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

Author: Mark Fletcher

Terrific email from a magazine publisher

Check out this terrific email from Dave Brazier, Publisher and Editor of Boar it up Ya and Shoot Ferals Australia magazines:

Hi Mark how are things?

I cannot remember if I advised you of some changes I’ve made to assist in helping Newsagents that little more. Reading your thoughts on IPS on the Blog prompted me to send this to you.

Boar it up Ya & Shoot Ferals Australia magazine titles recently returned to IPS for all distribution requirements throughout Australia.

I have used all distributors available within Australia in my 13 years of publishing, and am of the firm belief that IPS now offer the best sales and support model for Newsagencies by far.

Offering 27% commission for Newsagents that stock and sell my titles I see is a step in the right direction in supporting so many agencies that continue to struggle in the current business and technology climate.

In my direct support of Newsagents also, as of March 2015, subscriptions to both of my titles have ceased as I continue to promote and encourage readers to purchase or pre-order my titles from Newsagents and sub-agents direct. Newsagents are by far the biggest sellers of my titles and I fully appreciate the effort and struggles to house so many titles now within my particular market.

After speaking with many local Newsagents here in Newcastle where I am based, I have a better understanding of the day to day problems Newsagents are faced with. As a publisher I am doing my best to try and alleviate some of those problems, firstly by utilising IPS who will supply what is required to avoid over stocking, offering an extra 2% commission, not accepting subscriptions and reducing the overall sales period due to storage and display area restraints. My previous distributor initially pushed for a 16 week on sale period without me knowing or understanding that a majority of agents would pull stock off the shelves after just 8-10 weeks of on sale. In light of that, both of my titles will now be offered for sale for a period of 8 weeks only throughout Newsagencies in an aim of helping you with cash flow and storage procedures. I think a maximum 8 week on sale period is reasonable.

I’d like to thank all agencies who stock and supply my titles, and wish you well into the future.

Dave Brazier
Mob: 0418 502 760
Publisher / Editor “Boar it up Ya” & “Shoot Ferals Australia” magazines
PO Box 596
WALLSEND NSW 2287
www.boaritupya.com
www.shootferals.com.au
FIND US ON FACEBOOK / TWITTER / INSTAGRAM

I am grateful to Dave for giving his permission to publish the email here. If ever newsagents needed encouragement to support these magazines here it is!

22 likes
magazines

Why should Australians care about the future of the local newsagency?

The discussion flowing from comments by the editor of Monocle about newsagencies in Australia got me thinking about how we are perceived in the marketplace.

By we I mean newsagencies. Whether we like it or not, our businesses are all bunched into one bucket. One crap = all crap.

Do Australians care about us? This is an important questions because some in our channel rely on Australians caring. I think this is part of what is emerged in shop local pitches. For people to want to shop local or support Aussie businesses like newsagencies they have to like you, they have to see value in your business for them.

Before we can answer the question about perceived value, we have to know what we stand for. From what I see, too many newsagents to do not stand for anything other than running a traditional newsagency. There is absolutely no future in this as such a business has no point of difference.

We have to ask ourselves:

  • Is our business relevant?
  • What is it we stand for and is this of value to those we serve?
  • Are we competitive?
  • If we closed tomorrow would we be really missed?

Underscoring all this is the question: is your business growing?  If it is not, then you have your answer – you are losing relevance. You have competitors selling magazines, newspapers, cards and stationery that are growing. If they are growing and you are not your business is not as relevant to your shoppers as theirs.

I think there are some newsagents who act as if they are entitled, entitled to certain treatment by suppliers, entitled to support from the community, entitled to deals way beyond their trading circumstances.

All that matters is your own numbers compared against your history. Are you attracting more shoppers, increasing revenue and achieving a better trading gross profit?

It is easy to get angry at a magazine publisher who makes an ignorant comment. While it’s fair to complain, it is more important to take it as an opportunity to look seriously at your own business. Is it crap? Can you do better?

We have more competitors today than ever. Our only response to this is to be better at what we do than ever.

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Newsagency management

Overloaded with Hooray magazine by Network Services

IMG_8417The magazine allocations gurus at Network Services have outdone themselves sending us more than double our supply of Hooray magazine without evidence of us selling out.

What a waste of time, paper and money. It makes a mockery of their claims to the ACCC that they want to help newsagents make money from magazines. Their actions continue to fail to live up to their words.

