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

Author: Mark Fletcher

Culture is a key weapon for newsagents

Archie Norman, the UK supermarket guru who engineered the turnaround of the Asda supermarket chain says a winning culture is critical to success. That makes sense. When you read the article, Culture is key weapon in asile wars by Simon Evans in Friday’s AFR (pg 58) the comment about a winning culture makes even more sense.

Norman’s comment about culture has been on my mind this weekend as I have been thinking about some newsagencies I know of which are struggling. You can find an interesting insight into his approach to the job of supermarket boss here.

we have an extraordinary network across the country yet we do little to truly leverage this for our commercial advantage. While some of us may have strong success focused cultures in our individual businesses, the big challenge we face is developing such a culture nationally and consistently.

Given how our stationery, magazines and even greeting card business has performed in recent years compared to our competitors, we need a turnaround expert like Archie Norman telling us how it is and what we must do if we are to succeed.

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Newsagency challenges

Special interest magazines beat computer titles

SPECIAL INTEREST.JPGWith sales of special interest titles up by 25% this year compared to 2006 and sales of computer magazines down by the same amount it is no surprise that last week we further reduced space allocated to computer titles and increased space allocated to special interest titles.

Layout is key with special interest titles and this is something we work on at least three times a week – ensuring the have appropriate adjacencies and that the many segments within the overall category can be easily identified by browsers.

One challenge is real-estate. With these special interest titles supplied in small quantities we need to find a way to carry more stock in less space yet to still display the titles appropriately. We are working on that.

We balance our real-estate allocation based on data from our computer system. This includes spotting trends which guide us to be opportunistic.

Note to magazine distributors – this is not a green light to send us more stock, we will let you know if we want that.

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magazines

Quitting stock

We caused a frenzy unlike anything I have seen before at our new Frankston store on Thursday when we decided to quit manynitems we will not carry in the future. We have making some serious brand based moves and needed to quit masses of cheap non branded product imported from China. This photo is toward the end of the sale when things had calmed a bit.

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Current research indicates that consumers think newsagencies are expensive places to shop. My view is that we ought to embrace this, or part of it at least, and not fight it by going down the $2 or Reject Shop path. That bottom end of the marketplace is well served and I see no reason to take the newsagency shingle there. Maybe for the odd short term sale but not as a long term ranging option.

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newsagency marketing

People’s Friend – a honey pot title

peoples_friend.JPGPeople’s Friend is one of our best performing weekly magazines at Forest Hill, selling between 65 and 80 copies a week. I was interested to find it performing as well in our new Frankston location. This provides a demographic insight and helps us translate some magazine layout strategies from Forest hill to Frankston.

One of the issues I have seen newsagents struggle with is demographic differences when they move from one location to another. We are using magazine sales as the guide to differences in these first few weeks as we learn the new Frankston business. Hence our interest in finding People’s Friend performing well in both locations.

On People’s Friend, sales are strong enough for us to use this as a honey pot title – we put other titles which need support around or nearby. This strategy, while labour intensive, works a treat. I see several titles benefiting from being close to People’s Friend.

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magazines

Wrap display drives sales

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This is how I’d like to display flat wrapping paper in any newsagency own from now on. Beyond the stunning look, customers love it – the product is easier to browse and easier to return to the fixture. It looks as if it is calling out take me take me. The angles fixture also makes it easier to display two designs in a single tray if you need to. The trays are made to order – so that the product is the hero.

Annualising sales since we first tested this approach seven months ago shows that we should generate close to $20,000 a square metre.

The idea for this display and the very specific measurements came from Ben Kay retail manager within my group.

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giftwrap

eziPass easier than Dialtime

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The most common feedback we are hearing from newsagents who start using eziPass to sell phone recharge product is that it is easier to use than Dialtime. That and the additional commission they are making on key product.

The eziPass roll out to newsagents is going well. How could it not – it’s free, easy to use, reduces paperwork and comes with an excellent reconciliation statement. Oh, and you;re likely to make more money.

