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

Author: Mark Fletcher

Power outage in Melbourne (updated)

The power to the Tower Systems Head Office and several blocks around was knocked out just before 9:30 this morning.  While it is back on now (10:15), we were able to keep our 1,500 newsagent customers informed of alternative support access points through various information channels including this blog.  Since we take between 200 and 300 calls a day from newsagents, access is important.  We sent a newsfeed direct to the point of sale software desktop of our users, posted information on the Tower blog and emailed all of our users.

This post was orignially about the outage but since it has been fixed I have modified it to reflect the usefulness of the blogs and other communications channels – especially the direct to desktop RSS feed for our users.

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Customer Service

Hot Ink! brings in new customers

fhn_ink_cashback.JPGWe are experiencing the value of marketing outside the shop with the latest Hot Ink! campaign.  Customers are bringing in the brochure in with the products they want already circled.  The Brother $20 cashback offer is popular as is the exclusive coupon offering a 10% discount off a second cartridge.  As we find each time we distribute a Hot Ink! flyer to homes around our newsagcnies, new customers come and visit – some just purchase ink while others pick up a magazine, paper or other items.  The flow-on benefit of attracting new customers is considerable.

It is campaigns like this which are crucial for navigating to the newsagency of the future – individually and as a channel. We are promoting branded product at competitive prices.  This helps push-back on the consumer belief that newsagencies are expensive.  We are also promoting product knowledge.  This leverages what consumers think about newsagents when it comes to stationery.  Most important of all, we are promoting relevance. This is what newsagents have to do to stay, well, relevant.

The reaction to the campaign is exciting and motivating.

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newsagency marketing

Good Food features in integrated magazine display

fhn_aisleend_food.JPGThe photo shows our use this week of the new space we have created at the exit to our two magazine aisles about which I blogged last week.  We are promoting Good Food magazine as part of our ACP display commitment and because it has the free Italian cookbook this month.

The display was easy thanks to an excellent variety and quantity of collateral delivered with the stock.

We are getting used to creating integrated displays in this space, using one title as the focus point and supporting with other titles from the segment.  While some publishers may not be consider this integrated approach ideal for their brand, indications are that it works for us as the retailer.

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magazines

Promoting Grazia at $2.50

fhn_grazia_price.JPGThe Grazia price reduction to $2.50 this week is not as obvious as it could be.  While I am no graphic designer, I would have thought that using different colour to the masthead colour to show the special price would have made it stand out more and therefore have a greater chance of achieving a sales boost.  The $3.50 price on Famous is more obvious.  $2.50 for Grazia is a good deal, I’d make a noise about that.

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magazines

Scrapbooking Memories abuses newsagents

scrapbook_old.JPGThe new issue of Scrapbooking Memories went on-sale yesterday.  The old issue is not due for return for some weeks.  While I am sure between the folks at Express Publications and their distributor there will be excuses, these will not help newsagents.  One excuse will be that we can early return – that work if you have a distributor who respects the newsagent and makes the process easy and certain.

Some days are extremely frustrating dealing with magazine issues in newsagencies.  It is always the rats and mice titles, those outside the top 200, which cause the most grief and cost us the most time and cash.

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magazine distribution

The carbon footprint of overseas magazines

dsc05651.JPGDiscover magazine published an excellent article in April 2008 about the carbon footprint of each issue.  It wroked back the carbon cost of each issue from in-the-field news gathering through production, the retail and subscription distribution channels and, ultimately, to recycling.

The article got me thinking about the carbon footprint for a copy of Discover purchased here in Australia. It would be far greater by the time you add the cost of shipping product to Australia and distributing this on trucks across the country to newsagents.

Discover is not the only overseas title we carry.  Indeed, there are hundreds being air and sea freighted to Australia for distribution through the newsagency channel.  With a (generous) estimated average sell through of 50% and the unsold stock being returned, the carbon footprint on these imported titles is significant.

