Weather pain
The rough weather these past couple of days have thrown Christmas trading into chaos for several newsagents In know. Yesterday and Thursday were particularly bad in Melbourne – across the suburbs. While stock has been damaged, the more inconvenient pain has been the loss to communications from the shop – hitting the financial services and payment methods. If people can’t pay on a card they often leave the goods at the counter and walk out. In some stores, credit and debit cards are used for a third of all transactions.
Bags rule Christmas
While sales of Christmas wrapping paper are strong, it is the bags which have been a sell out. From this small Aussie designed and hand made bag right through to the large licenced product like the Spiderman Christmas offer from Hallmark. Getting extra stock has been the challenge – not so much for Forest Hill which we had good data for but other locations where it was a bit of a roll of the dice.
On the retail road
Being the hands on (obsessive) type, I’m spending many hours each day at the moment in and moving between our newsagencies at Forest Hill and Frankston, the newsXpress corporate store at Watergardens and the three Sophie Randall stores. The thrill of this is seeing Christmas retail from many perspectives, especially on categories common to each business: cards, wrap, diaries and calendars. I’ve learnt more about demographics and customers in the last few weeks as a result of this and am excited to play more in 2008.
My view of newsagencies
A common question people reading my ramblings here ask is why should they buy a newsagency? They see issues I raise as show stoppers in their consideration of buying a newsagency. Sure, there are challenges. Every business has challenges. Overall, newsagents can manage the challenges. A well managed newsagency runs well – the key is good processes, sound advice from experts / mentors and a regular stream of marketing and business development initiatives.
Life as a newsagent is good. It’s honorable work and important for the community – we’re the last bastion of personal service in a very corporate retail world.
Newsagencies have an excellent future if we focus on the right business decisions for our businesses. This means we broaden the focus of the newsagency in some areas and narrow the focus in other areas. For example, we need to tell our core suppliers we will do less of their bidding unless it can be demonstrated this work (posters, displays and the like) generates real revenue for us as opposed to them.
By leveraging our traffic, building a deeper basket on the back of increased traffic while at the same time tweaking margin, we can build very successful businesses. Our blessing, right now, is our traffic. Today, this is what makes buying a newsagency a good move. Entrepreneurial newsagents can leverage that traffic and create for themselves and excellent return on their investment.
Te key is to know you are going into a master / slave relationships in some parts of the business and to make decisions which minimise pain from the lashes as much as possible.
Listening to a customer
Jane was in severe pain and facial swelling due to a tooth problem at our newsXpress Forest Hill store a week back. Mr Wu, always ready with remedies for any situation, told Jane to have someone born in the year of the tiger to paint on her face in ink and using a brush the sign of the tiger with a circle around it – over where the swelling was. Respecting her customer, Jane had this done by Luke, who met the criteria, as she was leaving for work. Maybe it was the distraction of being stared at or maybe Mr Wu’s sage advice was right, but the swelling started to go down on Jane’s drive home.
It’s amazing what customers tell you sometimes.
When a book is a magazine
We received two copies of this Animal Songs book from a magazine distributor on September 12. It’s due for return next week. We have not sold either copy.
Magazine distributors ought not distribute books without permission. Titles with a shelf life longer than four weeks ought to be billed only after scanned sales data is provided. This title is another example of the abuse of the newsagency channel by a broken magazine supply chain.
Great Christmas music
We are playing the Christmas Channel from SKY.fm Internet radio in two of our newsagencies. It’s a great way to bring in Christmas music without having to change CDs.
Andre Rieu cover on Melbourne Observer
The Melbourne Observer has a cover story this week about Andre Rieu – guaranteeing excellent sales this week before Christmas. We have put copies of the Observer on the counter, next to copies of Limelight, the ABC mag with the Rieu DVD sampler on the cover. I’d encourage Victorian newsagents to try this, Rieu is very popular with broad appeal.
The Observer continues to actively support newsagents with listings and other mentions in its pages – giving more space than any other publication to our channel.
Expensive kitchen yearbook
This Kitchen Yearbook is another title chocking newsagencies. Fat, long shelf life, over supplied and taking newsagent cash away from more productive use. Key magazine stakeholders such as Pacific Magazines and ACP Magazines need to understand that the abuse of the magazine distribution system by publishers of titles such as this is part of the cause for newsagents not having time or resources for elsewhere in their businesses.
I am happy to carry to yearbook but would prefer to pay based on scanned sales when it comes off the shelf.
