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

Author: Mark Fletcher

Correlation between cards and gifts

I have been digging further into the January – March 2009 newsagent sales benchmark study data over the last few days and have evidence which demonstrates a correlation between gift sales and card sales in newsagencies.  Newsagents with a strong gift offering, $2,000 a month in sales or more, derive a benefit in greeting card sales. These newsagencies have out performed other newsagencies, where there is no significant gift offer, in the January – March 2009 versus 2008 comparison.

While gifts is a hard category to get right, those who have certainly benefit elsewhere in their business.  Newsagents successful in gifts I have spoken with tell me that it tookthree years or more to develop the knowledge necessary to be consistently successful with gifts.

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Gifts

Publishers offer to replace Alpha magazine

Several publishers are offering to replace the prime position occupied by Alpha magazine – next to newspapers in newsagencies.  This follows the move by News Ltd to cut newsagent margin on Alpha by 40%.  It will be interesting to see if newsagents have the guts to move Alpha and if they do, the impact on Alpha sales.

Publishers interested in proposing such a move should make contact through newsagency marketing groups as they have the best mechanisms of compliance.

My opinion is that Alpha should be moved away from its prime position immediately.  This prime space must be preserved for titles from which we receive premium margin and for which we have publisher commitment to respect our support in building success for a title.  Alpha is an opportunity for us to show how we feel about supplier decisions which harm our businesses.

Unfortunately, I suspect that newsagents will not move Alpha from its prime location – in part because of fear of retribution from News Ltd. and in part because of ignorance.

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magazines

Promoting Australian Homespun at the counter

fhn_homespun.JPGWe are promoting Australian Homespun at the counter this week as it comes with a free over mitt. This is the first time we have promoted this title in our prime counter location.  I am curious as to how it will perform.  The oven mitt, while nice, is a soft gift (common) gift.  That said, the crafts category is very strong for us so the title itself should pull results.  Our customers will let us know through the course of this week.

We had planned to leave our Weight Watcher’s magazine display up longer but with 75% of stock sold in four days we took the opportunity to leave some stock for our regulars.

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magazines

Correction tape as a fashion item

popnpop.JPGThe new Pop’npop correction tape from Pentel looks more like a ladies fashion or make-up item than correction tape.  This is why we have it at the counter rather than in our stationery department at our Frabkston store where we are trying the product.

If Apple can turn phones and computers into fashion purchases then why not correction tape?  The price point – $4.95 – makes impulse purchase friendly.

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retail

Class action on lottery space in newsagencies?

The Age published a good report from Michael Bachelard yesterday about how Tattersalls has blocked Intralot from accessing the best real estate for lottery product and the possibility of a class action.  Michael contacted me on Thursday, after he had been working on the story for some time – I was happy to answer his questions.

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Lotteries

Missed opportunity with Jobs Guide 2009

job_guide_09.JPGWe received Jobs Guide 2009 this morning.  It is published by the Department of Education, Employment and Workplace relations.  The Jobs Guide has a sell price of $26.95 and is not due for return until the end of January 2010.  These are not terms which are small business friendly.    Especially for a print product which is unnecessary – given that all content is available online.

And while on their website, it should list that the guide is available from newsagents.

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magazine distribution

AFL Chipz ignore newsagents

afl_chipz.JPGIt was disappointing to discover that the Topps AFL Chipz are being promoted as being available in major retailers but no mention of newsagencies.  Given AFL cards and albums we sell, tagging back to our channel in their advertising would have been apporpriate and useful for sales of their sales.

On the product itself, the Topps AFL Chipz look and feel very much like casino gambling chips. Odd for a product aimed at kids.

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Newsagency challenges

Missed opportunity for magazines

Publishers have missed an opportunity in newsagencies today.  While many of us are open and did receive magazines, we did not receive the usual marketing collateral material – especially for ACP Magaiznes titles.  Lack of collateral means the space is allocated to other titles for this week.  Based on the sales in the first half of today, it’s a missed opportunity.

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magazines

Kindle 3 for newspapers?

The Wall Street Journal reports that Amazon is developing Kindle 3, a larger (A4) screen version of the popular Kindle reader.  This would appeal to newspaper publishers looking for ways to move beyond paper as a platform.  The talk is that the Kindle 3 will be released before the end of the year.

Newspapers like the Wall Street Journal are available for the current Kindle readers.  The cost is $9.99 a month.  You start with a free 14 day subscription during which time you can cancel at any time.

The Kindle uses wireless technology to facilitate delivery of content anywhere in the US.  Wireless coverage is one reason put up for the Kindle not reaching Australia yet.

