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

Best Buys magazine not such a good buy

best_buys.JPGThis is not that good of a deal, certainly not a best buy. We received 15 copies of Sound & Image Best Buys Home Theatre on December 31, 2008.  As of yesterday morning we had sold two copies. For our gross return of $4.47 we have paid out $14.00 for the retail real-estate the title has occupied for two months.

Even though Best Buys is not due for return for another two months we are returning it this week – we have to cut our losses.

While I support independent Australian publishers, a model which sees me and other newsagents so heavily investing in titles like this is unfair.  Wolseley Media, the publisher, ought to consider offering more equitable terms to newsagents if they want to stay on our shelves.

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magazine distribution

Melbourne Observer features bushfire support thanks

fhn_observer_mar_09.JPGWe are giving prominence to the Melbourne Observer this week because of the stories of thanks to donors and other supporters of people affected by the recent Victorian bushfires.

This is a good and timely story from the Observer.  We know that it will resonate with our customers – hence our positioning in a high traffic area.

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Newspapers

Finding the iTunes price point for an article

Folio has a report on the Magazines 24/7 meeting which took place in New York a couple of days ago and, in particular, comments from Gary Hoenig of ESPN Publishing about finding the market price for content.   He cites iTunes and their 99 cent a song charge and the need for publishers to find their price point.

Breaking articles from a masthead and pricing them at a few cents will revolutionise many magazines as we know them.  With more and more portable devices available to deliver on-the-run access to text content, this is the next logical step in our space.  While it is happening today, it has not been widely adopted by publishers.  They will get there and sooner than we expect.

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magazines

Talking small business

The Minister for Small Business is hosting a summit in Melbourne on Friday to discuss the current economic challenges in the context of small business.  While I will not be attending, I had an opportunity today to share insights about the impact on small business and newsagents in particular with one of the Minister’s advisors.

I talked about the new bricks and mortar security requirements by banks for funding the purchase of newsagencies and the new lending rules put in place by major equipment lease finance companies – as well as covering some more general issues facing the channel.

I am hopeful that the two key points covered in the discussion make it to the talking points provided to the Minister ahead of Friday’s meeting.  The more diverse the input for a session like the more useful the outcome.

More newsagents should write to politicians to air their views.  I am finding the current Federal Government more responsive to representations – at least you get a response and, sometimes, a phone call.

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Newsagency challenges

marie claire cleverly packages mascara gift

fhn_marie_claire_mar09.JPGPacific Magazines’ marie claire this month packages a free gift is a unique way.  Rather than sticking the free Chanel mascara on the cover or in a fold out bag, they have slipped it on the spine and produced a cover wrap around.  Whereas free gifts with magazines often detract from the product they are promoting, the approach with this month’s marie claire reinforces the quality of the brand.

It does not look cheap – is what I mean.  This is important in the land of gifts with magazines.

The Chanel mascara giveaway and unique packaging have won marie claire access to our prime counter display space.

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magazines

Re-purposing Women’s Weekly collateral

fhn_aww_disp.JPGWe have lifted our in-store Australian Women’s Weekly display collateral and re-purposed it for a stand in the front of our newsagency.  This stand is seen by lottery customers who do not venture too far into the newsagency – a different mix to those who would have seen the material in its previous location.  We could not do this with all displays.  Our feeling is that the Magda cover story and the media coverage it continues to generate should make it work for us.

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marketing

Patchy February

February was interesting in our newsagencies. Many departments were up: Newspapers (9%), calendars (144%), diaries 171%), Art (8%) and gifts (77%). Magazines were down. Stationery was flat. At Forest Hill our magazine unit sales fell 14% while at Frankston the fall was 20%.

The fall in magazine sales correlates to the drop in customer count. The good news is that we are making more from each customer.

While our numbers are not what we would like, we are happy because of the growth in key good margin departments. We are operating business as usual, trying new ideas, offering deals on stock we want to quit and presenting our shops as cheerful easy-to-shop destinations.

We are pursuing new customers by distributing Hot Ink! Flyers to homes around our locations. As is always the case, we are seeing a good kick in ink sales.

Since we are in shopping centres, we are somewhat reliant on our landlord to lure new customers to the centre. I’d like to see landlords think right outside the box on this. The usual mix of kids activities, displays and feel good promotions are not having the same cut-through as they once had.

