Harvey Norman slows Ofis
The Australian yesterday reported that Harvey Norman’s new Ofis stationery business will not expand as rapidly as originally planned in the face of tough retail circumstances.
Swobbles and school holidays
Launching the range of Swobbles at the start of the school holidays have proved good timing. The colourful window display attracts kids and they bring parents and grandparents. Once they look at the display they see our card and social stationery ranges and this is a department benefiting from Swobbles in the window.
Another ad stuck on The Age
The marketing department at The Age newspaper decided that promoting 65% off cover price home delivery offer is more important than a headline about Glenn McGrath and his biography about life with Jane. What other newspaper publisher trashes their masthead and editorial content in this way?
Basic newsagent marketing
Marketing outside your newsagency is essential to growing the business. Too often I see newsagents rely on existing traffic or natural growth to boost sales. The latest Create Art flyer from newsXpress will bring new customers looking for quality art products at good prices. Some of these new customers will stick. The flyer is part of a broader year long marketing strategy designed to drive traffic, sales and depth of spend across multiple categories.
Major retailers spend a minimum set percentage of turnover every year on marketing. The Australian on Thursday had a story about Woolworths increasing its annual spent to $100 million, up 16% on the previous year. While newsagents cannot compete in quantum, they can compete by establishing a marketing budget which is a percentage of turnover. They can then balance the use of that budget across appropriate activities.
The Create Art flyer is a good example of cost effective marketing. Developed by the supplier exclusively for newsXpress, the store level cost can be zero or small depending on the number of flyers engaged and how they are deployed. The key is regular promotion of the business, using compelling offers for different categories, outside the shop.
Smart newsagents will increase their marketing spend across multiple departments in the face of tougher economic circumstances. Good execution will be rewarded with insulation against any downturn in our retail niche. Doing nothing externally sets the business up for average year at best or a drop is sales at worst. Given that rent, wages and other business costs increase annually, chasing growth is the only option.
I have some questions for newsagents reading this:
- What percentage of your turnover do you allocate to marketing?
- Is the marketing budget spread across your top four departments?
- Is the marketing spent on activity outside your store to pull new traffic?
- How do you track the success of the marketing?
- When you send external marketing do you engage in-store with a message and theatre to reflect the offer sent out?
- Is there a plan to your marketing at least six months out?
The risk is that newsagents and other small business owners see external marketing as too hard, that they cannot compete with the $100 million spend of the likes of Woolworths. There are many newsagencies which offer proof that you can compete. It is a challenge but as small business owners we are more local, flexible and connected than our big business competitors. Individual businesses can use this to their advantage. Groups of newsagents such as newsXpress can use their size to their advantage – as the Create Art flyer shows.
Stealing the crucifix
The crucifix from the front of a children’s book, My Little Book of Prayers, was stolen from our book sale table earlier this week. How pathetic is that? Given the price of the book, the crucifix would have to be worth less than 20 cents so I ask why? Because they can I guess.
The Classic Australian Movie Collection
I have see the TV commercial for the Classic Australian Movie Collection partwork series which is to launch July 16. Like other partwork TV commercial, it is designed to drive traffic exclusively for the newsagent channel. The first five movies are: The May From Snowy River, Gallipoli, Sunday Too Far Away, Rabbit Proof Fence and Picnic at Hanging Rock. This series has the potential to be HUGE and it is exclusive to newsagents!
Journalist layoffs
Check out the graphicdesigner blog for journalist layoffs by newspaper publishers in the US this year. It’s gruesome and indicates the impact of disruption on old media.
ASIC looking at Bill Express
Today’s Australian Financial Review reports that ASIC is investigating Bill Express. This is on top of reported active investigations by the ACCC and the Federal Police into matters related to Bill Express.
My understanding is that more former employees are prepared to speak out about matters relating what they saw while with the company. Someone has suggested that this is what will lead to further attention on OnQ and ETT.
Yesterday, OnQ, a major shareholder in Bill Express, announced that it would no longer consolidate, take over, Bill Express. In the same announcement the company said it was withdrawing fdrom International projects but did not provide details. My understanding is that the Vietnam operation is one such project. If this informatuion is current, it will be intresting to see the broader ramifications for the BOPO offer.
