I heard from another newsagent last week complaining about losing magazine sales because of a Coles deal which discounted a small group of popular titles by around 30%. In the story recounted to me, the newsagent was confronted by a customer asking for a refund for magazines purchased from them a few minutes earlier. Who can blame the customer for the question if it saves them $3.00?
A newsagent caring about their regular customers will find it hard to refuse such a refund request from a regular. They will be left wondering if they have to offer similar discount bundles to match the offer from Coles.
Several years ago, we got caught up in the pre Christmas discounting of calendars. We started in response to another retailer in the centre. We soon realised that we were discounting sales we would get regardless of the price since we offered a point of difference around brand, range and service. It took two years of hard work to win back higher margin business. All we had done with the discounting was to train our customers to expect to pay less.
I am concerned that this is what Coles and others discounting magazines will do – educate consumers to not pay full price for the popular magazine titles. I’d hate for that to happen. Look at major grocery items and liquor. These products are on a merry-go-round of discounting between the major chains. Smart shoppers never pay full price.
I’d hate for newsagents to be subjected to herds of customers chasing price. We rely on regular traffic – the peaks and troughs steep discounting is likely to cause could harm other parts of our business.
Some reading this may say that I discount already with the Magazine Club Card I created in 2004 and which has been adopted by newsXpress and some others. The Magazine Club Card is different. It rewards loyalty to the business. To achieve a free magazine, the customer has to purchase more than the average number of titles in a defined period.
The package discounting at Coles and some other retail outlets is trying to achieve the sale of two titles when a customer may only be shopping for one. While there is nothing wrong with that, the steep discount devalues the titles in my view and risks training customers to expect this as the norm.
I expect that the newsagency channel would be divided on the issue of discounting magazines. I do know of some newsagents who like the idea. What do you think? Would you participate if it were available to you?
Never ever.
Coles and woolies would be happy for us all to slide down that slippery slope as there would only be one winner – them.
For information:
I am aware that The Age are discounting this Friday’s Age at Coles Express outlets in Victoria in conjunction with Pura Milk.
Why not?
Seems the channel has already been sold down the river and discounted, itself, by mag and paper publishers, and distributors alike.
Why is there often a suffix, ‘NA’ after titles on mag dockets? Seems to me it’s because there’s also some special version out there. Or maybe we’ve got the special one – usually with a bag!
Just a thought. Could be wrong, of course.
The registered clubs associations jumped up and down when hotels got poker machine licensess but the hotel industry needed pokies to survive as the supermarket industry swallowed up alcohol sales. Are we prepared to accept the same happening with magazines? Supermarkets could end up selling magazines cheaper than we newsagents can buy them for. If you don`t believe this can happen ask your local publican how much he or she pays for a carton of beer and what your supermarket sells the same carton for.
Cheers
Al
Those of you who have a drink fridge in your shop.
Where do you buy the stock for it, CCA, or Coles/Woolies ?
woolies and i also buy all my chocklates there as well . buy a choclate bar for 80cents on special and selling them for $2.50 it is a biy hard to pass up and thats the same with cans of softdrink
Then again, woolies et al also demand very, very cheap prices on their goods. And many of these big suppliers will oblige, often at a loss. The little guys like us are the ones that help them with the shortfall, charging a premium.
We do sell most of the cans ex supermarket, but everything else is bought via CCA. Then again, CCA will advise that stores get cans from supermarkets. That’s the one thing they won’t get all precious about. I’d like to see them try, anyway.
Mark, We also run a magazine club card. Coles, Woolworths, Big W, Target are all running a buy 2 for $7.00. I know it’s only on selected mags for the moment anyway. It would appear from the poster advertising that it must be from network themselves who are subsiding it. Posters in all shops are exactly the same.
When & HOW does the newsagency channel apply pressure to magazine suppliers?
That is exactly how CCA wants to have it, they then only have to drop off at woolies or coles and not to all the little guys, once this is achieved watch and see what you pay for your cans then!!! CCA may be taking a hit now on pricing but as they say “short term pain for long term gain”. Support them at your own peril!!!!
Greg,
The best way for us to apply pressure is to make ourselves valuable to them. The last thing any publisher would want is for Coles or Woolworths to account for any more magazine sales. If that were to happen, publisher margins would be slashed.
Discounting is the only way these guys now how to gain entry into a market, once they establish themselves they jake the price up. No one should be suckered into going with these guys as they will not have the range or service to stay long term in the mag area.
Look at the US, the big chains are dumping mags because of the crap margins they offer compared to other lines that are less work.
The supermarkets also tried to muscle in on newspapers as well but that has gone down like a lead balloon, people will not line up at a checkout behind people with groceries simply to buy a paper or a mag. It will only ever be an impulse item not a destination.
Sorry to intrude, but for the price of say one magazine per month, you can get plenty of data on your iphone/smartphone and access all the magazine-style content you want plus much more..
Surely physical magazines will be a thing of the past soon..
As I went to buy my groceries last night, from Woolies none-the-less, I was very amused as I passed the aisle that contained their magazines. There was a couple flicking through a few of the (very poor) 4WD selection they had complaining quiet loudly they could not find the magazine they were after. As I passed them with my trolley filled with groceries I whispered “try your local newsagent, you’ll no doubt find what you are looking for there”. Both turned with appreciative looks, like they simply had not thought of that and said “thanks”.
Now two things struck me, firstly that they were complaining about the lack of variety at a supermarket who’s specialty is food not magazines and the second was that they had seemingly not thought to go to their lovely local newsagent who would no doubt have a wide variety of 4WD magazines along with other things.
Supermarkets have become one stop shopping and people are becoming lazy because of it. I think in order for us newsagents to surivive we need to embark on somewhat of a public re-education program, perhaps this is something our “hardworking” associations can do with the dollars we pay them every year??
good point, i like the idea
for the price of an iphone or smart phone you can buy a lot of magazines and besides that i don’t even know anyone with an iphone or a smart one . Speaking from my own experince most of my customers would not even have a normal moby phone let alone one with capabilities of reading a magazine so i don’t see this playing much of a role where i am in the near future ,but it might be a different story in the cities where every where you look people are on there phone looking stuff up .
Shaun…..same for this area.
Even my switched on youngest boy (Apple Tech) is over the “latest & greatest/wizz bang gadget”. He would rather lounge & browse with a “real” mag.
Shaun – I was referring to the incremental cost of a data plan on top of your phone plan.
It is a different story in the city – when I’m on the train many people are browsing the net on their phones these days. Also, absolutely everyone I know (including my grand-parents) have mobiles.