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

Author: Mark Fletcher

Young people and newspapers

Young People and the News is an interesting report by Thomas E. Patterson, Bradlee Professor of Government and the Press, John F. Kennedy School of Government, Harvard University. The report speaks to a key challenge for newspapers:

… young Americans are estranged from the daily newspaper and rely more heavily on television than on the Internet for their news. A few decades ago, there were not large differences in the news habits and daily information levels of younger and older Americans. Today, unlike most older Americans, many young people find a bit of news here and there and do not make it a routine part of their day.

The report is further evidence of why newspaper executives and others speaking with newsagents about future trends ought to be more open about the data on which their corporations are making their plans for the future.

How can it be that there are so many esteemed commentators challenging the future of a key product category yet our suppliers say it is business as usual?

Australian newsagents ought to fear ignorance more than change.

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Media disruption

Newspaper distribution consolidation

I am curious as to why consolidation of newspaper territories is slow in Sydney compared to Melbourne and, to a lesser extent, Brisbane. It may have something to do with the different approaches being taken by publisher representatives in Sydney.

If publishers want to encourage consolidation of newspaper home delivery territories they need to be flexible in how they view the retail newsagent. They also need to better reward the distribution newsagent who is investing in the consolidation. A visit to Melbourne to review the approach of the last two years would provide an excellent blueprint.

It appears that some publisher executives want to control too much in some states. Smart newsagent operators prefer commercial arrangements which reward growth.

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Newspapers

Proposed Supanews Federal Court action

To ensure proper management of funds, Macedone Christie Willis Solarie Partners, the lawyers representing Corie and Tammy Schwarzl – the Supanews franchisees who lost their business to Supanews without compensation – have established guidelines which will be available to any newsagent contributing to the costs of mounting a case. See this earlier post on the matter.

The prospect of Federal Court action is, I am told, causing some challenges within the Supanews Retail Group – the new business formed by the old Supanews (members of the Gaskin family), and the Pacific Equity Partners owned Angus and Robertson / Whitcoulls group. My understanding is that some senior A&R people are most concerned at the potential for damage to the reputation of their respected business. Franchisee disputes can become messy and personal.

Regardless of your view as to whether several Supanews franchisee stores have fallen over or been pushed, the Supanews model is challenged. The focus of a Federal Court case against Supanews by the Schwarzls will help various stakeholder focus their minds on the structure and its operations.

Donation to the fund can be made by direct contact with their lawyers.

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Newsagency challenges

Six months being carbon neutral

We have been carbon neutral in our newsagency for six months now. Not much has changed in a practical sense as we were always careful on recycling, purchasing green power etc. At least by purchasing carbon offsets we have a commercial understanding of our carbon emissions. Easy being green, the organisation we are working through, has provided some excellent material to help.

I’d encourage other newsagents to take the step. It’s a good community move.

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Social responsibility

A magazine of the future

Blanket is a new magazine in the Art and Design category. It comes out of Brisbane. What is most interesting about Blanket is that it is an online only publication.

With sales of print magazines in the same category flat or falling, an online model makes sense. Given the online focus and target demographic, it is appropriate that Blanket has a MySpace page.

Newsagents need to see that the magazine space is changing, Blanket is proof of that ever if it a special interest title. The best place for newsagents to respond to magazine changes is in our in-store fixturing – less but better designed space should help us boost sales from fewer titles.

Watch Blanket and the other online only models launching regularly.

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magazines

Who will be first?

Jon Fine, blogging at BusinessWeek, asks: Which American Paper Will Be The First To Kill Its Print Edition? In his article in the magazine, Fine picks the San Francisco Chronicle. Both the blog and article are essential reading for newsagents and their publisher suppliers. The discussion challenges the views put by publisher representatives speaking at newsagent meetings in recent months.

No, I am not gloomy about the future of newspapers. Realistic is what I would call it. By understanding the changes coming, newsagents will be better equipped to make the business decisions which best suit their businesses. Newsagents have to put their needs ahead of those of their suppliers.

Change can be liberating.