Click on the image and see the ridiculousness of the situation.

Screen Shot 2015-07-16 at 12.59.07 pmI did a search on the Hooray website to see who else nearby has the title. Sure enough, it is everywhere. I wonder if Network has overloaded my competitors?

If I was the only retailer with the title I would feel better about more stock but with these other outlets nearby why on earth send double the quantity when there is nothing special about this issue.

7 likes
magazine distribution

I am not the Mark Fletcher on the POS Solutions blog

Screen Shot 2015-07-16 at 7.54.28 pmA Mark Fletcher made a negative comment on the POS Solutions blog on June 24. All comments on that blog are moderated. I emailed the owner of POS advising the comment was not from me. I also commented on the blog saying this – twice. My comments have been blocked. The negative comment remains without clarification. It does not make sense.

I mention it as a newsagent chided me for the rude comment.

Update (19/7): Bernard Zimmermann, the owner of POS and moderator of the blog has now removed the comment. I’ve not heard from him so I don’t know what the story was/is.

13 likes
Ethics

IBISWorld: Newsagencies are turning to non-traditional sources of revenue

Screen Shot 2015-07-16 at 6.32.44 amOn a forum managed by the ANF, a copy of the IBISWorld Industry report OD5495 Newsagencies in Australia January 2015 has been published.

This report is copyright protected as outlined on their website and costs $995.00 to purchase from IBISWorld. I suspect IBISWorld management would like to know from the ANF about the source of the report and why it s forum has been used to distribute the report.

While I am not publishing the copy of the report leaked to me, I will comment on some data points as they do not ring true to me.

The report claims on page 3 there are 2,470 businesses in the newsagency channel. I think this number understates the facts by around 1,000 businesses. It also disagrees with the various numbers of newsagencies put about by representatives of the ANF.

In 2013 I received an email from the head of communications for the ANF seeking data for the IBISWorld report being collated at that time. That correspondence leaves me wondering if data for this latest report was provided by the ANF.

The report claims newsagency marketing group membership:

  • Newspower: 21.8% or 438 locations.
  • Nextra: 11.4% or 281 locations.
  • newsXpress: 5.2% or 128 locations.
  • The Lucky Charm: 1.5% or 37 locations.

On page 27 of the report the author claims a total of 3,500 establishments and 2,470 enterprises. Even using this data the marketing group membership numbers feel wrong:

  • Newspower: 21.8% or 763 locations. The ANF CEO told me last year it was 650.
  • Nextra: 11.4% or 413 locations. The Nextra website says the group has 295 outlets.
  • newsXpress: 5.2% or 182 locations.
  • The Lucky Charm: 1.5% or 52 locations.

I can only speak for newsXpress, the group for which I have accurate data. In January this year newsXpress had 185 members. Today it has considerably more than this. I encourage representatives of Nextra, Newspower and The Lucky Charm to correct the record.

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Newsagency challenges

When an employee resigns by text message

While we as employers have considerable obligations to employees in terms of notice required for roster changes through to termination of employment, employees have far more flexibility. This was brought home to me recently when a casual employee with a regular roster of 38 hours a week sent a text message resigning an hour prior to their rostered start time on a Sunday morning.

There had been no complaint, no inkling of unhappiness whatsoever. Indeed, training was being provided for what we hoped would be a long-term retail career.

While I accept the regulations employees must adhere to, I think there is room to increase obligations on employees in some areas. In this instance, for example, I’d suggest some form of modest financial penalty would be appropriate for resignation at such late notice.

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Hiring employees

Another Bauer discount magazine pack

IMG_8393This discount pack of Woman’s Day, Yours and Good Health for $9.95 is a massive discount off the cover price of all titles. I look at this constant discounting by Bauer and wonder where and when it will end. I am not aware of any newsagents who see the discount packs work financially for them.

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magazines

Monocle editor responds to reporting on his comments about newsagents

Please see below comment from Tyler Brûlé, editor in chief of Monocle in response to comments attributed to him by B&T and commented on by me here.

As Australia is one of our most important markets (third biggest in the world) it’s clear that that most in the trade do a very good job and it’s hardly in our interest to criticise an important franchise of independents who’ve been critical to our growth. You will note that the headline in B&T does not reflect the content of what was said in the interview. The point being made is that everyone in the magazine distribution has to work hard at innovating and we cannot simply blame all things digital for this industry’s woes. Just as magazines have to deliver good editorial and outstanding covers, paper companies need to keep innovating with stock, distributors need to deliver on time and retailers need to keep pace with shop designs that are welcoming and encourage consumers to linger and spend more.

