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

Author: Mark Fletcher

An iTunes for newspapers?

Rich Gordon at Poynter.org poses this question and tells readers than an iTunes for news already exists – the Amazon Kindle.  regulars here will know that I have followed the release and growth of use of the Kindle with great interest.  While not available in Australia – due to the complexity of telco coverage here – in the US and the UK it is generating considerable interest as a book and newspaper reader.

From a newsagents perspective, the Kindle cuts us out.  We can’t even sell subscriptions for a small clip. 

The supply chain between publisher and consumer has been turned on its ear.  It started with music, migrated to film and now is impacting print.  This disruption to our traditional business model is the best opportunity we newsagents have had for decades to reinvent ourselves.

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magazines

Back To School magazines

t5bts.JPGTake 5 this week ought to interest newsagents who are running a Back To School promotion as it comes with a 32-page Back To School cookbook plus an opportunity to enter a Back To School competition.  It makes sense to include magazines like Take 5 in the more traditional Back To School promotion – to promote departments outside of stationery and chase add-on purchases from customers attracted to the Back To School sale. 

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magazines

Network weekly magazine returns a breeze

I have heard that some folks are scrambling to be ready to handle the new weekly returns process being introduced by Network Services.  The introduction of weekly returns is no surprise, it was announced more than six months ago.  The operational processes were established well before then.  I am not sure what the fuss is some quarters is about.

Tower Systems predicted this move by Network Services when they moved to fortnightly returns some years ago and so catered for weekly returns at that time.

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magazine distribution

Promoting Super Food Ideas at the counter

fhn_sfood_ideas.JPGWith Woman’s Day sales up 30% Monday and Tuesday and a sell-out likely, we replaced our Woman’s Day counter display this morning with one for Super Food Ideas.  Super Food comes with a free kitchen timer, making the $2.90 price exceptional value.  As is often the case, we were given little in the way of marketing collateral – one crushed poster – so we made our own.

With many newsagency regulars visiting two or three times a week, changing the main counter offer display mid-week is worthwhile.

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magazines

Magazines and 2009

Media Life has published an interview with Martin S. Walker, Chairman of Walker Communications, in which Walker is asked to predict what 2009 holds for magazines.  While it has a distinctly US focus, it is an interesting read.

Personally, I think the magazine department is in for a rough year.  How much this impacts on newsagents will be determined by publishers, magazine distributors and us newsagents.  Fair allocation should see us only carry the cost of lower sales.  Unfortunately however, I suspect we will have to carry the cost of unfairly high supply for fringe titles.  Smart retail will be about mitigating the impact of poor decisions by distributors.

I am anticipating January magazine unit sales down between 10% and 15% on last year in many newsagencies.  While this is only based on sales data for the first twelve days, I am confident that the dataset I have is indicative.  The newsagencies which will buck this trend are local holiday destinations, where there has been major development or a shop fit or where some other local factor (a loyalty program maybe?) is softening the impact.

The way to deal with this challenge is to focus more attention on magazines.  Ensure the layout is the best for your demographic, keep moving product so it looks fresh, create and maintain hot spots where you can drive impulse purchases, drive a point of difference around the category and manage supply – as if that is truly possible.

I have been fortunate to have had the time to visit thirteen newsagencies in the last week.  In each case, most of the discussion has been around opportunities for magazines and not problems.  The newsagents I have spoken with understand they can make a difference and have been prepared to engage in pursuit of that.

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magazines

Hoax sells Quadrant

pushingquadrant.JPGThere is nothing like a hoax on an editor to sell a magazine as the folks at Quadrant are finding I am sure with the latest issue. 

While a low volume special interest title, it is a challenge to find a copy of Quadrant anywhere thanks to the the hoax which has been widely reported.

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magazines

Has VANA found the pot of gold for newsagents?

VANA, fresh from announcing to its newsagent members in Victoria that it has failed to achieve an increase in newspaper home delivery fees in negotiations with the Herald and Weekly Times, claims that through its new (marketing) group, newsagents will be able to achieve between 35% and 40% gross profit.

I am told that VANA reprepsentatives are rolling through Victoria this week and next chasing more newsagents to be part of this new group as not as many signed up as they needed.

