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

Author: Mark Fletcher

Flooded with Kitchen yearbook

fhn_kitchen_yearbook.JPGNewsagents may want to check how many copies of Kitchen Yearbook they have received from NDD.  This is another long shelf life Universal Magazines title oversupplied to newsagents.  The sales performance, its size and long shelf life combine to make this title loss-making for us and, I bet, most newsagents.  Our average sell-through is less than 50% yet NDD has increased supply with each of the last three issues.  NDD says I can early return.  The weight means that for each four copies I will have to pay $3.00 in returns costs – I am funding the failure of their supply model.

Almost a month after I asked NDD and Network to stop supplying Universal titles they are yet to act.  This is my business and my money, no supplier can force me to take product which will cause me to lose money.  To force that I will have to take the matter to the ACCC.  I should not have had to but it now seems likely.

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magazine distribution

Returning old magazines

fhn_golf.JPGHave I missed something?  I thought that the old issue of a title was returned when the new issue came in, in most cases at least.  We received the January issue of Australian Gold Digest yesterday.  The December issue is not due to be returned until next month.  Of course, we have sent it back early.  Many newsagents would not.  I have checked out the December issue of Australian Golf Digest.  There is no reason I can see inside the magazine for it to have an extra month on the sehlves.

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magazine distribution

Are you using Photo Express?

photo_express.JPGI was in a newsagency yesterday with a Photo Express kiosk and was surprised to find out the terms under which this has been provided.  The costs seem extraordinary for little or no return.  Knowing a bit about computer equipment, it seems to me that the kiosk was priced at the very high end. 

I’d be interested in hearing from other newsagents with a Photo Express kiosk and whether it is profitable.

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Newsagency challenges

Costco is coming soon

costco.JPGThe sign at Waterfront City in Melbourne heralds the imminent arrival of the giant US retailer Costco on Australian shores.  Costco is bringing a style of retailing new to Australia in this 14,000 sq metre warehouse and other stores it says it will open.  While not playing too much with newsagent core circulation products, their arrival will have other retailers respond, especially in the areas of stationery, ink, cards and gifts.  This is another reason we each need to continue to evolve our model to be fresh and relevant.

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Newsagency challenges

Magazine oversupply and long shelf lives

I visited a newsagency today to review their magazine situation.  We pulled off titles supplied between July and the first week of November for which most of the original supply remained on the shelves.  We filled two very large trolleys with early returns.  And magazine distributors complain that newsagents are not good business people and do not pay their bills on time! 

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magazine distribution

Not so Groovy Grandmas

fhn_groovy_not.JPGWe have had Groovy Grandmas, a new magazine, on the shelf for three weeks.  We allocated four pockets in a good location near high volume titles speaking to the same demographic.  We have not sold a single copy.  Given the lack of sales, the real-estate the stock is taking and the four month on-sale, we are returning half the supplied stock today.  I am all for supporting new titles but without a single copy sold in three weeks something had to give.  If the result next month is no better the remaining copies will be returned.

I would feel differently is there was a well funded campaign supporting the title or if we were only billed for sales.  The magazine distribution model is such that we need to look carefully at new titles like Groovy Grandmas and act to mitigate our losses.

I would also feel differently if I have been consulted about receiving this title in the first place.  This is what I do with another distributor and it allows me to buy-in to launches.

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magazines

The season for Cupcakes

frank_easycupcakes.JPGWe have sourced a good cupcake making kit to display with the new AWW Cupcake Cookbook at our newsagency in Frankston. Both are displayed next to high volume women’s weekly magazines.  Once we sell out of the cupcake making kits, which will be in the next few days, we have other Christmas gift products to display with magazines.  I am confident that this display will result in good business for the AWW cookbook too.  We are using space which usually displays smaller special interest magazine titles.  As we have to do at Christmas, we shuffle and find new display spaces.

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magazines

Expecting the discount

It is disappointing to see some businesses including newsagencies heavily discounting Christmas cards.  While retail is tough, I don’t see the sense in training consumers to expect up to 50% off Christmas cards – not given the sales being achieved in stores which are not discounting.

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Greeting Cards

Packaging issues affecting magazine distribution

Product packaging issues affecting print media (magazine) distribution in Victoria is a report written by Mark Thomas of Loadrunner transport.   Mark worked with 1st Fleet and then with Zip Couriers handling magazine distribution.  His report documents issues and challenges which demand attention, issues which were first raised a year ago.

I am grateful to Mark for his permission to publish his report here for people to read. The report eloquently covers challenges which frustrate newsagents and many others which I am sure are new to us, challenges which impact on the magazine product consumers are presented with in newsagencies.  Mark’s passion for customer service is evident in his words.

In general there is still much that can be done to improve quality of service, delivery standards and to reduce the number of human related errors. A large number of parcels are still packaged with inadequate, insufficient or inappropriate strapping that directly contribute to product loss, damage to stock and numerous other problems.