On environmental grounds alone, the distributing overseas titles here needs to be reassessed.  In some cases, such as Discover, they serve a purpose and fill a genuine need while in other cases, crosswords, craft titles and home furnishing titles for example, they are filler taking sales from an excellent range of locally produced product.  The environmental impact of this unnecessary stock ought to bar them from entry. Yet we have them because magazine distributors make it cheap to distribute them without allowing for the environmental cost.

Take crosswords, I’d love to work out the carbon footprint of a Lovatts crossword title and a Penny Press crossword title.  I suspect the difference would illustrate why we need to restrict overseas titles in segments where consumer interest is well satisfied with local printed and published titles.

Publishers are aware of environmental issues.  Surfing magazine was onto this in 2007 – but only through an offsets program.  The PPA in the UK undertook some research into this in May 2008. FIPP is also doing work in this area.  There is an interested related discussion at Dead Tree Edition.

Just as packaged foods warn us about fat, sugar and sodium and washing machines are rated on energy and water efficiency, maybe products such as magazines ought to have a carbon footprint rating.   At the very least, there could be a warning sticker on the cover of overseas titles in a category well serviced with local and more efficient titles.

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Environment

Free local newspaper for Victorian bushfire areas

phoenix.jpgA free local newspaper. The Phoenix, covering Victoria’s Bushfire affected areas has been launched by the company behind the Melbourne Observer newspaper. The Phoenix will be primarily distributed through newsagencies in fire affected areas including Nillumbik, Whittlesea, Murrindindi, Mitchell and Yarra Ranges – 100 outlets in all.  Once again newsagents are playing an important community role.

Each issue of The Phoenix will carry free advertising listings businesses in the bushfire affected areas. The Melbourne Observer office is providing free backup support for calls and faxes in addition to underwriting production costs.

The Phoenix is a terrific initiative for the newsagents in bushfire affected areas and the wider community.

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Newsagency opportunities

Losing university students

I understand that newspaper publishers want to educate university students to read newspapers.  They also want to drive circulation.  $20 for a year’s subscription for a university student – including home delivery on weekends – is an amazing deal.  These offers are from publishers who refuse small business newsagents even the smallest cost of living increase.  The two issues are related.  You cannot discount your product by 97% to grow circulation and then pay less than minimum wage to newsagent to fulfill part of the service.

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newspaper home delivery

Displaying Easter Eggs

sr_mc_choc.JPGClick on the image to see a larger version of the Chocolatier Easter Egg display our team has created at our Sophie Randall Melbourne Central store. Customers entering the store are greeted with this table. We experiment at our Sophie stores with fixtures and display concepts with a view to using these in our newsagencies. The table we have used for the Easter Egg display works well in newsagencies.

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confectionary

Online Training Academy for newsagents launched

My software company, Tower Systems, formally launched its online Training Academy for newsagents today.  This is an exciting move for us and for newsagents – guaranteeing a on-goinging training opportunities which will help produce better outcomes for newsagents, their customers and their suppliers.

Free online Training Academy for newsagents and newsagent staff

MELBOURNE – March 10, 2009 — Tower Systems, Australia’s largest supplier of retail management software to newsagents has launched a free online Training Academy for newsagents.

Through the Training Academy, newsagents can access formal training designed to help them better compete in today’s environment.

This is an unprecedented opportunity for newsagents and further demonstrates the leadership of Tower Systems to its community of 1,500+ newsagents.

Fully interactive, participants learn from each other and the workshop leader – as if are in the one room – even though they can be at home or their shop. Questions are answered and live examples provided to create a professional learning experience. Each session ends with a test to gauge what has been learned and the value of the experience.

Tower Systems provides access to all training for free. There is no limit to how many workshops newsagents and their staff participate in.

“Anyone can train you about what button to press and when, this is different. We train you about the why, we help you genuinely save time and make more money.” commented Mark Fletcher, Managing Director of Tower Systems. “Training like this, months and years after you install our software, helps you unlock tremendous value from the relationship with us.”