Luxury Homes not a luxury
Luxury Home Design Collectors Edition is a good exampl of what is wrong with magazine distribution in Australia. The long shelf life – six months, it’s size – close to 4cm, it’s cover price – $15.00, and the scale our model – driving, I estimate, a sell through rate of around 40% in most newsagencies.
Titles like this make up the 65% of magazines which are cash-flow negative for newsagents.
Newsagents rate software companies
The Australian Newsagents’ Federation invited newsagents using a computer system to respond how they rate the customer service experience. 91 responded. The ANF has published the results at their website including verbatim all comments registered by newsagents. The comments make for interesting reading as do the ratings.
I am thrilled to that out of five possible service levels, 67% of Tower newsagents gave us the highest rating, 15% rated us at the next highest level and 12.5% at the third highest level (acceptable). Our challenge is to improve our service so that in the next survey we rate even better.
As the biggest software supplier to newsagents we have more at stake. However, as newsagents, we understand every day the importance good software backed by excellent service. Thank you to all newsagents who participated.
Ho Ho Ho storm in a tea cup
Some shock jocks. journalists and commentators – and their followers – have been doing their best to take the Ho Ho Ho out of Christmas.
Our experience, behind the counter in our newsagencies, is they have failed.
A common comment from customers when they see the t-shirt (modelled beautifully by jane and Jo from our newsXpress Forest Hill location) is good on you or some idiot wanted to ban that, followed by a laugh.
We are congratulated, smiled at or, if we are lucky, Ho Ho Ho ed at. We often use t-shirts to connect with seasons and this Ho Ho Ho line has received the best reaction I can remember.
Selling magazine subscriptions
Interesting to see the over the counter magazine subscription offers from Pacific Magazines evolve further this Christmas. The photo shows a rack of subscription packs for five Pacific titles from a Newslink location in Brisbane airport yesterday. The packaging is a considerable improvement on what has been tested here before and what I first saw in the UK in WH Smith locations in 2005.
The latest subs package from Pacific is a considerable improvement on the magazine subs offer pitched through Bill Express newsagents. The key is how we merchandise the offer – in this case, they look like gifts and are therefore able to be displayed with gifts.
I’d like to sell two types of magazine subscriptions. One for use as a gift and fulfilled through home delivery and the other fulfilled through pick-up from my shop. While not core business, I can see an opportunity ti increase sales of magazines through my outlet with access to these.
Newsagents embracing publisher offer
The offer of an interest free loan from the Herald & Weekly Times to Victorian newsagents to fund a move away from the POS Solutions DOS software has engaged many of the remaining 180 POS DOS users. The non-compliant POS DOS software has been holding back technology advances for newsagents for too long.
It will be interesting to see how News Ltd handles the same problem elsewhere. My estimate is that of the 700 POS Solutions newsagent users, around 40 are still using DOS. The Victorian move at least offers a model for consideration.
Promoting car magazines
We are featuring car magazines in a display at our front counter. The display took ten minutes to execute yesterday. Key to the display is the cheqered flag border – we found the design online in seconds. Without a bold border, the display would get lost in the visual noise of a newsagency. Whit it, the stand draws attention and incremental sales are achieved.
This type of display which promotes a range of titles from the category is more valuable to my newsagency than focusing on a single title since it promotes range.
I am frustrated that magazine publishers reward you for displays built around their titles but offer nothing for a display like this which, in my mind, is more valuable for the health of the channel on which they rely. While there is a place for bold displays around a single title, this simple stand of ours is more likely to drive incremental sales across several titles than a single title display. Plus, it is more likely to drive these sales in my business as opposed to promoting a title which is ultimately purchased elsewhere.
The newsagency channel tends to reward people for being average, doing what the major suppliers want. True innovation is often ignored – because it’s not understood.
Benchmarking project update
I spent a flight from Brisbane to Melbourne early this morning pouring over data from thirty newsagencies for our benchmark project – comparing November 2007 with November 2006. I am grateful to have the opportunity to review and compare department and category level sales data from so many newsagencies.
While a more thorough analysis is a week or so away, it is clear that November was a tough month for magazines. The average fall I am seeing in unit sales year on year for November is 9%. While there is a risk in comparing sales for one month, an analysis of the magazine category performance shows that the drop is not only being driven by the weeklies – which we know are down on last year based on recent circulation data.
Another learning which appears likely to emerge from the benchmark research is the diversity in balance across newsagencies. There are some dominated by one or two departments while and there are others with excellent balance across the departments. This is important for us to consider as we deal with more disruption brought about by technology distribution changes.