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Media disruption

Growing wrap sales

When developing the layout for our card and gift shop we decided to move from the traditional wrap fixtures. Instead we went for this unit:

its_a_wrap.JPG

We are so happy with the results that we are using an expanded version of this display in a new newsagency we are involved in. Customer feedback has been wow! and that is enough for is to copy the idea.

Certainly we notice that customers are more likely to touch the product and any retail expert will tell you that once a customer touches a product they are more likely to purchase.

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Greeting Cards

Magazine Club Card coverage in the UK

magazine_card.JPGThe Magazine Club Card which I created in 2004 is the subject of a report in the respected Circulation Briefing newsletter by Jim Bilton at Wessenden Marketing. This is very respected international coverage for what is a local low-tech magazine marketing initiative.

The many newsagents who have implemented the loyalty program can be proud of the attention this program is now drawing.

When we first launched the magazine Club Card in August 2004 we expected it to run for six months. It continues today without a break. Unlike a greeting card loyalty program, this one works on a continuous basis – especially if you stick with the rules we developed when we launched.

Every day we receive positive feedback from our customers about the program. A newsagent who is using the program said that the Magazine Club Card is the single most valuable marketing initiative he has seen in 30 years. That is what matters to me – that newsagents are able to use this simple program to grow their magazine sales and demonstrate a rewarding value proposition to customers.

This card is better than a VIP Card or some similar points based loyalty program. It connects with our customers in a more timely and practical way. I know of a newsagency which ditched the VIP Card for this and makes more money as a result.

It would be good to see Australian newsagent journals cover the Magazine Club Card as Circulation Briefing has in the UK.

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magazines

Blogging for an outcome

t3_july.JPGThe situation with T3 magazine is frustrating: the two editions pull focus from each other on the shelves in a segment of the magazine space which is already challenged. I would prefer to see one edition closed down – not just in my newsagency but across the network.

I have seen enough data to form the view that newsagents are not winning by having two titles. The problem is that with each from a different distributor there is no perspective at the supply end.

I figure that by blogging about this those responsible for T3 will at least look at their situation. Sometimes I find that blogging achieves more than dealing direct with a supplier.

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magazines

Ads on the front page

Mark Friesen, a news designer at The Oregonian in Portland, Oregon reports at his blog about the consideration being given at The Los Angeles Times to start permitting advertisements on the front page.

I should send Friesen a copy of The Age with ads and a post it type ad stuck on the masthead.

I wonder what designers within Fairfax would say about the debate in the US.

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Newspaper marketing

Australia Post shuns retail

post_closed.JPGAustralia Post demonstrated the benefits of government ownership at their Forest Hill (VIC) corporate store on Saturday. While other retailers in the centre embraced the VIP shopping night to promote the opening of Meyer, Australia Post, opposite our newsagency, was defiantly closed. The Minister responsible for Australia Post, Helen Coonan, says that Australia Post competes in the retail space without any benefits of government ownership. That they can get away with closing on Saturday as well as their usual closure on Sundays is proof that Government ownership has its benefits.

If Australia Post was serious about retail and did care about its customers they would embrace opportunities such as VIP nights. Instead they revert to their public service mentality and hide behind the Australia coat of arms.

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Australia Post

We are not car makers

Further to my post a week ago about Fisherman and Boatowner, the editor has gone to ground and is not expanding on his comments that the distributor, NDD, is to blame and that he did not mean to attack newsagents – not to me and others I have spoken with at least. The Fisherman and Boatowner situation, gross oversupply for many and undersupply for others, supports the claim that newsagents are treated poorly by the magazine supply chain – particularly in the long tail, titles outside the top 200 sellers.

No matter which KPI you use, return on investment, return on floor space, stock turn, or cash flow, smart newsagents are able to measure the cost to their businesses of the inefficiency in the magazine model. That they are denied the opportunity to make good business decisions about magazine supply is an appalling situation. Those presiding over the current supply model in the magazine distribution businesses ought to give entrepreneurial newsagents the tools to =run their businesses as they see fit – I suspect that the result would be an increase in overall sales.

