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

Taking magazines to the customer

fhn_cmagsfront.JPGThis display of Christmas themed special interest craft and cooking magazines which we have right at the front of our shop near other Christmas products is working well for us.  I am certain that we are selling some of these titles to customers who would otherwise not browse the shop looking for them.  We are refreshing the titles as new ones come in which match the Christmas theme.  We have three times the titles showing in the photo including some of the more mainstream titles such as Notebook, Real Living and Better Homes and Gardens.

Anyone can create a display like this at the front of their shop.  All it takes is a few minutes selecting the titles.  For motivation, count how many people browse the whole magazine department compared to shopping the front few metres of your shop.  If yours is a typical newsagency, more than 60% of traffic does not go deeper than the first few metres.  This is why displays like this around themes and seasons are vital to the health of your magaizne department.

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magazines

Content versus texture, the digital battle

Flexibility is trumpeted as another advantage of the digital newsagent over its corner shop rival. Regular readers of a particular publication can choose to buy a month’s subscription to their favoured title but for a generation that has grown up with the luxury of free content from a plethora of different providers, there is an opt-out from that rigidity.

Read more of what Amol Rajan has to say here in his column at The Independent.

“If you think that we’re totally eradicating the printing and distribution costs for these publications, as well as opening them up to a whole new market, I think in time we could argue that we ought to be able to offer a cheaper product than our rivals in normal newsagents. There are potentially enormous cost-savings to be made there.”

Ouch!  Here, Rajan is quoting Tony Pescott. Tony Prescott, director of new business development at Asda, the Wal-mart company which has launched a digital newsagent offering in the UK.

The issues here ought to be the main agenda item at newsagent meetings.  Many of the issues we face today tie back to challenges facing print and our bricks and mortar businesses.

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Media disruption

Chips with your magazines

I was surprised to receive the email today announcing that magazine distributor NDD is to distribute Sultry Sally potato chips.  Magazines and potato chips are an odd mix.  This brand launched in Safeway and Woolworths earlier this year.  While some newsagents would be happy with a supermarket line, I am more included to hunt out chips not being sold in a supermarket. 

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confectionary

Women’s Weekly Christmas issue selling well.

fhn_aww_dec08w3.JPGFollowing continuing stong sales, we have decided to leave Australian Women’s Weekly at our prime counter position until at least Wednesday.  We usually turn titles in this position weekly or even more frequently.  While I know this goes against what I write here about regular customers becoming store blind, given that it is selling from this location replacing the display because of some rule did not make sense.

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magazines

Puzzles selling well for Christmas

fhn_puzzles_christmas.JPGThe mix of puzzles we have at the counter – Hannah Montana, High School Musical, Disney and Dora the Explorer – is selling well.  We’re finding the price point works in this lottery counter position – the purchase decision is easy.  We have capped the front corner of our counter with Christmas offers, these puzzles and Darrel Lea Christmas items. 

The Christmas gift items which are a more considered purchase are placed further into the store.

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retail

Bargain Shopper not selling

fhn_bargs.JPGWe have sold eight copies of Bargain Shopper from Universal Magazines since it arrived eight weeks ago.  They sent us 73.  several years of sales data shows that we will sell a fraction of the 73.  The oversupply is from a company which says it cares about the environment and cares about newsagents.   As regulars here will know we gave the title a crack and promoted it in a high traffic area.  All we could sell in eight weeks in 8 copies.  And the title still has months to stay on the shelf.  The behaviour of Universal around Bargain Shopper is another reason I do not want their product in my newsagency any more.  No amount of requesting has altered their behaviour, so I am better off without all of their titles.  Universal would know from the data they have that I and many other newsagents will lose money on Bargain Shopper yet they did not alter their supply model or financial terms.  Based on my experience I would say that this title is bad for the environment and bad for newsagent cash-flow.

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magazine distribution

Great retail wrapping paper

christmaswrap.JPGWe buy paper from The Wrapping Paper Company for use in our stores.  The paper in the photo is one of the designs we selected for our Christmas free wrap services.  They have good product including wrap, ribbons, tape etc – all at good prices. 