The real benefit is the bringing of the sale of phone vouchers to the point of sale software – this considerably cuts mistakes and helps with in-store traffic management.

we launch the stand alone version next week – it is in QA right now. This is for newsagents not using Tower Systems software.

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phone recharge

Women’s Health kicks

womens_mens.JPGWomen’s Health, the new magazine launched by Pacific Magazines on Monday this week is kicking some huge goals based on sales data I am seeing. Sell through rates of 50% and above for a launch title not even seven days is fantastic by any measure. I have seen plenty of copies sold at the counter, as an impulse purchase – demonstrating the effectiveness of the Pacific marketing and advertising campaigns.

What is also fascinating is the kick Men’s Health is achieving as a result.

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magazines

The Form racing insert/newspaper launches in Vic

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The Age last week rebranded its Friday sports section as The Form. As I have blogged here previously, The Form could be the start of a new free newspaper offering from Fairfax. While it is included in The Age in Melbourne, In Sydney it is a separate free publication with the Sydney Morning Herald and presents distribution challenges for newsagents.

Victorian newsagents ought to talk with their NSW colleagues to understand more the impact of the launch of The Form as separate from the newspaper.

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Newspapers

The charity christmas card pitch

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Boxed Christmas cards have changed considerably in Australia over recent years. This year, more than ever, it is a charity story with each of the major publishers embracing charities centrally in their pitch. The charity brand pulls focus from the brand of the product itself.

What was a point of difference for one or two card companies in 2005 is now me too. Card companies will need to find other ways to distinguish their offering since there must be considerable competition for charity endorsement.

In London last November I noticed that every boxed card offering from major publishers had a charity connection. That is true here this year for the first time. While I support the charity contribution, it makes for a noisy marketplace. I wonder if we ought to do more at the retail level to engage beyond selling the product.

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Greeting Cards

G magazine for the green lifestyle

g.JPGWe received our first issue of G magazine Wednesday. Looking through it, I see an opportunity to create a new display category, bringing together titles around the climate change theme. Some titles such as G and Renew will anchor the category and others, such as this month’s National Geographic will make appearances based on their cover story.

The problem with creating an environmental category is where to put it. Of the six to eight titles I see as fitting in currently, only two are in the same MPA category. We’ll sort it out and have a crack.

I am glad G has been launched – it could help us carve out a new niche.

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magazines

Lying reps say anything for a sale

A rep visited my Frankston store on Tuesday telling Simon, the manager, that I had asked them to visit to discuss putting their stock into the business. I had made no such request. I am tired of reps turning up without an appointment and lying to get an order. Newsagents deserve better.

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supplier arrogance

Bookmarks drive magazine sales

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What did you notice first in this photo of magazines? Hopefully it was the four yellow tags. They are a bright yellow arrow pointing to a title as being just in. These bookmarks are our latest innovation in magazine promotion which we are going to be rolling out exclusively through newsXpress locations.

I have had the idea for some time but creating the high quality form cut bookmarks was too expensive for one store. Rolling it out across 150 stores is more viable. It also provides newsXpress an excellent opportunity to demonstrate again its credentials in innovation in magazine marketing.

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Vogue Living is a good example where these bright bookmarks can work well. Being monthly it is easy for consumers to forget when the next issue is in – especially if they do not purchase every issue. By being selective in our placement of the bookmarks and limiting the number in use at any time, they become a beacon to eyeballs.

With so much visual noise in a newsagency it is easy for regulars to become store blind. This is a real problem for poster displays. I think a small number of the bright just in bookmarks could do more for the selected titles than a poster display stuck someone on a wall in the newsagency.

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Slimming and Health is another good example of where our bookmark strategy will work – even if we get two or three extra glances a day that will lead to impulse purchases.

Just as others copied the magazine club card I developed in 2004, I’d expect other marketing groups to copy this innovation. There is more to this than printing a bookmark and sticking it in a few titles. The bookmarks have been painstakingly designed, the colours carefully chosen and the research undertaken on the number to use at any one time and the titles on which to focus.

