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

Author: Mark Fletcher

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

Distributing news

The New York Times has a fascinating article by Brian Stelter on how young people consume and distribute news.  It looks at this through the prism of the current US primary election process.  It makes a case that for this generation, the medium has changed.

As the last step in the old media supply chain this article speaks to newsagents.

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Media disruption

Crossword competition hots up

crossw_apr08.JPGIt is good to see the heightened competition between the Puzzler and Lovatts brands in newsagencies. 

The fight for the best shelf space, in-store promotions and counter offers for crossword / puzzle titles is healthy and provides newsagents with choices they would otherwise not have.

Puzzler and Lovatts dominate a strong category for newsagents and the heightened competition between them can only grow the success of the category.  Smart newsagents will review their space allocation for crossword / puzzle titles and find ways to have more facings seen by more eyeballs.

In each of my stores, outside of the traditional crossword / puzzle display, we have key titles from Puzzler and Lovatts on display next to or very near women’s weekly titles such as New Idea and Woman’s Day.

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crosswords

National pricing

Aldi, the supermarket chain, is introducing national pricing.  This is a bold move in the supermarket space.  But it makes sense.  Lower ad costs, consistency etc.  I’ve been surveying newsagents recently and the difference in pricing across 4,600 newsagencies for basic items like A4 pads, envelopes, staples etc is considerable.  Even among marketing groups, for most categories, there is little consistency.

Sure, Aldi stores are corporate stores.  That certainly makes it easier.  Others will follow and we will be left to decide if we play the game too.

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Newsagency challenges

Online training for newsagents

At Tower Systems we have scheduled more free online training opportunities for newsagents:

  • Tuesday, 15 April 2008 10:00 AM Magazine Management
  • Tuesday, 15 April 2008 2:00 PM Stock Re-Ordering
  • Thursday, 17 March 2008 10:00 AM Magazine Management
  • Thursday, 17 March 2008 2:00 PM New User Training

Each of these sessions runs for 60 minutes, longer depending on questions. Access is free. All you need is broadband and a phone – for a toll free call for audio.  Book by email, please email bookings@towersystems.com.au. Even if you to do not use Tower Systems you;re welcome to participate and see how this online training works.

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Customer Service

A timely magazine re-issue

Gordon and Gotch sent us more copies of the Melbourne Wedding & Bride. Even though it is an inch and a half thick and difficult to display, we sold out first time around and should move the extra stock without a problem. It’s good to see the system working for us.

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magazines

AFL JSquad magazine in Australia Post

aflj.JPG While the JSquad magazine website says it’s available at newsagents and K-Mart, a colleague spotted the magazine in an Australia Post Post Shop last week. Not a newsagency which is also a Licenced Post Office, no, a full on Post Office.

Post Offices don’t sell magazines but not for lack of trying. For years there have been reports of Australia Post pursuing magazine publishers to have their products in Australia Post retail outlets.

Magazines, newspapers and lottery products are the last categories from newsagencies to be targeted by Australia Post.

Australia Post is a government protected monopoly. My view is that through its 865 or so government owned retail stores it has strayed way beyond the brief permitted by the act of parliament under which it operates. If it does bring magazines into its mix it will be time for newsagents to rally to stop Australia Post using its protection to hurt small family businesses.

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Australia Post

Making the pole the hero

frank_soft.JPGOur Frankston newsagency has a pole right near the counter, a big ugly pole.

We have tried several approaches to hide the pole and or work around it. In each case we were making excuses. We found that by embracing the pole, making it the hero, it works for us beautifully.

Last week we made the pole a feature of our new plush display. We kept access either side easy and this helps our customers see the new range. This was important since we are positioning ourselves outside the traditional newsagency range – if we had buried the plush inside the store, we risked losing focus.

This display is seen by everyone. It demonstrates we’re evolving the business, makes the newsagency look more appealing to kids and a place parents can find gifts.

The display is important on another front, in pursuing an excellent rang of plush we are pursuing a better margin, better than average for a newsagency. Plush is not the only new category we are pursuing as part of our margin play, it’s a start.

Once we take the plush display off the pole we will replace it with something else which continues to respct the pole as the hero.

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Gifts

Intralot inches closer

The folks at Intralot are well into the process of briefing Victorian newsagents and other interested retailer about their offer.

We are into the final countdown to the most significant change in the distribution of lottery products in Victoria in decades. There will be new retailers and new products.  Several existing produce will cease.  retail locations in existing retailers will change by necessity and new retailers will sell some lottery products.

The battle about Intralot is yesterday’s fight.  Today the focus has to be on the opportunity the change brings.