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Newsagency challenges

March customer newsletter

fhn_nl_mar09.JPGClick here to download a copy of our March customer newsletter.  As the photo shows, we have this in a help-yourself stand at the front of our newsagency at Forest Hill.  While it is a bit of work to produce the newsletter, it is a valuable way we spread our stories to passers-by.

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Customer Service

Signing with e-pay is now easier

e-pay has just announced that new contracts with newsagents will not have any break penalty. This makes it even easier for newsagents to sell e-pay mobile phone and other electronic voucher products through eziPass platform. To sign up, please go to the retailer sign up page on the eziPass website.

eziPass is integrated with Tower Systems newsagency management software. From within the Tower software you can easily sell mobile recharge for all the major telcos. This integrated solution cuts keystrokes, eliminates mistakes and makes selling easier. Long lines are eliminated as you can sell from any computer on the network.

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phone recharge

Wide magazines present display opportunity

fhn_magspace.JPGSpace management in newsagencies is challenged with more magazines using the fold out plastic bag to hold a free gift with the latest issue. These titles are best presented with the give-away on display – otherwise the value of the gift as the driver for purchase is lost.

Traditional magazine fixturing does not help with display. Where possible we will display with the gift fully showing. Many newsagents fold the gift back, meaning that the customer only sees the cover. I think this hurts sales.

The gifts are an important way to lift sales of a title – maybe not so at the moment since so many titles have the free gifts – but display so as to drive sales is a challenge in some newsagencies. This is one reason we created the display at our counter but we currently have an abundance of titles competing for this one resource.

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magazines

Noise complaint threatens newsagency with closure

I received an email over the weekend from Jennifer Round of Gerroa Newsagency, Post Office and General Store – a coastal town located around 90 minutes from Sydney. The local council says it will fine them $10,000 every time there is a complaint about the noise associated with wrapping newspapers early in the morning.  Jennifer’s own words best describe the situation:

The business and residence is combined with a vacant block to one side and a property to the other with a cliff at the back. The house next-door to us is used during holiday periods.

In February 2007 a neighbouring newsagent gave up there newspaper territory and we took it on and unlike others we are actually making money from it.

However, the increase in work re wrapping papers, trucks arriving in the night, vehicles in and out of the driveway in the we hours have lead to a neighbour lodging a noise complaint. We were a little annoyed since the complaint is from a semi part time neighbour who never came in and saw us just filled a complaint with the council whom are now threatening to issue us with fines if we do not cease operations.

We are in the process of tying to reduce the noise as best we can. We have striped the garage and have lined the walls and roof with insulation have relined the walls with noise reduction plasterboard. Have laid rubber mates on the floor and will laid some on the walls in an effort to reduce the noise of the wrapping machine which seems to be the issue of the complaint.

We are after other ideas we have contacted an acoustic engineer whom has quoted us $10,000 in improvements however they aren’t able to say that after all that work it will make too much of a difference.

We do not have anywhere else to wrap the papers. We have looked at other locations in neighbouring towns but still have the same issues we have at the moment commercial/industrial properties surrounded by residential properties. It would also be unprofitable to move.

We are wondering if any other Newsagency have had issues with noise complaints from neighbours, businesses and alike. Moreover, if they have how have they managed it.

If we are not able to work something out it looks like our doors will be closing not because of hard economically times but because of our local council who are more interested in fining us up to $10,000 for each complaint than finding a solution that will benefit the community as a whole.

As Jennifer says, if you have suggestions, please post comments here.

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Newsagency challenges

AFL Record sales up 30%

fhn_record.JPGThe season preview edition of the AFL Record is selling well for us – 30% ahead compared to the same period last year.  So much so that we would hope to sell out in the next week.  Our sales growth may be due, in part, to our opportunistic co-location of the title at Tattersalls counters. Almost anything AFL is a good impulse product in Melbourne this time of the year.

It is important that we know these titles we can pitch at the counter and act accordingly – and early in the sales cycle so that we benefit from a cash flow perspective.

