We’re pleased with the range of graduation gifts we have found, the yellow mugs especially. Graduation is a good season for us with cards and gifts – from primary school through to university. Indeed, having good graduation gifts on display helps drive good card sales and this, in turn, gets people shopping the rest of the card department.
Newsagents are telling me that they have removed Alpha magazine to the back room ready for return. They say they will continue to do this with new issues of Alpha. It is certainly a practical way to let News Ltd know the extent of your anger over their decision to cut margin and take away home delivery sales.
If many newsagents do this, refuse to display Alpha in-store, sales of the magazine will drop. This will bring the title to the attention of advertisers who would be expected to seek a reduction in advertising rates.
It will be interesting to see how many newsagents take action on this. In the past, newsagent actions have not matched by their words. I suspect that News Ltd is banking on this. They have in the past.
I have been asked by some newsagents who attended my presentation at the QNF State Conference last week for a copy of the slides. I have loaded them to Slideshare. Click on the image below to play the presentation.
Unfortunately, without the commentary some slides won’t make sense. The abridged version is this: we are in the midst of massive change. Rather than ignoring this, embrace it, do something, change your business. I am optimistic about the future because there are many proactive newsagents building new business models – some of which I discuss in the presentation.
We flipped around 30% of the titles (around 150 titles) in our main magazine aisle last week. Instead of starting the right side of the aisle with food titles and cookbooks, we moved gardening titles to the top followed by home and living and then women’s health and food. This simple change refreshes the offer not only for our customers but for those in the newsagency all the time.
We need to keep making changes like these to challenge the subconscious assumptions made those who shop regularly with us.
I am often asked why I spend time working magazines if I think they are a dead category. I don’t think magazines are dead. They have their challenges and newsagents have their challenges with them – mainly to do with poor management by magazine distributors. That said, magazines present an excellent opportunity if executed properly by distributors and newsagents. The work of constant innovation in my shops is about creating a point of difference from nearby magazine retailers.
By reducing the income newsagents make from Alpha magazine, News Ltd places further financial stress on Australia’s family owned small business newsagencies. Newsagencies are mixed businesses – no one part of a newsagency can stand-alone. Newsagents rely on the profits from some departments to cover loss making home deliveries and to cover the falling profit, in real terms, from News Ltd newspapers.
The decision to cut margin on Alpha by 40% and to take home delivery sales of the title away from newsagents and shift this to Australia Post is being taken by newsagents as an indicator from within News Ltd of how the company views newsagents and an indicator of a closer relationship between News and Australia Post.
For all the talk in the pages of News Ltd newspapers about everyday people, News Ltd walks to a different beat.
I’d like the opportunity to debate their decision in a public forum. They have to face up to the stress they are causing for newsagents and their families.
We are promoting Burke’s Backyard at our prime counter position this week. The free pet DVD with this month’s issue should drive excellent sales. It has been our experience that Burke’s Backyard responds well to promotion – we have high hopes for this issue. The pet connection is timely given the cat partwork which is also being promoted at the counter.
Regulars here will know that we prefer to only promote magazines with good-value gifts in this location. The space used to be used for the usual counter offers one sees in newsagencies. We gave it over to magazine promotion around a year and a half ago.
The Home and Away collector’s edition continues to sell well – five copies in the last week. We are driving this success by moving the the title around – this week we have it next to the Herald Sun. The success we have having with the Home and Away magazine, this far into the on-sale, is a (good) surprise.
The importance of newsagents and the Australian newsagency channel to the launch of Alpha magazine by News Ltd three years ago is clear in a promotional document I found at the Australia Post website.
The document praises newsagents including our compliance with the demands of News Ltd: Three weeks after launch, ALPHA magazine was still positioned with the newspapers in over 88% of retailers nationally. Yes, we did that.
Newsagents are a key reason Alpha has been such a success. Thanks to our efforts we have made it a sought-after title among consumers and other retailers. In hindsight, we were too generous with our commitment.
Rather than sharing the rewards of the success of Alpha, News Ltd is doing the un-Australian thing, they are doing a runner on a mate after the mate helped them. This is appalling behaviour.
It is no surprise to me that newsagents are angry. Check out the comments at my original post on this topic and the follow up post. I know of newsagents who will write to NDD saying they do not want the title. I know from my past experience that NDD will not permit newsagents that right. I suspect that for some newsagents, this will be the issue which drives them to cloes their NDD account.
The team at our Frankston newsagency embraced their passion for fashion by creating a display next to the counter featuring several fashion magazine titles.
Non-corporate displays like this give those working in the newsagency an opportunity to express themselves. This gives the business a local feel – important if being local is important to the newsagency.
The display also provides an opportunity to bring titles to the counter area which would otherwise not be featured in this space – Nylon and Allure for example.
