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

Author: Mark Fletcher

Silly Stationers Supply

Stationers Supply, a warehouse supplying newsagents in Melbourne, Sydney and Brisbane, has reportedly decided to remove 3M products from its product mix. This is nuts. 3M brands like Scotch, PostIT and Command are important to newsagents. For a warehouse to remove them will only harm the warehouse as newsagents will source what they need elsewhere.

UPDATE 02/04/08 (10:30AM) : Stationers management has reversed its earlier decision and will continue to stock 3M.  A 3M rep has contacted me and advised me of this this morning.

I have had a conversation with the MD of Stationers and he says he never made the decision about 3M in the first place.  Personally, I doubt this.

UPDATE: 02/04/08 (01:42PM):  Stationers Supply has contacted me again and threatened legal action if I do not remove this post altogether.  While I could do that it would not represent the events.  I heard through 3M yesterday about the decision – one of my newsagencies had been told.  I subsequently heard through 3M this morning that Stationers reversed their decision.  No legal threat can alter what happened.

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Newsagency challenges

Retail tenancy size and newsagencies

Don’t believe what they say, size matters, it matters a lot when you have to pay the rent off the back of an old retail model built back when small was beautiful.

Landlords like big newsagencies – 250 square metres and above. The size isn’t a problem if a margin model can be built which supports the cost base.

Where newsagencies struggle is with margin for the lottery, magazine, newspaper and some confectionery categories. 25% or less does not cut it today. These products are usually supplied with a model which leaves the newsagent with less control over key business levers.

The 25% GP on newspapers and magazines was set decades ago, before the rents and sizes of today.

The only answer is for newsagents in these larger format businesses to devote less space to the 25% and less margin products and more to the products which provide opportunity and reward for entrepreneurial effort.

If landlords want these larger format traditional newsagencies and 25% and lower GP suppliers want to be represented in these spaces then something has to give otherwise we will see newsagents reject the opportunities.

I am aware of a couple of situations at the moment where the landlord wants a “traditional newsagency” and some suppliers will only permit their top selling products if a broader offer (read less successful products) is included in the mix. While smart newsagents use a lease consultant to navigate such challenges with the landlord, many do not and end up with a lease which does not work for the traditional model.

The market will ultimately decide how this plays out. The result will be a smaller hybrid newsagency with less of the traditional newsagency range. There will be pain for some who do not work the sums of occupancy cost.

When it comes to shopping centres inn Australia, size does matter for small business.

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Newsagency challenges

Double or Nothing book free

Harper Collins is providing free access to the full manuscript of Double or Nothing, the true story of two friends who bought a Las Vegas casino. This is a bold move for a publisher, one I’m surprised to see from a mainstream publisher. Good on them!

Anyone can read them manuscript free at the Harper Collins website using their Browse Inside service. It’s a great way to promote a book.

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Book retailing

Leveraging magazine sales decay

fhn_aww.JPGUnlike weekly magazines, monthlies each have different sales decay curves. Knowing the decay for a monthly is important because it lets us know when we have the best low-hanging fruit opportunity. With Australian Women’s Weekly in one of our stores it’s the first week. If we promote hard in this time we can more easily boost sales than if we promote later in the four week on sale period. The challenge is promotional material – ACP tends to supply promotional material in week two or three.

Last week, with one posted available, we created minimalist display with the product the hero. It’s worked. Sales are stronger than our average decay curve for the last six issues.

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magazines

Bill Express share price watch

Watching the share price tumble of Bill Express has become a popular sport among newsagents. Today’s 28.5% drop in their share price have been cause for considerably commentary.

It didn’t need to be this way. Had Bill Express treated newsagents differently they could have relied on their key retail network for support rather than today’s game of guess how low the share price will go.

One of my newsagencies was advised today that we are now ranked 35th in Australia for bill payment transactions. That’s 35th out of around 3,500 newsagents. We’re in the top 1%. We’re not making money from bill payment, nothing.

