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

The problem with magazine subs

My bone today is with the Australian magazine subscription system. In short, it sux. While Eva Mendes is smouldering away on the cover of Harper’s Bazaar in my newsagent, she is nowhere within the vicinity of my mailbox… and I refuse to buy her in duplicate on account of waste. Last month, my Harper’s Bazaar was about two weeks late. Hence why I refused to post anything about it. Poo to you, tardy one.

That is Erica Bartle writing at her Girl With a Satchel blog yesterday.

A smart publisher would work with newsagents on a subscription model which rewards the consumer for loyalty and rewards the newsagent for selling a subscription as well as providing the collection service.

The newsagent / publisher technology exists today.  All that is mising is the will from the publisher side to make this happen.

As Erica shows in her blog post, consumers continue to shop at newsagencies regardless of having a subscription.  Leverage that and create a welcome win win.
It is easier to manage dtstributuoin ot a retail network than it is to tens of thousands of individual homes.  A good technology link can ensure that the publisher, consumer and newsagent are all communicated with professionally, consistently and with satisfaction.

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magazine subscriptions

Empty shelves

dsc04586.JPGI took this picture while out shopping on the weekend. It breaks my heart to see a newsagency without stock, especially in core category such as greeting cards. This situation reflects not only on the individual newsagency but also all other businesses operating under the newsagency shingle.  It also reflects on the supplier brand names represented inside the business.

Our industry associations need to develop a national plan to deal with newsagents in difficulty. Such a plan would need to cover assessing the cause, co-ordinating support if considered appropriate and monitoring the results of any such activity.

With the economic challenges which have emerged in the last few months, more retailers will struggle.  Unless the industry has a co-ordinated national response, too many newsagents will be among those who close their doors unnecessarily.

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Newsagency challenges

Harvey Norman OFIS to open in Mentone

A Harvey Norman OFIS superstore will open in Mentone on Nepean Highway this weekend.  I checked out the store yesterday, it is a close of the Auburn store from what I could see.  It will be interesting to see how it performs since it is near to the best performing Officeworks store in the country.

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Newsagency challenges

Save money, cook at home

moneytightcook.JPGThanks to these low cost food magazines we can make a good money-saving pitch to consumers.  Good Taste, Resipes+ and Super Food Ideas each publish meal plans to suit any budget.  Featuring these right now, with the economic news of the day, should drive good sales.

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magazines

iPhone delivering newspapers

ohpone_papers.JPGThe Apple iPhone is now a portable newspaper home delivery run management device thanks to the geeks at Tower Systems.

The photo shows a newspaper run list live on an iPhone. This takes the feed direct from our software.

What is really cool is that you can turn the phone on its side and the run list turns with you. You can re-size the text using the usual iPhone touchscreen tools.

While I don’t expect many newsagents to use an iPhone for  run lists, it is cool to have the option. It also demonstrates innovation around newspaper home-delivery business.

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Newspapers

Free Mythbusters DVD drives FHM

fhn_fhm.JPGThe free Mythbusters DVD with the latest issue of FHM wins the magazine a week at our most valuable counter sales position – between two busy sales points.  Since there was no marketing collateral with the title today (except for a small card announcing the free DVD) we have created our own for this display.  FHM is not a strong title for us and would usually not be featured this way.  Mythbusters, however, is a brand which appeals to our demographic.

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magazines

Hating Australia Post

I served a customer on Saturday who wanted to pay an Optus bill. On advising her that we no longer processing bill payment because of the collapse of Bill Express and that she could pay the bill at Australia Post opposite us, she folded the bill, put it in her bag and said she hated Australia Post. Time spent in the queue at Australia Post can do that to you.

If the executives behind Bill Express had not botched the business, bill payment could have been viable for newsagents.

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Bill Payment

Strong third quarter

We have recorded a strong third quarter at Forest Hill – up 8% in non agency revenue compared to the same quarter in 2007. Excellent growth has been achieved in the good margin departments of cards, books, gifts, art and ink. Magazines are line ball – this is a good result given that weeklies are down 8% in unit sales. The 0% change for the department reflects a shift in sales in our newsagency, we rely less on the weeklies and more on special interest and other titles we obsess over.

I have poured over the figures for the quarter in detail because self funded retirees make up a sizeable portion of our customers. Given the economic challenges of this year we were expecting to see sales taper off. We were fighting against this with considerable in-store activity but we still expected to see a slowdown. While it may yet come to our door it has not happened yet, thankfully.

