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

Author: Mark Fletcher

Tobacco getting too risky?

Stories about stings being played out to catch retailers selling cigarettes to underage customers are growing in number. Some catch people behind the counter doing the wrong thing while others appear to be entrapment. Regardless, selling cigarettes is getting to be more complex than the margin justifies. While we have been out of the category or ten years, I do know of others doing very well. The key appears to be big, well managed and with good staff training around compliance. It’s those selling $1,000 or less a week where compliance slips, managing stock is a challenge and the cost challenges the return.

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Newsagency challenges

Driving newspaper sales with a price cut

sun_uk.JPGImagine one of Australia’s daily newspapers cutting its cover price by 43%. That’s what has happened with London’s Sun from News International this week. 35p down to 20p. Consumers would be happy – such are the benefits of a competitive marketplace where there is considerable choice in newspapers. The price drop apparently applies only in London. This story caught my eye because Australian newspaper publishers do follow overseas trends: DVD and other giveaways to boost sales (but publishers here are not as addicted as in the UK), free newspapers – to name two. With newspaper sales flat at best it would not surprise me to see publishers play with cover price in some markets to drive sales. There is more background to this story at followthemedia.

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Newspapers

Cashless sales cost

Check out this report from Finance Markets about cashless retail:

The days of scratching around for coins in your handbag or pocket to buy a newspaper or sweets could be numbered. 16% of people said they often do not buy daily items such as a coffee or a newspaper because they do not have change or do not want to break into a note.

Consequently, MasterCard has launched a new generation of ‘Tap & Go’ cards which allow people to purchase items costing under £10 simply by touching a chip card against a reader.

HSBC bank and retailers such as McDonald’s and Coffee Republic have already signed up to use the MasterCard system, which is called PayPass. It has been introduced in certain parts of London and will be rolled-out to the rest of the capital later this month with the remainder of the UK in 2008. It is expected that 5 million of the cards will be issued by the end of 2008 and will be recognised by 100,000 retailers.

Be sure to read the full report. This type of cashless trading is what the Myki system for Victorian public transport is/was being built on – the project is a year late due to technology issues. With major retailers signing up to support the UK MasterCard project it is afir bet it will come here.

Notice the first example in the story? Buying a newspaper. The risk for the retailer from cashless trading is the per transaction cost. While it will be lower than current credit cared costs, it will be interesting to see how it compares to the cost of transacting in cash.

Newsagents are at the end of the food chain on things like this. Our independence works against us because of what suppliers say are difficulties in negotiating deals with KPIs and disciplines built in. Maybe this is where the major software providers with 500 or more sites can help newsagents compete through a common platform.

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Newsagency challenges

Branding stationery: Crayola

As part of our mission to bring in strong brands as we rebuild our stationery department, we have made a considerable space and stock investment in Crayola. Here’s how it looks in store as of this morning:

crayola_wow.JPG

This display is at the end of one of stationery aisles and has been created to draw people in.

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Stationery

Elevator magazine for baby boomers

elevator.jpgElevator magazine launches next week. It is good to see the publishers offering newsagents bonus commission for the launch issue. They have asked newsagents to place the title at the front of the store. I think this request is too vague. I would be more specific and request that Elevator be placed between Australian Women”s Weekly and Woman’s Day in the main women’s magazine display. I’d also ask that it be featured on on an aisle end – especially with the team behind Kath and Kim on the cover. Finally, I’d make sure all team members are aware of the magazine and its content so they can make comment as appropriate.

Someone asked me yesterday if there is a market for Elevator – a magazine for baby boomer women and men. While I am no expert, the answer has to be – for the right title, yes. Time will tell how Elevator travels. I think it’s two month on sale will work against it as will the dual gender focus but I’m not a publisher and don’t have access to the research they would have supporting their launch strategy. What the market does not need is another Life – the ABC title.

