Woolworths is offering Woman’s Day and NW magazine for $2.00 off if purchased together in a catalogue promotion which has newsagents concerned. Discounting these popular weekly magazines in this way risks resetting consumer expectation in relation to price of these titles and other weeklies. Newsagents are not well positioned to compete if magazines go the way of other supermarket such as soft drinks and breakfast cereals which are always on special somewhere.
Discounting like this with the majors, if continued, diminishes the value of the newsagency channel – where 50% of magazines are sold. The last position publishers want is to be more reliant on supermarkets than newsagents for sales. This is what they risk if campaigns such as this one featuring Woman’s Day and NW take off.
While we run a loyalty program for magazines in our newsagencies, this is a whole of category offer and pursues genuine incremental growth rather than shifting a purchase from one retail channel to another.
Wouldn’t it be more beneficial to use a promotion like that in newsagencies in the hope of selling more of the publisher’s magazines which aren’t stocked in supermarkets?
Micheal, publishers already have newsagents where they want them so why would they offer us anything new, they see supermarkets as a huge potential market so will offer incentives to get in to that market. What they are missing is that supermarkets play harder then the small newsagent so will be more demanding and will drop them like a bad smell once they suck them dry.
The question is who is paying for the promotion, my calculations is it is a 4% return unless you are getting kickbacks. But this has happened before with offers like 10% off phone recharge when we only make 6% to start with.
Has anyone else heard about what Walmart has done in the US, they suck the local economies dry then move on, and people wonder what happened and why there isn’t any jobs left.
im sure Milk bars used to think they were the only ones who could and even should sell milk,they weren’t,and now they are extinct…why would we think we should be the only one to sell papers and mags,its flawed thinking ,and guess what milk used to be delivered in the mornings and now its not and the world didnt stop spinning
If nothing else can unite of channel than surely this type of behaviour can. Woolies wouldn’t have done this campaign off their own back. It is supported and a poorly driven stratergy.
What a message, each newsagency taking Womans Day off the shelf from Wednesday. We have our inital sales but the distributor wears the 15% or so sales that they may have got. 15% of 30000 each week will soon hurt. Yes it may drive people to Woolies but then again will it?
Or further still encourage sales of New Idea in its place.
Brad I am fairly certain if they can’t get the title at your store they will go elsewhere to get it, then next time they are thinking of buying a magazine they won’t come to you as you didn’t have it last time.
Not a smart business move afterall.
Mary simply a question of if 3000 newsagency’s did it. Look to the opening statement that under a joint approach It would hurt. I would love to sell 30,000 copies myself but alas no.
Yes the consumer will look else where if it was a definate purchase, these sales have occured by Wednesday, after that it is more impulse or ‘while I am here’. Yes Mary may not be a great idea with even 100 newsagents but this is a forum where you can vent somewhat.
Brad, Your suggestion of taking Woman’s Day off the shelf is not appropriate. Big sticks rarely are. We need to be smarter in how we pitch our channel to publishers.
At the end of day we just have to recognise the fact that we have been divided and conquered as a channel. We can expect much more of this to occur in the near future as our toothless tiger of a national body continues to work on commercial ventures rather than our best interests. Our only saving grace is that in the current economic climate many of the weaker newsagents will be bankrupted thus making the strong even stronger.
I can’t argue with any comment above.
Does anyone have any figures on pre and post deregulation?
I don’t mind newsagencies competing in the deregulated marketplace, but how can we compete if we don’t have some form of even keel with our competitors?
mark
dont you think it is time for the big stick to be used the anf has been using the softly softly approach for years?intlock home delivery fees and magazine cashflow problems not to mention bill express how much longer can we afford to take this? about time we took a stand cheers andy
What group in the industry has the power to wield a ‘big stick’? None.
yOU’VE HIT THE NAIL ON THE HEAD jARRYD, Coles and Woolies act as one unit and can demand huge discounts and kickbacks from all suppliers, newsagents are fragments and stand no chance on going up against this kind of power but there is more then one way to gain market share other than discounting.