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

Author: Mark Fletcher

Finding display space

frank_feat.JPGIn the five months we have owned the newsagency in Frankston we have been experimenting with magazine displays in all sorts of places. We want to find the locations which work the best – outside of the traditional aisle end and other usual feature displays. Based on our experience elsewhere we expect to find two of three small locations of space from where we can really drive magazine impulse sales.

The photo shows our latest experiment above the waist height newspaper poster display at the front of the shop. This is not working for Burke’s Backyard so we will try another title next week before we we move onto another space.

We have found one new space which works well but we really need a second for the type of magazine promotions we like to run.

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magazines

WAN battle highlights newsagents

It is good to see the press coverage of the battle between Kerry Stokes and the Board of West Australian Newspapers. For the first time in years, the big sticks used by some newspaper publishers against small business newsagents are exposed. Today’s Age reports the court action by a newsagent and more planned by others about delivery fees which have not increased for “about a decade”.

At last we read that newsagents in Western Australia have not had a home delivery fee increase in ten years. Memo to the folks at The Age: check your own track record. While you have permitted an increase, it is less than CPI and does not even allow for the considerable increase in fuel.

Newspaper publishers choke newsagents. They control the price of what we sell and the price we can put on services related to that product. They do not control our costs. Indeed, they actively increase our costs by forcing us to use out of date practices.

While some publishers are better than others, the control they exert over newsagents as a block undermines delivery businesses. Their controls deny us the opportunity to be entrepreneurial. We’re treated like servants, and paid like it.

While I am pleased to see the appalling treatment of newsagents given coverage in the wash of Kerry Stokes’ battle with WAN, newsagents need to remember how their colleagues were treated in Canberra when he owned The Canberra Times. If my memory is correct, this is when contractors were appointed to replace newsagents, unilaterally removing the home delivery of the newspaper from newsagenrts who had faithfully served the newspaper for decades.

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Newsagency challenges

Relaying wrap

wrap_move.JPGIt was a real team effort Thursday, relaying the wrap category at Forest Hill.  We moved it from the front of the card area to the rear, next to flat wrap.  The change was part of our commitment to keep moving categories within the store.  What you see in the photo will change in the next few months.

The impact of the move has been immediate.  Up to last night, sales of wrap have increased by 50% – compared to the average of the last year of Fridays (out of seasons) and in comparison to the last four Fridays.  Ths increase is because regulars see it whereas before they had become ‘blind’ to it.  Sure, it is early days.  We are all certain the increase will be sustained.

As a consequence of moving wrap, we moved four other categories and they are enjoying increased sales as well.  This goes back to my comments here a couple of months ago about stationery – just by taking everything off, cleaning and putting it back in a different place sales will increase.  This work of moving stock is more valuable for a newsagent than much of the paperwork suppliers want us to complete.

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giftwrap

Who is Fern?

We have four magazines in-store at the moment with cover stories about a lady called Fern, her love life and weight issues. 

fern.JPG

Who is Fern? We had to find out because, well, four magazines and some questions.  The Mirror has the story.  We wanted to find out because of her success at dominating the covers.

I wonder about the relevance of these UK magazines here sometimes.

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magazines

Holden vs. Ford

holden_ford.JPGWe’re having some fun and promoting Holden and Ford branded magazines at the same time at our Frankston location.

On the stand in the photo we have a bunch of Ford magazines on the left and a bunch of Holden magazines on the right.

In the middle of the stand we’re inviting our customers to vote for the car maker they prefer – this is the bit I really like, customer interaction!

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magazines

Shopping trolley tokens a hit

shop_trolley.JPGWe’ve had shopping trolley tokens in our Frankston store for a just on a week and have all but sold out.  They are proving to be an excellent counter impulse item.  Small footprint.  Good margin.  An easy sell.  We have ordered more and will run them for another few weeks before resting them.  In terms of return on space and return on investment the first shipment of tokens easily beat everything else at the counter.

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retail

Newsagents walking from Bill Express

The Australian Newsagents’ Federation has announced today that it will not renew its relationship with Bill Express. While they announced this some weeks ago, Bill Express had another crack at a relationship. This was rejected. Newsagents will applaud them for this.

Here’s part of what the ANF said to member newsagents today:

Bill Express has recently approached the ANF with fresh proposals for our two organisations to continue working together past the termination date of the present channel agreement which ends on 31 May 2008. Over the last several weeks the ANF has been in discussions with Bill Express and has been evaluating those proposals. The ANF has concluded that those proposals do not merit a continuing relationship beyond the present arrangements.

Hundreds of newsagents are trying to quit their contracts with Bill Express – all because Bill Express removed a long standing financial subsidy paid to newsagents which, for most, was the difference between loss and break even.

Bill Express is so swamped by newsagents wanting to quit that they are not responding to newsagent request to terminate their agreements.

Today’s announcement by the ANF is a material change to Bill Express’ circumstances and I’d expect an ASX announcement to follow.