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magazines

A better way to upsell in retail

part_move.jpgFor around six weeks we have had partworks displayed on our dance floor in an area we use for promotional displays. Yesterday, we compacted the display and moved three titles into the location in the photo in front of one of our lottery counters. While minor in effort, it is moves like this which are important to newsagencies.

Allocating time every morning to move product in the front part of the shop maintains a fresh feel and helps the newsagency itself drive upselling for you. Whether it is this partworks display or something else, it is essential we regularly change our upsell pitch at this entrance – it is this constant change which drives sales and basket efficiency.

I see this work as far more valuable and reliable than asking employees to ask customers if they want fries with their purchase. By making the store itself do the upselling your counter team can focus on being with the customer rather than pushing product onto them.

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newsagency marketing

The Duracell bunny comes to town

duracell.jpgIn rebuilding our stationery department we have chosen Duracell as our core brand of batteries. We have committed to a decent range. An unexpected surprise was the gift of the Duracell bunny in the photo. Given the legendary status of the bunny, we are going to run a competition and give the large bunny to a lucky customer.

Our commitment to Duracell has come out of our commitment to the best brands in each category. I see little value in newsagents promoting house brands when we cannot match the multi million dollar house brand campaigns of the majors. We will do better riding on the coat-tails of major brands by stocking their product instead of a newsagent house brand which means nothing. While this will cost us some business at the low end of the market, it will win us business at the top end.

I was in our local Reject shop yesterday and they cover the low end well. I think it dishonours the Newsagency shingle if we try and compete with the reject shop.

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Stationery

Classic John Wayne Collection

The first five movies to be released through Australian newsagents in the Classic John Wayne Collection part series are: Part 1 – The Searchers; Part 2 – Rooster Cogburn; Part 3 – Hell Fighters; Part 4 – Rio Bravo; Part 5 – Stage Coach. I am told that some rights are still being negotiated – hence the lack of a complete list.

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partworks

And the point of the SMH blog is?

Natasha Hughes took a shot at fashion and beauty magazines in her blog post: Bag the mag? at the Sydney Morning Herald yesterday. The post appears to be more of a lure for comments than any substantial comment. The conspiracy theorist in me asks if it has been timed to coincide with the ACP 30 days of fashion pitch. That aside, of particular interest is some of the comments posted. This comment sums it up:

If you think one monthy mag costs you about $10 – well thats $120 a year (thats if u buy just one a month!). I know i would rather spend that $120 on a massage, or a night out etc . so many better options out there. Go to your local library and read them for free if you really must.

Ouch.

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magazines

Promoting The Age Good Food Guide

good_food.jpgThe Age 2007 Good Food Guide (and it’s Sydney cousin) provide newsagents an excellent opportunity to promote fresh product and drive some good impulse business. This year we capped a card aisle with this display prior to Father’s Day. Sales have been excellent – all included other product meaning it’s not a destination purchase.

The more we actively promote fresh product such as the Good Food Guide the more we reinforce that we’re up to date. This is on my mind because too many newsagencies are set and forget businesses in my mind – too few changes are made and customers become store blind.

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magazines

Bazaar offer displays badly

bazaar.jpg

Some magazines are a challenge to display properly when they some with giveaways. This month’s Bazaar does not fit traditional fixturing well and no alternative has been provided for a front of store display. The gift is valuable yet we cannot do it justice. Some days you have to leave things in a less than ideal state – this is one of them.

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magazines

Feeling like a school kid

Tattersalls marked us down for putting non Tattersalls product on their counter. They did not give us bonus points for promoting their product on our Newspaper stand – and breaching publisher display rules.

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Lotteries

Promoting my newsagency

nx_nl_sep07.JPGWe have released our September newsletter and placed it at the front of the newsagency. We have tweaked layout and content based on feedback.