I wish magazine publishers and distributors would support category-wide promotional initiatives.
The decision by News Ltd to cut the margin paid to newsagents for the sale of its Alpha magazine by 40% demonstrates the double standards of the organisation.
In the pages of their newspapers, News Ltd paints themselves as champions of small business, yet in their boardroom they make decisions which hurt small business. There is no good news for small business newsagents in the Alpha decision by News Ltd.
Having launched and built Alpha sales to an excellent level, newsagents are to lose margin, customers and other benefits. This is an arrogant profit focused decision by News Ltd.
While there is nothing illegal in their decision about Alpha, it is my view that News Ltd has acted unethically towards newsagents, their so-called partners.
There will be more decisions like this in the coming months and years as News Ltd re-jigs their business to today’s economic and news distribution requirements.
John Hartigan, Chairman and CEO of News Ltd is on the Federal Government’s Business Advisory Group and has been regularly called on by government to serve on boards and in other capacities. I wonder how his colleagues on these boards would view him if they knew that he presided over a company which treated small business owners unfairly and, as I content, unethically.
The government owned Australia Post shop opposite our newsXpress Forest Hill store has changed its hours on a Saturday. It now closes at 1pm. Tenants in a shopping centre have an obligation to support each other. We rely on the traffic Australia Post pulls as do other retailers nearby – indeed we rely on each other. It is the government ownership of Australia Post which allows them to get away with this arrogant behaviour.
Intralot has provided new in-store marketing collateral to support sales of their products. I especially like the floor decals and that they lead customers to the purchase point. In addition to the decals we have been given new posters, counter mats and other materials. It takes hard work to break into what was a monopoly marketplace and it is good to see that Intralot is continuing to invest.
After playing a key role in making Alpha Australia’s largest selling men’s monthly magazine, newsagents have been ‘rewarded’ by News Ltd. News has cut newsagent margin by 40%, cut revenue by direct (non newsagent) supply to Woolworths, Coles/Bi-Lo, Franklins, Big W, 7-Eleven and Coles Express, seized control of newsagent home delivery customers and shifted distribution to NDD.
Newsagents earned 50% margin from the sale of Alpha. This was in return for prime space allocation – next to newspapers. It is this prime space commitment from newsagents which got Alpha to the circulation it has today.
For the last three and a half years, newsagents have been told to only sell Alpha with a News Limited newspaper. In the early days some News representatives were quite threatening to newsagents about this. That strategy is out the window with these latest changes. I am curious as to what this makes of News demanding that newsagents sell it with a newspaper.
Curiously, the announcement from News implies that the changes with Alpha will benefit newsagents. There is absolutely no benefit in these changes for newsagents. It is offensive for News Ltd to suggest otherwise.
Newsagents are white-hot with anger toward News Ltd about this move with Alpha. They feel “conned”, “ripped off”, “cheated”, “abused”. This is the issue of the moment among newsagents.
News makes a big deal in its announcement that the commission through NDD is 5% more than is usual for magazines through NDD. While that may be the case, it is less than newsagents have historically made from Alpha. Indeed, newsagent margin has been cut by News by 40%.
You’d expect us to be used to this abuse – building a product and having what we have built taken away by a supplier. For all of our complaints, however, we do not fight back. We feel helpless.
Publishers will do what they think is right for their businesses. Newsagents need to start to do the same.
The Age has a post-it note type ad stuck over a teaser for a story on the young royaly inside today. I don’t understand why they could not have replaced the story teaser with their ad. On the ad itself, they are pitching 20 weekends of home delivery for $39. I wish I could make an offer like that as a retailer. The more they push consumers from retail the less interested retailers will be in their product.
Using older front-of-shop fixturing in a magazine relay this week, we were able to create what I’d rate as a reasonable magazine offer above the newspapers. Living within the needs of the business – to keep adult and sport titles near the counter and needing a place for a very small business category – we segmented the shelves above the newspapers. From the left we have blokes magazines, in the middle is business and to the right is our women’s section. Following guidelines established with the team at the newsagency, the titles in the women’s section will change through the week – the goal is to lift sales of New Idea, Woman’s Day, Take 5, That’s Life, Who, OK!, Famous, Better Homes and Australian Women’s Weekly early in the on-sale.
The women’s titles in the display are co-located here – that is, their main display is in the women’s section of the main magazine display.
The key change we brought to the display was structure which can be maintained with some simple rules. While this may need to adjust as the business builds experience with the change, a clear structure can be maintained.
Too often, at the front of newsagencies I see confusing messages – a mixup of magazine titles which do not support each other. While it is okay to have several categories in the one display, they need to be segmented vertically and with logic. We need to make it easier for customers to see our offer, we need to show them what to buy. This is best achieved by promoting titles which they know and are more likely to purchase on impulse.