Bill Express could turn newsagents around if they act quickly: reinstate the $250 a month marketing subsidy; start actively promoting the network; make the IT infrastructure more reliable; improve Help Desk support; and, make running Bill Express cost less. While these are not new suggestions, maybe the new low share price will focus the attention of the Board of Bill Express.

Click here for some background on the frustration newsagents feel toward Bill Express.

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Bill Express

Promoting Burke’s Backyard magazine

burkes_mar31.JPGWe’re using our new feature space at the counter to promote Burke’s Backyard magazine. The free seed offer this month is compelling and, we feel, is ideal for an impulse purchase at the counter.

While the publisher would probably prefer a power end display, I know that this smaller display at the counter will result in more sales in our newsagency.

We also have Burke’s Backyard displayed in the gardening section to make sure we take care of our regulars.

This close to the counter display permits a pitch in the right circumstances.

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magazines

Newspapers f&*^ed?

The Newspaper Association of America has reported the biggest fall in ad revenue for US newspapers in 50 years. See the Editor & Publisher report for details then go to Jeff Jarvis’ BuzzMachine blog for his view and the view of his broad cross-section commenters.

While we feel a long way from the slide in newspaper fortunes regularly reported out of the US, that is no reason to think this will not happen here. Our excellent retail and distribution channels, innovative publisher initiatives and limited owner diversity are protecting Australia from the forces at work in the US.

Retail newsagents rely on the traffic generated by newspapers. The daily or almost daily purchase is the foundation of loyalty for purchases in other categories. I’d guess that few newsagents have a plan in place for when this traffic dries up. While regulars herewill see me playing with various options in my newsagencies, there is considerably more to be done.

With between 50% (rural) and 73% (suburban) of newspapers sold alone, the risk to newsagency traffic should newspapers catch cold is considerable. This is hat newsagents need to discuss and debate at regional meetings, conferences and conventions. It’s a newsagent problem and only newsagents and those working for them will find the appropriate solution – I say this because publishers can only discuss this from the perspective of their share price.

Are newspapers f&*^ed?  No, I don’t think so.  They’re facing considerable change as is our channel.

There are other ways to ask this question but I’ll leave that for another time.

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Media disruption

Hotspur magazine helps my newsagency

hotspur.JPGWe have more magazines about specific English football clubs in stock than we have for AFL clubs. Hotspur, the official magazine of the Tottenham Hotspur Football Club is just one of a range of titles. Even though we sell only one or two copies, they are highly browsed. I’ve watched the browsing recently and it’s beneficial for us – dad is reading about his club while mum and , sometimes, the kids, are spending money. This is another reason why I don’t have a this is not a library sign in my newsagencies.

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magazines

Tag team marketing

A couple of days after our Ink promotion ended our book sale started. Like the ink promotion, the book sale was promoted through flyers delivered to homes around our shopping centre – for all three of our newsagencies. Daily revenue from the book sale is between $400.00 and $750.00. This is a huge success. We are also tracking growth i other product categories – from the new traffic pulled as a result of the sale and the good vibe in-store as a result of the deals on the book tables.

On the ink promotion – it’s been over two weeks now and the drop off is sales is barely measurable.

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Book retailing

Reconsidering Christina Re

c_rea_fhn.JPGWe have carried Christina Re invitation and paper craft products in our newsagency for more than four years. Sales have been up and down over. The fall came when the supplier put the range into another store in the centre – they closed a year or so later.

It’s a fashion business this invitation and paper craft area and customers need to be regularly reminded you’re in the space. The range needs to be refreshed as well – so that there is always something new on offer. Volume is not sufficient for the retailer to carry the cost of this turn.

We were promised supplier support and since it has not happened we’re looking at alternatives.

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Stationery

Underbelly sell out

Placing the Underbelly book at the counter of our three newsagencies was a success, we sold out. This was on my mind this morning since my post here about us selling Underbelly is the fourth most viewed post on this blog in the last two months. The top three, in order, are: Customers want plastic bags; Bill Express stares down newsagents and AFL & NRL competition open.

