The Home and Away magazine continues to deliver good sales a month after we first received stock. It is certainly paying its way. We keep moving it around to help shake out any who may not have seen the title – this approach is working for us.
The publishers of Silicon Chip magazine ought to engage more fully with their magazine distributor to address the oversupply that I and other newsagents are experiencing. Something is wrong when you consistently receive more than twice what you usually sell. The excess stock is returned and pulped. This is a bad environmental story and a bad small business story. Silicon Chip magazine is loss making for me and, I bet, many other newsagents. The publisher could address the issue by asserting more control over supply. The only party making money from supplying more than we can sell is the distributor.
I noticed an Australia Post outlet promoting 50% off greeting cards on the weekend. I saw another with the same offer today. Then I saw the Government owned Australia Post outlet with all cards removed from their fixturing – as shown in the photo. I wonder if Australia Post is changing its greeting card strategy. I know that cards have been underperforming for years in the Government owned outlets, certainly not achieving the ROI or return on floor space desired by the managers of the 865 strong Government owned retail chain.
The 50% off promotion is odd. It is running for two weeks but it excludes key seasonal offers such as Easter cards. While I would expect their supplier to be funding the offer, it is unfortunate that this Government owned business is again chasing business from independent small retailers like newsagencies.
In the 48 hours since I blogged about the Hearst e-reader (following the story in Fortune magazine), hundreds of stories / commentaries have been published. The interest is a measure of how others view the opportunity of such disruptive change in print publishing circles.
Congratulations to East Ringwood Newsagency for winning Victorian Distribution Newsagent of the Year on Saturday night. This is a good story as the winner started as a paperboy. Congratulations to Morwell Newsagency for winning Victorian Retail Newsagent of the Year. Employee of the year was won by a team member from yarrawonga Newsagency.
Cycle Sport, the leading UK magazine for fans of professional road racing does not sell well in my newsagency. Our sell through is usually around 40% meaning that around 60% of supplied stock is returned. Beyond the frustration of the inability of the publisher and distributor to get supply right and fair is that Australians can pay $15.50 for Cycle Sport in a newsagency or have it home delivered through magshop for $14.99 an issue. The same company controls the supply of Cycle Sport to Australian newsagents and operates magshop. They make newsagencies look expensive. The excess stock reduces space available for other cycling titles including Australian titles.
Let me recap – we are oversupplied, we are made to look expensive and there are barriers to us achieving a fair supply arrangement. While the magazine distributor – Network Services – will deny this, they ought to spend a month in a newsagency and experience life on the other side. This would help them, hopefully, work in partnership with newsagents.
I would like the UK publisher of Cycle Sport to explore a more direct relationship with Australian newsagents which permits us to compete on price and achieve equitable supply arrangements. At least then the key parties to the relationship have a common goal – selling more magazines.
The American Society of Newspaper Editors has cancelled its annual conference. They join Magazine Publishers of America, and the World Association of Newspapers cancelling conferences this year.
Charlotte Hall, president of ASNE said: “The industry is in crisis. This is a time when editors need to be in their own news rooms doing everything they can.”
While newspaper publishers and others in Australia will say that we do not face the challenges they face in the US and Europe, I think they are wrong. Our local economic circumstances are different (maybe just delayed) but we cannot hide from the impact of disruption caused by technological change. Content will be more accessible and more content will be free.
Now is the time for us to focus our attention on our future. It may be that spending too much time on challenged products such as newspapers could be an inappropriate focus of our resources – not for all newsagents but for some. We are over-satisfied with distribution newsagents and consolidation will gain pace. In retail, we see ourselves as the dominant specialists whereas I suspect that publishers project our influence in retail will dilute in coming years.
We have to ask whether we have the courage (individually and as a channel) to reduce our investment in non-growth activities such a newspaper distribution and retail and direct that reduced investment to new fields of revenue.
Many newsagents are doing this already. Many others are undertaking shop fits and other changes as if operating twenty years ago with specially built (expensive) newspaper stands in their shops.
Newsagent meetings and conferences need to consider these things. We need robust debate to help us work out what we, collectively and individually, need to do.
Fortune overnight reported what could be a game changing move by the Hearst Corporation:
Against a backdrop of plummeting ad revenue for newspapers and magazines, and rising costs for paper and delivery, Hearst Corp., is getting set to launch an electronic reader that it hopes can do for periodicals what Amazon’s Kindle is doing for books.
According to industry insiders, Hearst, which publishes magazines ranging from Cosmopolitan to Esquire and newspapers including the financially imperiled San Francisco Chronicle, has developed a wireless e-reader with a large-format screen suited to the reading and advertising requirements of newspapers and magazines. The device and underlying technology, which other publishers will be allowed to adapt, is likely to debut this year.
The Amazon Kindle, selling more than 300,000 devices last year and probably many more this year thanks to Oprah’s endorsement, has changed book reading for many. The full impact on book sales will not be felt for a couple of years yet. The Hearst move could do the same for newspapers (maybe) and magazines (more likely).
