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

Author: Mark Fletcher

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

Ink upsell

A chap who only came in to buy some ink from us purchased three items on impulse at our counter: a wine magazine; a bag of Darrell Lea liquorice; and, a copy of Great Walks magazine at the counter. We didn’t offer any of these, our counter displays did the work for us.

Now if only we could have a customer like this chap every half hour or so.

We put a lot of effort into using our shop to up-sell for us. We know from our own experience in petrol outlets how frustrating it is to be offered some deal when all you want to do is pay for petrol and leave. With our approach, customers choose to be up-sold and they walk out more satisfied ads a result.

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Customer Service

Early calendar sales strong

cal_dogs.JPGWe went out early with calendars this year compared to previous years and it is paying off with weekly sales of more than $1,000 at full price. In our location, these are good numbers. The dog calendars are working the best – I can see us ordering backup stock to tide us through Christmas. I am glad we have none of the magazine company offerings.

Diaries are equally as strong as calendars this year compared to last.

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Calendars

Vic. newsagents stirring over lottery decision

Newsagents in Victoria are starting to ask questions about the probable loss of scratch lottery products. It’s a bit late, the time to ask questions and take action was February this year. Inaction by newsagents is part of the reason the Government has got away with this anti small business decision. Here is what the petition said:

We, the undersigned, are concerned citizens who urge the State Government of Victoria to ensure that lottery ticket and scratchie games are sold only in independent small businesses in Victoria to protect jobs and to ensure these tickets are sold by well trained staff committed to ensuring responsible gambling and, specifically, not in big supermarkets such as Coles and Safeway / Woolworths.

To sign this petition, click here.

In a more practical sense, my software company, Tower Systems, is offering free help to newsagents to quantify the potential knock-on impact of the loss of scratchies on their business.

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Lotteries

Walking customer’s shoes

Roy Peter Clark has written an excellent essay published at Poynter exhorting journalists to read newspapers – for the future of newspapers. Clark says journalists are probably out of touch by not engaging with the product they help create.

I wonder if this is true with newsagencies. How much do we engage with our channel as a customer? With the hours newsagents work it can be difficult but it is essential. This experience of shopping other newsagencies might be what we need to navigate our own future.

Clark writes about spending 15 minutes a in the morning reading newspapers and more time in the afternoon on feature articles. If we are to engage with our channel, as a customer, it needs to be as structured.

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Newsagency challenges

Misfiring the Women’s Health launch

womens_health.JPG

We received plenty of stock of the launch issue of Women’s Health today but no promotional material. Our plan was to put up an aisle end display in a high traffic areas but we have used that for another title due to lack of material to support Women’s Health. What we did get was a red counter unit but that’s hardly enough to make a display.

I’m not impressed with this launch. Publishers need to understand that proactive newsagents plan their displays and need material when a title arrives – not days later.

So, without publisher support, we have engaged in a co-location strategy. We have Women’s Health inn our weeklies area (see photo), in the health area and as the feature magazine on our busiest lottery counter.

UPDATE: I was at another newsagency today and they received free standing stand on which to display Women’s Health – so, I am not sure what happened to his for Forest Hill.

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magazines

Magazine City

The Sunday Age ran an interesting article for magazine lovers yesterday. Magazine City is about Melbourne’s independent magazine boom, covering titles you’re unlikely to see in newsagencies. It’s interesting to see Sahil Merchant, founder of Mag Nation quoted – this respects Mag Nation’s unique offering in the magazine space and demonstrates their business as the category leader it is.

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magazines

BP promotes Women’s Health

I was at my local BP petrol outlet last night and noticed a promotion for Women’s Health, the new magazine from Pacific Magazines which launches today. The deal was a free sampler of a couple of articles from the magazine if I buy a bottle of water.

The lack of knowledge by the employee behind the counter about the new magazine and the co-promotion with water meant the campaign was a dud where I live. I was surprised to see the new title being promoted in the BP outlet given their poor commitment to magazines.

I am not aware of the sampler offer being put through newsagents. If it ran in petrol outlets I’d be most disappointed. Newsagents are well placed to talk up magazine launches. We are the ones who will invest plenty of real-estate promoting the title today and for this week.

Publishers suck up to newsagents telling them how great they are and that Australia needs the magazine specialist retailers. Sometimes, their marketing decisions tell us otherwise.

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magazines

Helping measure the loss of instant lottery sales

We have established assistance for newsagents using the Tower software who would like forecast the impact on their businesses of losing instant scratch ticket sales – in the light of the Victorian Government’s announcement two days ago.

We will confidentially analyse basket data from participating newsagencies for the last six months in a way which can be used to project the impact sales on other departments. This information will help these newsagents better plan for the future – maybe a future without scratch ticket sales.

If you would like to access this free service please email our support team.

We will review basket data for the participating newsagencies against basket data we have for our broader community.

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Lotteries

Samsung printer giveaway

free_printer.JPGOur printer giveaway is going well – two Samsung laser printers have been won and have four to go.

