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

Author: Mark Fletcher

Dynamic Business dual cover mix up

dynamic_business.JPGThe photo shows the front and back to Dynamic Business. The challenge is which side do you give the facing to? Given how is arrived in the bundle our team thought it was an export title and considered it to be of little interest to our demographic. Flip it over and there is the better known masthead. While the label generated by the point of sale software provides the details.

Sometimes, on a busy magazine day, there is little time to read the detail of the labels. We sorted it out and now display Dynamic Business as opposed to some obscure export title – I wonder if others had the same experience. This is not the only title to have a dual cover. When publishers do that it would be good for newsagents to be provided a heads up which includes the reasoning behind the decision and suggested action.

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magazines

Bread Day shows how Magazine Week could work

bread_day.JPGAs the Bakery Australia website says, The National Bread Day has been conceived to popularise the consumption of bread across the country by creating awareness of its dietary and nutritional values. Brilliant.

As I blogged here a month ago, in the UK they have Magazine Week for similar reasons – to popularise magazines. Indeed, at their website they say: We started Magazine Week because we wanted everyone to know just how big and diverse the UK magazine industry is, with a magazine for every available lifestyle, hobby or interest. Brilliant again!

Newsagents could launch magazine week and own the concept in consumer’s minds. If we got the pitch right we should see a sales kick and greater loyalty to our channel compared to the other channels selling magazines. Key to such a week or a day is to have the pitch right and consistent across the channel and to support this with a giveaway – like the Bakers Delight booklet given free to every customer today (see photo). Brilliant.

If we are the magazine specialists we need to find a way to own that concept. A Magazine Week or a Magazine Day could do the trick. If publishers, the MPA or associations get behind this, I’d love to be involved.

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magazines

Using posters well

We capped our magazine area with over thirty metres of light boxes for magazine posters when we moved to our current location five years ago. While I’d prefer to have LCD screens capping magazines, these light boxes still work well. They look especially good when publishers make sure we have sufficient poster material to boldly promote a title. The issue of Australian Womens Weekly out today is a good example.

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As is the current issue of Better Homes and Gardens.

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This is bold in-store support above and beyond the aisle end displays, co-location and front of house posters demonstrate the difference between a newsagency and, say, a supermarket or convenience outlet selling magazines.

Publishers need to keep good quantities of these materials flowing for without them newsagents cannot create good display and fill their light boxes.

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magazines

Eftpos poll updated

The eftpos poll is three days old. Of the 147 who have voted so far, 100 of those voting, hopefully newsagents, say they do not charge any eftpos fees. 36 charge under 50 cents, 8 charge a percentage and 3 charge $1.00 or less. I am surprised at the range and that so many newsagents do charge a fee. Here is the link if you have not voted yet:

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Uncategorized

The new adult magazine area

new_adult.JPGEleven years ago when I bought my newsagency we had one and a half metres of adult magazines. Today, we barely have one column – not counting the column with Zoo Weekly, Ralph and FHM.

The photo shows the new adult section as I see it in an average newsagency.

While different demographics will require a different range, sales data I see from other newsagencies suggests that a column or less is all that is needed to service the adult category. The Internet and the establishment of petrol outlets as a viable magazine channel mean that adult is not the category it was for newsagents eleven years ago.

It is disappointing that some distributors continue to overload some newsagents in the adult category by supplying more product than can be justified by the sales data. Often, when this is brought to their attention, they fix the problem. This should not have to happen, distributors ought to scale back based on the sales data and not a complaint from a noisy bugger like me.

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magazines

The spinner stays

activity.JPGSpinners are a nightmare in retail. They block sightlines and can make a store look messy. We removed several last year and vowed we would not bring in. All we kept were two sticker spinners – which work a treat. Two months ago we relented and agreed to a trial – for the activity books spinner in the photo. These activity books are performing better in terns of sell through, return of floor space and return on investment than half the magazines we carry.

We have carried activity books in the past but without the success of this range.

We have looked at whether we could locate the range elsewhere and remove the spinner. The challenge is that the spinner itself allows us the ability to move the product. For example, is school holidays we located it near our activity table, during the Tax Time Bonanza! sale, it is near that display … and so on. Watching customers as they browse and buy off the spinner, it is clear that it needs to be in a high traffic area. So, the spinner stays for the moment, for as long as we see a commercially viable return.