Maybe Fisherman and Boatowner should close down – from retail at least. That newsagents are effectively funding the title by providing free shelf space and labour ought to be enough to see it removed from supply in all but the locations where it pays its own way. If such a move leads to the demise of the title so be it. I don’t see anyone providing financial assistance to keep struggling newsagencies open – we are not car makers after all.

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magazine distribution

Leveraging lottery jackpots

double_dip.JPGWe have lottery jackpots across all games in Victoria at present including the Wednesday game: OzLotto $8 million; Wednesday Tattslotto $2.1 million; Powerball $20 million; Saturday Tattslotto $21 million. Given past success we are running a joint game syndicate based on Powerball and Saturday. This allows promoting a $41 million first division pool. No matter how we mix then, syndicates sell well as punters appear to be happy to have more chance even if their piece of the pie is smaller.

Jarryd Moore makes an interesting comment about this at his blog, asking whether going too early with a jackpot hurts sales. Our experience is that it does in the short term but once you have built a good pool of syndicate customers it does not hurt. As for regular over th counter sales, we have not compared the impact.

UPDATE: We sold eight shares in 24 hours. Today we will add another syndicate.

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Lotteries

The blessing of Myer and Jennifer Hawkins

It has been forty three years in coming and today it finally arrived. Myer opened at Forest Hill Chase where our newsagency is located. Some say this brings the respect the centre deserves.

Myer has taken the space formerly occupied by Harris Scarfe and while they are a reasonable department store, the Myer brand counts for more. All day the centre has been crowded, long before Hamish and Andy and Jennifer Hawkins arrive to bless our good fortune. Here is the crowd from earlier today outside Myer:

myer.JPG

Up a level and at our corner of the centre, far away from Myer, we have been enjoying Christmas like crowds. The boost is most welcome following five months of poor traffic due to major construction all around us.

I guess what is interesting to me the most about the arrival of Myer is the talk of people – shoppers and people working in the centre – about Myer adding respectability as some call it to the centre. The morale boost among shoppers and store owners is bound to have a good knock-on effect for all businesses in the centre. we can’t wait! And all before Christmas! Between now and then a bunch of national brands new to the centre will arrive.

Being in a major centre leaves small businesses, such as newsagencies, at the mercy of the strategies of the leasing manager and the major tenants. No matter how hard a small business markets itself, it is difficult to overcome challenges of the location and the tenant mix. At Forest Hill at least we are looking at the best of times in our eleven years so far.

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Newsagency challenges

Boosting Donna Hay

donna_hay.JPGNothing against Donna Hay but the magazine bearing her name does not sell that well in our newsagency. The Donna Hay kids issues, however, sell exceptionally well. So, the brand is not the problem with our sales.

Looking at food titles generally, Delicious sells well (sells out since our supplies have been cut) as does Gourmet Traveler. Donna Hay is the weakest of the mix yet we receive more copies than the other two – ah the magazine supply model starving and drowning all at once.

We are planning a promotion for the next issue of Donna Hay to reintroduce the title to our customers. This will happen at the same time we relay our food related titles – it is time for a major rethink of how we display the range. We want a better point of difference.

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magazines

Famous makeover

famous_redo.JPGFamous magazine has had a makeover and as a result it stands out better when in the mix on the shelf with competitors Who and NW.

We are going to use our magazine loyalty program to support the new look with a double clip option on Famous next week. While the merchandiser has created a good in-store display I feel that an over the counter offer to draw attention to the new look could help more.

The offer will also remind our team of the new look – it is hard sometimes to keep up with the changes in product at the counter.

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magazines

Prince flips the model, goes free with a newspaper

With print media and the music industry both chasing rainbows online it is interesting to see Prince giving away 3 million copies of his new CD, Planet Earth, with The Mail in London this weekend. Here is what his website has to say, in part:

Always a musical innovator and icon, Prince is once again leading the charge into a new music distribution landscape, redefining tradition and setting new precedents. As well as having taken the innovative step of giving copies of his new album “Planet Earth” away with concert tickets to his London O2 dates, Prince has new plans of putting music directly into the hands of fans. In association with the Mail on Sunday publication, Prince will deliver his new album “Planet Earth” to nearly 3 million readers in the UK on July 15th.