The low cost service provided by newsagents is one reason newspapers are not under the same pressure as their US counterparts to find alternative distribution channels.

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Media disruption

News Ltd establishes newspaper reader panel

News Ltd has established a reader panel through which they are inviting members to voice their opinions through surveys.  While inviting feedback on News Ltd newspapers is a good initiative, the approach is not as open or reader driven as it could be.  Participants go in the draw for a prize with each survey completed – readers keen to help create better newspapers would participate even if no prize was on offer.

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Newspapers

Understanding the Amazon Kindle challenge

kindle2_05-440x266.jpgSal Cangeloso has written an excellent review of the Amazon Kindle at Geek.com. It was accompanied by the photo which I have included here to show how the size of the Kindle compared to a book.  The Kindle is not currently available in Australia and Amazon appears to be in no hurry to release it here.  It’s lack of availability is another reason Australia is behind the United States when it comes to print book sales compared to digital book sales – or in front depending on your perspective.

The Kindle is used to read books, magazines and newspapers.  It collects content through a wireless network connection – anywhere in the United States.

When the Kindle and similar devices are released here, disruption to print media will gain pace.  The Kindle rests the distribution channel for publishers.  This is why newsagents need to be aware of it and other disruptive technologies.  From my first post about the Kindle in November 2007, I have considered this to represent a serious challenge to our model.  Australian newsagents were created, after all, solely for the purpose of distributing print media products.

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Media disruption

Sales Based Replenishment works

Despite criticisms in some ill-informed quarters, the Sales Based Replenishment program being driven by ACP Magazines and Network Services is working.  I have first-hand evidence.  Woman’s Day sold very well at Forest Hill on Monday last week, more than usual for a Monday.  SBR noticed this and provided more stock – thus avoiding a certain sell-out by the end of the week.  ACP wins.  We win.  We did not have to do anything to trigger extra stock.

Through the newsagent software company I own, Tower Systems, I have been involved in SBR since the first trials began in 2005.  This latest incarnation is by far the best.

The experience with Woman’s Day this week is evidence of how proper use of point of sale software can help a newsagency increase sales.

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magazine distribution

Making the column a display opportunity

dsc06906.JPGWe have embraced the column near the counter at our Frankston newsagency as a magazine display opportunity.  We keep evolving our use of this obstruction – this stops our team and our customers becoming store blind.  It served as an ideal location for promoting Zoo Weekly last week as it is at the end of the men’s magazine aisle.

Too often, newsagents see columns like this as a barrier, something with which to do battle.  This usually ends with the column being cluttered, covered with junk and becoming more of a battle.  By embracing it and telling a bold retail story, we use it as an opportunity – we force ourselves to see the column in a different light.

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magazines

ABC Radio National hosts forum on quality journalism

Geraldine Doogue hosted forum of the Future of Mass Quality Journalism last week.  Panelists included Eric Beecher, Publisher, Crikey and Business Spectator, Campbell Reid, Group Editorial Director, News Ltd., John Hewson, former Liberal Party leader, Professor Wendy Bacon, Head, Journalism, Information and Media Studies University of Technology and Alan Kohler, Publisher, Business Spectator and Eureka Report.  An edited version of the panel discussion was broadcast on Radio National this morning.

Newsagents and others who derive income from newspapers would find the discussion most interesting -it is available at the ABC Radio National website.

While our channel was created to distribute and support newspapers, we will play little role in the future of quality journalism.  While there is debate about the extent to which new technology and other disruptive factors will impact print media, we need to make business decisions based on the maximum impact, so we are prepared.

RELATED STORY:  Check out the report of Russell Crowe’s new fiml, State of Play at the Telegraph website.  The opoening paragraphrepresents the hope covered in the article:

Whither newspapers? With Russell Crowe as the champion of the downtrodden reporter, good endings seem possible for an industry often portrayed as morgue-bound. The new thriller, State of Play, in which Crowe stars, is so mesmeric that it may, in the optimist’s dream, do for the print media what Florence Nightingale did for nursing.

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Media disruption

AFL Team 2009 albums back in stock

afl_albums.jpgThankfully, the AFL team 2009 albums are back in stock in my newsagencies and, I suspect, newsagencies across Victoria.  This will make weekend shoppers very happy.

While we received plenty of boxes on Thursday, we expect them to be sold out by mid next week. As I have noted several times here over the last few weeks, AFL magazines and cards are more popular this year.  I’m not complaining, just wondering what else we can pitch with them to leverage the opportunity.

