Bauer yesterday launched a three month long promotion exclusively in Woolworths supermarkets across Australia. The stand in the photo is the in-store offer:
BUY ONE GET ONE ½ PRICE.
The Bauer titles involved are: Woman’s Day, NW, Take 5, OK!, Yours, Australian House and Garden, Australian Women’s Weekly, Cosmopolitan and Homes+.
A supermarket person I spoke with yesterday said they expect Bauer would be paying Woolworths for the space for the floor unit in each store for the three months and compensating for the cover price discount.
I get that publishers need to pitch different offers in different channels from time to time. Most of these promotions run for a week, two weeks or maybe the on-sale period of a monthly.
This three month long campaign by Bauer and Woolworths is too long. It has serious potential to divert purchases from local newsagencies to Woolworths. Is this what Bauer wants? Their actions suggest it is.
The newsagency channel people at Bauer, people who probably had nothing to do with the Woolworths decision, would remind us of the money the company spends on our channel – merchandisers, the Connections program, a business building program and reader rewards. None of these investments has tangible value for newsagents in my opinion. I would rather the company make a more direct and practical investment in our channel.
Newsagents account for 50% of magazine sales. This makes us the largest single channel of magazine sales in the country. The investment in our channel should reflect this and it should consist of offers and marketing that shows us as the dominant magazine channel.
The thirteen month long promotion in Woolworths is a mistake by Bauer in my opinion, inexcusable. It is an attack on small business retailers, the very retailers Bauer executives claim are important to the company.
I was at the Bauer Connections conference in Brisbane a few months ago and listened to the usual round of praise for newsagents and statements of how important the channel is to Bauer. The thing is, these statements are hollow when confronted with the Woolworths promotion.
This three month long promotion by Bauer exclusively in Woolworths has come at a time when the company is flexing its muscles with some newsagents. They are demanding magazines be located in prime space and that Bauer titles be given 50% of space. This is truly ridiculous. If they push that with me I will quit their titles as Bauer titles taking 50% of magazines space and magazines being in prime location in-store would not pay for the retail space.
The issue of Bauer space demands and the Woolworths promotion are connected as they are all part of today’s magazine world. The publisher is doing what it thinks is best to address crashing circulation and in that mix of activities is forcing newsagents to commit to prime space allocation and paying Woolworths to discount titles so as to pull sales from nearby newsagencies.
Yes, this is the conflicting world in which we find ourselves.
What should Bauer do?
They should produce compelling magazines that are highly sought after for content. They should make magazines harder to get. This will see shoppers value them more. They should support newsagents as magazine specialists as I have outlined here before when I called for magazine publishers to ditch support for supermarkets.
Yes, I know, I am not a publisher, what would I know? I could be wrong on this but I think Bauer getting closer to Woolworths will not work for Bauer in terms of their newsagent relationships nor in terms of the long term Woolworths relationship. I see Australia’s two big supermarkets as greedy, selfish and not good for local communities. I’d not want to be part of helping them hurt communities. I see newsagency businesses as family run, and local, vital to local community health. I know which of the two is better for Australia and Australians in my view.
Newsagents account for 50% of mag sales, maybe. But we are not a single channel. We are more a grouping of disparate businesses with differing aims, no marketing clout, competing strategies. What benefit for Bauer in trying to herd cats.
And they wonder why Newsagencies are reducing pockets and chasing change.
They are lemmings bereft of ideas
Time to pay for pocket space if they want priority in newsagency. By the way customers are not fooled to buy junk magazines, those pensioners are wiser than before. Not asingle customer says i love woman day, i hear more from hello mag buyers
Colin I think you miss my point. Bauer spends time and money telling newsagents how important we are yet they do not invest in actions that measurably benefit us. My request is they are smarter at what they claim to do.
In Media Diary in the Oz yesterday was yet another list of Bauer management who have quit. Pretty hard to be smarter about what you do when anyone who knows anything has left and your left with newbies without years of experience within the company.
Make a statement then Mark…remove a title such as Yours magazine or Cosmopolitan from your stores, accompany it with an official letter explaining why…..
You are in a position to make a statement that will make them listen…
This has gone on for many years.. none of this is new. Unfortunatley though, NO industry representative has lead the way in making a statement.