If you are getting into gifts, a free wrapping services, especially for major seasons, is essential.

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retail

Promoting the ACP cookbook offer

fhn_acpcook.JPGWe are promoting the ACP cookbooks offer at the counter, featuring a different cookbook every couple of days.  This is in addition to a power end display.  Promoting the right title makes this a good counter offer, an easy purchase.  Our regular customers will understand the added benefit of our Magazine Club Card with this offer as we give a clip on the card for an ACP cookbook.

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magazines

Magazine compliance roundtable discussion

Tower Systems has scheduled a free online roundtable discussion on magazine compliance for Tuesday December 9 at 11am.  This discussion will review current standards and provide newsagents with steps to take to ensure their businesses are compliant and ready for the next phase of IT innovation in the magazine supply chain. This session is available for supported Tower Newsagents only.  Bookings can be made by emailing bookings@towersystems.com.au.

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newsagent software

The old pharmacy

discount_pharmacy.JPGDiscount is the new “thing” in pharmacy retail in Australia.  Stores screaming discount on their shingle and across the front windows have replaced traditional pharmacies on every secod street, or so it seems. 

The pharmacy of yesterday, offering personal service and local knowledge is fading and being replaced by these impersonal barns which use a claim around price as their only point of difference.

In some of these discount pharmacies, the price pitch stops at the door for inside many items are priced the same as you would find in a more traditional pharmacy.

I wonder if this is a trend we will see in the newsagency channel, a group built around a price proposition.  It would be challenging to achieve because so much of what a newsagency traditionally sells has a slim margin and is, somewhat, price controlled.

It is interesting to consider whether someone will boldly play the price card because some of the challenges pharmacies face we face too.  Much of what they sell is sole elsewhere.  There are too many retail outlets.  Suppliers are frustrated with lack of discipline  The overall shingle will support only so much divergence from the traditional offer.

While I have no interest in a price based offer in the newsagency channel as this would distract from our core unique propositions of community connection and customer service, the question is interesting to contemplate.

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Newsagency challenges

The future of newspapers

Click on the image below to see a TV report, The uncertain future of the newspaper industry.  This ran an New England (US) TV NECN – New England Cable News – last night.

I am sure that other TV stations are running similar reports.  Public reports like this become a self fulfilling prophecy.

From a newsagents perspective, the concern has to be howw we configure our businesses in terms of attracting customers and the shop fit itself for the changes coming whatever they are.

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Media disruption

The great Christmas CD sale

fhn_christmascd.JPGWe have adjusted our merchandising for our ABC Christmas CD specials and the results were immediate.  This display at the counter is driving excellent business.  In one of our stores today a customer bought ten of the feature title on display and came back half an hour later and bought ten of a different title.  She made the point “I only came in for a card!”.  While we were achieving sales with our previous pitch, this new display, in the same location, works much better.  The lesson we learned is that less is more – removing clutter from a display helps customers see what you want them to buy.

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retail

VANA’s mistake with the Futures project

VANA is making a mistake investing time and member funds in developing its new nesagency marketing and management group (the Futures Project).  This project does not seek to serve all Victorian newsagents.  Nor does it seek to address the operational issues of most concern to Victorian newsagents.  If I were on the Board of VANA, I would push for the organisation to focus on:

  • Pursuing, without fear or favour, a fairer and more equitable magazine supply model for all Victorian newsagents
  • Private and public lobbying around achieving a fair return for home delivery of newspapers for all Victorian newsagents
  • Lobbying the State and Federal Government for assistance to help all Victorian newsagents navigate the significant change ahead
  • Establishing a register (benchmark) of supplier terms which VANA members could use to compare terms they have been offered
  • Working with GNS, the industry owned stationery supplier to build a strong consistent statewide stationery business in all Victorian newsagencies
  • Being more visible among all Victorian newsagents, listening to their concerns and discussing how VANA can better engage
  • Getting out of all commercial activity
  • Committing that the organsiation will not, in future, seek financial assistance from suppliers for conferences and the like because of the conflict such funding creates

Once sufficient progress has been made on these five key areas and if VANA had resources available, I would push for what I would call phase two of the reinvention of VANA. I’ll leave those thoughts for another time but they include practical help to fix troubled newsagencies.  While some of us do this today, VANA could bring valuable statewide focus to such effort.

