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

Author: Mark Fletcher

Express Publications abuses the newsagency channel

fhn_extreme_media_group.JPGExpress Publications, publisher of Xtreme Fords, Xtreme Holdens, Zoom, Street Commodores, Street Fords, Fast Fours, Fast Fours and a bunch of other titles, sends newsagents sealed bags of, often out of date, magazines on a never-ending merry-go-round of abuse of the channel.

Their bagged magazine packs suck newsagents of cash, labour and retail real-estate.  The title facing out of the bag this month will come back in a bag as a freebie in a few months.  Newsagents fund this gross inefficiency by paying to send back bags of magazines which have failed to sell, because their bags take more space than a usual magazine and because most of their titles are inefficient.  In my view, Express Publications abuses small business newsagents.

The magazine distributor controls supply and permits these bagged heavy titles to have access to the newsagency channel. While I am sure they will claim to have sales data to support a claim that they are doing nothing wrong, they are not paying the bills newsagents pay, they do not assess the true economic benefit of the titles to a newsagency business.  Many of us need a sell through of 60% or more of these titles within 30 days of on-sale  just to break even. Anything less than this and we lose money.

The Express titles are in categories which are well satisfied with what I’d call real magazines – titles with fresh content and which are presented in a browser friendly format.

We ought to negotiate better terms around these titles, terms which reflect the additional costs associated with.  That or we cut them altogether.

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magazine distribution

Happy St Patrick’s Day

st_pats.JPGIn addition to traditional St Patrick’s Day cards, Hallmark has provided this and some other fun cards.  Our St. Patrick’s Day card sales have been good – we are getting known for these smaller card seasons.

St Patrick’s Day is the big day, one day of the year, for the Irish Echo newspaper.  Unlike other ‘foreign’ newspapers, the Irish Echo struggles in my newsagency except for around March 17.

This day is good for some retail theatre – in newsagencies especially.

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Greeting Cards

Promoting Women’s Health and Men’s Health

fhn_health_mar09.JPGWe are promoting Women’s Health and Men’s Health out the front of our Forest Hill store this week.  We never place posters for a magazine without an opportunity to buy. Click on the thumbnail for a larger version.

fhn_health_mar09_2.JPGThis second image shows the placement of the display – in front of our main lottery counter.  We change the display in this position weekly, sometimes twice a week depending on the browser attention and sales achieved.

Cash is currently up for grabs from Pacific Magazines for Women’s Health and Men’s Health for display and sales uplift achievement over the next three months – $5,000 in total across the two titles.

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magazines

Phased support for magazines in retail

fhn_gardening_aust.JPGWhen the latest issue of Gardening Australia came out last week we gave it prime position at the counter.  Yesterday, we had to give this space to something else.  Rather than displaying Gardening Australia only in the gardening section, we setup a small display in front of our newspaper stand.

Titles with excellent offers deserve promotion beyond the first few days or week.  Newsagents are encouraged by publsihers to go big and bold in the on-sale week.  I like the idea of having a plan B (less demanding of space but still in a traffic area) for a successful title for beyond the first week before relying only on placement in regular magazine fixturing.

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magazines

March newsagency sales numbers

How’s business?  This is a question often asked between newsagents.  I have created a new category on this blog for irregular posts I’ll make about month to date to year to date business performance.  This will hopefully open more conversations between newsagents about how they are trading.

To the close of business last night, March 15, here are our numbers for March 2009 compared to 2008:

  • Magazines. Down 13%.  Women’s weeklies down 6%.
  • Lottery products.  Down 15%.
  • Ink. Up 15%.  HP accounts for 73% of sales.
  • Newspapers.  Up 2%.
  • Stationery.  Up 32%.
  • Cards.  Line ball.  Non seasonal – up 5%.  Easter was earlier last year.
  • Stamps.  Up 91%.
  • Art.  Up 18%.
  • Copying.  Up 5%.
  • Gifts.  Up 415% – off a low base.

All percentages are based on unit sales except for stataionery, ink, gifts and lottery products.