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retail

Mad magazine bagged

mad_magazine.JPGBoys of all ages love to browse Mad magazine (yours truly included) so imagine the shock to find this issue wrapped in plastic. No, it not is full of adult images, they have sent two free issues with this current issue.

While the freebies are a nice gesture, the plastic bagging will hurt sales, or lead to trash, since Mad is highly browsed.

The best alternative I can think of would be to have the giveaway product at the counter and a sticker on the cover promoting this. At least browsers would be satisfied.

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magazines

Inspiration from small spinners

One of the biggest challenges newsagents have when bringing in a new line is location. Too often the product is displayed in such a way that makes finding the right location difficult. Such was the case with the inspirational cards and mini books. We have these for several years, in one form or another, but it has only been in the last few weeks that we created a small display at the end of one of our card aisles that they started to work for us. Here is a photo of what we did:

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The easy comment is that we should have done this ages ago. Time and space were a challenge. It was only when we moved the Darrell Lea display from this aisle end and bought the table that we were able to use the space in this way. Now, instead of having these small, and annoying, spinners spread in various places, we have them grouped together. As well as each line selling better, we are finding customers buying two or three.

Our message for sales reps out of this is: as well as promoting product, show us via photos how to best display it in a busy and real-estate poor newsagency. Otherwise the spinner gets shoved from pillar to post, as we did, until either it is tossed or re-born when space and time provide the opportunity.

Our message for ourselves is to pay more attention to the stock we have and to keep working categories until we find the best way to display them in our store so that we achieve the return we need.

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Greeting Cards

Private equity and Australia Post

It has been suggested to me that the media speculation of two weeks ago about the future of government ownership of Australia Post may have been half right. I am told that one proposal is a management facilitated buyout of the retail network, leaving the distribution business in government hands. While such a move would not address international best practice in terms of the postal service, it would put significant dollars into the government coffers.

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Australia Post

Tax time stationery deals

We have followed the GNS Mid Year Sale with the newsXpress Tax Time Bonanza! sale. The range of products is quite different. The Tax Time offer has more branded product. It also extends my range into areas where newsagents have been weak. I particularly like that I have a paper offer which is not matched by Australia Post, K-Mart and others as happened with the GNS sale.

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We have a long table on our dance floor with all the products. Traffic is being driven by the promotional flyers distributed around the centre and at the front of our shop.

This is the second of these two page flyers we have distributed under the newsXpress banner this year. The regular pitch of stationery in these flyers is important, in my view, to re-educating consumers about newsagents, particularly newsXpress newsagents, and the stationery range and price offers – built around brand name product.

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Stationery

Welcome price increases

On the weekend I blogged welcoming the price increase for the Sunday Herald Sun. While newspaper publishers continue to be shy at adjusting cover prices even to keep up with CPI, magazine publishers are not. Auto Action, Picture Premium and Rugby League Week all have cover prices coming. Keeping up with CPI helps newsagents keep up with rent and wage rises. If only the newspaper publishers understood that.

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magazines

Magazine headers stand the test of time

magazine_header.JPG

How is this for a bit of nostalgia? John Klemm from Mildura send me this magazine header which he has had in his newsagency for around twelve years. At Tower Systems we started creating these personalised magazine headers 15 years ago as a serving to our software customers. They were the first of their kind, long before the marketing groups and MPA got into the space. We created these headers for around 150 newsagents.

The idea behind the headers was to help customers differentiate between the sea of titles in newsagencies. From a software perspective we used the provision of the headers to drive better category management and title placement in Tower newsagencies. We saw this as an appropriate way for us to engage with our customers and demonstrate how point of sale software can be more than a glorified cash register.

The header for Small Business which John sent me last week has held up well compared to some of the headers I see in newsagencies today. It certainly says something about the quality of the computer printer and ink we were using at the time.

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magazines

Sudoku for Dummies, newsagency edition

sudoku_newsagency.JPGMy initial reaction upon seeing Sudoku for Dummies was that newsagents cannot compete on price with bookshops. Then the text, Australian Newsagency Edition, was pointed out to me.

Having a Newsagency Edition allows us to promote this as an exclusive title. It also stops price comparison.

Newsagents ought to actively promote their exclusivity with this book. We have the title in a good position next to our range of sudoku titles.