This plan has shocked the music industry and set local retailers into chaos causing major controversy about the new future of music retailing as presented by Prince.

Kenyon Farrow makes some good points about the move by Prince at his blog.

While a free CD from Prince will not, of itself, alter the commercial fortunes of newspapers or music, it will be disruptive enough to get music and newspaper bosses looking outside the square as they navigate their future in challenged marketplaces.

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Media disruption

Why stop at the Trading Post and Google ACCC?

The announcement yesterday of court action against Google and the Trading Post by the ACCC has shocked many. The case appears to centre around the names of businesses which compete against the Trading Post appearing in the title of sponsored links (ads) for the Trading Post on the Google website. In plain English, people using Google might see, say, company A, click on that expecting to get to company a and find them selves at company B.

How does this connect to newsagents? Earlier this year, as I blogged here previously, RSVP, the Fairfax owned business, paid for a campaign with an affiliate of Commission Monster which targeted my 3loves site. Here is how it looked on a Google search:

rsvpsquat.jpg

3loves is a social networking site connected with Find It, the online classifieds model created to provide newsagents with revenue from online classifieds.

The scam against 3loves appears to be similar to what Google and the Trading Post are charged with.

People searching for 3loves were presented with what appeared to be a link to the site. When they clicked that they were taken to Google. Now I don’t know if Fairfax had any knowledge of this. What I do know is that they were the beneficiary of the action – or at least their RSVP site was. Fairfax approved the use of Commission Monster. Commission Monster manages its affiliate relationships. Each of the companies involved ought to have known about campaigns like that which benefited Fairfax by targeting my 3loves site.

My question is, if the ACCC can take Google and the Trading Post to court, why not Fairfax and the other parties involved – plus the scores of others who have engaged in similar tactics? I doubt that the Fairfax press would out their involvement in something similar to the current ACCC action.

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Online classifieds

FiFi breaking

fifi_broke.JPGFiFi’s World is a very popular new partworks magazine. Sales are very strong – thanks to the target audience (young girls), the school holiday launch and a good TV campaign.

The problem is that many newsagents are having to refund customers who return folders which have broken. The importer tells me they are going back to the UK publisher to seek replacement stock. With some newsagents reporting a 50% product failure rate the rectification cost could be extraordinary. I’d note that my shop has been lucky, we have a less than 10% failure rate.

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partworks

Big W to rollback magazine prices?

Big W at Mittagong in New South Wales is a concept store for the group, a place where they experiment with and refine ideas before rolling them out nationally. At Big W Mittagong you will see a professional and broad stationery offer dominated by national brands – essential for unlocking money from the brands for fixtures, rebates and marketing funds. There is also a compelling greeting card offer, well signed with the John Sands brand.

It is the magazine display which would interest most newsagents – many magazines in their display are on rollback prices, discounted. Rollback pricing is a feel good offer consumers love – look at what Coles are doing at present with rollback pricing on grocery items. I know from working with the magazine club card for the last three years that magazine buyers like a deal. The rollback strategy will work.

Big W Mittagong and the similar concept stores for Officeworks, Target, Coles and Safeway will all show that these big business competitors we so often complain about invest heavily (as do their suppliers) in navigating change. They experiment, gather data, tweak and ultimately find the model which they run with nationally.

While it would be easy for a newsagent to walk in, see the magazine rollback price offer at Big W Mittagong and get angry. the reality is that there is nothing stopping newsagents making similar strategic moves. It starts with us being entrepreneurial, exerting more control over our businesses and stopping busy work – things we do for the sake of being busy.

PS. Check out the Big W website and how they are promoting the new Harry Potter book. There is a clock counting down its arrival. Nice.

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magazines

Promoting outside the shop

Apparently a My Business magazine ad playing on Australian Newsagent Satellite Radio yesterday promoted the title as being available in newsagencies as well as by subscription. This would be like the CSI producer running an ad on Channel 9 saying it is available for download elsewhere. My Business would do well to revisit their ad copy for in-newsagency ads.

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magazines
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