I feel it is necessary to identify a number of problems that require urgent attention and strongly believe if the below issues are examined in a responsible and professional manner, that many of the current problems associated with magazine deliveries could be avoided entirely.

If magazine distributors are serious about improving the quality of service then may I suggest that there is a great deal that requires attention in their own backyard. The contractors and drivers responsible for delivering stock into stores are not always at fault, and there are far more productive measures that can (and should) be introduced apart from wrongly directing blame for any problem encountered.

Unfortunately, Mark’s complaints last year fell on deaf ears.  Rather than listen to the message, those who should care shot the messenger.

The breakdown of issues by title ought to be of particular interest to the publishers of the titles listed.  Remember, this is from a transport operator trying to do the best for publishers, to deliver their product in a merchantable form.

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magazine distribution

Newspaper prophecy

9. The death of newspapers

Newspapers as we know them are in decline. Are you reading this in hard copy or online? Around the world, newspapers are shutting down or moving to the web. Blogs are replacing the mainstream media.

The profession of journalism, and the way we consume media and get our news, is being transformed. I’m not sure whether this is a good or bad thing, but there’s no doubt it’s happening.

From Ten prophecies from the digital millennium  in The Age today.

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Media disruption

Jamie Oliver launches food magazine

Jamie Oliver has launched Jamie Magazine, a bi-monthly, in the UK exclusively through the WH Smith chain of newsagencies. 

While I am sure Jamie Magazine will be successful, I do wonder whether the market needs another food title.  For newsagents, space is an issue as well as capital.  each new title requires shelf space which is not currently free.  It also requires our cash to fund its release through the newsagent network.

I am disappointed that Oliver has gone with a big business chain and ignored small business newsagents.

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magazine subscriptions

How much sudoku is too much?

sudoku_titles.JPGHow many sudoku titles is too many?  As the photo shows, we currently have eleven sudoku titles at our Forest Hill store.  We often have more than that.  Between 60% and 70% of our sales come from one title – Super Sudoku from Lovatts.  We do not need most of all of these other titles.  I am certain that if two thirds of the titles were cut, our total revenue from sudoku titles would not be affected.

The Australian magazine marketplace is flooded with UK and US imports.  They are sent to us because there is no risk.  We provide access to our space and our labour for free.  We even pay for shrinkage, theft.  We carry the risk.  This flooding of an already well satisfied, saturated even, market is something the ACCC could look at.  Especially given that small business enwsagents are the victims.  This plays out to a consumer cost because it impacts on the services we can offer and on our very viability.

As comments here over the last few weeks show, it is difficult for newsagents to cut titles from their product mix.  Many who have tried end up giving up and just accept the dumping as evidenced in the number of sudoku titles in my newsagency. 

I’d like to see a small working party established between Australian publishers and several newsagents to formulate a joint strategy on this issue.  Nothing fancy – meet online, gather data (which is easy to get) and develop a position paper which could form the basis of a submission on dumping to the ACCC.  I’d start in the crosswords area because it is an easy target and rife with dumping.

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crosswords

Taking magazines to the customer

fhn_cmagsfront.JPGThis display of Christmas themed special interest craft and cooking magazines which we have right at the front of our shop near other Christmas products is working well for us.  I am certain that we are selling some of these titles to customers who would otherwise not browse the shop looking for them.  We are refreshing the titles as new ones come in which match the Christmas theme.  We have three times the titles showing in the photo including some of the more mainstream titles such as Notebook, Real Living and Better Homes and Gardens.

Anyone can create a display like this at the front of their shop.  All it takes is a few minutes selecting the titles.  For motivation, count how many people browse the whole magazine department compared to shopping the front few metres of your shop.  If yours is a typical newsagency, more than 60% of traffic does not go deeper than the first few metres.  This is why displays like this around themes and seasons are vital to the health of your magaizne department.

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magazines

Content versus texture, the digital battle

Flexibility is trumpeted as another advantage of the digital newsagent over its corner shop rival. Regular readers of a particular publication can choose to buy a month’s subscription to their favoured title but for a generation that has grown up with the luxury of free content from a plethora of different providers, there is an opt-out from that rigidity.

Read more of what Amol Rajan has to say here in his column at The Independent.

“If you think that we’re totally eradicating the printing and distribution costs for these publications, as well as opening them up to a whole new market, I think in time we could argue that we ought to be able to offer a cheaper product than our rivals in normal newsagents. There are potentially enormous cost-savings to be made there.”

Ouch!  Here, Rajan is quoting Tony Pescott. Tony Prescott, director of new business development at Asda, the Wal-mart company which has launched a digital newsagent offering in the UK.

The issues here ought to be the main agenda item at newsagent meetings.  Many of the issues we face today tie back to challenges facing print and our bricks and mortar businesses.