I see the arrival of Intralot and the repositioning of Tattersalls as an opportunity for every newsagent to reinvent their lottery offer, to exploint the publicity and advertising and to re-engage with shoppers about our in-store offer.  So, outside of everything Tattersalls and Intralot will do, we will engage and leverage the change for the maximum potential.

What does this mean?  Better in-store displays, more local promotions, education aimed at our demographic and more fun!

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Lotteries

Where we will end up

“We have one certainty – we can never be sure where the industry will end up,” Murdoch said in a Gaston Hall address about the changing face of media. “It is true that technology is changing accepted ways of doing business. It’s making us work harder for our customers.”

Newsagents ought to read what Rupert Murdoch said this week at Georgetown University in the United States.  We need to be thinking and talking as much about our future as Rupert Murdoch and his competiors do about newspapers.

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Media disruption

Designing the shop fit

I’ve spent considerable time this week working on plans for a new shop. We are six versions and still going.

The devil is in the detail as this is where the business works or fails – how much sock you can placeper qsquare metre, how it is displayed, whether your directing traffic appropriately and, most important of all, how easily you can reconfigure the shop without changing the shopfit.

The problem with many newsagency shopfits is their inflexibility.  From magazine stands to card fixtures, we need to ability to turn the layout on its ear without having to bring in tradespeople to make construction changes.

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Newsagency challenges

Promoting Burkes and Better Homes

We are featuring Burke’s Backyard and Better Homes and Gardens at the counter at Forest Hill this week.  They are a good fit and often sell together.  Having just one in the display does not maximise our potential – hence the dual display.  The photo below shows not only the display but where it is in terms of the counter and access to the busiest of our two magazine aisles.

burkes_better.JPG

From this counter position there are several counter offers, the magazine stand and, behind that a Girlfriend feature display and to the right of that our Women’s Weeklies magazine category.

The Burkes / BHG display will change Monday, being at the counter we need to move displays through every five to seven days otherwise customers become store blind.   We will still co-locate these two titles elsewhere, just not at the counter.

We do this work because we want to achieve growth in sales of these and other titles we promote, not because we are paid a fee by a magazine publisher.  Publishers need to understand the differences between newsagents and their other retail channels.  Newsagents can be more entrepreneurial if they are rewarded for growth.  Th only alternative is we put a price on our space and charge fees like Coles and Woolworths.  Publishers would scream.  Th current situation of no fee and no incentive for growth is unfair on newsagents.

We will still do what we do in my newsagencies because we are retailers – I just wish we were rewarded for above average growth.

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magazines

Roller Boy is back

roller_boy.JPGThe Roller Boy pen, pen holder, clip, clock thing is back for the third or fourth time. We’re having success by placing the display bin in the photo in high traffic areas and moving it each day or two. We find Roller Boy works best when standing alone, without anything distracting nearby.

As with any impulse offer like this, the key is to get in, sell and not repeat too soon.

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retail

Recycling disposable magazine fixtures

recycle_stand.JPGThe cardboard magazine fixture under the wrapping in the photo is now four months old. It’s been on the shop floor every day since we received it. Two weeks after its initial purpose was done, we dressed the stand for another title, then another and another.

Girlfriend is the latest magazine to benefit from the stand. Travis at our Frankston newsagency is responsible for this piece of art.

We are committed to not only recycling unsold newspapers and magazines but also old fixtures – giving them many lives by re-dressing them appropriately for other titles.

It would be good for magazine publishers and distributors to encourage this recycling – why not offer a prize for the best every month, something to encourage newsagents to recycle these disposable fixtures more?

The particular stand we have used this week to support Girlfriend is ideal because it is well made. We also like it because it’s easy to move and place where we need it most.

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magazines

Basildon Bond, who knew?

basildon.JPG

Basildon Bond is one of those brands which can be taken for granted by newsagents. I certainly have. While we have some of the range on our shelves – not enough – it is not treated with the respect it deserves. We don’t feature it in any way and I suspect that if we did we could achieve some sales growth. I suspect this is a brand newsagents could embrace without much competition.

While researching the brand I came across some interesting history at the Basildon Bond website:

The Basildon Bond brand was developed in 1911 by Millington and Sons, a London-based stationery manufacturer. The brand became the property of John Dickinson Stationery when Millingtons was acquired in 1918.

In reality, the brand name was arrived at purely by chance. In the summer of 1911, Millington‘s was considering the introduction of a new rag writing paper, and some of the directors of the company were staying at a country house in a little village in the Thames Valley in Berkshire. One of the matters arising was a name for this new paper brand. The directors decided to take the name from the house in which they were staying, Basildon Park. Therefore, it has no link with the more famous Basildon in Essex.