The comment was provided to me last night in an email discussion with and started by the Communications Director for Monocle. The discussion was useful. I made this point:

Our channel is made up of around 4,000 small businesses.  We have no control over the magazines we receive. We make 25% gross profit off each magazine we sell.  More than 5o% of magazines sent to us are unsold and have to be returned at our cost.

For most newsagents, magazines are a break even service at best.  For decades we have fought for terms which would allow us to compete with massive supermarkets but have been unsuccessful.  This is why newsagents are reducing their commitment to magazines.

I accept that the reporting may not be what was intended – a point made by the Director of Communications in one email:

I wanted to drop you a quick note regarding your blog and your post yesterday re: Tyler’s interview in B&T Weekly.  We woke up to see the dramatic headline that B&T Weekly had chosen and were disappointed.

Australia is our third biggest market and we have invested a lot of time in both visiting newsagencies and finding ways to work with newsagencies more effectively.  It’s very important to us.

We also want to make it clear that Tyler was commenting on some newsagents, not all newsagents. Some are brilliant. Some are not so great.

The point we were actually trying to make is that ‘the internet’ is not the only problem when discussing the future of newspapers. It’s the entire chain – paper companies, retailers, transport, prices – as well as the environment you buy them in.

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magazine distribution

RETAIL NEWSAGENCY SALES BENCHMARK APRIL – JUNE 2015 vs. 2014

The June quarter was tough newsagents. Sales in the core traffic driver of magazines declined more sharply than in recent quarters. Add to this the continuing decline in newspaper sales and we ought to be very concerned as the traffic from print media sits been at the core of viability for many newsagencies.

Cards, too, experienced a tough quarter with the majority of newsagents reporting declines as did lotteries.

Traffic is mission critical for our channel. With core traffic categories of papers, magazines and lotteries declining for many, the question has to be: what new traffic initiatives are you engaging with? Sitting by and watching the traffic decline and complaining about it is no plan. What new traffic initiatives have you engaged? Your answer is critical to the future of your business.

Here are the headline numbers for the benchmark study:

  • Customer traffic. 77% of newsagents report average decline of 2.6%.
  • Overall sales. 61% reported an average revenue decline of 3.1%.
  • Basket depth. 65% report a 2.5% decrease in basket size.
  • Basket dollar value. 232% report an increase in basket value of 3.8%.
  • Discounting. 35% of respondents using a structured loyalty offer.

As has become common in the benchmark studies, the performance of the channel is not uniform. While there is bad news, there are many newsagents enjoying growth.

Benchmark results by key departments:

  1. Magazines. 92.9% of newsagents report an average decline (in units) of magazine sales of 9.1%. Weeklies lead the decline.
  2. Newspapers. 69.3% report average decline of 5.5% in unit sales. Capital city dailies lead the decline.
  3. Greeting cards. 57.9% of report an average decline of 3.9%.
  4. Lotteries. 55% report an average decline of 2% in unit sales.
  5. Stationery. 58.5% of newsagents reported an average increase of 3.5%.
  6. Ink. 29% of stores report ink separately. Of these, 62% reported growth of 4%.
  7. Gifts. Of the 83% in the offering gifts, 71% reported average growth of 6.8%.
  8. Tobacco. Of the 50% with tobacco, 75% reported an average decline of 6.8%.
  9. Confectionery. 52% of stores reported an average increase of 2.7%.
  10. Toys. Of the 32% toys, 69% reported growth of 7.2%.

Product mix shift. The shift in product mix I have seen recently continues. Ranges are expanding as is the average price point.

My own numbers off a good base, are: Books: up 586% and accounting for 2% of sales (thanks to adult colouring). Diaries: up 78%. Cards up 14% with Everyday Counter up 24%. Cards account for 25.44% of sales; Gifts up 45% and they account for 12% of sales, Magazines down 7% and down to 27% of sales from 34%, Stationery up 8%, Plush up 17% and accounting for 12.34% of total sales and Toys up 161% and now at 4% of sales. Traffic: down 2%; Average Sale Value: up 10%; Average Item Value: up 19%. Each of these key measurement points compounds on the other. Sales: up 11%. GP: up 15%.