The online program includes training on magazine management, stock control, point of sale, stock take and how to move from POS Solutions to Tower Systems.

The online training services are in addition to Tower Systems’ group and one-on-one training sessions which are delivered around the country.

Access to the Tower Training Academy is from any computer with broadband. A phone is used for toll-free audio participation.

The Tower Training Academy is part of the exclusive Tower Advantage TM initiative.

Tower Systems serves in excess of 1,500 newsagents with retail management and home delivery software. It serves more newsagents than all other software companies combined. Tower owns and operates three newsagencies – it uses its software itself and provides test facilities for supplier initiatives.

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Customer Service

Discounting magazines

wool_mags.JPGWoolworths is offering Woman’s Day and NW magazine for $2.00 off if purchased together in a catalogue promotion which has newsagents concerned.  Discounting these popular weekly magazines in this way risks resetting consumer expectation in relation to price of these titles and other weeklies.  Newsagents are not well positioned to compete if magazines go the way of other supermarket such as soft drinks and breakfast cereals which are always on special somewhere.

Discounting like this with the majors, if continued, diminishes the value of the newsagency channel – where 50% of magazines are sold.  The last position publishers want is to be more reliant on supermarkets than newsagents for sales.  This is what they risk if campaigns such as this one featuring Woman’s Day and NW take off.

While we run a loyalty program for magazines in our newsagencies, this is a whole of category offer and pursues genuine incremental growth  rather than shifting a purchase from one retail channel to another.

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magazines

Promoting Women’s Health and other magazines

fhn_w_health.JPGWe are promoting a range of health magazines with a feature of Women’s Health at the front of our newsagency. The display in the photo is right on our lease line, in easy view of passers-by.

Our sales data shows that Women’s Health sells well in the first on-sale week so it’s appropriate that we give it prominence this week. The approach we have taken is in line with what I have been writing here recently – that we want to feature other titles with the feature title. This improves the chance of a more efficient shopping basket and demonstrates to browsers that our newsagency has more than the featured magazine of offer ion this category.

Visual merchandising aficionados will see that we are blocking vertically – except for the Annette Sym Weight Loss Journals at the lower right side.

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magazines

Print at home newspapers

MediaNews Group in the US is planning on releasing a print at home personalised newspaper offer according to a report yesterday at PaidContent.  Apparently, the company plans to sell or rent special printers with which customers would print personalised copies of the newspaper.  The project focuses on cutting the most expensive costs from the current newspaper model – printing and distribution.  The New York Times has more on this story.  Of course, we have had this flexibility online for years.

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magazine distribution

Promoting The Cat Collection

fhn_cat_partworks.JPGWe have high hopes for The Cat Collection partworks which came out today.  We arranged to get plenty of stock, expecting that this partwork will be popular with our customers.  We have a display at the corner of our counter, between our two lottery selling points – a good location for impulse purchase.

2009 will see fewer partwork launches than 2008 according to the partworks experts so getting a titles which will be successful is more important – hence our high hopes for The Cat Collection.

Partworks are more successful for newsagents than your average magazine in that a partwork customer is 33% more likely to purchase other items in-store according to our basket data studies.  The other benefit of partworks is the putaway opportunity.  Putaway customers are loyal and a good partwork will bring them back regularly.

We will maintain our promotion of the launch issue of  for two weeks and hope to get convert many sales to putaway commitments.

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magazines

Obama magazine sells well

obamamag.JPGHistorical Collector’s Edition featuring Barack Obama sold 66% of allocation at our newsagency compared to the 0% sell-through for the Sarah Palin edition.  I thought the high cover price ($21.50) might be a turn-off.  Clearly not.  It will be interesting to see how long the Obamas can drive magazine sales – I noticed that Oprah is sharing her cover for the first time with a photo of her and Michelle Obama on the cover of O magazine  in the US.