There is no sense in working on a futures project unless you have taken care of today.

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Newsagency challenges

Lovatts promotes newsagencies

ad_lovatts.JPGLovatts Publications is promoting newsagencies with the running of our newsagency ad in two of their current publications.  The back pages of Super Sudoku and Clue Words have the ad.  This coverage is being provided free by Lovatts in support of newsagents.  I didn’t approaach Lovatts for this support.  They heard about the TV ad and wanted to help support our channel. 

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newsagency marketing

Pitch to entice magazines online

UK digital publishing solutions providor Zmags claimed yesterday that it can help publishers cut costs by an average of 82%.  The claim is another of many being pitched to magazine publishers to entice them to move a print to an online model.

While I cannot vouch for the savings claim by Zmags, evidence is mounting of success being achieved from online magazine models. 

My concern is that newsagents will ask one day how this happened and why the channel did not see it coming.  This is another reason we need to take control of our shop fits and not have builders create shop fits which cannot easily evolve as our business model evolves.

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magazines

NSW catches up to online lottery sales

The NSW State Government has introduced legislation to permit the sale of lottery tickets online.  The Sydney Morning Herald has the story.

In Victoria, Tattersalls has been successful in driving online lottery sales for several years.  Click here to see my first post about this in April 2005.  Tattersalls uses its retail network of newsagencies and other businesses cleverly to drive online sales.  This is done without compensation to the retailers.

In Queensland, the Golden Casket pays a small trail commission to newsagents who sell a registration card which is used for online sales.  This was negotiated by the Queensland Lottery Agents association.  While the trail could be larger and run for longer, it at least respects the role the retail outlets play in facilitating growth in online sales.

The reality is that more over the counter business will move online.  While it would be a waste of resources to try and stop the online businesses, we must not permit our retail businesses to be used to facilitate migration of our customers online as has happened in Victoria. 

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Lotteries

Major changes at Fairfax

“The old model of newspapers is dying. The newspaper industry is trying to innovate as much as possible and it just hasn’t struck gold yet and figured out what will work best. It’s a serious problem for them and they may not solve it at all because it may turn out that less and less people want to buy newspapers in the future.”

This is a quote from Ed Butler, a Senior Analyst with IBISWorld.  He is quoted in an article published by ad industry journal B&T speaking about the turmoil at Fairfax following the ‘resignation’ today of CEO David Kirk and the sacking yesterday of Alan Oakley as editor of the Sydney Morning Herald – are evidence of the challenges of newspapers.  These changes have been brought about on the back of a considerable drop in Fairfax share price, staff retrenchments earlier this year and other major changes.

Newsagents are experiencing changes in their dealings with Fairfax through trimmed margin on subscription offers, more complex and time consuming consumer offers and other changes.   Fairfax sees newsagents as a cost rather than an opportunity.  If they reversed this view and treated newsagents with economic respect they may have healthier sales than today.  By this I mean that Fairfax should reward newsagents for growing sales.  Instead, with some of their current offers, newsagents are effectively penalised for new subscription customers.

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Media disruption

Money magazine supports newsagents

ad_money.JPGThe latest issue of Money magazine from ACP Magazines has a the full page ad promoting newsagents on the inside back cover. ACP is providing the space for this newsagent marketing campaign free of charge. This is a terrific support from ACP. They offered the space without request. We have copies of the print ad in A3 and A4 size for newsagents to download from the Tower Systems website for newsagents who want to support this campaign.