As a VANA member, I would prefer to see them focus attention on outcomes for all newsagents through Association services before they make wild promises for a new commercial venture. 

Many Victorian newsagents pay $1,500 or more a year to be part of VANA.  I suspect they would like to see a return on that investment before paying around $500 a month to this new VANA group.

Part of the hgefty monthly fee for the new group apparently relates to collecting data to help in measuing business performance.  Many newsagents already have this data at their fingertips thanks to smart software.

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Newsagency challenges

A second bite from a magazine display

vm_cosmo.JPGMany in-store magazine displays are visible from the front only, seeking attention from people walking into the newsagency.  We have capped our Cosmopolitan display this week with a small display – three cover run ons stabled to create a three sided presenter – which makes the cover visible to customers walking from another section towards the counter.  This gives Cosmopolitan greater visibility.  Blokes leaving our bloke aisle will (may) see it.  Ladies leaving our women’s aisle will see it – probably for the second time as they will have noticed the major display when walking in.

While we are not visual merchandising experts, creating a display which promotes to traffic in more than one direction must increase the chances of driving the action the display is pursuing.

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magazines

Promoting crossword magazines to lottery customers

fhn_cwrod_front.JPGWe are promoting crossword titles on a stand leading into the counter from where we handle the majority of our lottery sales.  Starting from the left, we have the Lovatts full size titles followed by a column of smaller format Lovatts titles.  In the middle we have two columns of the Women’s Weekly Puzzle Book which came out yesterday.  This is followed with a variety of small format crossword titles and a column of Puzzler titles.

Our reasoning for choosing crosswords is that it is the holiday time and people who do not usually do crossowrds might be looking for some low-cost entertainment.

This promotion is in addition to the column of crosswords we have next to our women’s weeklies and our regular crossword category.

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crosswords

Promoting Woman’s Day at the counter

fhn_wd.JPGWe have given Woman’s Day prime position at the counter this week because of the free Taste of Summer cookbook.  This is an excellent promotion from Woman’s Day for this time of the year and placing it at the counter will maximise the opportunity for us.  We have not overburdened the display with too much collateral since the product itself is what will drive sales.

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magazines

OnQ in liquidation

OnQ was placed into voluntary liquidation on December 23, 2008 by resolution of the company’s creditors.  It remains unclear what impact, if any, this will have on the Bill Express equipment which sits in the back rooms of thousands of newsagencies around the coountry. 

On Q is the company which committed to paying rebates to newsagents for the Bill Express / DialTime equipment and services. The rebates were the reason many newsagents signed with Bill Express.

OnQ oine of the Bill Express related companies which would have been part of the ANF due diligence process in the lead up to their endorsement and promotion of Bill Express to newsagents.  The ANF did not conduct any due diligence.

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Bill Express

Making good newspaper news in Australia

There is plenty of good news we can make about newspapers in Australia, to balance my three posts from earlier this morning.  While none of the items below will ‘protect’ the whole category, combined, they make newspapers interesting for newsagents who embrace them.  We have an opportunity to make business decisions in pursuit of better sales:

  • Local newspapers sell.  Take the Melbourne Observer.  Once customers know you have it they are loyal.  We can sell 100 copies a week.  Customers come to us because we have it.  There are plenty of local newspapers like this around the country.
  • Foreign language newspapers are growing.  Unit sales are up 10% year on year and even more in many newsagencies.  They drive good add-on sales in various categories.  The key is to display them well and offer a good range.  The challenge is the restrictions applied by some distributors who will not provide direct accounts and therefore lose sales.  Foreign language newspapers account for 12% of our newspaper sales at Forest Hill.
  • Special interest papers sell.  Newspapers about racing, motor sports, collectibles, markets – local interests.  Some newsagencies feature these and have found regular customers and good growth.
  • Rewarding loyalty works.  With publishers placing their product in various locations – petrol, convenience, coffee – newsagents could run their own loyalty club specific to their store and thereby own the customer.  The key with any loyalty program, however, is to not reward usual behaviour but reward above average behaviour.  Some newsagents reward usual behaviour in other categories and it does not benefit their bottom line.
  • Sell the free local newspaper.  Most local newspapers are delivered free of charge.  Some newsagents give them away in their shops.  Since this is a service for which there is a cost, consider a charge to reflect your investment.  A smart publisher will support this and thank you for promoting their brand.
  • Co-locate.  Putting newspapers in a second location in your shop, at the lottery counter for example, will win additional sales.  The key is to change this.

