style magazine has not come through the distribution process well. Customers will have trouble finding an undamaged box in our newsagency. While the skin product itself is not damaged, the poor presentation of the box will be a turn off to the target demographic. Men’s Style is not alone in delivering damaged gifts. The answer is smarter packaging of these free gifts.
When magazine publishers treat newsagents as business people they find deeper and more professional engagement. Sadly, such engagement is rare. Instead, we are treated as simple folk who respond to competitions for a great display or obey onerous rules.
A magazine publisher offering bonus revenue for above industry average sales achievement would find a significant lift in newsagent engagement. The publisher of Popular Science is using this approach – offering bonus margin for greater than 50% sell-through. This is what will encourage newsagents to act as business people and not merely as visual merchandisers.
The folks at Notebook magazine are encouraging newsagents to create a great display promoting the latest issue. One of their representatives gave us the flier (pictured) earlier this week. They have $1,200 on offer – nationally. The cash will be distributed to the newsagents with the best display. It’s not much of a deal really.
This reward has nothing to do with sales in a specific newsagency. I see it more as getting their brand in front of as many eyeballs as possible. I appreciate that the publisher will take a different view. They will say it is the kind of promotion they find works. They will say they don’t have the money to pay additional reward for specific placement or for an increase in sales – I think Coles and Woolworths will tell me something different.
I am disappointed that newsagents are told to place Notebook next to Australian Women’s Weekly without paying for this premium space. Many newsagents would need to rearrange space to achieve this and have Notebook in its usual location. Maybe if they offered a placement fee for such specific placement more would be inclined to act on the request.
I like Notebook as a product and have good success with it – even though it is not as good as it used to be. The complaints I make about their current promotion could equally apply to ten or more magazines in newsagencies today. So, this post applies to all publishers who offer the possibility of a reward for a good display and ignore the opportunity to treat us as business people.
Regulars here have every right to criticise me for succumbing to publishers and doing the displays they want. I certainly publish plenty of photos here showing this. In my defence I’d note that at my newsagencies we do displays which we believe will drive sales outcomes, not just to create a nice billboard.
Tower Systems is hosting four newsagent specific free online training workshops this week:
To book a free place, please go to the Tower Systems website, and click on online training. You will need a boradband connected computer and a phone from which you will make a toll-free call for audio participation.
I mention these workshops here as access is available to all newsagents regardless of the software they use.
Disclosure: I own Tower Systems.
The ACCC has commenced legal action against CardCall Pty Ltd for alleged contravention of the Trade Practices Act in relation to the sale of their Talk Tomato, Daybreak, OZcall and Green pre-paid phonecards.
Twitter is the social website of the year. The latest race for followers in proof of that. Kutcher was in a race with CNN to get to 1 million followers. The interest in this story is evidenced by the 1,500 news items accessible through Google about the race. Kutcher’s victory was announced by Oprah Winfrey on her TV show. On a side issue – MTV has a story asking whether Oprah joining the Twitter community is a tipping point to the end for Twitter.
Ashton Kutcher on Twitter Magazine was launched yesterday on Ulitzer. This is an online magazine offering live news and comments on Kutcher’s Twitter journey. At the Ulitzer page you can subscribe to updates for free.
CNN refers to Twitter regularly on its programs and is hailed as a pioneer in mainstream media on the use of Twitter.
The amazing growth of Twitter this year is relevant to newsagents because it reflects a significant shift in how gen x and gen y receive and pass on news and other information. Celebrities are embracing Twitter at a phenomenal rate. By tweeting on Twitter they are able to cut out middlemen and control more of their story. From a media company perspective, such as CNN, it is another distribution channel for content. In the US, content is delivered free by mobile phone. Here in Australia, you need a special app for your iPhone to get this.
I am not sure how we can use Twitter in our newsagencies. It could be a channel for promoting special deals. It could also be how we pass on story headlines to encourage people into the shop to buy a magazine – but that feels like a poor idea to me. One thing is for certain, if any newsagent does use Twitter, tweets need to be relevant to the newsagency – otherwise what is the commercial value?
Can we ignore Twitter? No! Our businesses were founded on being a news and information distribution channel. Twitter is a news and information distribution channel. The success of the race between Kutcher and CNN is a reminder that the core of our business model is changing. We need to embrace that. It is a terrific opportunity.
I have been a Twitter user since January 2008. I joined to see what was happening and to use it to publish anything I thought was newsworthy. How Twitter is used has changed significantly since then.
For those who don’t know much about Kutcher, he is an American actor, married to Demi Moore, creator and host of TV show Punk’d and star of a bunch of flms including Dude, Where’s My Car?, Just Married, The Butterfly Effect and The Guardian. He is also the co-creator of several other successful TV shows.
For more about Twitter, go to Wikipedia – also check out their definition for a Tweet.
LATER: Folio magazine reports that talk of Twitter and other social media sites dominated the Magazine Day conference held in News York this past week.