A key part of the growth is attributable to an investment in the business, expanding several departments and introducing new ones. We are planning more of this as we pursue the new newsagency model which we feel is right for our situation. Sure there is doom and gloom in the news – we deal with that by remaining focused on the other side.

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About us

Advice on post Bill Express ANZ terminals

I am grateful to the Queensland Newsagents Federation for permitting me to post here information they sent to their members last week about the ANZ ftpost serminals sent out following the collapse of Bill Express. This is important and timely advice for newsagents:

ANZ Eftpos Terminals            

If any newsagent wishes to return the ANZ Eftpos Terminals which were sent out shortly after 8th July (Bill Express’ last day), please make sure you do so prior to Wednesday 8th October (THIS WEDNESDAY)

Contact ANZ Merchant Contact Centre – 1800 039 025 prior to the end of the (3) three month ‘rent free’ period to advise you wish to return the Eftpos terminal.

You will then be required to complete and return to ANZ a ‘Closure Request Form’, authorising closure of the facility and the terminal will be collected. (There should have been one in the box you received the terminal in)

Your account will need to remain active for 30 days to finalise any transactions and for processing the final merchant facility statement.

As far as I am aware, the QNF is the only association providing this level of up to date advice on Bill Express related matters.

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Bill Express

Newsagents and Dr John Tickell’s book

dsc04626.JPGDr John Tickell is a nice bloke. I appreciate his knowledge and enjoy listening to him. His new book, how to put $3,000 in your pocket guaranteed, has been sent to newsagents on terms which will not help us profit even close to the promise of the title. The margin is not a fair book margin. The size makes it challenging to display with magazines. The title does not easily fit with other categories we sell. There is no supporting material to promote the title. The only way I can see this book working is at the counter – but the margin is way to slim to justify that position. But the counter is where we have it. We will give the book a couple of weeks before making a decision on returning.

What I would have preferred if I got a say in how this title was to be distributed to newsagents is:

  • A margin of 40%.
  • A unit we could easily place next to newspapers or on the counter.
  • Marketing collateral.
  • A promotion among newsagents with reward based the best early sales.

Just sending product is not enough. In is not fair to small business newsagents.

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Book retailing

Comparing loyalty programs

The Sunday Age today has a report today (page 3 of the Investor section) which compares the Coles and Woolworths loyalty offerings.  It makes for interesting reading.  The table accompanying the rep9ort shows that if you spend $200 with Coles your reward value is $1.28.  With Woolworths, for the same spend, the reward value is $12.76.  If you spend $200 in my newsagency on magazines and buy, say, 33 magazines at $5.95 each – spending $196.35 – you earn three free magazines.  With an average redemption $5.95, a $200 spend with us earns total rewards of $17.85.  We beat Coles and Woolworths.

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magazines

Wegmans closes photo labs

US supermarket group Wegmans is closing its photo labs.  Photo shops are closing across Australia too.  While newsagents can see the impact of digital photography through the sale of magazines and printer ink, I wonder how many of us are playing in the photo printing space, selling printers.  As a channel we have been too timid in entering the hardware space.  If Australia post can sell printers we can too and opffer an alternative to the shrinking number of photo labs around.

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Newsagency challenges

Partworks in Spain

spain_partworks.JPGI have been sent this photo by a colleague currently traveling in Spain – it shows how one news vendor displays partworks.  Beyond using the footpath to display the product, look at the range of titles.  I can count at least thirteen different partwork titles running.

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partworks

Astrology magazine oversupply

wellbeing_astrology.JPGOur net sales for the Wellbeing Astrology annual magazine for the last three years have been 2, 3 and 2. This year, thanks to the distributor (Network Services) and or the publisher, we have been sent 8. With a four month on-sale, we are protecting our cash flow are early returning three of these. While we could have returned more, we chose to return only three to ward off any argument about promotions they plan.

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magazines

The green magazine store idea

What if newsagents introduce a cardboard recycle box for customers who return old magazines when they come in to purchase new issues? This would present a good community message and build habit – getting customers to return to us. Of course, there would have to be some rules around what we do with these but they can be easily sorted out.

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Environment

Affordable Ink not so affordable

affordable_inks.JPGThis ink dispensing unit branded Affordable Ink has been installed at Forest Hill Chase.  A check this morning of their prices shows that their branded ink is not so affordable.  The same products at our newsagency in the centre retail for between 10% and 20% less.  What frustrates me is that the landlord lets another competitor in with dubious offer and based on a low real-estate and labour cost model.  This is disrespectful to existing tenants.  I wonder what their marketing, cleaning and other contributions are.  I am all for competition – Dick Smith is about to open opposite us – but in fair terms and based on an honest offer.