Changing magazine displays or completing a full relay is a huge challenge for any newsagent. I can understand why people resist. For many, it is a tough task just keeping up with day to day maintenance of the sprawling magazine department – especially where you have less space than you need for the titles being sent. This is why getting the supply back to a manageable level for your business is the right place to start.
To guide our relay choices we consider the guidelines published by the Magazine Publishers of Australia some years ago, local demographics, local sales history and gut feel. The key is to know that the relay is not an end point. We need to continue to evolve our magazine layout to keep it fresh and to chase every business development opportunity.
Given that motorsport is top of mind in Melbourne this weekend – thanks to the Formula 1 Grand Prix – we are promoting Top Gear Australia at our prime counter position. We created the display yesterday and will leave it run until Monday morning. I will be interested to see what uplift we achieve. This late in the on-sale for an issue Top Gear anything more than a couple of copies would be a good result.
Notice that we have AFL collector cards on either side of the display. Hopefully, kids will point to them asking mum or dad to buy a pack and when they look they’ll see Top Gear – and buy cards and the magazine.
While it might seem like a lot of work to create a display like this for three days of sales, my view is that it makes absolute sense. Our goal is to sell more product and we can do this by creating displays which connect with local events. You cannot miss the Grand Prix in Melbourne this weekend.
We need to rethink airfreight titles because of the confusion they cause some customers. There is the issue of what appears to be fluctuating price – the airfreight edition costs significantly more. There is also the issue of sequence – take Model Engineers’ Workshop. Issue 148 (airfreight) came in three weeks ago. Yesterday, issues 147 and 149 (airfreight) came in. So, we are rethinking whether selling airfreight titles is appropriate for our shop. Based on questions I have been asked I suspect not. There is also the issue of the higher cost of theft – given the cover price. My concerns aside, however, I do know of newsagencies where it is appropriate.
Express Publications sent out a bagged magazine today which is a waste of money and space. The feature title is an old copy of Caravan and Motorhome – two issues older than the one we currently sell. We have eight caravan titles and each struggles so why Express and Network Services would think we would want a ‘new’ (old) title is beyond me. Gotch would handle this better – I could say no prior to allocation.
I am early returning the junk today from Express – I don’t have the spare space for it.
The counter display we did for Good Taste magazine worked a treat – we sold ten copies in two days. The other ten copies we were short suppliers will not arrive until next week – too late for us. had NDD continued its Friday deliveries we would have suppoirted the sale through the weekend and sold double what we achieved in two days. Ugh!
I wish newspaper publishers in Australia supported the over the counter subscription system like the have in the UK. Read how these subscriptions operate with The Guardian:
How does Guardian and Observer Subscriber work?
The subscription scheme is based on a voucher system. We will send you personalised, dated vouchers for each day of your package. You simply detach the appropriately dated voucher and hand it to your retailer as payment for your copy of the Guardian or Observer. You will receive a new set of dated vouchers every three months. Your retailer will be fully reimbursed for the full price of your newspaper.Where are my Guardian and Observer vouchers accepted?
Most local newsagents, major supermarkets and petrol stations will accept your subscription vouchers as payment for your Guardian and Observer newspaper. If you have a problem using your voucher then please contact us on 0845 1204733 9am to 5pm seven days a week. Calls charged at local rateMy local newsagent already delivers my papers. Can I still subscribe and benefit from the saving?
Yes you can. If your local newsagent already delivers your papers to your home, simply hand your Guardian and Observer Subscriber vouchers for the relevant month to your retailer and these will be put towards your bill. Please note that you will need to arrange home delivery of your papers directly with your newsagent who may charge you for this service. Home delivery is not part of the Subscriber scheme.
While I am sure there would be some bumps with implementation, something along the lines of what The Guardian offers would drive sales more days of the week. I have pitched this several times over the last few years and failed. Maybe others here, if they like the idea, could pitch it to their publisher contacts.
The photo below shows how the team at a newsagency I was in yesterday are using the feature space between their newspaper display on the left and the start of the magazine display on the right. The Easter gifts display stands out.
While the magazine and newspaper fixturing on either side is inflexible, the gift area fixturing is flexible and allows for a professional looking display. The keys with this high-traffic feature space are to tell a compelling story and to change the story regularly.
Often I go into newsagencies and see feature space like this populated with dust covered products which look like they have been there for months. No wonder they are covered in dust.
SPOTTED.mobi, a mobile magazine rack, has been launched for the iPhone. It aggregates the top 20 headlines from a selection of magazines. Click on the headline and you’re taken to the story. Headlines are updated hourly.
I suspect publishers pay to be on so there is a limit to the titles. Still, it’s another reason to not need the print product.