The website is a wealth of information and resources including an excellent link on the art of letter writing. It’s this information which adds value to the brand. We’re certainly looking at how we can use these resources to better promote the brand and increase our sales.

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retail

Australia Post milking the monopoly

ap_carpark.JPGThe photo is of a sign outside the government owned Australia Post retail shop at Forest Hill, in front of car park spaces reserved for Australia Post vehicles. To the left of this Australia Post car park is another spot painted in yellow and marked for Australia Post delivery vehicles.

I rarely see any more than one Australia Post vehicle in any of the spots set aside for the Government owned business. Sure, some plain looking cars could be for mail contractors but I suspect not all of them.

The privilege of this car park space right at their front door is another example of special treatment afforded Australia Post because of the monopoly protection it has from the Federal Government. If they want to take retail sales from small business newsagents, as they are doing, they ought to have these car parking and other protected privileges taken away.

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Australia Post

Unfortunate jackpots

lottery_battle.JPGThe $20 million OzLotto jackpot this Tuesday is pulling focus from the $19 million Tattslotto Saturday coming up superdraw. It’s hard to upsell customers to a superdraw with an average first division payout of $1 million or less compared to the jackpot with an average first division payout ten times that. Oz is harder to win and fewer share in then first devision. Lottery customers know this and shop accordingly. I’d love Tattersalls and their national lottery partners to undertake in-store research as background to developing an alternative to the Saturday superdraw approach – we need something which works for the whole lottery category.

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Lotteries

Making money from newspapers

The truth is that the newspaper business is still a huge industry and will be around in one form or another for the rest of my life. That is not to dismiss the declines, but only to note that there’s still a lot of money there and what is required is strategic change, not giving up the ghost.

This is Chris Anderson (editor of Wired magazine) writing at The Long Tail blog a few days ago about the financial situation for newspapers and how people can still make money from them.  It’s an interesting read.  Predictably, newspaper folks are talking up the post – see the McClatchy editors blog post on this subject.

What people forget is that industries peak at the top. Which is to say, at the very time that the first and second derivative people are writing off a business, those who can stand back and see the value still left in it can make a mint. Laugh at newspapers if you will, but I’ll bet some private equity firm out there is looking at the chart above and licking their chops.

There is not much in the post from an Australian newsagent perspective other than caution to not become a victim of the new generation of newspaper ownership.  Bean counters operate very differently to newspaper proprietors of yesteryear.  Lack of newspaper ownership diversity in Australia is protecting (not sure if that is the right word) us (for the moment) from what Anderson writes.

As a newsagent, at the end of the food chain, I want an equitable return from my labour and real-estate investment in newspapers.  I need annual growth – from increased sales, better margin or some other direct financial benefit.  I the growth is not achieved, the category loses ground and becomes of less interest – especially for shopping centre newsagents paying $1,000 per square metre of floor space and more.

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Media disruption

Newsagents, publisher in court

It is good to see the case WA newsagents have against West Australian Newspapers finally get to court. The Australian had the story yesterday. This battle has been around for years, costing newsagents hundreds of thousands of dollars as they had to absorb increased wages and costs including fuel. No increase for ten years is appalling behaviour by a supplier.

News Ltd, the publisher of The Australian, ought to check its own record, it’s not a whole lot better than WAN. Kerry Stokes, WAN shareholder seeking a seat on the WAN Board, is quoted in the article as offering an alternative to newsagents:

“How about instead of this being just about you delivering papers and getting so much per paper, what say we take a base and we give you a much higher commission for every increased paper you sell?” Mr Stokes said. “So if you sell 1000 papers now, (and then) you sell 1100 papers, maybe we double the commission rate on the next 100. We’ve got to find ways to sell more newspapers and we’ve got to make sure we don’t send our suppliers broke. The system is inequitable.”

I like the sound of that – a supplier talking to newsagents as if they are business people and offering a remuneration based on achievement. It’s about time.

Newsagents are the most important channel to many suppliers yet we are treated as second class citizens through poor trading terms and poor service levels. But we’re not as organised as we could be so we may facilitate some of that shabby treatment.

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Newsagency challenges

Donna Hay giveaway offer

dhay_gift.JPGDonna Hay is the magazine we are featuring in our giveaway space this week. This is the space we have reserved for magazines with what we consider to be the best giveaway in-store. The product is the hero in this display – that’s why we choose what we promote carefully. While displays like this don’t meet publisher requirements, they work.

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magazines
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