On a side issue, the newsagents who have implemented the MPA magazine categories in their businesses make benchmarking easier. We are going to contact those who have not to help them achieve this standard.
How should we respond to ofis?
2008 will be the year of stationery with Gerry Harvey’s ofis offer due to open early in the year in Auburn and Albury. Naturally, Officeworks will react as will other major retailers in the office supplies space. I’d expect each to have advanced plans – which begs the question, are newsagents planning to react and if so, how? This will be a big challenge in 2008 – the opportunities for us are excellent with stationery about to receive plenty of attention.
Moving magazines between newsagencies
The latest version of our Tower Systems software enables newsagents to run multiple newsagency locations from one server. Each newsagency can know what the other has in stock. It makes comparing performance easier as well as a bunch of management tasks.
The challenge for the industry and magazine distributors in particular is how we manage the movement of magazines between the stores. The Tower software can do it easily but the magazine distributors are not able, at their end, to track this movement.
I see it already between our Frankston and Forest Hill locations. A title slow in one location could be a sell out in the other. Using the multi store software I can, in an instant, account for the movement of the stock between businesses so my accounting is all taken care of. The only problem is the implications in the magazine supply model since they, still, only look at returns to determine sales.
With consolidation of distribution and retail newsagencies high on the agenda, this is an issue which needs to be worked through.
Are newspaper posters redundant?
We are about to design a new shopfit in our Frankston newsagency as part of re-branding to newsXpress and have been looking carefully at the space allocation for newspapers. In the pre-planning phase we have been watching how customers approach the newspaper stand. Less than 1% look at the poster. This is making us question the value of the real-estate taken up by the posters.
Removing the posters in the photo would provide display space for between eight and ten magazine titles. I estimate that giving this space over to promoting magazines, impulse stationery specials, appropriate gifts or even seasons greeting cards could generate significantly more revenue than incremental sales of newspapers.
A common question we get from non-regular customers is where are your newspapers? I am sure we are not alone in getting this question in a newsagency. The posters are missed.
As the person paying the rent, I want to maximise my return and this space above the stacks of newspapers is valuable.
I;d like to see newsagents test my no poster theory and see if newspaper sales in those locations are different to newsagencies where posters are maintained.
Digging for gold in magazines
The women’s fitness / health category of magazines is strong thanks to the re launch of Good health from ACP a year back and the launch this year of Women’s health from Pacific Magazines. The success this year of these two excellent titles is, in my view, the making of the category in 2007. Supported by between fifteen and twenty other titles, we now have a category which is well browsed and around which we can build excellent add-on business in food and lifestyle titles.
A risk newsagents sometimes make is not noticing trends, like with the women’s health and fitness category this year, and therefore don’t capitalise on the opportunity. Managing magazines is about much more than the labour of putting product out and taking it off and working through the archaic paperwork the magazine distributors require newsagents to use. The entrepreneurial work of chasing incremental sales is what interests me the most and where I find the best reward.
In our situation, by moving this category and playing with it every couple of days, we are driving excellent growth from key titles and achieving an excellent return on the space allocated.
Magazine publishers need to reward newsagents who work like this. We are far more valuable to them than the mass merchants who invest little in driving magazine sales.
Better than candy
This stand was full ten days ago with small journals from For Arts Sake. Rather than leaving these products in our social stationery section, we put them on display at the counter for stocking-stuffer gifts. We have sold almost all the stock I ten days. As the stand emptied, we filled the space with similar product. That is selling too. We have used this approach elsewhere at the counter – adding stocking-stuffer suggestions with great success.
World’s first ‘newspaper’ phone
When I first read that Sweden’s Dagens Nyheter claimed to have launched the world’s first ‘newspaper’ telephone: a mobile phone offering the daily’s subscribers direct and free access to its website I was surprised. Details on the launch are at the European Journalism Centre website. This world first is actually a special Nokia phone with a button which takes you direct to the newspaper website. While cool for people who want to read their newspaper on their phone, it’s not that big a deal.
Magazine merchandisers – ugh!
A merchandiser from a magazine company came in this week and proceeded to remove a display we created the day before for the new issue of another title, ignoring the display for the old issue of the title there were to create a display for.
I’d prefer the magazine distributors to pay me to handle merchandising – at least that way I can stop them taking down fresh displays for titles from another company. It would also stop them partially covering other titles with their material.
I don’t want merchandisers just coming in and making changes unchecked any more. I want them to register when they arrive and get approval from the manager for any display they want to put up.