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Bill Express

A craft magazine found

make.JPGYesterday I asked whether the number of craft magazines being published was falling – based on thinning shelfs at my newsagencies.  Make is one of many digital (online)n only offerings in the craft space.  But Make is more than a digital magazine for as the tag line says, it’s the ultimate craft community.  They demonstrate a passion for their subject at the site equal to the passion I mentioned yesterday when writing about The Winding Road car lover site.

The folks behind Make can create an online offer without the costs of a distribution channel.  They save on warehousing, logistics, retail and shrinkage.

While it will take years for digital to significant hurt print in the magazine space, I expect that in the special interest area we will feel pain sooner.  Make is an excellent example of a more timely offer which leverages online technology to offer a significant (interactive) point of difference over print.

When I blog about things like this I always get a call or email from at least one newsagent telling me to pull my head in.  The theory put to me is that by writing about it I encourage publishers to pursue online over print.  This horse has bolted folks.  Online is the new game in town for magazine publishers.  We need to accept that and adjust our model accordingly.  Print will have a place in our businesses for a long time to come, but on a different basis to today. We can either get scared about the wave we can see or grab a surfboard and ride it in.

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magazines

Farewelling New Woman

new_woman_final.JPGWe are giving New Woman magazine a bit of a send off this week with a display in prime position at our counter for the issue just published.

New Woman is eligible for this gold star space because of the free stuff with the magazine this month – $39.95 worth of lip gloss and a mirror. The display has been up for a day and its working. Our only frustration is that the title was sent out without any marketing collateral.

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magazines

Managing Herald Sun footy cards

footy_cards.JPGWe have used the form in the photo to manage Herald Sun footy cards for a few years now. It provides our team and our customers with certainty for the full season of the cards. The structure and rules around the spreadsheet make the cards stress free for us. It also ensurfe we do not over commit.

Promotions like the footy cards are all about driving newspaper sales. By tight management of the process we’re able to control labour cost and ensure good customer outcomes.

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Newspaper marketing

Who needs a car magazine?

As their website says, The Winding Road is a monthly manifesto for the driving obsessed. It’s a free digital magazine. The content is excellent and their traffic substantial. Who needs to buy a car magazine if you can get more upto date and passionate content online. Their explanation of why it’s free is excellent (the highlighting below is mine):

The digital edition of Winding Road is free for several reasons. Primary among these is that it just plain costs substantially less to produce a digital magazine than it does a conventional print magazine. Second, as a free publication we can build up a group of loyal and devoted readers faster than we can if we charge for the magazine. This in turn allows us to attract advertisers who are ever so desirous of tempting our loyal and devoted readers with their products.

Those same advertisers are the reason there isn’t a catch. As with print magazines, advertisers are a main source of income. Provided that we do our part in attracting advertisers to Winding Road, the magazine should continue to be free in the long run. That’s why we offer you a three-year free subscription, not the ever-popular one- or two-issue “trial offer.”

The Winding Road is the kind of new media disruption magazine publishers, distributors and newsagents need to study and understand. It has a passion which resonates with

Josh Gordon, writing at Folio magazine says that The Winding Road gets over 180,000 unique readers viewing an average of 22 pages every month.

Car magazines are important to newsagents, they account for a high proportion of browsers. I’d hate to seem them stop visiting and get their pleasure online.

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magazines

Craft magazines disappearing

craft_titles.JPGAt first I thought it was just me and that for some reason we were not getting as many craft titles as usual. Checking around other, I soon found that newsagents are experiencing this too.

While my survey sample size is small, it makes me wonder if fewer titles are being published, whether they are being sold through other channels or it’s just a seasonal drop in range. Sales are still good, so maybe it’s supply efficiency at work.

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magazines

Visiting Harvey Norman Ofis

ofis_bag.JPGAs I blogged Tuesday I visited the new Harvey Norman Ofis stationery business in Auburn (NSW) on Tuesday.While it’s not fair to assess a new business which is barely a few days old, this is a Harvey Norman enterprise. These people know retail. They have time to get this right. Given their size and the bucket of cash available to support the new enterprise I think an early days assessment is fair. Their marketing suggests they are ready for such scrutiny.

I went to Harvey Norman Ofis expecting to see a next generation model of stationery and office retailing., something which would make put them ahead of OfficeWorks, the main national brand player in this space today.  I didn’t see that. far from it. This was a clone of Officeworks. No generational change.  Nothing special.

The customer service was exceptional and the feature displays attractive but the core of the business was nothing special. Laptops were laid our like Officeworks and Harvey Norman. Ink and toner the same. I wanted to see innovation driving sales. Instead, the focus in on creating a sense that this is the place for a good price deal. There is nothing new in that. Especilly when the prices are not amazing.

As I said, the customer service was excellent. If this is maintained then that is a huge point of difference with Officeworks.

The store itself felt, well, bland. The pink logo is the strong visual but even then it’s only in the uniforms, plastic bags and at the front. In-store signage, which may be temporary, was not the bold message I expected.

To support the opening they give you a brown paper bag and anything you can fit inside during your shop you get 15% off. While it’s not a new idea, the execution at Ofis is good – I was offered the bag three times and told to fill it up. I know the idea has been used in at least one stationery outlet in the US with good success.

