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

Rupert Murdoch on old media

Rupert Murdoch writes in the latest issue of Forbes:

Consequently the old media are threatened by the erosion of our traditional profit centers. Certainly we can’t count on things like print classified advertising being around forever.

The same is true for newsagents. We cannot rely on old profit centres.

Old media can survive–and thrive–in this new environment, but they must adapt. We must learn how younger generations of consumers prefer to receive their news and entertainment, and we must meet those expectations.

So must newsagents.

The good news is that we are learning–and fast.

The bad news is that newsagents are not learning fast.

But the future of media is a future of relentless experimentation and innovation, accelerating change, and–for those who embrace the new ways in which consumers are connecting with each other–enormous potential.

The future of the newsagency channel lies in us stopping being newsagents and becoming, well, relevant because today our relevance has slipped.

Rupert Murdoch has a talent for making old media take notice at critical moments in time. He did this in 2005 and again last year. This essay in Forbes continues the trend. It is as much a call to action to newsagents as it is to old media. I hope we take notice.

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Media disruption

Too much of a good thing

english-mags.JPGOutside of the usual English weeklies and monthlies I am surprised by the range of English garden and home magazines. While I have photographed three titles, we usually have between six and eight on the shelves at any one time.

Sales are barely okay. They would be stronger if we culled the range. For example, we really only need one English garden magazine, not two. Magazine distributors would not necessarily see this oversupply as they don’t take on board what the others are doing.

The sooner we have a magazine czar controlling the magazines which get access to the newsagents channel the better.

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magazines

The bin diver

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One of the first customers we see each day is a chap who rummages through the bin at our lottery bench where people discard used instant scratch tickets. He grabs the tickets and checks them over and over. Every couple of weeks he finds a winner. How great is that?

Newsagencies are like that. We each have customers who interact with us in ways you’d never encounter in big business. Sure, some of these interactions are annoying but they connect us with the community in a unique and vital way.

When I first found out about our bin diver my instinct was to ensure the bin was emptied before we opened in the morning. Now, if I’m there when he comes in we trade a smile and I feel good that leaving a full bin is, in part, good customer service.

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Customer Service

Anzac Day connection

I continue to be surprised by the difference in customer interaction in my newsagency and my card and gift shop. Both are in the same centre and often attract the same customers. However, customers act differently in each store. In the card and gift shop people tend to share more of themselves and their experiences whereas I the newsagency speed to exit is the issue.

Take these Anzac inspired sculptures…

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We bought them not expecting strong sales – more for creating a connect with Anzac Day this week. Customers who see the sculptures often have a story to tell.

Seeing a customer bring someone else in just to look at the sculptures makes us feel good. It’s one of the experiences we wanted to create with this new shop.

There is an emotional connection we experience in the card and gift shop which we see less often in the newsagency.

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Uncategorized

Floppy disks?

No wonder newsagents are losing stationery sales. Floppy disks are one of the products to be featured on a flyer being sent out on behalf of newsagents next month. While floppy disks sell occasionally, they do not sell sufficiently to justify prime promotional space in a brochure or shelf space in my shop. We need to promote current branded product at keen prices – not yesterday’s product which few people use.

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Stationery

Social stationery challenges the newsagency

lady-jane.JPGCard companies are extending more and more beyond greeting cards and into social stationery and related items. Newsagents are taking up the opportunities of a broader product offering.

The challenge for newsagents is how to extend into what for some is a new category. Take the Lady Jane Note Blocks (see photo) from For Arts Sake. They are a brilliant gift, idea for Mother’s Day and beyond. Even though they come with an excellent retail display, it is not enough to have this unit alone – it needs to be part of a broader story of social stationery.

Newsagents moving into this space will need product from three or four suppliers so that they can create a striking visual display. They need sufficient stock and range so that social stationery can own its own space in store. This product cannot be located in the stationery department nor can it be located in the card department.

Products like the Lady Jane range work well when placed in a space of their own with complimentary products which, when seen together, demonstrate a choice for the consumer. The attractiveness of these social stationery items lend themselves to a bright and happy retail story. That cannot be achieved by one or two ranges.

The risk for newsagents is that they will be told by one card company rep to take their range of social stationery and nothing else. Better advice would be to take this range and be sure to get two or three other ranges too.

Social stationery is hot. It is not an easy fit for a traditional newsagency and requires different retail skills. The best way to learn how to make it work is to visit gift shops and some of the majors such as David Jones and Myer.

For me, success in the social stationery space begins with an appropriately diverse range.

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giftwrap

Dolly magazine sales kick

Sales data I have seen from several newsagencies shows that the ‘scandal’ of the photo on page 24 has resulted in a sales kick. Not massive but a kick nevertheless. The same newsagents tell me that despite the small kick, browsing of the title went through the roof last week.