My newsagency is in an outer suburban Westfield centre in Melbourne with around 300 stores including majors, a nextra newsagency, two Coles supermarkets, Wild, Typo, several large independent card shops and twelve gifts shops. We fight a tough battle. What we do in this business any newsagent can do. Growth is achievable.

NEWSAGENTS, IT IS YOUR FUTURE TO OWN

I urge newsagents to focus on traffic followed closely by margin (GP). Attracting new shoppers to your business is vital and guiding them to purchase items that have a higher margin (50% and more) is essential.

  • New traffic can be found in gifts, plush, toys, homewares, fashion, ink and office furniture opportunities. You have to buy well and promote even better. More often than not your suppliers will not be traditional newsagency suppliers.
  • Higher margin can be achieved if you have a consistently pitched loyalty program and carry items not readily available in other shops near yours.

We have more control over our businesses than ever before. What we do with this is up to us. The trends affecting us are obvious. As I note in the headline: our future is ours to own.

I worry that too many newsagents want to be told what to do. No one will do this, no one will tell you what to do. While they may provide options and ideas, what you do in your business is 100% up to you.

My advice to help you work out for yourself what to do is:

  1. Chase new traffic.
  2. Make your shop different to what is usual for a newsagency.
  3. Buy products for potential and not to stay within the boundaries you set for the business.
  4. Buy for your customers and not for yourself.
  5. Be a retailer first and a newsagent second.
  6. Most important: know your numbers and run your business chasing better numbers.

Please take this benchmark report as a call to action.

I’d be happy to comment confidentially on any individual situation.

17 likes
Management tip

Is your website mobile friendly?

Screen Shot 2015-07-14 at 8.50.40 amIf you have a website for your newsagency make sure it is mobile device friendly for if it is not Google will downgrade your ranking. If you are not sure, use the Google test tool. You do not want the results I found for one site I checked this morning. Sites that are not mobile friendly reflect businesses that are not up to date and not easily accessible to people on the go.

3 likes
Uncategorized

The Art of Knitting, again

IMG_8369While I am not sure about another go round for The Art of Knitting, we are promoting the title with the floor display unit placed in a high traffic location. Partworks are a point of difference for newsagents despite their frustrations.

1 likes
partworks

Growing a high street newsagency – a story of inspiration for newsagents

I my analysis for the April – June newsagency sales benchmark study I am fortunate to have data for this suburban high street newsagent. The year on year results reflect the challenges of the traditional newsagency and the benefits to be gained by approaching the challenges as opportunities:

  • Number of sales: up by 1%.
  • Average sale value: up 23%.
  • Average items per sale: up 5%.
  • Overall revenue (exclusive any agency revenue): up 11%.
  • GP: up 17% as a result of the shift in focus to higher GP items.
  • Cards: up by $1,750 to $13,500.
  • Magazines: $37,000 – down 15%.
  • Newspapers: 16,900 units – down 8% in unit sales.
  • Stationery: $9,500 – up 9%.
  • Gifts: $15,500 – up 75% from the year earlier.
  • Plush: $6,250 – up 250% from the year earlier.
  • Toys: $4,500 – up from $0 the year before.
  • Confectionery:  $1,500 – up from $800 a year earlier.

This is a newsagency in transition. It is in an area of considerable competition. The strip is busy with gift shops, two supermarkets with magazines, two convenience stores and another newsagency also with magazines. The owner made a decision to pursue a point of difference and to do this aggressively.

The challenge in transitioning the business is to not kill off core traffic. One needs to carefully balance taking space back from magazines and to only do with with products that attract new traffic of their own.

In the gift, toy and plush space you need to make quick decisions to get the maximum benefit out of trends and get out by the time everyone else is in on the trend.

I am sharing these results today to show that newsagents are growing their businesses. It starts with making a decision to pursue this.

16 likes
Management tip

Monocle publisher Tyler Brule ignorantly rips into Australian newsagents

Tyler Brule, publisher of Monocle magazine is quoted by B&T in an article titled: Print’s Biggest Problem Is Aussie Newsagents Are Crap: Tyler Brule

“You go into lots of news agencies in Australia,” Brule told B&T,  “and it’s not a very nice experience. They haven’t changed for decades and that’s not in a good way. I’m not saying everything needs to evolve, but they’re just run-down, they’re tired looking.”

B&T has used a photo with the article that shows a crap representation of magazines – one of the old wave cure magazine fixtures that was out of date ten years ago.