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newsagency marketing

ANF election for NSW Director

An election is under way for the NSW Director of the ANF following the tie of six votes all from the last election a month ago.  I have spoken with Stuart Kilborn, the candidate running against incumbent Brenton Brown.  I like what Stuart has to say and that he is not tained by four years of failure as Brenton is.  While I have grave doubts about the relevance or effectiveness of the ANF, current members in NSW ought to vote.  Click here to see a copy os Stuart’s candidate statement.

Stuart has not sought my endorsement nor asked for coverage here. I am giving it because of the failure of the ANF to adequately represent newsagents under the watch of the current NSW Director and because the organisation desperately needs new blood.

While on the ANF election, it has been put to me that during the vote last month the organisation had one of its staff contacting members seeking votes for the incumbent NSW Director.  I don’t know if this is true.  Maybe NSW newsagents could advise if they were contacted.

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Newsagency challenges

How the Federal Government hurts small business

fhn_apost_dec08.JPGThrough more than 850 Federal Government owned and operated retail Post Offices the government’s commitment to a sustainable small business economy is mocked. Successive Federal Governments have sat on their hands and allowed the bosses at Australia Post stray further beyond offering the services permitted under the Act. Indeed, they had the Act drafted in such a way as to make it hard to prosecute a case against Australia Post for selling books, CDs, DVDs, general stationery, ink, cameras, BBQ sets – all manner of items already available from thousands of stores across Australia.

The Australia Post Christmas catalogue is a perfect example of how Government ownership is being abused.

Australia Post, thanks to its monopoly protection around postal services, lands people in its shops for a fraction of what a newsagent costs. A look inside the door of a Government owned outlet shows this stamp and service business looking more and more like a newsagency and other retail outlets. I took the photo of the entrance to the Government owned outlet at Forest Hill (VIC) earlier this week.

I don’t blame Australia Post. They have successfully manipulated the process to get politicians and policy on their side.

The politicians have been convinced into thinking that Australia Post needed these other products to make their retail network viable. This is what the former Minister responsible, Senator Helen Coonan, told me when I met to discuss this issue (without success).

If the current Federal Government is serious about small business it will research how the retail Post network operates overseas and research the impact of Australia Post’s retail expansion has hurt businesses like newsagencies over the last ten years. Overseas they will see that best practice is considered to be retail outlets that focus on postal services. Back home they will find that small business retailers like newsagents have lost, I’d estimate, more than $100 million to the Government retail network.

The Howard Government failed to engage on this issue for its entire tenure. This is an opportunity for the Rudd Government to show if they are serious about small business.

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Australia Post

Discussing magazines

I have organised an online discussion about magazines.  Given the comments here about the Universal Magazines matter I thought it would be good to see if newsagents want to talk.  If enough newsagents register interest I will organise the online discussion through the WebEx platform Tower has.  There is no cost.  All you needs is a computer with broadband and a phone for a toll free call for the audio.  My feeling is that a group talking through the issues could benefit from sharing experiences.  Spaces would be limited.  Please register your interest by email on bookings@towersystems.com.au. 

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magazines

The Kindle a year on

Readers can visit Amazon’s online store and upload a new book right to their Kindle. Subscribers also can have electronic versions of The New York Times and other newspapers and magazines delivered automatically to their Kindles in time for reading with their morning cup of coffee.

From a report overnight at CNN.COM about the amazing success for Amazon’s year-old Kindle portable electronic reader.  While the Kindle does not work here, it will eventually.  The Kindle and other future similar devices will disrupt the print media supply chain.  The question for newsagents is at what point will we realise this.

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Media disruption

Promoting magazines for Christmas

frank_christmasposter.JPGThis is how our Frankston store is using the poster we have created to promote magazines as a Christmas gift this week. We are using the poster as we would single title posters from a magazine company. I hope more newsagents are using these free posters – I had the artwork created to provide us a way of pitching magazines as a gift worth considering. Too often we turn our shops into billboards for individual titles and miss a more valuable opportunity to promote our broad range. The poster represents a selection of publishers and product categories. We will create a different display next week using the sale collateral.

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magazines