I would be interested if others have seen these units.

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Newsagency challenges

Calendar strategy delivers results

frank_cal.JPGOur calendar sales in September were up 72% at Forest Hill and 37% at Frankston.

At Forest Hill the increase is driven by having a solid range on display early in the calendar season.

At Frankston it is thanks to a new point of difference – previously this store focused on magazine distributor calendars. We are focused on a more unique range of titles. We have given over a column at the front of the store to promote our calendar range as well as to feature a Calendar of the Week.

At each store we are not discounting and do not plan to discount until after Christmas. We leasrnt our lesson three years ago after playing the discounting game for two years and losing. Now, we focus on range and service – two areas in which the discount calendar outlets.

Too often, newsagents think that discounting is the way to win a sale or grow a business is to discount. Discounting is admitting defeat if you have gone to it ahead of other smarter options such as a point of difference in range and or service. While there is a time for discounting with calendars, as I have learnt from my own mistakes it is not now – not even with others discounting nearby. If you have the right range you don not need to discount.

I’d note that the calendar strategy we follow is that developed by newsXpress more than five years ago, long before I joined the group. Indeed, this is one reason I was attracted to newsXpress – to replace magazine distributor calendars with better margin more unique product.

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Calendars

The Monthly – our magazine of the week

monthly_nov08.JPGThe Monthly continues to deliver excellent covers which cut through the visual noise in a newsagency. We are featuring the latest issue as our magazine of the week. While other retailers are paid a fee by publishers to feature titles, we do it because we believe in a title – a recommendation our customers can trust.

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magazines

The challenging book business

The book business as we know it will not be living happily ever after. With sales stagnating, CEO heads rolling, big-name authors playing musical chairs, and Amazon looming as the new boogeyman, publishing might have to look for its future outside the corporate world.

So opens a cover story in New York Magazine. Headlined The End, there is no doubt about the writer’s view of the book business. The article chronicles challenges faced bybook publishers. Many of these challenges face newsagents and this is what market the article compelling reading.

It’ll be rough going in the meantime; some publishers will transform, some will muddle through, some will die.

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Media disruption

Bargain Shopper overload, again

bargainshopper08.JPGLike, I suspect, every newsagent in Australia, we have been overloaded with Bargain Shopper. Based on last year’s sales we are headed to a 50% return rate. Maybe the new look will do the trick. We are doing our bit by creating a display next to our main newspaper stand. It connects well with the economic news of the day since the publication is all about helping people save money.

On the broader issue of gross oversupply as appears to have happened with Bargain Shopper, magazine publishers and distributors now more than ever need to take care. Newsagents do not have the capacity in today’s marketplace to be the bankers for publishers and distributors.

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Newspapers

Promoting Donna Hay

dhay_nov08.JPGWith a 2009 calendar and tea towel as gifts with the latest issue of Donna Hay, it is logical to promote this at the counter. I will be interested to see how it performs as Donna Hay sells steadily through the month – we will only have this display up for five to seven days.

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magazines

Compendium for gift related lines

compendium.JPGCompendium is supplier I’d recommend to newsagents looking to get into the gift or social stationery category. Their books, cards, booklets and other items are an excellent add-on to a greeting card purchase. We sell them in two of my newsagencies and they work very well. We actually started dealing with Compendium through our Sophie Randall gift shops. The Compendium range works for Sophie customers too.

I like that the Compendium products are well merchandised – this makes it easy to move around the store. Their various products are space efficient too. This enables us to fit them almost anywhere. For example, we bring it to the counter for a week or two, then move to the card aisle and then in the gift area.

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Gifts

Featuring magazine categories

I like the way they feature key magazine categories in the large newsstand at Dubai airport. As well as offering a full range on their regular magazine racking – showing 30% of the cover vertically – they have top titles in top categories on display in the three units you can see in this photo:

dubai_mags.JPG

What I like about these units is that they bring together several categories. For example, on the men’s magazines unit you have titles covering fashion, health, lads interests and cars. Newsagencies only co-locate the major weeklies if they co-locate at all. I like this unit from Dubai and want to see if I can get something with a slightly smaller footprint working to promote by key customer.

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magazines
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