Magazines is our biggest department by far – the financial pain of the sales fall is significant.  As regulars here will know, we promote magazines aggressively and certainly pursue a point of difference around range.

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How is business?

Promoting 2009 season AFL cards

fhn_afl_select.JPGThe 2009 Select AFL Champions cards were launched today and we are promoting the cards and album at our premium counter point.

Endorsed by the AFL and the Players Association, the cards have always been a good seller for us.  Based on sales so far of other AFL related products this year, I’d expect sales of the Select cards to be up on last year – hence our opportunistic high traffic area display.

One reason we like these and other AFL collectible cards is that they are habit based product.  They will bring people back – as long as they associate our shop with satisfying their interest.  To anchor our place in their minds we work hard to ensure that we have enough stock for long into the season.

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Newsagency opportunities

How the Google book lead innovation in newsagency software

swideas2.jpgIn another first, Tower Systems launched Software Ideas on Friday, a facility at its website which gives its newsagent users a greater say in the direction of the software and delivers greater transparency over the product development process.

The Software Ideas initiative is as a direct result of several Tower team members reading Jeff Jarvis’ book What Would Google Do? The book struck a nerve with the Tower team which was already working on ways to give newsagents more say in development.

While we have always discussed changes with users, parts of the process have been behind closed doors.  Now, all users – anyone coming to our website including competitors – will see the change requests and the votes.  This transparency and our acting on requests from users will make the Tower software the most valuable software for newsagents.  It is the only software where users have a self-managed, transparent, democratic role in determining the direction of the software.

Click here to see the press release being sent out today launching the Software Ideas facility.

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Customer Service

Going early with Easter pays off

fhn_easter_front.JPGWe are not timid when it comes to promoting seasons nor are we late to the party.  It is hard to enter our Forest Hill store and not pass Easter cards, plush and Darrell Lea products.  The display in the photo (click on the image for a larger version) is the latest created by our team and the second time the range has been moved since being put up two weeks ago.  Sales are excellent, up on last year.

Customer behaviour I saw yesterday vindicates putting all Easter items together – several times I saw people purchase a plush or gift item, an egg or two and a card.   Too often in newsagencies I see cards on their traditional place and a seasonal promotion, like for Easter, in another place and with other products in between.  No matter how much of a merchandising challenge, all product categories for a season work better when placed adjacent to each other with room for people to move around and easily pick up any product.

Historically, product layout in newsagencies has been dictated by suppliers, it still in in some areas.  Now, more than ever, we need to lead on this front in pursuit of what is right for our businesses as opposed to what may be right for one supplier or department.

If you are a newsagent and you have Easter products in several places, I’d suggest you place it all together in one area with a unifying, bold, theme.

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Gifts

Watching the moves of book retailers

Newsagents ought to be watching the moves at Borders, Waterstones and Barnes and Noble.  They are busy evolving their models, redefining their businesses.  Barnes & Noble just bought Fictionwise, an e-book retailer.  Borders is launching a new e-reader.  Waterstones has done a deal to be the exclusive retailer for the new Glen David Gold novel, Sunnyside.  In fact, they have done much more than this in the last few weeks.  They are cutting deals and making strategic decisions in pursuit of their future.

They are disrupting their own businesses.  This is what we should be doing, competing with our traditional businesses.  While some newsagents are, the vast majority are not.  This is a huge risk for the future of our channel.  Disruption is going on around us – newspaper readers are getting satisfaction online, so are magazine readers and lottery customers.  These are key traffic generators for us.

Each of us needs a plan.  It has to come from us and it has to have our businesses at its heart.  no one else will do this for us, certainly not most who claim to represent newsagents – most of them just don’t get what leadership is about.

Smart booksellers are worth watching.  Their moves can awaken and motivate us.

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Book retailing

Be wary of a call from St George

We received a call from St George bank at one of my newsagencies last week encouraging us to take up a new terminal deal.  They pitched the deal saying that they were endorsed by the ANF.