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Book retailing

Australia Post retreats from online bill payment

The Australian Financial Review today reports that Australia Post is scaling back its online bill payment service. While it is not good karma to rejoice at the hardship of another, I say good on Bpay for beating Australia Post in the online bill payment game.

Newsagents entered the over the counter bill payment space in 2003 in partnership with Bill Express. The Government owned Australia Post engaged in all manner of blocking tactics to stop the small business network from competing. One tactic involved a claim of intellectual property over the barcode billers printed on their bills.

Today, more than three years on, newsagent over the counter bill payment transaction volumes remain small compared to Australia Post. I would say that this is, in part, due to the aggressive stance taken by the Government business.

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Australia Post

Eftpos poll

I have setup a poll to find out how newsagents handle eftpos fees. Once you click vote the free polling software will take you off the blog and show the results so far.

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Uncategorized

Glam, the magazine of the future?

glam.JPGAs the stats in the graphic show, Glam.com is hot. According to commentators, Glam is not the #1 internet site./network visited by US women. Venture Beat has a full story about Glam and its success.

One must ask if Glam is the women’s magazine of the future? Is this what will replace Madison, Cleo, Cosmopolitan and Marie Claire? While just about everyone reading this will say no, the visitor stats to the Glam website speak for themselves. 17 million in a month is amazing readership.

The key to the success of Glam appears to be the 350 magazines, websites and blogs make up its content network. This provides content diversity.

Glam is demonstrating that here is an online audience and that advertisers want to connect with that audience. This will, naturally, see some advertising migrate from print media which targets the same audience, to online and, specifically, Glam.

Newsagents ought to take a look at Glam and compare it to magazines on their shelves. It is another reason newsagents need to be investing resources in navigating to the newsagency of the future.

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magazines

Treasures cards are a hit

treasures.JPGNever have I seen such excitement around a new range than I have seen with this Treasures range from For Arts Sake. We put this tall spinner of regular size cards and a small counter top spinner of gift cards into our new Sophie Randall Cards and Gifts shop last week and the reaction has been immediate.

While I was reluctant to bring in a spinner to what has, until now, been a spinner free zone, it is the best way to display the pop out cards. Browsers can easily see what they are buying without having to handle the product. Indeed, the spinner is one reason the interest has been so strong.

I was in the shop yesterday and was surprised at how many comments these cards attracted – particularly from women. They loved the detail and that they could browse the range without having to take each out to look at it opened.

The gift cards – not shown in the picture – are especially popular. The $4.95 price point is no barrier because, as one customer said, the card is part o the gift.

We did consider the Treasures card range for the newsagency but considered the card space there already at its peak in terms of range. Maybe in a few months we will fold out an existing range with this.

For the record, I have no stake in For Arts Sake. They have not asked me to write this post.

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Greeting Cards

Another post it type ad stuck on The Age

age_june23.JPGHere is the front page of the A2 section of The Age newspaper today – the post it type ad which is often on the front page of The Age is now on the front page of the popular A2 section.

I pulled the fellow post it type ad for HBA and it ripped the page.

I overheard a couple of wait staff at a cafe this morning talking about the stuck on ads. One said to the other: I hate these. I wonder how much longer Fairfax will continue with ads newspaper readers hate.

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Newspapers

Promoting magazines on an LCD screen

lcd_acp.JPGACP magazines make it easy to maintain a relevant slide show on our LCD display at the counter. We have had the LCD in place for close to two years and for most of that time we created our own display. It was time consuming. For the moment we have switched to the ACP slideshow and are enjoying the time saving.

What we – the newsagents now using LCD displays – need is an easier way of merging content from Pacific Magazines, ACP Magazines and other publishers we want to promote – and in a way which more easily allows our content.

Customers notice these displays and I am certain the products promoted will benefit.

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magazines

Partworks island on the dance floor

We have created an island display on our dance floor to support the Charmed, Fifi, Harry Potter, Felicity Wishers and Yu Gi Oh partworks. It’s in a high traffic area and is driving good impulse sales.

partworks_dance.JPG

While we also promote these partworks in the appropriate categories in our magazine area, we always find that we get more business with this high traffic promotion – especially while the TV commercials are running.

The island display is a little smaller that when we started as we have sold plenty of stock this past week.