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magazines

Introducing the new card range

fhn_new_card_range.JPGWe are introducing the new Hallmark baby card, gift and packaging range with a display at our counter rather than across in our card and gift department.  This front-of-shop corner location has more foot traffic so it makes sense to show the new range off to more shoppers.

I like the decision our team made to place this display here as it reminds newspaper, magazine, lottery and stationery customers that we also play in the greetings and gifts space.

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giftwrap

Oversupply of Silicon Chip magazine to newsagents

fhn_silicon_chip.JPGThe publishers of Silicon Chip magazine ought to engage more fully with their magazine distributor to address the oversupply that I and other newsagents are experiencing. Something is wrong when you consistently receive more than twice what you usually sell. The excess stock is returned and pulped. This is a bad environmental story and a bad small business story. Silicon Chip magazine is loss making for me and, I bet, many other newsagents. The publisher could address the issue by asserting more control over supply.  The only party making money from supplying more than we can sell is the distributor.

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magazine distribution

Is Australia Post changing its card strategy?

ap_cards.JPGI noticed an Australia Post outlet promoting 50% off greeting cards on the weekend. I saw another with the same offer today. Then I saw the Government owned Australia Post outlet with all cards removed from their fixturing – as shown in the photo. I wonder if Australia Post is changing its greeting card strategy. I know that cards have been underperforming for years in the Government owned outlets, certainly not achieving the ROI or return on floor space desired by the managers of the 865 strong Government owned retail chain.

The 50% off promotion is odd. It is running for two weeks but it excludes key seasonal offers such as Easter cards. While I would expect their supplier to be funding the offer, it is unfortunate that this Government owned business is again chasing business from independent small retailers like newsagencies.

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Australia Post

Vic. newsagents of the year

Congratulations to East Ringwood Newsagency for winning Victorian Distribution Newsagent of the Year on Saturday night.  This is a good story as the winner started as a paperboy.  Congratulations to Morwell Newsagency for winning Victorian Retail Newsagent of the Year.  Employee of the year was won by a team member from yarrawonga Newsagency.

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Uncategorized

The problem with Cycle Sport magazine

fhn_cycle_sport.JPGCycle Sport, the leading UK magazine for fans of professional road racing does not sell well in my newsagency.  Our sell through is usually around 40% meaning that around 60% of supplied stock is returned.  Beyond the frustration of the inability of the publisher and distributor to get supply right and fair is that Australians can pay $15.50 for Cycle Sport in a newsagency or have it home delivered through magshop for $14.99 an issue.  The same company controls the supply of Cycle Sport to Australian newsagents and operates magshop.  They make newsagencies look expensive.  The excess stock reduces space available for other cycling titles including Australian titles.

Let me recap – we are oversupplied, we are made to look expensive and there are barriers to us achieving a fair supply arrangement.  While the magazine distributor – Network Services – will deny this, they ought to spend a month in a newsagency and experience life on the other side.  This would help them, hopefully, work in partnership with newsagents.

I would like the UK publisher of Cycle Sport to explore a more direct relationship with Australian newsagents which permits us to compete on price and achieve equitable supply arrangements.  At least then the key parties to the relationship have a common goal – selling more magazines.

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magazine distribution

US newspaper editors cancel conference

The American Society of Newspaper Editors has cancelled its annual conference. They join Magazine Publishers of America, and the World Association of Newspapers cancelling conferences this year.

Charlotte Hall, president of ASNE said: “The industry is in crisis. This is a time when editors need to be in their own news rooms doing everything they can.”

While newspaper publishers and others in Australia will say that we do not face the challenges they face in the US and Europe, I think they are wrong.  Our local economic circumstances are different (maybe just delayed) but we cannot hide from the impact of disruption caused by technological change.  Content will be more accessible and more content will be free.

Now is the time for us to focus our attention on our future.  It may be that spending too much time on challenged products such as newspapers could be an inappropriate focus of our resources – not for all newsagents but for some.  We are over-satisfied with distribution newsagents and consolidation will gain pace.  In retail, we see ourselves as the dominant specialists whereas I suspect that publishers project our influence in retail will dilute in coming years.

We have to ask whether we have the courage (individually and as a channel) to reduce our investment in non-growth activities such a newspaper distribution and retail and direct that reduced investment to new fields of revenue.