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magazines

Coffee gaining attention

images.jpgCoffee is emerging as the new category to try among rural, regional and even high street newsagents. I know of several who are now selling coffee – from automatic machines through to the full on barista model. Since newsagents are open early, coffee makes sense. The keys, from the people I have spoken with and who are having success with coffee, appear to be: provide a good product, fast service and a fair price.

The biggest challenge appears to be around managing labour resources given that coffee is more labour intensive at the counter than selling newspapers and magazines and given that newsagency customers tend to be impatient.. The excellent margin on coffee makes funding additional resources easier.

I have heard of one misstep where the newsagent went with lower quality coffee and equipment. It was not until quality was improved that business picked up.

Coffee fits with the early morning strategy I blogged about recently. This strategy was shared with me by a follow newsagent who has made some very smart moves in his business by embracing change.

Coffee is not easy to try in a shopping centre – mainly because of the permitted use clause. It is something I would seek to have permitted if I had the necessary space and the newsagency was in the right location in the centre. If I had a newsagency in a high traffic location and already did good business in the morning I’d be trying coffee right away. That and some pre-packaged good quality muffins and the like. This would be an easy move. Machines can be rented and good baristas employed casually (if you go for the full-on personally made model) for a trial period if you are unsure.

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retail

Selling sport magazines

cricketmags.JPGSports magazines perform very differently between newsagencies from the data I see.  Cricket magazines, for example, perform poorly in my Forest Hill shop while Golf, Soccer and AFL titles perform well.  Since many are small volume titles, they need careful management at the distributor end.  Unfortunately this is not always the case and newsagents end up over-serviced in one sport and under-serviced in another.

Since magazine distributors act in isolation, it is a challenge for them to adequately manage the category for newsagents.  While it is impractical, sharing data, even category data, between distributors could lead to more equitable distribution for newsagents. Outside of the Trade Practices Act issues with this, I suspect that such sharing may not be in the commercial interests of the distributors.

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magazine distribution

Promoting St Patrick’s Day

picture-010.jpgBrett and Alexandra Carey at newsXpress Deception Bay have put their Bill Express screen to excellent use promoting St Patrick’s Day a day whic usually passes quickly. Promoting it early may mean more than some extra copies of the Irish Echo.

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retail

How about this for a magazine promotion?

Would it be cheeky offering a discount off a Puzzler crossword if a Lovatts title is purchased? What about offering a customer buying marie claire a discount off the cover price of Cleo? Or a discount off Who if someone buys OK!? In each case, the original purchase is intact and the special offer added to the basket.

Woolworths in Queensland is currently promoting a deal where you can get NW and Woman’s Day for $6.95.  My idea is more about promoting across publishers and even across product catgeories – but with publishers and other suppliers financially supporting the promotion.

Newsagencies have many single item sales. Petrol outlets are the same and they address this through their counter offers. While these are frustrating, that they continue to be pitched demonstrates that they work.

We could do the same thing but in a smart way. A publisher could make an offer to newsagents to pitch their product if a competitive title was purchased. Given that we could only have one of these running at any one time, it could be a valuable new sales driver for newsagents.

We could even play with this approach and offer a discount off Woman’s Day if a customer purchases a lottery ticket.

Newsagencies have excellent traffic. We ought to consider leveraging that by breaking with tradition. If it works for petrol it may work for us. There is a win for our customers with a special offer, a win for the supplier selling more product and a win for us thanks to what should be a good back end deal meaning we make what we would have made.

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magazines

Being the heart of the community

Newsagents who see their businesses as being important and connected to the local community ought to check out My Shop Is Your Shop.  The My Shop Is Your Shop – Local And Proud Of It campaign was established in 2004 in support of a campaign promoting independent retailers in the UK.  It focuses effort around National Independents’ Day. The brilliant website is packed with excellent resources which community-connected newsagents could adpot for use here in Australian.

Everything about the My Shop Is Your Shop campaign connectswith newsagents and how we see ourselves in the community.

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Customer Service
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