The Bauer conference is a crock of shit…a smokescreen to ease the concerns of naive newsagents.
People power CAN make a difference, as seen a few years ago when Fairfax attempted to make newsagents insert the TV Guide into its newspapers.
Well written letters and emails mean nothing without a clear consequence to support it.
Mark, I got your point about duplicity of Bauer.
My point is that 50% of magazine sales do not come a single channel. They derive from a collection of outlets that are in decline, are factional and disperate. Newsagents are an easy target for the likes of Lottoland, Bauer and Newscorp. And when the monopoly GG gets its act together, we can expect them to join the feeding frenzy.
The term Newsagency has become toxic. The best will distance themselves whilst the rest whither. The major suppliers are not charities, they are in it for profit and if that means exploiting the weakest link, so be it.
Amanda is right. Magazine retailers need a banner to rally behind. But it ain’t got a come from the Newsagency Channel as it is the problem, not the solution.
Amanda, I, like all newsagents with direct magazine supply, have a contract with Bauer. Doing what you suggest would breach the contract.
This blog post is a statement. In fact, it is the only public statement.
This campaign by Bauer feels new to me. 13 weeks. Many titles. The level of discount.
I made my feelings known to the company when I heard of the campaign last week.
Any newsagent contemplating your urged statement would have to consider withdrawing from the Bauer contract.
Colin, Bauer refers to the channel. It sees it as a single thing despite the different trading names. All I am doing is calling on the folks at Bauer to match their words with actions.
How convenient for Bauer. They deal with a single entity that has no cohesion or voice. Makes if very easy to do one thing and say another.
Contracts are signed by both parties. They come up for renewal and as with any contract, terms are negotiated and agreed.
Channel members need a cup of cement. Toughen the fxxk up. I’m up for the fight but where is the rallying call gonna come from. Sure as hell the associations are not up to it and the marketing groups have their own priorities.
And welcome to the old newsagency channel. This is an opportunity for groups to differentiate. I suspect those that do will not talk publicly about what they do in this space.
Mark on your comment that all direct supply newsagents have a contract with Bauer is that still true for new entrants to the industry?
I would have thought a contract with Gordon & Gotch guaranteed supply of all titles distributed by them including Bauer titles. It’s not like we have a direct contract with Pacific Publishing or any other independent publisher distributed through G&G.
If Bauer’s pressuring newsagents to display magazines in a way that benefit’s them and disadvantages us and we don’t actually need a contract cant newsagents invoke the 12 months notice and tear up the contract in a years time?
Steve, my understanding is that for a newsagent to have direct supply of Bauer titles they must have an agreement in place. This would be a direct agreement or an assignment of an agreement with the previous owner.
This contract situation with Bauer has continued even after they closed their distribution business.
What each newsagent can do will depend on the actual contract in place.
I have suggested to Bauer that this issue needs resolution on a national scale, that the terms of the contract, dating back 16+ years, are out of date.
Mark, I suppose it’s unfortunately a case of “might is right”.
To be honest I can’t find my original Network contract but a read of the current Bauer one is sobering reading. “Agents must allocate at least 30% of agents retail selling space to the display of magazines unless otherwise agreed by Bauer Media”, I’m not sure if that’s 30% of your entire shop dedicated to magazines or 30% of magazine space dedicated to Bauer titles but either way it would be unpalatable for most newsagent’s and I suspect a lot of us are in breech of our contract’s. And thats before the 6 poster racks inside 6 poster racks outside and 20% of window space dedicated to promoting Bauer products.
Steve, it is 30% of the entire retail space.
This is one of several reasons why I have urged Bauer management to review the contract. The current one is, mainly, more than sixteen years old and woefully out of date with our businesses today and the marketplace more broadly.
Bauer will send you the contract for your business if you ask them.
Having bought the business in 2014, I recall a fairly demanding Network contract and less so with GG.
I regarded the Network as unenforceable and besides the shop already did not comply. I ignored the contract and took out 50% of magazine space.
With. Network gone my only contract is with GG. What proportion of magazine sellers are in my position. No direct contracts with Mag publishers and free to do as they please.
Can of worms opened Colin. This is a good topic for discussion.