Many newsagents are doing this already.  Many others are undertaking shop fits and other changes as if operating twenty years ago with specially built (expensive) newspaper stands in their shops.

Newsagent meetings and conferences need to consider these things.  We need robust debate to help us work out what we, collectively and individually, need to do.

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Media disruption

Hearst to launch e-reader and disrupt the supply chain

Fortune overnight reported what could be a game changing move by the Hearst Corporation:

Against a backdrop of plummeting ad revenue for newspapers and magazines, and rising costs for paper and delivery, Hearst Corp., is getting set to launch an electronic reader that it hopes can do for periodicals what Amazon’s Kindle is doing for books.

According to industry insiders, Hearst, which publishes magazines ranging from Cosmopolitan to Esquire and newspapers including the financially imperiled San Francisco Chronicle, has developed a wireless e-reader with a large-format screen suited to the reading and advertising requirements of newspapers and magazines. The device and underlying technology, which other publishers will be allowed to adapt, is likely to debut this year.

The Amazon Kindle, selling more than 300,000 devices last year and probably many more this year thanks to Oprah’s endorsement, has changed book reading for many.  The full impact on book sales will not be felt for a couple of years yet.  The Hearst move could do the same for newspapers (maybe) and magazines (more likely).

The stories circulating are that the Hearst device will have a bigger screen and be foldable.  Both attributes would be crucial for a newspaper or magazine experience.

The device would work by downloading the latest content, to which the customer is subscribed, from the publisher.  The supply chain shrinks.  The use of paper is eliminated as well as the distribution network including retailers like newsagencies and similar businesses.

Hearst has a track record for investing in disruptive technology.  See the announcement from Eink 1998 about Hearst participating in a capital raising for the further development of eink technology.  They remain an investor today.

There is considerable coverage of this move by Hearst including the predictable: Can Hearst save newspapers with an e-reader? at PC World.  More than 500 blog posts have been published on this in the last 24 hours.

I have been talking about this type of technology for years and see the move by Hearst as inevitable.  My concern is that newsagents are not engaged in discussion about this.  Indeed, they either do not believe that their model will be disrupted by technology or that existing suppliers will involve them somehow in a new model.

New technology will impact sales of magazines and newspapers.  It is already but today’s economic climate is masking the true impact.  I would like to see on-going thoughtful (politics free) discussion about this issue among newsagents. While there has been some here over the years and at workshops I have run, there has been little truly useful engagement.

The coverage overnight about the move by Hearst is significant for Australian newsagents.  It will be interesting to see if newsagents agree.

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Media disruption

Loving nudists

tan_magazine.JPGTan magazine has an excellent sell through in our Forest Hill store. We sell between ten and twelve copies of the fourteen we receive each issue. The sales are excellent for a small special-interest indie magazine. It beats some big name monthlies.

What I like is that customers will come to us for Tan because of its special-interest status whereas they can go to a myriad of outlets for these other major monthlies.

We are wondering if we should leverage our success with the Tan and run a promotion. We could do nude day but I think our landlord would have an issue with that. Maybe we will go with a fig leaf display. We want to come up with something to see if we can increase sales further.

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magazines

HP74 ink – only $25.95

Big W is advertising HP 74 ink for $32.84.  Our price is $25.95.  Big W is advertising the HP 56/57 twin pack for $81.98.  Our price is $69.95.

Big W claims to be committed to giving customers low prices on everything they sell.  When it comes to ink, Big W is not offering low prices.  Our newsagency and other newsXpress newsagencies with the Hot Ink! offer beat them on key popular items.

Where Big W can beat us is in convincing consumers that anything in a Big W store is at a low price.  Kudos to their marketing for acheieving this.  As is the case with some of their ink, the marketing claim is not maatched by aaction in store.

To be fair, there are plenty of products where Big W beats us.  I’m happy to have a win.

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newsagency marketing

2009 sales benchmark results

I’ll be sending out the results of the first newsagent sales benchmark study for 2009 to participating newsagents this weekend.  This is the only current data available as to the sales health of the channel.  Several suppliers have also sought access to the data, to provide them with an understanding of trading conditions.

Industry associations ought to concentrate on this type of existing and available benchmark activity rather than plotting how to make more money from newsagents.

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Newsagency challenges
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