While publishers focus attention on newsagents who do aisle end and other poster displays, our view, arrogantly, is that innovation like these bookmarks is far more valuable as drive drive systemic change in the management of magazines in newsagencies.

There were skeptics in 2004 when I created the magazine club card – newsagencies which have embraced this are delivering considerably above average magazine growth primarily because of the loyalty offering.

The newsXpress just in bookmarks won’t deliver a retirement size cash bonus but they will help drive above average magazine sales. They provide practical evidence of the newsXpress point of difference and further support our brand over individual product brands.

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magazines

John Howard’s small business credentials

Take a look at the latest Annual Report from Australia Post and see how successfully this wholly government owned and government protected enterprise has leveraged its monopoly brand even more successfully this year to take revenue from Australia’s family owned newsagencies. Mr Howard and his team have permitted and even encouraged the 846 Australia Post corporate stores to go after newsagencies in the areas of stationery, bill payment, phone recharge and other areas. They hide behind the legislation and conveniently forget that they can change this. yes, they care about small business.

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Australia Post

The Cult Times copy

cult_times.JPGCult Times magazine and the TV Zone Inter Special title (right) are the same – certainly a read of the text of the cover suggests as much as does the photo. To really check I’d need to open the sealed bag of the title on the right. Customers won’t notice. The bagged magazine is more expensive.

They appeal to the same demographic so why duplicate copy and put it under a different masthead? Unless there is substantial difference in content this repackaging ought not be permitted as unsuspecting consumers could be ripped off. My benchmark would be that a title would need to have at least 50% unpublished content. I suspect that is not the case with Cult Times and its sister publication.

I am annoyed because customers who been ripped off will complain to us as the retailer.

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magazines

For Pavarotti collectors

limelight_abc.JPGLimelight magazine which came out yesterday is an opportunity for newsagents to shine. While we have put a couple of copies in the usual location, we have put more stock in our high traffic women’s weeklies area. With the Pavarotti cover and the bonus CD of Paravotti and Dame Joan Sutherland it is bound to be of significant impulse interest.

Every Monday, Wednesday and Friday we look for magazines with covers which will attract impulse purchase – it’s a low hanging fruit opportunity.

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magazines

Naughty schoolboys

We were mystery shopped by Tattersalls a week ago and failed – no up-sell, no query as to whether they had a Tatts Card and no good luck at the end. While we should have done these things, we were busy and the failings are the exception and not the rule at our newsagency.

I wish the mystery shopper reported on Tattersalls products up-sell promotions away from the Tattersalls counter, the promotion of Tattersalls products outside our shop in our widely circulated newsletter, our entertaining house syndicate campaign and our above network average sales growth.

I guess these above average activities don;t matter to the examiner who has been asked to measure all outlets by common, average, criteria.

The report card from Tattersalls makes us feel like naughty schoolboys as it focuses only on getting us to be average while ignoring where we are exceptional.

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Lotteries

R rated Penthouse slip up

Oops. R rated Penthouse arrived in newsagencies today without a plastic bag – meaning anyone could browse the porn title. The distributor advised newsagents late today that they are sending out plastic bags for us to stick Penthouse in and seal.

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magazines

Oversupplied Derriere

Is it just my newsagency or are others overloaded with Derriere magazine. We have three different issues on our shelves at the moment. None selling – chewing up cash, space and labour. The porn magazine market is dead.

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magazines

Private label strategy

private_label.JPGPrivate Label Strategy by Nirmalya Kumar and Han-Benedict E.M Steenkamp is an excellent book for anyone involved or interested in the use of private labels (house brands) in retail. This book has specific application for Australian newsagents given the use of a private label (Sovereign) to combat the private label strategies of our competitors: Australia Post, Big W, Coles, Safeway, K-Mart and Officeworks. The book also helps us understand the place of private labels net to branded product.

Too often in the newsagency channel we copy others without thinking the strategy through or researching whether it may be appropriate to our situation. I suspect our approach to private label stationery is an example of this. Take the Sovereign private label stationery offer from GNS. This appears to be all about price – it is certainly not a quality proposition. Sovereign doesn’t provide better margins so on price it fails.