While there is no doubt that newspapers are challenged, newsagents can take actions in their businesses to soften the impact of any downturn.  My list is far from complete.  The key is to do something rather than watch the tide come in (or the tsunami if you believe that).

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Newsagency challenges

The end of two-newspaper towns?

Alan Mutter thinks this year may see the end of two-newspaper towns:

Although there aren’t many two-newspaper towns left in the United States, the few remaining No. 2 papers are the least likely to get out of 2009 alive.

While we would think about Melbourne and Sydney as our two-newspaper towns, in regional Australia there are plenty more with strong local dailies.  From the data I see, the local newspapers seem to be faring the best.  This supports overseas trends – local is better, people like to read about themsleves and their own baackyard.

Newsagencies are local businesses yet we do not embrace this as well as we could.

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Media disruption

Google and saving newspapers

Eric Schmidt, CEO of Google, had some interesting things to say to Fortune magazine’s Adam Lashinsky when interviewd about the future of newspapers and whether Google could “save” them.  The opening question sets the tone of the piece:

Is there some grand gesture Google can make to solve the newspaper industry’s problems?
It’s not obvious what the grand gesture would be. Google can’t make the cost of newsprint go down. We also can’t materially change the way consumers behave, and consumers are in fact moving their lives online. We have been able to send clicks to their Web sites, which they can monetize. So that provides some revenue. The problem is that doesn’t provide enough revenue to offset the loss of the other revenue.

The interveiw is interesting because Schmidt makes it clear he wants news brands to survive, to provide content, but thinks the print model is losing the fight and doesn’t know what to do to save it.  Lashinsky has posted a follow up to the story.  Chris Snyder weighs in at the Wired blog network.

We are insulated, for the moment, from newspaper challenges here in Australia because of our smaller marketplace and the different newspaper distribution system.  However, we have kidded ourselves for too long into thinking that the US and European troubles for newspapers will never happen here.

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Media disruption

Predicting newspapers going out of business?

But what if the old media dies much more quickly? What if a hurricane comes along and obliterates the dunes entirely? Specifically, what if TheNew York Times goes out of business—like, this May?

Michael Hirschorn poses this question in an article published a couple of days ago in the Atlantic magazine.  But rather than concentrating on the closure of a print operastion, Hirschorn looks at life beyond. 

This is what we should be thinking about, life beyond print or at least with a significantly changed print media product mix.  Newsagents give over between 25% and 50% of their retail real-estate to print.  In some cases, the monthly rental for this space is upwards of $10,000.  Do we have a fall-back (disaster) plan if, say, 25%, 50% or more of the revenue coming from this space disappears.

If the newspaper challenges in the US start to appear here, and some say they are already, we need a plan – just as we need a plan should our businesses be hit by any disaster.

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Media disruption

A horseshoe for the bride and traditions

wedding_keepsake.JPGI was asked yesterday about  the purpose of the wedding keepsake, a bridal horseshoe.  My customers were a young Chinese woman and her mother.  I stumbled through, saying it represented a wish of luck for the bride on her wedding day – to be given after the ceromony.  The giving of a horseshoe is something they had not heard of before.  They loved the idea of it bringing luck for the bride and bought one.  Judging by the animation of the conversation between them, I expect to sell more to other guests before the wedding.

The encounter made me realise I didn’t know enough about the history of the bridal horseshoe or wedding keepsakes generally.  Check out The Brides Diary for one example of more on this subject.

Product knowledge is very important and maybe I am not as advanced as others on this.  I know that for our Sophie Randall business we have a booklet we have put together explaining religious occasions and the difference between baptism, confirmation and other similar religious occasions.  The wedding horseshoe encounter has convinced me to expand this to add wedding tradition information along with details of traditions for other occasions for which we sell products – graduation, twenty-first birthdays and the like.