On March 20, 2008 I blogged that I had negotiated lower eftpos and related rates for newsagents.  This deal was better than newsagents had at the time with ANZ through the ANF endorsed Bill Express arrangement.  Pressure from the ANF on St George soon gave them access ot the deal I negotiated.  It would have been smarter for the ANF to negotiate a better deal without being shamed into it.

I got the better rates with St George in part because I sought no commission on transactions.  There are too many businesses and organisations taking a clip from business conducted by newsagents.  I wanted to see what could be achieved by eliminating a middle man. The results from March last year speak for themselves.

Today, a year on, bank rates have moved.  Now the ANF is the St George partner, both parties owe it to newsagents to disclose the commercial terms of the relationship.  If the ANf wants to neegotiate on behalf of newsagents it needs to put in place deals which ensure newsagents make the maximum amount possible.

For five years, more than a million dollars of money which ought to have gone to newsagents went to the ANF as part of their Bill Express related relationships.  This makes me suspicious of any deal with which they are connected.  Is St George paying anything to the ANF for endorsement?  If so, disclose it.

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Bill Express

Promoting Darrell Lea with magazines

fhn_dl_move.JPGWe have moved one of our Darrell Lea displays to an aisle end which is usually used for magazine displays.  Our goal is to introduce new customers to the Darrell Lea range.  The move is one of several significant changes developed by our newsXpress Forest Hill team and introduced on the shop-floor by them to freshen the retail offer.

The changes certainly freshen the business – they were obvious when I walked in this morning.  While we regularly move products, yesterday’s changes are the most significant in one day for more than a year.  I am confident we will see a sales kick in all categories impacted by the moves – indeed we have seen this already.

Too often, newsagents see their retail businesses as set and forget in terms of product placement and visual merchandising.  Retail is brutal, now more so than ever.  We have excellent traffic in newsagencies yet fail to make the most off that because we resist change.  Moving the Darrell Lea was not hard.  The hard part was letting go of a magazine display space.  But, hey, we have plenty of other magazine display spaces we have created so no real loss.

The key to change is to accept that it is not an end game.  The Darrell Lea stand will move again.  The aisle end may once again become a magazine display space or it may be used for something else.  As I said, change is not an end game, just another step in the journey of retailing.

This move is in line with my blog post recently about stationery and the importance of change.

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retail

Handling failed products

fhn_quitting.JPGWhen a product fails we move it, cut price and move it again in an effort to quit with dignity.  We are testing the space backing onto our photocopier for the newspaper mugs and end of line alpla bears.  While the stock is old, it is clean and the display looks fresh.

I have seen plenty of newsagencies with stock which is years old and showing no signs of moving.  This begs for the stock to be left.  As we play more in the gift space we are bound to have lines we need to quit.  We have learnt to not be too attached to margin.  If something is not working we know we need to get out ASAP.  Hopefully this space near the copier will work well for this.

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retail

Staples rebrands Corporate Express in Canada

Staples announced this week that it will rebrand its Canadian Corporate Express operation as Staples Advantage Canada.  I’d expect to eventually see the Staples name here in Australia  and with that more of a consumer focus applied to the traditional Corporate Express offering.  Such a move would shake-up stationery retail here – hence the need for us to work on our own stationery offering.  Staples acquired Corporate Express in July 2008.

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Newsagency opportunities

ACP launches Sales Based Replenishment program

ACP Magazines has launched a Sales Based Replenishment program for twenty-one of its titles with newsagents.  Through my software company and one of my own newsagencies, I have been closely involved in the two SBR trials with ACP for five years.  This latest SBR incarnation demonstrates the value of trialling the SBR approach to magazine distribution.   We have shared our own learnings with other software companies not involved in the trials.

The key benefit on the ACP SBR program will be a reduction in sell-outs in newsagencies.  This is good news for the publisher and for the newsagent.

The key to gaining the maximum benefit from SBR is accurate on-time sales data.  Newsagents who do not provide this automatically will miss out.  Supplying accurate on-time sales data is something Tower covers in its free online magazine management workshops as well as at its face to face training with newsagents.

