Author: Mark Fletcher

We have started rebuilding our stationery offering following major disruption over the last five months with construction in the centre and in our tenancy. The building project will take a few months as we are taking our time and focusing on brands. We have started with tape and are building a stolid story around the 3M Scotch brand. What is interesting to us is the challenge of accessing enough of the range to adequately represent the brand.

This is a huge problem for newsagents across the country. They rely on stationery warehouses for the range of a brand they carry and often a national brand is not as fully represented in the warehouse as it could be. This is what we found with Scotch when we started.

We like national brands because consumers are more likely to know and trust them and because they are advertised more often. Newsagent warehouses need to understand this and help newsagents pitch a more consistent brand story.

While on the issue of stationery, I am pleased to see the ANF preparing to survey newsagents about the newsagent owned GNS warehouses on the Eastern Seaboard.

Caravan World and Caravan Trader are two good titles with okay sales compared to other titles in the segment. We have both on the shelves at the same time and displayed in the same area. I am surprised, therefore, that we also have a double pack with the current issue of Caravan World and the previous issue of Caravan Trader. The cover price of this is $2.00 above the usual price of Caravan World. Why would I pay even $2.00 more for old caravan ads? Maybe I ma missing something – this seems very odd.

The special 15th anniversary edition of Who out today is the first post-transition issue following the acquisition of the title last month by Pacific Magazines. The additional point of sale material to support the special edition is welcome.

There is a real opportunity with the new energy directed at Who by the folks at Pacific to drive traffic and sales on a Friday. Hopefully, newsagents will get behind the title with bold in-store display. The more we do this across the channel the more attention we will get from Pacific. Tapping into their integrated TV campaign would be excellent for newsagents.

I see Who as an opportunity to refresh the store for weekend traffic and to underscore our relevance as the destination for magazines.

I was on a flight from Brisbane to Melbourne yesterday and noticed the passenger next to me reading a magazine purchased from a newsagency using software from my company – the barcode label was the giveaway. While reading the magazine my fellow traveler took out the subscription card and started to fill it in. I couldn’t resist and asked why they would subscribe rather than buy at the newsagency. The answer was simple – because they like the title and the newsagent does not always have stock.

I talked about putaways and it appears that her particular newsagency is not a fan. Putaway magazines are not professionally labeled, there is no SMS message sent when a title comes in – in all the process turned her off using it. The title in question is small in circulation but there is not a problem getting supply. A good putaway service would have retained the customer.

My new friend completed the subscription form and planned to post it today.

The independence of newsagencies is a strength, for us as individuals, and a weakness, collectively. The lack of a national consistent putaway program must lose us customers every day if what I say of the flight yesterday is anything to go by.

I am sure the newsagent has their reasons for not pursuing putaways. My view is that there is no choice – putaways are unique to our channel, we own them. Any one of us not offering a professional putaway service weakens all newsagencies and leads to regular customers turning to subscriptions.

I have been told about a retailer in Melbourne pitching a three magazines for the price of two offer. The free magazine is the cheapest of the three bought. The promotional signage in the shopping centre indicates this is a limited time offer.

I am surprised to see such steep discounting of magazines – I wonder if it is a thought through strategy or a knee jerk reaction to address a traffic problem.

Magazines are not bought on price. Loyalty to a retail outlet is not likely to be won by this deep discount deal.

We are responding to the considerable press coverage being given to the housing affordability issue by creating this column of magazines next to our usual placement for The Bulletin, Time, Newsweek and The Monthly.

We are creating a special header to draw attention to the relevance of Money, Your Mortgage, Property Investor and Australian Property to the issue of housing affordability.

In a week or so, when we have the space, we plan on duplicating this display next to our newspaper stand – in an effort to demonstrate the range and relevance of magazines connected with such a topical issue.

While we are not expecting a huge sales kick from this work, we see small steps like this as essential to underscoring the breadth of range of magazines in our newsagency. It is not enough to have the range on the shelves and hope that customers will delve deep into the shop and browse.

By focusing on housing affordability we are connecting with a current and personally relevant issue. The same approach worked when we focused on healthy eating and living a few months back.

It is disappointing to see the folks at Fisherman and Boatowner have another crack at newsagents this month with a full page ad luring people to subscribe. While I acknowledge it is their right to make such a pitch, it concerns me that they do so in terms which make newsagents out to be the bad guys. Newsagents make 25% off the cover price for each issue we sell.

For our 25%, $1.98 per issue sold, we provide shelf space to display the product, labour to unpack, price and put the product on the shelf, labour to process returns, the cost of cash to fund the stock and the cost of shrinkage. I get two copies a month and sometimes sell both, sometimes one and sometimes none. If I sell both I break even.

The discount offered for direct subscription is 37.7%. Maybe the publisher could consider more equitable terms for newsagents rather than trying to cut us off.

The sales decay experienced by weekly magazines in newsagencies is quite different to that the same titles experience in other retailers. For the top selling titles: New Idea, Woman’s Day, NW, Take 5, That’s Life and Who, the first tow on sale days are crucial. The graph below – for capital city based newsagencies – shows the decay over the seven day on sale period for these titles plus TV Week – the line with the least sharp decline. In rural and regional newsagencies the decay curve is not as sharp.

I produce this graph weekly and compare the decay curve for major titles against previous weeks – in part to track in store activity and in part to predict where the week will end.

Reporting on sales decay for major weekly titles can set the merchandising agenda for a newsagency if the newsagent wants to be data driven in decision making. We have seen stores go from a set and forget approach to merchandising to a proactive approach where displays are driven by data – seeing two titles occupy prime space over the course of a week rather than one.

That’s Life and Take 5 and the titles with the sharpest decay based on the data I have seen. Sales growth is there for the taking for newsagents who aggressively pitch these titles on Wednesdays and Thursdays.

The decay reporting direct from within the Tower Systems software makes tracking this growth easy.

We really need to sort out this T3 problem. Here are the covers of the two issues we have on the shelves at the moment: the issue on the left is the Australian edition and is dated August 2007 and on the right is the UK edition and it is dated July 2007.

Having different issues of what is, for the most part, the same magazine on the shelves at the same time is nuts so we will cancel the UK edition – but this should not happen in the first place. I wish commonsense would prevail – it happens with more titles than just T3.

It is VTAC Guide (a book listing tertiary courses) season in Victoria so we are using part of the dance floor to promote them.

Past experience tells us that we have a few days to move the bulk of the stock before sales slow to a dribble – history shows that between 75% and 80% of all stock is sold in the first week and the remainder over the next three months.

With something like the VTAC guide there is no point in being all that pretty – hence the trestle table stuck in this high traffic area. This approach gives the feeling of urgency and hence serves our goal this year to sell 200 to 300 within a week.

We have a display of stationery next to the VTAC Guide to attract add-on sales from people driven to us for the guide.

I’ve written here before about the frustration of some magazine freebies which are poorly stuck on covers and do more harm than good – the Boost Bar with Alpha ladst month was like this, falling off everywhere.

The free Bueno chocolate being given away this week with New Idea and Famous in some newsagencies is a well executed offer.

By providing the chocolate separate to the magazines makes for neater shelves. It also allows us to get the thanks when we give the customers the chocolate bar – this is a nice bonus.

Handing the chocolate personally certainly adds value to the gift and provides an opportunity for the customer to connect the gift more with the newsagency than if it were just stuck on. Everyone likes to feel special and this promotion works in with that.