Bill Express has invested considerable funds into the launch of BOPO and while it has gained some traction, the return is probably not where it needs to be at this point.
One executive within Bill Express has been putting it about that what has been published here about Bill Express is fiction. I clearly identify what I have been told versus what I know to be true. He or anyone else in the company is welcome to let me know what is inaccurate so I may publish a correction.
The problem with overseas crossword titles
Newsagents must take action on overseas crossword titles. All three magazine distributors, Gotch, Network and NDD are supplying us with these titles. Collectively, overseas crossword titles perform appallingly. This performance is driven by having too many titles on offer.
Given that the distributors seem unable to resolve this problem, the only option is to tell one or two of them I no longer want overseas crossword product from them. This will leave me with selection from one distributor and, hopefully, better sell through rates from a smaller range. Based on performance, I am likely to drop NDD and Network (except for Puzzler titles which perform well).
The only alternative is for distributors to agree to a pay for performance model. If a crossword title has a sell through of lower than 50% they pay me a service fee. This has been put before and rejected.
Intralot scratchie sales strong
Three days in and our Intralot scratchie sales at Forest Hill are better than where they were under the old brand. At Frankston and Watergardens where the category is new for us sales are good but with room to grow. Still little comment about Intralot vs. Tattersalls.
The Intralot launch has been a bit rocky but nothing more than I would expect for a new business. Given some of the hurdles they have had placed before them I’d say they’re doing okay.
LA Times launches kindle version
The LA Times is now available for the Amazon Kindle Reader according to the LA Times blog. This is another step in the evolution of news distribution.
Promoting wedding magazines
We have created a column of wedding magazines next to Australian Women’s Weekly, a column of crossword titles and our top selling weeklies. This is in addition to our usual wedding display further into the magazine department.
The display has been up for two days and has resulted some sales. We will leave it in place for two weeks before we replace it with another category we want to feature in the high traffic area.
Since it is wedding season the time is right to co-locate wedding titles in this way. There is no shortage of stock to display.
The newspaper honey pot
Newspapers generate a tremendous amount of traffic for newsagents. The photo, taken yesterday at Forest Hill, shows how we try and leverage add-on sales from this traffic. We have more items around papers than usual because all other display spaces are being used. Usually, we would have only two stands next to newspapers. That said, what may appear to be a cluttered look is working well without hurting newspaper sales. We will leave the display setup like this for several more days, a week in total. Anything longer and customers don;t notice.
Maghound magazine subscriptions
Maghound is an online subscription website developed by Time Inc. in the US for selling magazine subscriptions. They have close to 300 titles already. What is interesting is the ability to subscribe to multiple titles and have one charge.
Maghound subscribers will also be able to switch between titles mid subscription – that’s weird. I am surprised publishers accept it. I can’t see a subscriber switching from one title to another happily given that when they sign up they committing to a title long term. It has always been this way. I’ve not heard people talk about wanting to switch so why create the proposition. Okay, there is the point of difference but it’s not that good for a point of difference.
Top Gear launch of the year
Even though the year is barely half over it will be a challenge to beat the launch of Top Gear. This is the best launch I have seen in a long time.
The marketing collateral is excellent, supplies good and the word of mouth around the new title fantastic. These elements make it easy for newsagents to support the launch. Kudos to ACP Magazines for their support.
The reward for all the effort around the launch of Top Gear is excellent sales.
Joining the Bill Express class action
Newsagents wishing to join the Class Action commenced by a group of newsagents in NSW can do so by emailing their details to Hank Spier at spierconsulting@netspeed.com.au. Hank is the Barrister involved in the action with Charles Sweeney QC.
Once Hank has your details he can provide advice on a lawyer / client basis which may include advice regarding the monthly equipment lease.
Petrol prices challenge magazine sales
Mediaweek has a report Australian newsagents should read about the impact of high fuel prices in the US on over the counter magazine sales.
One major distribution executive said that his company’s unit sales were down 6.5 percent in the first quarter versus the year-earlier quarter. And at major wholesaler The News Group, unit sales declined 7.4 percent for the first four months of the year compared with the year-ago period. Particularly hard hit were men’s titles, down 26.2 percent, and news magazines, down 17.6 percent, per the wholesaler. Celebrity magazines were down 6.4 percent, although dollar sales were up as a result of cover price increases.