We have moved the display to the top of one of our stationery aisles, wrapping and labeling boxes to represent the printers given away already – to make winning real and achievable.

Having branded free stock like this to support local in-store promotions is important in our newsagency competing with Big-W, Australia Post and other national retailers nearby.

From a sales perspective, stationery is tracking good growth – this is probably more due to our major overhaul of the range around national brands than the printer giveaway itself.

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Stationery

Second magazine management workshop

The magazine management workshop held at Tower Systems‘ head office in Melbourne a week ago went well. It took a new approach to helping newsagents better manage magazine arrivals, returns and everything in between. The content was tested in our own newsagency and in close consultation with magazine distributors – to help drive more commercially viable supply to newsagents.

We are repeating this workshop this coming Thursday (Oct. 18) starting at 10am – in Melbourne. This free training is helping newsagents save time in magazine management as well as achieve better business outcomes. We’re planning dates for other locations so watch this space. Anyone is welcome to participate. Email us to book.

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magazines

Kristin Hersh, middlemen and newsagents

hirsch.JPGI was fortunate to see Kristin Hersh perform last night at The Palais in Daylesford last night.

Beyond her songwriting and wonderful performance ability, Kristin Hersh is experimenting with a new model for sharing her music with the world.

Gone is the big record company, middlemen and fees for music. She has handed her future to the people by establishing the Coalition of Artists & Stake Holders, or the “CASH Music Project”.

As her website declares:

We’re committed to not holding music hostage, the music will be free. We’ll be asking for donations and offer you the opportunity to subscribe to Kristin’s career – past, present and future.

It struck me on the drive home from Daylesford last night that the challenge faced by Hirsch and the entire music industry is not dissimilar to one of the challenges faced by newsagents. The traditional model has become so disrupted so as to compromise its viability in its current form. Rather than react, Hirsch and her team are evolving a new model – in consultation with old and new fans.

Newsagents need to act as boldly if they (we) are to enjoy a bright future. This means breaking with tradition and listening to ourselves and our customers more than our suppliers. If we do not do this, our future will be dictated by others whose long-term needs most likely do not match our own. Our channel is riddled with middlemen and processes which make money for others and not for us. While they cut costs our of their supply chain, we are burdened with more costs. As Kristin Hirsch has done with her music, we need to seize control, for ourselves.

If you get a chance to see Kristin Hersh on her remaining Australian tour dates, it’s well worth it.

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Newsagency challenges

Vic. newsagents face multi-million dollar lottery loss

“Victorians who buy a weekly lotto ticket probably won’t notice much change – lotto tickets will still be available from a wide range of outlets throughout metropolitan and regional Victoria.

“But they will start to notice a more comprehensive and diverse mix of products and changes in retail networks from next year.

This is John Brumby, from in his press release Thursday this week. Then this from the Intralot press release oin the same day:

INTRALOT is looking forward to establishing a successful operation and contributing to new product ideas and distribution methods that will provide greater convenience and choice for Victorians.

There you have it. The retail network will change. Intralot clarifies further with:

The company will establish an expanded and modern distribution network, based on a state-of-the-art online system that will exceed 1.000 points of sale.

Around 10% of lottery product traffic is generated by scratch ticket customers. More than half scratch ticket sales include other items. Some of those customers will not visit a newsagency if scratch tickets are sold elsewhere. This will impact the sale of magazines, newspapers and confectionery – the items most often sold with instant scratch tickets.

VANA, the Victorian newsagents association and the Lottery Agents Association of Victoria ought to have lobbied harder and sooner on this issue. They were asleep at the wheel. My concerns published in this place were well founded.

So, how much will Victorian newsagents lose if they lose scratch lottery tickets? I’d suggest the annual losses will be in the order of $5 million and $10 million in sales across several categories. Some will reduce employees if the impact is too much … the knock on effect of this decision by the State Government of Victoria will take more than a full year to unfold, maybe longer.

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Lotteries

The profitable competition

Tattersalls started a promotion this week around the Cox Plate. People who buy a 50 line lottery ticket get what appears to be a free entry. They open this and then send a text message with the code word printed on the ‘free’ entry to see if they have won. The text message costs 55 cents. One customer threw the scratch ticket away, angry at being asked to pay for what they felt ought to be a free entry. I agree with them. This kind of competition which costs money to enter can do more harm than good to a brand.

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Lotteries

Expensive displays

good_health.JPGHere is an example of where rules can work against newsagents.

The excellent Good Health is a feature magazine in the ACP magazines Connections program. This means we are to do an aisle end display. If we do that we will not have enough stock for the co-location strategy which works well for this title.

So, we have decided to not do the Connections display. Instead, we have Good Health in three locations including between Australian Women’s Weekly and Woman’s Day. We have sold six copies in four and a half days – that’s 37.5% of supplied stock. I’d expect to have sold 60% by Sunday – demonstrating that our strategy is appropriate for the 16 copies we have received.

I understand that the Connections display is also about promoting the brand. The reality is that I need a better return than I can get from 16 copies if I am to provide an a valuable aisle end for as display.

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magazines