I don’t look at traffic that often and was surprised this morning to see that the blog is attracting, in average, more than 600 outside  (not including me or anyone in my business) visits a day generating 2.5 pageviews per visit.  41% of our visitors arrive here as a result of a Google search.  People using search engines and who end up here are looking for: newsagency; magazines; GNS; newsagent; ofis to list the top keywords.

Outside of the traffic to the site, I receive between five and ten emails a week from people with questions about posts or related to topics I talk about.   This it part of blogging I really enjoy – contact with people I would otherwise not have had contact with.

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About us

Bypassing the magazine supply chain

Tribune Media Services in the US has announced the launch Opinionated, a weekly political magazine available only on the Amazon Kindle e-book.  Think about what this does for the supply chain – TMS publishes and immediately the issue is availaboe through Amazon for Kindle reader owners.  No print production costs, no distributor, no freight company, no retailer.  No wonder the price is US$0.49 an issue.

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magazines

Betfair decision opens market

The High Court decision this week about Betfair is expected to further open the gambling space. Newsagents already have a connection with Betfair having been offered the opportunity to undertake over the counter ID checks for people wanting to open Betfair accounts.

Newsagents have long relied on the traffic generated by lottery and instant scratch ticket gambling. Just as that was facing disruption due to more outlets selling gambling and the arrival, in Victoria at least, of Intralot who will sell through other outlets as well as newsagencies, Betfair is unshackled by the High Court.

I have lottery products in one newsagency and not in two others.  While they alter the traffic dynamic and present some challenges in this regard, having them makes your business a destination and this is what matters.  Some of the challenges will change thanks to competition.  In Victoria, for example, one Intralot starts trading I’d expect to see a more relaxed approach from Tattersalls.  This will make it easier for newsagents to be entrepreneurial in the gambling category.

If I have an opportunity to offer broader Betfair services such as account recharge and payout I’d consider it.

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Lotteries

Promoting newspapers

Alan Mutter has a good blog post about the latest campaign by the Newspaper Association of America to promote newspapers in the US.

The creative people behind our local newspaper campaign, being run by The Newspaper Works are taking a similar obscure approach to promoting the newspapers here.

I want to see newspapers promoted as relevant and valuable, not as something quirky or funky. People creating this marketing ought to spend time watching people who buy newspapers and see the low hanging fruit opportunities for sales growth.

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Media disruption

Complete art story

canson_crayola.JPGWe’re enjoying success by pitching Crayola art and craft products next to the range from Canson.

Beyond the solid visual message we’re attracting good sales to justify the commitment.

While Crayola is a children’s story, it plays well next to the more grown-up art products.

Laying out 230 square metres of retail space is challenge and it’s good to have well branded product we can plan-a-gram like this. It makes our job easier and provides for an easier store for the consumer to navigate.

Historically, newsagents have carried parts of ranges and ended up with displays which are not as striking as they could be and which do not do the brands justice – it’s a lose lose for the newsagent and the brand. In part, this problem was facilities by newsagent wholesalers not carrying full lines from suppliers. With more newsagents dealing direct they are unlocking the kind of displays we see from Crayola and Canson.

There are plenty of suppliers who will for with individual newsagents on plan-a-gram offers, all it takes is to make an approach.

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art supplies

Sticky packaging problem

dl_packaging.JPGDarrell Lea came up with some nice looking packaging for their Easter egg product. The design was let down by poor adhesive – many boxes popped open, exposing chocolate and making some product unsaleable. Darrell Lea sent out double sided tape to fix the problem but to use this retailers had to put their hands into the boxes – probably in breach of food handling regulations.

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confectionary

BRW on entrepreneurial newsagents

BRW this week has a two page article abut newsagents and life ten years after deregulation. It’s a good piece by Jane Lindhe as it appropriately covers the challenges of the channel – Australia Post, supplier control and the dilution of soft gambling traffic.

While I am conflicted since I was interviewed for the story, it’s great for newsagents to be featured in this way. It represents a shift from the complaining about history to genuinely moving forward. It focuses on us acting as business people rather than process workers.

Newsagents have good reason to feel proud about this interest from BRW, we’re a legitimate and moving channel. It’s an article worth sharing with your bank manager and other ‘stakeholders’.