Accessing sales data from newsagents is a holy-grail of sorts for the channel – every supplier wants accurate on-time sales data. ACP has placed a value for newsagents on the provision of this.  Smart newsagents will ensure they provide it so they don’t sell out.

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magazines

No room for magazines

fhn_no_room.JPGWe ran out of space for a magazine at one of our newsagencies yesterday. Every available space in the category was full and no title was due for return. This happens regularly in many newsagencies each week across the country yet magazine distributors continue to pour product into the channel. Publishers and distributors complain about newsagents returning magazines early yet they continue to leave newsagents with no choice by sending too much stock – as we experienced yesterday.

I am aware that the ACCC is considering looking at magazine distribution. I hope that this develops into a formal Inquiry. Newsagents need this as do Australian publishers.

Every day in newsagencies across Australia there are examples of what I’d consider unconscionable conduct around magazine distribution.

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magazines

Promoting crosswords with lotteries

fhn_lov_cwords.JPGWe are promoting the Lovatts special bonus pack at one of our lottery counters as part of a Brain Awareness Week promotion. This $9.50 pack includes two current titles and a How To booklet from Christine Lovatt. $16.00 value for $9.50. What I especially like is the header cards provided with the latest product from Lovatts. Their claim to be Australia’s BEST! reminds shoppers that not all crossword and puzzle produycts are the same.

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crosswords

Lazy visual merchandising

frank_merch.JPGOn the column at the front of one of our shops today I noticed six unrelated magazine titles being promoted.  That we allowed it to happen is our fault.  That a merchandiser did this thinking it made sense is another issue.  It makes no sense to promote Aboriginal Art magazine next to Health Smart.  I would be interested to know the fee paid for the visit to abuse our space.

While I have reinforced that merchandisers need to get permission for every display, this can be difficult to police sometimes, especially in locations which are hard to see from the counter.

We will remove this visual noise (mess) and reclaim the front of the shop for our own purposes.

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Newsagency challenges

Bill Express trial update

The second Scheduling Conference in the matter of ACCC v Bill Express & others was held yesterday before Justice Finkelstein.

The ACCC successfully sought a preliminary trial to determine the issue of liability for the third line forcing and misleading and deceptive conduct elements of the case, with the issue of BNY’s involvement to be determined at a later date.

The preliminary trial will commence on 13 July 2009.

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Bill Express

The future of newspapers discussion

There is an interesting discussion under way at Core Economics about the price of The Age newspaper.  Well, that’s how the conversation started.  Now it has evolved into a discussion about alternatives to the print newspaper for accessing news and information.  In the mix there are mentions of the iPhone and the Kindle from Amazon.

Newsagents ought to be engaged in similar discussions.  Alas, we are not.  This is due to publishers telling us it is business as usual and due to ignorance. One day we will, with hindsight, realise we missed an opportunity. Of course, some individual newsagents have not missed the opportunity and are reinventing their newsagencies already.

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Media disruption

Promoting Gardening Australia at the counter

fhn_garden_aus_apr09.JPGWe are promoting the latest issue of Gardening Australia between our two busiest sales registers.

The free gardening gloves packaged with this issue of Gardening Australia make it a good candidate for this successful impulse driven location.  That and the changing season.

The only frustration is that the magazine came with one poster. If the glove giveaway is designed to boost sales then they need more than one poster to help us tell a decent retail story.  The publisher may say that they pay a merchandiser to visit and take care of that.  My view is that they should save the $35 for the merchandising visit, pay us and provide appropriate materials for the job.

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magazines

Easter card and gift sales strong

eascards.jpgGoing out early with Easter cards and gifts is paying off – sales are good.  I’d be surprised if we are not more than 10% up on last year by the time we reach Easter Sunday in April.  Easter is a feel-good season so sales growth amid the doom and gloom stories makes sense.  Easter is also a season around which newsagents can promote their local-shopping credentials – helping shoppers buy locally and save and support the local economy.  We need to promote more around the local themes – newsagencies are ideal businesses for this.

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Greeting Cards
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