The report claims some publishers are considering cover price discounting based on coupons to drive sales. I don’t like that idea at all. I would rather publishers work with retailers so that we can more easily fund sales and marketing levers in our businesses to drive sales.
I’ll have some more to say about this in a few days but I’d note that newsagents can take action right now to shore up magazine sales in a tougher economic climate. Yes it means more work – but it is what one does in the face of competition, work harder. In today’s market the competition is for the dollar because of higher fuel prices and people spending less of luxury items.
Trashing magazines
It is my experience that bagged children’s magazines are less likely to be opened and trashed in-store than car, craft, women’s, surfing and computer magazines. Every day we pick up product trashed by adults. Bags ripped open, freebies missing or on the ground. The example set for children is appalling. The adults ought to be ashamed.
Media interest in Supanews story
I have heard that there is media interest in the court case being mounted by Corie and Tammy Schwarzl against Supanews. Their blog has a sniff of this story. I have heard elsewhere that the story of what happened to them at Supanews Tuggerah is if for serious attention.
Starbucks to close under performers
Starbucks has announced that it is to close 600 underperforming stores in the US market. The closures are part of a commitment by the company to transform its business. Starbucks is doing what Kleins in Australia did not, they are re-energising their retail offer, ensuring relevance.
The question we have to ask ourselves is how many newsagencies would be closed if a review similar to that undertaken by Starbucks was done in our channel. How current is our model? How relevant are we to today’s consumer? Would a Starbucks review lead to our closure?
What lottery loyalty?
I watched a as a customer asking for a ticket in the now defunct Wednesday Tattslotto for tonight was easily sold an alternative product. As I noted in my post earlier today, customers don’t care about the brand, some don;t even care about the actual game. It is the dream for tonight that matters – hence the ease of selling an alternative ticket.
Promoting Harper’s Bazaar
Our latest counter offer at Forest Hill is for Harper’s Bazaar magazine.
The free Florence Broadhurst notebook worth $39.95 which comes free with the magazine makes this an ideal counter offer.
Promoting this at the counter solves a problem of trying to make this item work in traditional magazine fixturing – where the notebook offer is lost. Displaying the offer opened out as we have respects the magazine and the gift.
Bill Express related entity in liquidation
Bill Express related entity Technology Business International Pty Ltd (TBI) has appointed a liquidator. TBI is the company newsagents signed leases with for the Bill Express equipment. The only resolution put to the extraordinary general meeting of TBI was:
That as the company is unable to pay its debts as and when they call due, the company be wound up voluntarily and that Geoffrey Neils Handberg be appointed Liquidator for the purpose of such winding up.
The meeting was attended by Sandro DiDonato as proxy for Technology Business Holdings Pty Ltd (TBH), the sole shareholder in TBI. TBH has four shareholders with 96.5% of the business being owned by Equip Rentals Pty Ltd (ER). ER has one shareholder – Sandro DiDonato and was deregistered in December 2007.
Bill Express accounts for June 20, 2007 listed TBI and Technology Business Systems Pty Ltd (TBS) as owing $22.8 million to Bill Express. The imminent liquidation of TBI would appear to reduce the assets of Bill Express by $22.8 million – unless it has been part or full repaid between June 3, 2007 and June 30, 2008.
The minutes for the extraordinary general meeting of TBI were originally dated June 26, 2008. This was amended by hand to June 30, 2008. While I am not sure about the significance of such a change, I wonder in the minutes were prepared in advance of the meeting and if so, how far in advance.
Newsagency sales benchmark
I am undertaking another sales benchmark study with newsagents, this time for a full year to June 30, 2008 compared to the year earlier. The details on how to participate can be found here. The more newsagents participating the more useful the data.
Scratchies back in town
The drought is over! Scratchies are back in town – instant scratch tickets that is. We received Intralot scratch tickets yesterday, put them out and achieved good sales – including in two outlets which had never sold this category of product before.
Most customers don’t care about the brand, they care about the game or the price of the dream or entertainment they are buying – many yesterday would not know they were among the first to buy Intralot product.
Instant scratch tickets are an important part of the product mix and having them available again after a two week absence reminds us of this. A bonus is that Intralot are flexible about location.