The stories circulating are that the Hearst device will have a bigger screen and be foldable. Both attributes would be crucial for a newspaper or magazine experience.
The device would work by downloading the latest content, to which the customer is subscribed, from the publisher. The supply chain shrinks. The use of paper is eliminated as well as the distribution network including retailers like newsagencies and similar businesses.
Hearst has a track record for investing in disruptive technology. See the announcement from Eink 1998 about Hearst participating in a capital raising for the further development of eink technology. They remain an investor today.
There is considerable coverage of this move by Hearst including the predictable: Can Hearst save newspapers with an e-reader? at PC World. More than 500 blog posts have been published on this in the last 24 hours.
I have been talking about this type of technology for years and see the move by Hearst as inevitable. My concern is that newsagents are not engaged in discussion about this. Indeed, they either do not believe that their model will be disrupted by technology or that existing suppliers will involve them somehow in a new model.
New technology will impact sales of magazines and newspapers. It is already but today’s economic climate is masking the true impact. I would like to see on-going thoughtful (politics free) discussion about this issue among newsagents. While there has been some here over the years and at workshops I have run, there has been little truly useful engagement.
The coverage overnight about the move by Hearst is significant for Australian newsagents. It will be interesting to see if newsagents agree.
Tan magazine has an excellent sell through in our Forest Hill store. We sell between ten and twelve copies of the fourteen we receive each issue. The sales are excellent for a small special-interest indie magazine. It beats some big name monthlies.
What I like is that customers will come to us for Tan because of its special-interest status whereas they can go to a myriad of outlets for these other major monthlies.
We are wondering if we should leverage our success with the Tan and run a promotion. We could do nude day but I think our landlord would have an issue with that. Maybe we will go with a fig leaf display. We want to come up with something to see if we can increase sales further.
Big W is advertising HP 74 ink for $32.84. Our price is $25.95. Big W is advertising the HP 56/57 twin pack for $81.98. Our price is $69.95.
Big W claims to be committed to giving customers low prices on everything they sell. When it comes to ink, Big W is not offering low prices. Our newsagency and other newsXpress newsagencies with the Hot Ink! offer beat them on key popular items.
Where Big W can beat us is in convincing consumers that anything in a Big W store is at a low price. Kudos to their marketing for acheieving this. As is the case with some of their ink, the marketing claim is not maatched by aaction in store.
To be fair, there are plenty of products where Big W beats us. I’m happy to have a win.
I’ll be sending out the results of the first newsagent sales benchmark study for 2009 to participating newsagents this weekend. This is the only current data available as to the sales health of the channel. Several suppliers have also sought access to the data, to provide them with an understanding of trading conditions.
Industry associations ought to concentrate on this type of existing and available benchmark activity rather than plotting how to make more money from newsagents.
PaidContent reports that Computer Shopper, the US magazine for computer and related products buyers, is quitting its print edition and going 100% online from its April issue. While it is no surprise – because of the challenge facing computer titles -news like this on top of other recent closures brings the challenges of many magazines into focus.
While this is a US title, the challenges it faces are here in Australia too. So much computer magazine content is available online free. The buyers of these titles are tech savvy so why pay foe what you can access for free?
The Rocky Mountain News in Denver, Colorado announced that tomorrow’s newspaper will be its last. This 150 year old newspaper, the oldest in Denver, is closing because of significant losses last year and no improvement in sight. The metro population of Denver is 2.8 million.
We are promoting Delicious this weekend at the counter at our newsagencies. The free DVD featuring Bill Grainger qualifies it for this prime location. We’ve gone for the monochrome background to let the product feature and also because of not other collateral available to support the promotion.
Delicious is one of those titles which sells regularly through the month so promoting at this point should find some incremental business for us.
Intralot has released a consumer competition which can only be described as ridiculous. To enter you need to have four losing $2 lap time scratch tickets, four losing $3 bingo trifecta scratch tickets, one losing $5 poker night scratch ticket and one losing $10 $500K Gold ticket. Up for grabs is one of six $5,000 holidays in New Zealand. Entry is expensive and convoluted – you need to post the tickets to Intralot. The games themselves are old, I suspect this is why they are running the competition.
I love the idea of a second chance draw competition to drive traffic for the Intralot brand.make entry based on two tickets but not ten tickets. base it on a current game, a successful game and not on these old games already rejected by consumers.
This competition, in its current form, is likely to fail.
Robyn Ritchie of newsXpress Whittlesea, along with a group of Whittlesea women, is involved in an important bushfire recovery project focusing on two areas of recovery:
AAP reports that sales at Office Depot dropped 17% in North America in the fourth quarter – 18% when looking just at same store sales. This fall demonstrates how challenged the office supplies business is in the United States and, most likely, worldwide. Given the closure of OFIS by Harvey Norman and anecdotal evidence around, I’d expect significant sales falls in the large format stationery businesses here.
Newsagents have an opportunity here. Shoppers who usually go to an Officeworks for a big stationery buy up or to purchase furniture or technology will put thoses purchases off and therefore not pick up general office suppliers yet they will still need general office supplies.