This issue reinforces the launch of Little Ears magazine, promotes our green credentials (we have been buying carbon offsets for more than six months now), our commitment to cartridge recycling and that we’re a lucky place to shop. It also promotes our Spring range of magazines. The newsletter genuinely connects with in-store features and promotions.

As it must be, content of the newsletter is personal to my newsagency – it’s important we reinforce the local nature of our businesses in such communications.

We have found that more shorter stories work – this is one of the changes this month. They reflect the breadth of our offering and speak to a broader community. What we don’t want is the newsletter to feel too commercial – like one big ad.

While suppliers, magazine distributors and publishers mainly, are selfish want aisle end promotions and measure us by our compliance in creating these, I’d suggest that initiatives such as this newsletter are as valuable and they take our offering beyond the four walls. Plus they promote the whole of the business and this makes for a healthier newsagency channel.

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newsagency marketing

Spring magazine promotion

spring_mags.jpgWe have redressed our Father’s Day magazine display with this display of magazines with a Spring theme. Usually we would be bigger and bolder with a Spring theme but space issues right now preclude this.

This Spring display has been up 48 hours and we have sold product off the display. Our plan is to switch titles around Thursday to give other titles coverage.

We will leave this display run a week as there are two new title launches next week for which we need front of store space.

A newsagent called me Monday to suggest that these front of store display defeat the purpose of the full range of magazines and that we are stopping customers browsing. They may be right. The sales data from my shop suggests that more customers buy from the front of the shop than anywhere else. Observation shows many do not browse magazines. These front of store strategies are designed to lift the efficiency of lottery and newspaper sales – the two categories where more than 60% of sales are those products and nothing else. By focusing on the front of the store we have improved efficiency considerably.

Since this display is not promoting a single publisher’s titles it will not be recognised by them as valuable. I’d argue that newsagents need to do more of these whole of category displays rather than single publisher or single title displays.

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magazines

Tattersalls switches to Microsoft from Linux

The Australian is reporting that Tattersalls is moving from its Linux based technology to a Microsoft based solution. One outcome I would like to see from the move is integration between gaming terminals and point of sale systems. This would reduce double entry of data and thereby reduce mistakes, save time and provide for better cash management. It would also reduce the opportunity for fraud.

I have discussed this with Tattersalls and other lottery agencies in the past without success.

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Lotteries

Darrell Lea misses sales opportunity

I love Darrell Lea product. Top sellers like liquorice allsorts, plain liquorice and rocky road sell well. Where they miss sales is in not letting selected stores carry just the top sellers. By having to carry a minimum range some good potential outlets pass on the opportunity. I understand Darrel Lea will say they need the minimum range to pitch their brand appropriately. I suspect a trial in a group of stores would prove that with as few as, say, ten products the brand could be well represented and strong sales achieved.

A B-grade shopping centre newsagency needs to achieve sales of at least $8,000 per square metre of floorspace annually to cover costs. The more expensive the centre the higher this benchmark. Brands which want retailers to take a broader range drive down the per square meter return.

This is why I’d like to cherry pick by Darrell Lea product – so I can maximise my return rather than just serve the Darrell Lea needs.

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confectionary

Newsagents gear up for gift vouchers at Christmas

Through July and August, Tower Systems gave newsagents using its software a module to manage the selling of gift vouchers. The take up of this gift from Tower has seen newsagents access hundreds of thousands of dollars worth of software at no cost. The feedback from newsagents is that many will pitch gift vouchers strongly this Christmas – now that they have a robust means of managing the cash deposited onto vouchers.

I remember reading somewhere a few months ago that in the US now gift vouchers account for as much as 20% of all Christmas sales in some stores. By tapping into this, newsagents can win the sale without needing to have the perfect gift on display at the time. Selling gift vouchers is all about connecting the store with the recipient. If the giver feels the recipient will like the store then they will buy in and purchase a voucher.

This is what the Tower mission was – to give newsagents something else to sell without it costing them anything.