As Private Label Strategy documents, private labels are about much more than price.

With a potential retail network of in excess of 4,000 newsagents, I would hope that those involved in developing the Sovereign strategy for newsagents take time out to read this book – it is the first of its kind. I am finding it inspirational and challenging.

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Stationery

Canon beats other brands

ink_wg.JPGCanon is outselling the other major ink brands at our Watergardens location three to one. This is different to the mix we are seeing in other locations.

Maybe it says something about the demographic? Who knows? All we know is that it will affect our stock holding mix if this trend continues.

Canon might be the first printer offer we carry.

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Stationery

Bags over wrapping paper

bags_tissue.JPGBag sales are hot in newsagencies – talk to any of the car and wrap companies and they will tell you it is so. Year on year growth is excellent. But for bags to work, we need new designs regularly.

I was in a newsagency yesterday where they are tapping into the bag opportunity with discounted product. While the price point is low, the quality is too. This is false economy. I think people want to be proud of a gift they are giving and this means they want a nice bag. The cheap bags don;t cut it.

I really like the Hallmark range which came out with the bag of tissue paper on the outside – this gives the sense of a value add and makes the bag even more appealing.

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Wrapping paper

$30 million reasons to engage

With OzLotto jackpotting last night, we can look forward to around a 15% to 20% kick in lottery generated traffic and a bigger kick in sales. We’ll drive that with some major in-store moves starting today as well as dressing the lottery counter to maximise up-sell opportunities.

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Lotteries

Do you recognise him?

person.JPGMaybe you recognise this person? He visited one of our shops on Sunday, took four items off the shelf, put them in a bag, went to the counter and convinced a team member and a manager on the phone that he had bought them earlier in the week and found they did not suit and asked for a refund. We have the video footage from several angles showing the scam from the moment he takes the items off the shelf to when he pockets the ‘refudn’ we provide. If you recognise the person please let me know.

It’s easy to get scammed when you’re busy, the key, as we have been reminded, is to have clear simple rules in place to stop the scam from the outset.

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theft

Emerging new IT standards

We are actively engaged with four key newsagent suppliers on technology enhancements which will evolve into new IT standards for newsagents. What is exciting about these exclusive projects is that the resulting new standards can be easily and quickly deployed across the network of 1,400 newsagents using the Tower software.

One enhancement which really excites me will drive a more commercially valuable magazine supply model – I am seeing a magazine distributor actively engaged in understanding each newsagent’s business in a way I have not seen before. To be exclusively engaged in this project an honor – I can’t wait for the outcome for all newsagents.

I expect we will see more newsagents involved in trials of new standards in a matter of weeks.

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Newsagency challenges

Demonstrating faith in newsagencies

quayside.JPGWe settled yesterday on the purchase of Quayside Newsagency in Frankston.

My purchase of this business is evidence of my faith in newsagencies and my commitment to serve newsagents as they (we) navigate complex challenges. Yes, I complain about these challenges newsagents face – I still like the channel and am glad to have this opportunity to extend my investment.

Quayside Newsagency is a retail only newsagency is in an excellent location outside Coles in the busy Bayside centre. Currently badged as Newspower, we will replace this with newsXpress branding externally and internally – hopefully prior to Christmas.

The settlement process has taken twice as long as expected but we’re in now and pleased to have an opportunity experience a different demographic and work with a new team of people. Most of all, we are thrilled to have another newsagency location where we can experiment on our mission in search of the newsagency of the future.

Simon Frost has moved from the Tower Systems Help Desk to manage this business. While such a step is a considerable challenge, Simon was keen for the change. I am glad to extend the Tower / newsagency bridge through Simon’s experience.

Having spent time in the business yesterday I have noticed considerable differences between Frankston and Forest Hill and while some differences are demographic, others are not and may well lead to new opportunities for each location being uncovered.

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Newsagency challenges