The article and the quotes from Jordan Cowen and Paul Martin show that there are entrepreneurial newsagents out there pursuing a bright future for the shingle.

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Newsagency challenges

Success with an independent title

informed_investors.JPGMike Wang, publisher of Informed Investors, a Chinese language business magazine, found this blog and pitched his magazine to me. He wanted to get it into more outlets.

We have had the title for close to a year, it’s selling between 5 and 8 copies an issue. We have it on the shelf near BRW and with our foreign language newspapers.

I am sure there are many small independent titles like this one which cannot justify the cost of using a traditional magazine distributor. An opportunity exists for newsagents to open another more direct channel with these independent titles.

I hear from at least one independent publishers a week – representing usually only one title. These are the folk who find the traditional channel too expensive.

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magazines

Geelong Advertiser cover up

The Geelong Advertiser has joined the ranks of newspapers allowing news on the front page of the newspaper to be covered up by a stuck on ad.  Even if it is for a promotion connected with the beloved Geelong Football Club, it damages the newspaper.

ga_mar28.JPG

I know publishers do this for the ad revenue.   This is a short term view since newspapers will only attract ads if they sell and they will only sell if readers trust the product.  I suggest that trust is challenges by covering up news with stuck on ads.

Thanks Andrew for the photo.

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newspaper masthead desecration

Paper craft seminars show the way

The US National Stationery Show in the US, the big trade show of the year for stationery retailers, in May this year will feature a paper crafting (scrapbooking etc) seminar track, Gifts and Tablewares magazine reports.

“The paper crafting seminar track is designed to educate and inspire a broad cross-section of attendees, from veteran scrapbook retailers to social stationery shops looking to expand into this key segment,” said Patti Stracher, show manager. “Both groups will learn how to attract paper crafting enthusiasts, and generate additional revenue from this growing product category.”

The opportunity in in the paper craft / social stationery area in Australia would be similar to the US yet it is a category in which most newsagents barely dabble. We tend to look for suppliers to take care of the category for us. The successful operators I see manage the category themselves, dealing with several suppliers and providing in-store activities which draw in consumer.

Newsagents looking for a category around which they can build a healthier business ought to research paper craft.

Footnote: there is a paper craft / scrapbook event on at Caulfield racecourse this weekend.

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retail

News Ltd plays favourites

Management at the Adelaide Advertiser, the SA arm of News Ltd, is playing favourite with newsagent software companies.  They are pushing one locally developed software system.  Even though Tower Systems (the company I own) has 120 newsagent users, Advertiser Newspapers refuses to include us in discussions on IT changes they want in their relationship with newsagents.

Earlier this week they sent advice to newsagents about data extraction.  The information they provided Tower newsagents was based on a version of our software we have not sold in eight years.  No wonder it does not work.  I am suspiicous that this was a deliberate move by Advertiser Newspapers to support their pitch to newsagents to buy the local software.

Newsagency software has changed considerably in the last five years.   Only natuional solutions will prevail – because of the critical mass software companies need for viability thanks to the cost of maintaining compliant software.   Advertiser Newspapers can’t protect theirhome grown software by favoring them.  Blocking competition is not good for newsagents.

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About us

Carry on collection at newsagencies

carryon.JPGThe Classic Carry On Film Collection is the latest part publication in newsagencies. It’s a good series for the baby boomers – I recall many a cold afternoon spent watching these hilarious films.

We’re promoting the Carry On series right at the front of the shop. We’re setting up a DVD so people get a taste for the humor.

The only downside is the TVC – there is no mention on audio of newsagencies. Anyone listening to the ad would miss that the Carry On collection is at newsagencies.

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partworks

Statement re news to business

I was asked yesterday about my connection was with News To Business, the service spruiked by Brendan Geyer. I have no connection. I have never used News To Business and have no plans to use them.

The person asking me assumed there was connection because News To Business comes up of you do a Google search for Newsagency Blog. This is a paid ad – News To Business pays for the newsagency blog keyword. While I appreciate the compliment of their paid-for ad based on our coat tails, I wish I could stop it.

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newsagency marketing
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