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partworks

The newspaper home delivery subscription rip off

Newspaper home delivery in Australia is an addiction newspaper publishers cannot shake. They appear prepared to give away anything to get a customer on board. Then, once a customer has fallen off at the end of an offer, they go back with the same heavily discounted offer to win them back. With deals of 50% and more off cover price it is no wonder the home delivery deals are popular.

The problem is that small business newsagents are funding a disproportionate part of the subscription deals. Following my post a couple of weeks ago about newsagent concerns about the Home Delivery of the West Australian, I received several emails from newsagents in South Australia documenting the falling return achieved from home delivery of the Adelaide Advertiser.

Some Advertiser home delivery deals result in South Australian newsagents receiving 11 cents for the delivery. Out of this they have to fund delivery drivers, plastic wrap and other business overheads such as fuel, management time and collection expenses.

Years ago, the same newsagents would have received 25 cents plus a delivery fee of around 7 cents a day – 32 cents in total.

It is only since deregulation of the newspaper distribution arrangements, as instigated by the current Federal Government, that News Ltd has driven newsagent newspaper home delivery revenue down by, as the South Australian example shows, up to 65.6%. Newsagents cannot afford this. While News Ltd has been cutting newsagent revenue, wages, fuel and overheads paid by newsagents have risen.

Below is a table prepared by a newsagent showing the annual cost to South Australian newsagents of the News Ltd cuts in home delivery revenue. If the data feeding into this table is accurate, South Australian newsagents are $500,000 down annually. This is off the bottom line. Some have suggested to me that this analysis is conservative and that the numbers are worse.

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What is happening in the newspaper home delivery space and to newsagents in particular demands a Government inquiry. In 2004 I called for a Productivity Commission inquiry to follow up the impact of deregulation on the newsagency channel. This latest data out of South Australia and the evidence that newsagents are 65.6% worse off today than prior to the Government driven changes suggests an inquiry is warranted.

While some will say that the reduction in revenue is a result of competition I would observe that there is no competition for home delivery of newspapers. I’d also note that while News Ltd has been charging less and less for home delivery of newspapers, advertising rates charged by News Ltd have increased annually. News Ltd is covered – newsagents, who have no control over their revenue are not.

Small business newsagents have been disempowered by government deregulation and one has to ask whether that is good competition policy at work.

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Newsagency challenges

Calling poor customer service what it is

Last year, at the urging of Victorian newsagents using the POS Solutions software, VANA, the local newsagent association, facilitated a POS Solutions user meeting at the VANA offices. I complained at the time as the announcement did not provide any background as to their involvement in the meeting. The VANA announcement read like an endorsement by VANA. Since then, VANA has facilitated several more POS Solutions user meeting, the most recent this week.

VANA continues to be less than clear in explaining that they are facilitating the meetings because POS has been unable or unwilling to host user meetings in the past. This maintains the air of endorsement.

Tower Systems, my software company, has run regular user meetings since the early 1980s. We fund these ourselves. We have never used VANA offices or resources to facilitate them. Further, we actively support VANA in a number of ways on a pro bono basis.

As a financial VANA member I am disappointed at the implicit endorsement of POS Solutions and frustrated that people who should know better at VANA do not understand that their involvement – even in providing an office and sending an email – implies endorsement.

If POS Solutions lets newsagents down by not providing user meetings, so be it. It is their commercial decision. Newsagents make a commercial choice as to the software they use and that choice should not be propped up by VANA in any way.

Tower Systems currently serves in excess of 1,400 newsagents. My understanding is that POS Solutions serves around 700 – this is based in part on information supplied by POS Solutions to one of their clients late last year.

With only one more Tower Newsagent user meeting to go – Darwin July 12 – let me recap some numbers. We visited 23 cities and met with hundreds of our customers. Our investment in travel, hotel rooms, meeting room hire and the like, we invested over $50,000 in these sessions. We will invest a similar amount in the second round later this year. The most common questions related to user of Retailer 2. We have received 20 suggestions for changes in the software and we will look at these as we consider future updates. In the early 1990s, when our support was not as good as it could be, we would face angry customers at user meetings. This time around, as has been the case for years, we faced happy customers. We’d like to especially single out our Sydney customers for turning up over several sessions – they usually have the worst attendance record. This time around was huge improvement!

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newsagent software