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magazines

Dressing for Mother’s Day

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Like most newsagencies, our store is well dressed for Mother’s Day. We are fortunate that the newsXpress Mother’s Day materials integrate well with the Hallmark materials. We have used both to create a store within a store feel – somewhere special to find the right card and gift for mum.

Mother’s Day has evolved from being primarily about greeting card sales for newsagencies. Today, it’s equally about gifts such as journals, note paper, pens, books and magazine subscriptions.

We’re using our main display window to support Mother’s Day season.

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Please excuse the reflection off the glass in the photo.

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Greeting Cards

Borders up for sale in Australia?

I might have missed local media coverage of this announcement from Borders in the US about plans for its international stores including those in Australia. They have retained KPMG to assist in the processes outlined in their announcement.

This is big news given the considerable coverage given to the arrival and subsequent expansion of Borders here. The announcement does not suggest the brand will retreat, rather that they will seek strategic alternatives.

Newsagents need to read the entire announcement. It reflects knowledge of changes in categories or products and how consumers shop those categories which also impact newsagents. For example, that Borders is bullish about and expanding their Paperchase model is interesting – especially that they will be launching some standalone stores under this brand.

My view is that newsagents need to consider how e brand and the breadth of product categories behind the brand. We put considerable emphasis on a single brand to represent the whole of the store. It could be that that general store type approach is not working for us as well as several purpose created and small stores could.

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Newsagency challenges

Construction blocks access

Our landlord has constructed two of these rather large boxes in our newsagency, around 40 year old columns which need to be replaced. They will be in place for a month, blocking one aisle of stationery and an aisle of wrap and specialty papers.

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This box in the photo is an invitation for theft as customers can get behind it and pocket product without being caught. We will probably completely block this other aisle off Monday as the theft risk is too great.

We’re yet to resolve the issue of compensation for this three month intrusion into our floorspace.

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Uncategorized

Free sports newspaper model for Fairfax?

I have been wondering about the plan for The Form, the new racing guide published by Fairfax yesterday – separate for the first time from the Sydney Morning Herald.

One possibility is that they will make it a free weekly newspaper like Sport in London. Sport is distributed every Friday morning around London and while it has a broader focus than The Form, the free distribution model is one option available. The background material on their website provides a helpful insight into why they chose the free distribution model.

The UK Sports Journalists Association blog published a post April 19 about plans to launch Sportsnight, a free daily sports newspaper for London. This is an interesting and bold development – a daily (six days a week) sports newspaper.

This activity shows that the free newspaper distribution model is alive and well in niche areas. While Fairfax may have made some missteps with The Form yesterday, it shows them playing is a space which is working elsewhere. I would not be surprised to see them separate further from the SMH and pursue a broader audience.

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Newspaper marketing

The working poor

News Ltd’s Daily Telegraph has a cover price of $1.00. Over the many years the cover price has been $1.00, wages, rent and business costs for newsagents have risen at least 40%. The fixed low cover price means newsagents are far worse off today.

Newspaper publishers in their annual reports crow about advertising revenue growth. I’d told it accounts for in excess of 85% of revenue for a title and that he cover price is about recovering the cost of retail and home delivery distribution.

Newsagents are becoming the working poor with these low and unchanging cover prices. Our cost of doing business rises each year yet the return from a crucial core product such as newspapers remains flat – falling in real terms.

Newsagents are required to provide prime real estate, invest in display infrastructure, provide access to promotional space and carry the cost of rising wages, rents and overheads for a flat return. And to remain contented while the publishers push their product to more and more non newsagent outlets.

Publishers complain that newsagents are lazy, not compliant with their requirements and lack entrepreneurial drive. The compensation from newspapers does not motivate newsagents. Indeed, it de motivates.

If the publishers treated newsagents as business people and respected and rewarded entrepreneurial drive in a commercial way then more newsagents would demonstrate their business skills. When here is no such reward it is understandable that many newsagents channel their efforts elsewhere.

I urge the publishers to rediscover newsagents and reward entrepreneurial effort commercially.

The current behaviour toward newsagents is not socially responsible.

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Newsagency challenges

Another stuck on newspaper masthead ad

The Age today has another post it type ad – this time promoting weekend home delivery – $30 for twenty weeks. The bright ad pulls focus from the content of the front page and partially covers promotions for two features. When I pulled the ad off my copy, it tore the paper.

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As a retail only newsagent I’m not all that happy about the offer. I’d rather see more effort put into promoting impulse sales in my shop.

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Newspaper marketing

Toilet newspaper reading

Rydges Hotel in Canberra helps blokes pass the time while standing at the urinal by posting two full pages of the Canberra Times broadsheet. Today’s news selection was about the US shooting in Virginia. Heavy stuff while you’re on a rest break. Not sure if this makes me a pervert but here’s a photo of the toilet news offering.

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That’s a lot of reading.