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Media disruption

Chips with your magazines

I was surprised to receive the email today announcing that magazine distributor NDD is to distribute Sultry Sally potato chips.  Magazines and potato chips are an odd mix.  This brand launched in Safeway and Woolworths earlier this year.  While some newsagents would be happy with a supermarket line, I am more included to hunt out chips not being sold in a supermarket. 

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confectionary

Women’s Weekly Christmas issue selling well.

fhn_aww_dec08w3.JPGFollowing continuing stong sales, we have decided to leave Australian Women’s Weekly at our prime counter position until at least Wednesday.  We usually turn titles in this position weekly or even more frequently.  While I know this goes against what I write here about regular customers becoming store blind, given that it is selling from this location replacing the display because of some rule did not make sense.

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magazines

Puzzles selling well for Christmas

fhn_puzzles_christmas.JPGThe mix of puzzles we have at the counter – Hannah Montana, High School Musical, Disney and Dora the Explorer – is selling well.  We’re finding the price point works in this lottery counter position – the purchase decision is easy.  We have capped the front corner of our counter with Christmas offers, these puzzles and Darrel Lea Christmas items. 

The Christmas gift items which are a more considered purchase are placed further into the store.

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retail

Bargain Shopper not selling

fhn_bargs.JPGWe have sold eight copies of Bargain Shopper from Universal Magazines since it arrived eight weeks ago.  They sent us 73.  several years of sales data shows that we will sell a fraction of the 73.  The oversupply is from a company which says it cares about the environment and cares about newsagents.   As regulars here will know we gave the title a crack and promoted it in a high traffic area.  All we could sell in eight weeks in 8 copies.  And the title still has months to stay on the shelf.  The behaviour of Universal around Bargain Shopper is another reason I do not want their product in my newsagency any more.  No amount of requesting has altered their behaviour, so I am better off without all of their titles.  Universal would know from the data they have that I and many other newsagents will lose money on Bargain Shopper yet they did not alter their supply model or financial terms.  Based on my experience I would say that this title is bad for the environment and bad for newsagent cash-flow.

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magazine distribution

Great retail wrapping paper

christmaswrap.JPGWe buy paper from The Wrapping Paper Company for use in our stores.  The paper in the photo is one of the designs we selected for our Christmas free wrap services.  They have good product including wrap, ribbons, tape etc – all at good prices. 

If you are getting into gifts, a free wrapping services, especially for major seasons, is essential.

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retail

Promoting the ACP cookbook offer

fhn_acpcook.JPGWe are promoting the ACP cookbooks offer at the counter, featuring a different cookbook every couple of days.  This is in addition to a power end display.  Promoting the right title makes this a good counter offer, an easy purchase.  Our regular customers will understand the added benefit of our Magazine Club Card with this offer as we give a clip on the card for an ACP cookbook.

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magazines

Magazine compliance roundtable discussion

Tower Systems has scheduled a free online roundtable discussion on magazine compliance for Tuesday December 9 at 11am.  This discussion will review current standards and provide newsagents with steps to take to ensure their businesses are compliant and ready for the next phase of IT innovation in the magazine supply chain. This session is available for supported Tower Newsagents only.  Bookings can be made by emailing bookings@towersystems.com.au.

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newsagent software

The old pharmacy

discount_pharmacy.JPGDiscount is the new “thing” in pharmacy retail in Australia.  Stores screaming discount on their shingle and across the front windows have replaced traditional pharmacies on every secod street, or so it seems. 

The pharmacy of yesterday, offering personal service and local knowledge is fading and being replaced by these impersonal barns which use a claim around price as their only point of difference.

In some of these discount pharmacies, the price pitch stops at the door for inside many items are priced the same as you would find in a more traditional pharmacy.

I wonder if this is a trend we will see in the newsagency channel, a group built around a price proposition.  It would be challenging to achieve because so much of what a newsagency traditionally sells has a slim margin and is, somewhat, price controlled.

It is interesting to consider whether someone will boldly play the price card because some of the challenges pharmacies face we face too.  Much of what they sell is sole elsewhere.  There are too many retail outlets.  Suppliers are frustrated with lack of discipline  The overall shingle will support only so much divergence from the traditional offer.

While I have no interest in a price based offer in the newsagency channel as this would distract from our core unique propositions of community connection and customer service, the question is interesting to contemplate.

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Newsagency challenges

The future of newspapers

Click on the image below to see a TV report, The uncertain future of the newspaper industry.  This ran an New England (US) TV NECN – New England Cable News – last night.

I am sure that other TV stations are running similar reports.  Public reports like this become a self fulfilling prophecy.

From a newsagents perspective, the concern has to be howw we configure our businesses in terms of attracting customers and the shop fit itself for the changes coming whatever they are.

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Media disruption
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