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newsagency marketing

Open Garden sell out

As I blogged here on August 16, we are taking a different approach to some long shelf life titles such as Australian Open Gardens. We have now sold 18 copies when we would usually have sold 4 by now.

Most newsagents, on seeing a long shelf life title, will typically take a set and forget approach. We are now taking a different approach for some of these long shelf life titles and chasing sales in the first few weeks. With Open Gardens, the VTAC Guide and a couple of others it has worked. Finding the appropriate high traffic area space to drive sales is a challenge.

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magazines

Great POST billpay campaign

ap_gift07.jpgI picked up this gift at an Australia Post outlets yesterday. It was in a bright red envelope with a silver bow printed as if tied around it. Inside was this magnetised To Do List with a pencil. This is a brilliant giveaway – a perfect pitch for bill payment customers. It connects with the habit basis of bill payment and provides an excellent premium gift of value yet which perfectly promotes the brand. At each point – on the magnet header, on the pencil and on the pad the Post billpay message is loud and clear.

I love that number 7 on the To Do List is Pay Bills at Australia Post.

While I often complain here that the Government owned post office uses its monopoly brand to unfairly compete with independent small business, I recognise this brand based campaign as one of the best I have seen.

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Australia Post

Borders decision close

The Sydney Morning Herald reported this morning that Pacific Equity Partners (shareholders in Angus & Robertson and Supanews) are front runners:

But the private equity group Pacific Equity Partners is considered the front runner for Borders, given its ownership of Angus & Robertson and its desire to create a big book retailer to float on the sharemarket in the next 12 months.

In addition to the 180 Angus & Robertson shops, PEP owns the New Zealand bookseller Whitcoulls and the newsagency chain Supanews. PEP bought Supanews eight months ago to bulk up its retailing business.

A PEP victory with smart management around the Supanews brand and rejigging of their flawed (in my view) franchise model cold introduce some tough competition for newsagents.

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Newsagency challenges

Business, property magazine sales respond to effort

A month after a significant makeover of the business magazine segment (including property and news titles) and sales are up. Most major titles are showing growth. Some smaller titles are showing growth but less so. What we are seeing is greater efficiency – more two and three title sales – this was a key goal of the makeover.

business_mags.jpg

For too long in our newsagency business, property and news magazines were the forgotten cousin. We spent all our time elsewhere because sales in the business segment were tiny by comparison. Spending time relaying and attending to the display every few days is proving to be worthwhile.

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magazines

Launching Little Ears

lit_ears_sep07.JPGWe are supporting the launch of the excellent Little Ears reading magazine today by creating a new temporary children’s category between Women’s Weekly and Woman’s Day. We have achieved excellent results with this space in recent weeks promoting health and other special interest titles. This is our first crack at Children’s titles.

In support of the focus of Little Ears, we have carefully selected the supporting titles. By focusing on Letterand, Barney, The Wiggles and Parents, we have created a section of quality and respected titles. Hopefully this will generate good sales of the titles and especially the launch of Little Ears.

We have also located Little Ears in our usual Children’s section. It will be interesting to see which location generates the best sales. Based on the health experience in this space between two top selling women’s titles I’d expect the Woman’s day / Women’s Weekly space to do the best.

We are planning to use this space for several of the launches over the next few weeks – Great Walks and Elevator to name two of the new titles. Not all new titles lend themselves to this treatment. The key is the connection with female shoppers.

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magazines

Kevin Sheedy / James Hird souvenir

sheedy_hird.JPGThis Sheedy / Hird souvenir from the AFL is timely with the AFL finals starting this coming weekend. Newsagents handle one off titles such as this better than other retailers. We’ve put it at the counter as well as above the Herald Sun in our newspaper stand given that most sales will be on impulse.

Interest in Aussie rules football being what it is in Melbourne, a title like this is essential to reinforcing our community credentials. My only criticism is that it has been released a week too late – it would have been a good Father’s Day gift.

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magazines