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Newspaper marketing

Missteps by Fairfax with The Form

Newsagents are copping flack this morning from customers about The Form which launched today. I’m in Canberra today and noticed that at three non newsagent outlets the SMH is available but no copies of The Form. Here’s what newsagents are saying:

– The marketing material from Fairfax provided to some outlets does not make it clear that a purchase of the Sydney Morning Herald or the other participating papers.

– Customers expect The Form free with their paper and are annoyed it’s separate.

– Some newsagents have insufficient stock. UPDATE: make that: many newsagents have not received sufficient stock to cope with demand.

– Fairfax received too many requests for supply from SMH subscribers to get them processed in time leaving many home delivery customers without the race guide.

– Newsagents are copping flack because of these and other issues without compensation by Fairfax.

The Form doesn’t make sense. Why separate out of the newspaper a popular section and make customers jump through hoops to get access to it? One theory is that this sets the new title up for wider free distribution. But if that were the case then the launch would have been handled differently from the outset. As it is, Fairfax has got their customers and the supply chain offside. The title has a stink about it.

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Newspaper marketing

Intermedia disrespects newsagents

instyle.JPGA newsagent colleague contacted Intermedia yesterday wanting to purchase InStyle – for the Hairdressing Professional magazine for sale to a customer. The Intermedia representative said they would not supply the newsagent and that they wanted the customer direct – expecting the newsagent to hand over customer details. After further discussion agreement was reached to supply the title at full retail price to the newsagent.

So, the newsagent, providing exceptional customer service and hunting down the publisher, is rewarded with no commission. The usual commission for a magazine is 25% of cover price. Shame shame shame Intermedia.

Intermedia needs to decide whether they want newsagents to support their other titles such as Inside Film. Newsagents could be excused for pulling Inside Film if Intermedia does not change its approach.

Newsagents are the magazine experts. They offer a low cost road to market for publishers, especially Australian publishers. Companies like Intermedia need to respect newsagents and work with them on building sales rather than rejecting them.

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magazines

Isubscribe is bad for business

isubscribe.JPGFollowing my post this morning about the Mother’s Day magazine subscription deals at ACP’s magshop, tonight in the mail at home I find the twelve page mother’s day offer from isubscribe. I hope people don’t subscribe with this mob. If people want to get their magazine on time and in good order they ought to ask their local newsagent for a putaway. isubscribe has a sweetheart deal with publishers which gives them a wholesale price per title considerably less than small business newsagents. It sucks.

It is deals like this between publishers and isubscribe which lead to consumers thinking newsagents are expensive. Look at Good health. I get 25% off the cover price, I promote it actively in store with at least two major aisle end displays a year plus a multi pocket display every month. Isubscribe has this title for 33% off and they make money on top of that. reader’s Digest is worse – they have it for 50% off. Lovatts crosswords 30% off. National Geographic 45% off. Life Etc. from our ABC 44% off.

Magazine publishers will tell us they need a balanced supply chain – subscriptions, newsagents, majors and other retailers. Yet it is newsagents who invest the most in promoting these titles in terms of display and shelf space. It is newsagents who are compensated the least.

I wish publishers would compensate me as handsomely as they seem to compensate isubscribe. I wish they supported small business. Once day they will wish they did.

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magazines

Sydney Morning Herald supply problems tomorrow

Several newsagents have contacted us saying that there will be supply problems with the Sydney Morning Herald in regional areas tomorrow as a result of industrial action at their Chullora plant. The timing would be unfortunate because of the launch of The Form tomorrow – the free racing newspaper with the SMH – it used to be part of the paper and is now separate.

UPDATE: There is a stop work tonight from 10pm and another planned for tomorrow afternoon – this could impact Saturday’s paper.

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Newspapers

Is the Dolly naked pic marketing?

The publicity given to the ‘production error’ on page 24 of Dolly and the subsequent cover up of the image on copies sold through major retailers (and not newsagents) should result in bumper sales. An anonymous correspondent has suggested to me that the ‘error’ was made in marketing. I have no idea if it’s true and don’t really care. However it happened, sales are strong and that’s good for magazines.

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magazines

ACP Mother’s Day offer trades off newsagents

ACP Magazines has a great Mother’s Day magazine subscription offer with a First Class trip to Ireland as the prize.

I discovered the offer by searching for newsagents magazines in Google. Check out the results. The link to the promotion is an ad ACP is running – they pay Google per click on the ad. It’s disappointing that someone searching for magazines in newsagents gets an offer for direct supply from ACP.

While I appreciate ACP needs to promote its magazines any way it can, I wish I could offer this prize to the many customers who sign up for ‘subscriptions’ in my store – putaways we call them. We have around 200 customers who commit to collecting every issue of magazine(s) they like and every time they pay full price. So, because they don’t take the discount and don’t have the magazine delivered to their home, they miss out.

I’d prefer to see ACP invest marketing dollars in newsagent putaways. Newsagents, in turn, could provide good in store support for this exclusive retail offering. This seems to me to be a win win for the taking.

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Newsagency challenges
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