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magazines

When Take 5 magazine goes missing

take5_missing.JPGHalf our Take 5 supply was missing on Wednesday and Network Services was unable to correct this Thursday so we miss out.  The magazine distribution model does not deal well with missed magazine deliveries, especially in odd delivery weeks like around Easter.  We have customers who are frustrated.  I am frustrated.

Every Take 5 sale lost as a result of this is an opportunity for a customer to try somewhere else.  We estimate that we will lose between 40 and 50 sales as a result.

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magazine distribution

Crossword magazines for Easter

frank_easter_lovatts.JPGWe have the Easter themed issue of Lovatts Big crossword displayed with Easter products.  Anything to introduce crosswords to new customers.  Obsessing about small opportunities is how we demonstrate our magazine specialist status.  That’s what newsagents are, right?

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crosswords

The prospect of a one newspaper town

Click here for a copy (Courtesy of Crikey.com) of Mark Scott’s speech to media studies students at the State Library in Melbourne on Wednesday night. His comments about the future of newspapers are interesting.  Including this.

I suspect we also face the prospect of Sydney and Melbourne becoming onepaper towns like their small state counterparts and much of the US market. We will see closures and mergers.

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Media disruption

Magazine sales fall 10% in newsagencies in Q1 2009

A benchmark study of sales data from 97 newsagencies, comparing sales between January and March 2009 with the same period a year earlier, has revealed a 10% fall in magazine sales in newsagencies. The benchmark study has also revealed better than expected sales results for newspapers, growth for greeting cards and reasonable growth for stationery.

The benchmark study uncovered excellent success stories for many newsagents – demonstrating that many in this retail channel are pursuing change and benefiting as a result of this effort.  It also highlights that a concerning number of newsagents are yet to embrace the opportunity of change.

I have been pouring over data from participating newsagents for a week.  It is a long process because for the different ways newsagents record sales in some departments.  I am grateful to the newsagents who trusted me and provided access to confidential business performance data.  I am privileged to have this and the insights it is helping me form.

This benchmark study is part of an on-going project which tracks sales in newsagencies and provides the information for newsagents and others to access and consider.

More detailed store by store comparisons are available to participants in the study.  I have a presentation I am putting together for some suppliers and others to brief them on the state of the channel.

This benchmark project is another way Tower Systems helps all newsagents.

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Newsagency opportunities

Lottery companies let Victorian retailers and punters down

Tattersalls and Intralot have both suffered network outages recently and both failed to keep their respective networks informed. It is hard to believe that it is 2009 when you experience such poor communication followed up by buck passing and lame excuses.

We have old technology like mobile phones and email and new online communications channels like Twitter, Facebook, blogs and the like. Intralot and Tattersalls ignored these. They relied on their retail partners calling them. The problem is that they do not have infrastructure in place to cope with the calls.

Last night, newsagents had to leave their businesses without being able to confirm the status of some tickets. They had no choice, they could not get through to Tattersalls and there was no advice as to when they might be able to get through. The stress for some as a result of this was considerable.

This blog was the only confirmation for many newsagents that there was a network problem.

Poor communication by Tattersalls and Intralot reflects badly on our retail businesses. In my own shop yesterday a customer abused our manager, blaming him for her not being able to put her regular numbers on. Information from Tattersalls, anything, might have helped him provide something close to the customer service he prefers.

The Victorian Government ought to demand that Tattersalls and Intralot put in place better communication channels with appropriate redundancy as a matter of urgency. To do nothing would show them up as caring little about the punters they want buying lottery tickets and supporting the State Government addiction to gambling revenue.

Yes it is 2009 believe it or not. What we put up with yesterday was a joke. Lottery traffic is crucial, especially two days out from a long weekend. Tattersalls ought to have done better – they have been around long enough to know what Victorian punters expect.

It will be interesting to see in the lottery companies, Minister for Gaming or the Associations have anything to say on this issue.

My own small software company serving newsagents does a better job at communication.  In a recent blackout we had advice and help for our customers on our company blog, by email and backup call centre access through a network of mobile phones and a Skype phone.  Pretty basic stuff really.

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Customer Service

Promoting Weight Watchers magazine

fhn_weight_watchers_apr09.JPGWe are promoting Weight Watchers magazine between our two busiest sales counter locations.  The free photo frame gift with the magazine qualifies it for this premium location.  Shoppers are still getting used to the new monthly frequency of Weight Watchers.  Our counter placement is designed to attract those who know of the title but were not aware of the new issue being on-sale.  Having it on display at Easter should help too.  We are aiming for a 50% sell-through by Monday.  I’ll update this post then.

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magazines
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