Brule is promoting his new retail concept for magazines: Kioskafé so it stands to reason he criticises newsagencies.

If he thinks newsagencies are crap he’d have to think supermarkets, convenience and petrol outlets selling ,magazines are crap too as they are all similar in terms of fixtures and titles at the top selling end at least.

Shame on B&T for not taking Brule to task and asking:

  • How many Australian newsagencies have you visited?
  • When?
  • Specifically what don’t you like?
  • Do you have time to visit those who are innovating and growing magazine sales?

I suspect he shouldn’t like the questions as they do not suit his commercial narrative.

Bruce ought to look at the commercial terms newsagents are on through publisher relationships. 25% of flat cover prices is not enough to invest as Brule would have us.

I have responded to B&T today. Hopefully they run this.

15 likes
Newsagency challenges

Magazine publishers expand digital engagement

Pacific Magazines has finally hoisted the white flag on print with a massive digital transformation program that will radically shift its reliance away from advertising through a series of e-commerce ventures selling products and services in specific “industry verticals” where its mastheads operate.

This is the opening paragraph of a report from Paul McIntyre in today’s Australian Financial Review.

The Australian Women’s Weekly has increased its online traffic by 33 per cent since launching its new website and ending a longstanding tie-up with NineMSN.

Figures released to The Australian show the AWW online has increased its users from 846,644 in May last year to 1,133,820 in May this year, following its relaunch on April 1.

This is the opening paragraph of a report by Sharri Markson in The Australian today.

I urge newsagents to read both articles.

2 likes
Media disruption

Time to remove the newspaper stand

IMG_8037More and more newsagents are removing the large newspaper stands there were forced to install years ago by newspaper publishers. Some replace the stand with a new slim upright unit from a newspaper publisher while others find space in existing fixtures elsewhere in the business for newspapers.

The photo shows how one newsagent located papers on the side of the counter in what is usually a dead spot. I like this idea. With most papers purchased as a destination purchase, sales are not affected.

With publishers placing newspapers in other retail outlets such as cafes, post offices, supermarkets and convenience stores, they cannot command prime retail space in the newsagency.

My advice is to use your own fixture as this gives you absolute control.

Once you get rid of the old newspaper stand, use the space as prime display space where you can redefine your business.

9 likes
Newspapers

Media section in The Australian not what it used to be

IMG_8368The media section in The Australian on Mondays used to be the reason to seek out the newspaper. Not any more. Like so many other News Corp. outlets, it is being used to wage battles that serve the commercial purpose of the publisher rather than report news relevant to the section. Their current anti-ABC reporting is pathetic. Bias they complain about at the ABC is spread across their pages.

What was a good read is no more.

6 likes
Newspapers

Pitching Empire magazine with the full cover

IMG_8266The cover of the August 2015 issue of Empire magazine will appeal to many including plenty outside those who usually purchase the magazine. We have had this issue next to weekly magazines. This week we will give it a shot next to news papers. With San Diego Comic-Con in the news over the last few days the timing is perfect. I urge newsagents to check where they have this title.

1 likes
magazines

Sunday newsagency marketing tip: leverage customer passion

I bet you have customers in your newsagency who are passionate about their regular purchase from you. Their passion could be a magazine, a stationery item, a licenced product or their favourite lottery ticket.

Print up A5 size notes on which your customers can share their passion, their recommendation, for something you sell. Place the notes on a noticeboard created for this or with the products being recommend.

This idea respects the opinions of your customers and brings a recommendation beyond your own to bring attention to products you sell.

Sure it is a bit of work to harvest the recommendations. The result, however, is a more locally connected business where you practically demonstrate to your customers that what they think matters to you and to your other customers.

Show that your business is different. Live that your business is different. Then promote the idea on social media and in your shop window.

5 likes
marketing

Sunday newsagency management tip: be still in your newsagency

Find a place away from the counter or where you usually work in your business where you can listen and notice what is going on in the shop. Be still and listen. Listen for what you might usually miss because your attention is elsewhere. Listen with fresh ideas, to learn things about your business you may not know or may have forgotten.

While this idea may feel awkward or frivolous, the goal is to overcome store deafness and store blindness that can get in the way of seeing the business as others see it.

A simple comment from a shopper to a friend could open you to an opportunity you might have otherwise missed.

I say be still because most newsagents are busy when in the shop, busy not noticing comments or other things that could reveal opportunities.

7 likes
Management tip
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