The ultimate booklet I see for our newsagencies is something which we can have behind the counter to answer questions, help with card choice and help with gift selection.  Then I will be ready if I’m asked about a tradition like bridal horseshoes.

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Gifts

Working Abroad magazine out of place here

working_abroad.JPGWorking Abroad magazine is a UK publication written for people living in the UK and planning to work abroad.  It is an odd magazine to sell here in Australia. 

The current issue (on sale since December 1) has an article about working in Australia. 

There is little content to be of interest to someone already here.  There has to be a better way for us to control the titles which get access to our network.

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magazine distribution

Good collateral from NSW Lotteries

nswlotteries.JPGI was in a couple of newsagencies in Sydney yesterday and was impressed with the collateral provided by NSW Lotteries, especially that for the $5 million Monday draw on January 19.  NSW Lotteries provided A2 posters as well as the landscape poster in the photo.  I especially like the call to action: ASK FOR A MEGAPICK!  It was good to see the newsagent price a mega pick under the poster, making it easy for their customers.

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Lotteries

Promoting Good Health and Medicine

fhn_goodhealth.JPGWe are using the back of the ACP Magazines basket builder stand to promote Good Health and Medicine.  This is positioned so that guys leaving the guy magazine aisle and girls leaving the girl magazine aisle see the offer.  It is working.  People purchase off the stand, people who would otherwise not have seen the Good Health and Medicine.

In newsagencies we often build displays as destinations or as something people pass when they enter the store.  Using the back of the stand in this way and placing the Good Health and Medicine offer where we have we are targeting people who are heading to leaving – to the counter to pay for their purchase.

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magazines

Beware of books

I have heard of plans to supply books and book-like product to newsagents through traditional supply channels.  From what I understand the offer (in its present form) is unlikely to be as competitive as that put to traditional bookshops.  Current release books need to be provided on a sale or return basis at 45% margin.  Without this we are not able to be competitive on price against book retailers often located near newsagencies. 

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Book retailing

Magazine management training popular with newsagents

At Tower Systems we announced a free online workshop of magazine management for Thursday this week.  It filled in two days.  We announced another for later the same day.  It filled in less than a day.  Two more sessions were announced for Thursday January 15 at 11am and 2:30pm.  They filled in a day.  More will be announced in the next couple of days. 

It’s great that newsagents are eager to learn more about best practice in managing magazines.  We know from feedback from previous sessions that this workshop can help cut magazine management (arrivals and returns time) by a third in many newsagencies. 

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newsagent software

January newsletter

nljan09.jpgClick here to see a copy of our January in-store newsletter.  This is provided free from a stand at the front of our newsXpress Forest Hill store. 

You’ll notice that the newsletter also connects with the mobile phone recharge promotion we are running in store and about which I blogged yesterday.  We write items for the newsletter which we feel are appropriate to our customers and about products which we want to promote – it is our marketing after all.

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newsagency marketing

New Home Trends loses money for newsagents

newhometrends.JPGNew Home Trends and the various other Trend titles are poor performers.  Not only in my newsagencies but others I have seen recently.  They have a long shelf life (five months for New Home) and, overall, a poor sell-through (25% or less).  Despite the poor sell-through, the distributor (NDD) continues to send product.  While the NDD response will be that I can early-return the product, their internal systems should have alerted them that I will be lucky to sell one copy let alone all they sent me.  I either let them take my cash for product which will not sell or fund the cost of early return.  This is a perfect example of where we should rip off the cover and only send this back – to ensure that this title does not do the cycle further and cost more newsagents.

If NDD cannot sort these problems out, more newsagents will shut their accounts with the company.  A better outcome would be fair supply based on sales data. 

This problem matters to all magazine publishers in Australia because the money and time wasted on these Trend and similar titles (Universal Magazines) which are oversupplied and with a long shelf life is money and time not available for more productive titles.

I am happy to carry the Trend titles but only on equitable terms.  The current terms are anything but.

One day publishers will wonder why newsagents either shut or dramatically reduced magazine space.  The problem I have described in the blog post, and many others like it, will be a key reason. 

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magazine distribution
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