So, what does Ofis mean for newsagents? If Harvey Norman is committed for the long haul, and I am yet to be convinced of this given what I saw, newsagents need to be prepared for more competition in the stationery space. We need to get back to basics – the best range, keen prices, exceptional service and marketing our offer outside our four walls.

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retail

Boredom busters too late

boredom_buster.JPGLike plenty of other newsagents I ‘m sure, we received a box of recycled Simpson comics. The bag has the banner – Boredom Busters. A month ago the banner would have made sense.  They are too late for school holidays now. It’s a lost opportunity.

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magazines

eziPass now available for all newsagents

Applications for the eziPass electronic voucher platform are now being processed from newsagents who to not have the Tower Systems software. Tower users can access mobile and other electronic vouchers from within point of sale. Others can load some free software and access the eziPass products from any computer. The new sign up form can be accessed here.

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phone recharge

Beating Big W on price

bigw.JPGWe were pretty excited to discover that one of the books in our book sale is in the latest Big W catalogue and that we beat their we sell for less price. Our price is 19% lower than Big W – and we still making a good margin. Sure it’s only one product – the feeling is good in this small business. We will bask for a moment. The photo is from the Big W catalogue.

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Book retailing

Removing middlemen from a bank deal

There is a bit of noise around about alternative bank deals for newsagents. This has sprung up after I announced the deal with St.George and Bank SA.

Key to supplier relationships like this is the understanding who makes what. Banks offer sign up fees as well as a commission on transaction fees. I have rejected these to ensure the best deal for newsagents. There is no middleman.  For too long there have been too many middlemen taking a piece of what newsagents ought to make.

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Bill Payment

Success with The Art of Knitting

art_knit_36.JPGThe Art of Knitting continues to be a great partworks success for us at Forest Hill. We have eleven committed putaway customers and, thankfully, we get all the stock we need to satisfy their orders. To be in this situation by issue 36 is excellent.

We’re not so luck on some other partworks. Under-supply means putaway customers cancel orders and we either lose the business or go into the backorder black hole and lose time, money and our reputation.

Partwork publishers, the importer and distributors need to look at our numbers for The Art of Knitting and understand the scope of the opportunity if they get the model right.

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magazines

Shunning the free monthly

mothers_mat.JPGCopies of a new free monthly, Melbourne Mothers Matter, were left at the front of our newsasgency overnight. No advance advice, no cover note, just the product.

While Melbourne Mothers Matter looks good, we don’t have space for the freebie – twice the size of a magazine and does not fit the fixturing.

Also, why display a free title next to paid-for magazines carrying the same or similar advertisers?

I know I could argue that I should have the free title but financially it does not work for me. What I have on the shelves today is working. This is a business after all.

To their credit the publisher agreed to take us off the distribution list when I called them.

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magazines

Fairfax launches The Vine for Gen Y

The Vine is a news and information website for Gen Y from Fairfax.  This is a very smart move and should open an excellent ad revenue demographic for the company.  The interactive facilities of the website are an excellent aspect of the offer.

Ten years ago if Fairfax wanted to tap in to the equivalent of today’s Gen Y they would have launched a new newspaper or magazine.  Gee how times have changed.

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Media disruption

Unfair magazine KPIs

I am trying to help a newsagent get approved by a magazine distributor for processing magazine returns electronically. The distributor says no because the newsagents has only sent sales data for 50% of the trading days of the month.

Fair enough, the newsagent should be sending sales data every day. However, this is a one-sided relationship. The magazine distributor imposes tough KPIs on newsagents on sales data, invoice payment, displays etc and accepts none in return. They are supplying some titles which sell through at less than 30% yet the newsagent has no mechanism to use against the distributor.

Let’s play this scenario through a bit. The newsagent fixes processes at their end and does send sales data through every day, they are then permitted by the magazine distributor to process returns electronically. What happens about underperforming titles? Nothing.

This is a one-sided, unfair relationship. A magazine distributor treating newsagents as partners would have used the electronic returns request as a carrot rather than a stick.

The magazine distributor ought to stop managing newsagents by blackmail and start treating them as business people.

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magazine distribution

Leveraging newspaper home delivery

stepper.JPGThe Big Stepper is a machine which could strengthen the viability of distribution newsagencies.

It is a device which facilitates easily adding other product(s) to the newspaper package prior to delivery.

While there are challenges with newsagents adding product to the newspaper prior to delivery in existing newspaper contracts here in Australia, smart publishers will engage with newsagents if they want a viable home delivery network in Australia.

The current situation of publishers controlling all revenue points for newsagents and accepting no responsibility for business costs such as fuel and labour must change if newspaper home delivery is to be appealing. Something like The Big Stepper could be very interesting in improving viability. A more viable home delivery business will attract more entrepreneurial operators and this must be good for newspaper home delivery.

Warren Hannon, President of Stepper Inc in the US sent me details on his Big Stepper product and while I have not seen it first hand, it looks very interesting, certainly worthy of consideration. I understand a couple of newsagents in Australia have purchased this unit.

If I was still in the newspaper home delivery business I’d be looking at opportunities like this to leverage my key asset, my customer list, for more business opportunities.

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Newsagency challenges
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