Newsagents ought to refocus attention on stationery, make sure every customer visiting your shop knows that you aren in this space with quality product at keen prices and backed by excellent customer service.
Newsagents are well poised to pick up stationery business in the current economic climate. Whether we do that is up to us and the attention we bring to the category in our businesses.
News Magazines this week announced a reduction in frequency for Modern Boating magazine.
The boating industry has slowed and as businesses revise budgets to fight the downturn, reductions in advertising are becoming necessary for many companies. Modern Boating has examined trends and will temporarily reduce its frequency. After the Dec/Jan, Feb and March 2009 issues, Modern Boating will publish June and December issues. This alteration to the usual schedule is a short-term measure that will be reviewed continuously. New on sale dates for the June and December issues are timed to coincide with high interest periods around boat show season and summer.
Publishers are not always this up front in Australia. It is good to be in the loop.
Magazine distributors could follow this lead from News Magazines. Boating magazine sales have fallen significantly in all but except a few lucky newsagencies. The fair approach would be an overall reduction now rather than waiting the usual three months for such changes to be reflected in the scale out model.
Unfortunately, supply remains at 2008 levels for most titles, meaning that newsagents are being taxed unfairly.
We are continuing to experiment with gifts at our Frankston newsagency. A couple of weeks ago we put in a spinner of Gardeners’ Knee Pads. While we were skeptical, they have generated good sales and reminded us one again that we are not the customer. Indeed, this mantra is true in all demographic. In another of my businesses we brought in some beautiful Italian music boxes priced from $500 upwards. We still have them. We are not the customer.
The Gardeners’ Knee Pads in Frankston work because they stand out, are keenly priced, meets the needs of our demographic and make for an inexpensive gift. Of course, the sayings on the knee pads are key in their appeal.
We bought these from Gibson. My understanding is that this spinner was one of the last they had left.
For two weeks recently at London’s Heathrow Airport, HSBC gave customers the opportunity to build their own magazine based on articles from a bunch of magazines. Over the two week event 2,030 personalised magazines were created. Click here to read more and see a promotional video created by HSBC about the campaign. What a great way to present magazine content in a different way!
There are a couple of current stories about the Woolworths group from which newsagents can learn.
The first story is about the introduction of Optometrist services in Big W. The arrival of Optometrist services in several Big W stores is being advertised heavily on Melbourne radio. It is a compelling pitch around professional service and low prices on glasses and contact lenses – a change from the traditional big W pitch.
The second story is in yesterday’s Australian Financial Review (p51) and relates to the company’s moves in the electronics area. They are rebranding 300 electronics outlets to the Dick Smith brand. The article by Sue Mitchell reports that refurbished Dick Smith stores are reporting 11.7% sales growth. It says the Woolworths is investing in its electronics offer in pursuit of JB HiFi.
Here is this giant of a company expanding its product / service offer in one channel and significantly refurbishing its offer in another channel. They are doing what good retailers do, what we newsagents should be doing.
We are smaller and therefore more nimble yet we, most of us at least, continue to ignore or resist change.
Our new shopfits are, more often than not, old and inflexible. Our ranges don’t seem to change. Our business practices are from decades ago and we leave control over much of what we do to key suppliers.
We have opportunities for significant change without the need for major capital investment yet many newsagents appear to be happy being the newsagent which has always been. These newsagents will see their businesses shrink.
Smart newsagents are attending events like the Reed Gift Fair in Sydney this week and other non newsagency channel trade shows. They are reducing space for traditional categories and creating space for new categories targeted at their demographic. Changes like this need to be local, we cannot move thee channel as a whole into new categories. That opportunity was lost, as it should have been, with deregulation.
But back to Woolworths, my newsXpress Forest Hill business is opposite a new Dick Smith store. It is an appealing retail offer, motivating to drive change in our business. The range of product is good, thee price points keen and the customer service friendly and knowledgeable – all points that we in small business accuse national retailers of neglecting.
Every time I walk past this Dick Smith store, I wonder what a Woolworths designed newsagency would look like.
I have noticed that sales for the English weeklies have fallen in stores for which I have data over the last three months. Titles such as Best, Pick me Up, Woman’s Own, Yours, Real People, Chat and Woman are down compared to last year. People’s Friend bucks this trend hwoever. In the past when there has been a slump in sales of Australian women’s weeklies, the English titles have remained steady. Such appears to not be the case in this current economic cycle.
These English titles have been successful for us at Forest Hill. If the current trend continues, we will need to consider reallocating space in this high traffic area of our newsagency.
Calendars are continuing to sell at the rate of between ten and twenty a day at our newsagencies. We are fortunate to be achieving a margin of 60% on the discounted price. Watching customer behaviour, they are now more add-ons to existing purchases rather than destination purchases. There are some categories in our businesses which we need to quit immediately the season is over and others which will work well beyond what we would think is a reasonable cut-off date.
We have found that by promoting at a specific price point – $5 – we attract more browsers.
