Author: Mark Fletcher

Posters have been important to promoting magazines and newspapers since … forever. Publisher research shows that a good poster boosts sales. However, posters are becoming out of date. With the costs of plasma and LCD screens dropping so much it is only time before newsagents entirely replace printed posters with electronic versions.

I’m involved in a new newsagency where we have no provisions for printed posters and instead are locating four large plasma units at the entrance.

The photo above is from a restaurant in Hong Kong – the menu display draws attention. It changes, too, promoting the business across to the other side of the mall. These units will lure more people than printed posters could.

This is on my mind today because current ‘best practice’ in the newsagency channel is having a certain number of print poster units. Best practice, for the future, ought to be based on elimination of printed posters and their replacement with an integrated set of plasma or LCD displays.

Time magazine and the Pacific Coffee House group here in Hong Kong have put together a deal whereby you get a free 12oz coffee of your choice when you purchase the special issue of Time magazine for HK$38.

It’s an odd deal since coffee is the product of the venue promoter – Pacific Coffee House – yet their product is provided free. Usually, the freebee is the product you don’t usually sell. Pacific does not usually sell Time magazine. I am guessing this promotion is being run the other way around to get around circulation audit requirements.

This offer is reminiscent of the Starbucks Fairfax deal where The Age and the Sydney Morning Herald are sold for 50 cents at Starbucks outlets. As a retailer actively promoting newspaper and magazine brands, I’m not happy when I see such heavy long term discounting. It gives off a confusing message.

This 7-Eleven store in one of the skyway malls – kilometers of above the ground walkways connecting buildings and public transport i Hong Kong – has a great range of magazines. Probably the best range I have seen in a 7-Eleven anywhere. Magazines are in the window and draw good attention.

This store is different to where we see c-stores place magazines in Australia. Also, Australian c-stores do not have this range. The display in this Hong Kong store is U shaped and they have, I am guessing, around 200 titles – more than I expected.

For some newsagents this could be their newsagency of the future? A smaller but more efficient convenience offering with magazines a key category but other products also drawing traffic and providing margin balance.

While some Australian newsagents already play in this space the execution, I suspect, is not as structured as this store in Hong Kong.

Jumbo Magazine House in Hong Kong is a magazine oasis – plenty of titles in various languages.

Their display varies between full cover, horizontal overlap and vertical overlap. They fit a lot of stock into a limited space. What is interesting is that they pre-bag many of the magazines – you can see the stacks at the front of the shop.

I am sure there is an operational reason for this. It must be labour intensive though. I took these photos yesterday afternoon and there were two people in the shop busy putting magazines in plastic bags.

See the flat stack on the left – two deep.

Walking away from the shop I wondered if this was the newsagency of the future for some – a small footprint shop in a high traffic area. Doing some quick math for a 50 sq metre shop and I reckon it’s a model worth considering in some centres. Some are playing in this space – Magnation – but the Jumbo Magazine House is different to that model.

For years we have been adding to the retail newsagency model and maybe, for some, the future is to be found by taking away and becoming more focused on one or two core categories. As Chris Anderson writes in his excellent book, The Long Tail, there is good money to be made selling small numbers from a large range and if, sometime down the track, there are fewer magazine retailers of range, who knows.

Wow! How’s that for a bright magazine display. It is as bright in real life as the photo shows. The magazines are a beacon. This place is in Hong Kong in one of the skyway malls above the road. The only reason I notices them was the brightness of the display.

The Australian Women’s Weekly, the grand old lady of magazine publishing, could be in trouble if sales data I am seeing is accurate. Despite considerable investment in re-jigging the title by ACP Magazines over the last two years, the title is challenged. While sales remain considerable, they are falling in the newsagency channel. This may not be the case in other channels but I suspect not.

Look at the last year or so: a design revamp, more tweaking, three price points. These changes are unsettling to the traditional AWW buyer. Add to that the new and refreshed titles encroaching on this space: Better Homes and Gardens, Notebook, Real Living, Madison … there are many new titles playing to the same or a similar demographic. Also, habits have changed. We consume in shorter chunks now and AWW is more designed for a longer read.

Talk to executives from competitor publishers and they will tell you they are concerned. The last thing any magazine publisher in Australia wants to see is an iconic title like AWW in trouble. Trouble for AWW will reflect as trouble for the whole category.

If my information is right and AWW retail sales are falling, it will be interesting to see how the new management team in control of ACP Magazines handle this.

As a retail newsagent I need AWW to be strong. It is an anchor title in the most important part of my newsagency. I build other sales around its on sale period each month. But now I have to look for other honey pot titles to drive add on sales – titles off which I can grow weaker titles.

I first noticed that AWW was in trouble in my store a year ago when it was the most redeemed magazine title under our magazine loyalty program. It was the title our customers took as their freebie. To me, someone who failed economics and statistics, this suggested that AWW was a discretionary purchase with many no longer wanting to spend the money.

To try and kick sales we have run over the counter promotions and introduced road block display strategies based around AWW. Each has worked well, adding sales of 25 and more copies on the day – mid through the on sale period for an issue. However, one cannot do this every month.

I have no easy solution for AWW. Rather, I just want to record that AWW is unwell and we – newsagents, ACP Magazines and, indeed, all in the magazine channel – need this situation turned around.

To write this is heresy but someone has to open the issue for discussion.

For the last two years we have run a co-location strategy with weekly magazines – placing them in a second location for the first two days of their on sale period. Ben Kay, manager of my newsagency feels that Take 5 and That’s Life will be as successful without this additional front of house support. I disagreed initially but now I reckon that Ben may be onto something for these titles. So, we are leaving Take 5 and That’s Life in the body of the shop. We’ll measure their sales and the sales of titles near them. The risk with co-location is that you may get fewer add on sales since the customer does not enter deep into the store. I’ll report back how this goes.

Our Delicious sales fluctuate but not enough to have our supplies slashed. This month we are down 50% on last month and with such a small quantity we cannot feature the magazine or co-locate. A reasonable assessment of sales over the last four issues would not have resulted in this cut – it makes me wonder if someone has overridden the NDD scale out systems or whether their systems have a problem. I am sure the folks at Delicious would be concerned to hear about supplies being cut as we have experienced. It could be that I am not alone in the cut this month.

Zoo Weekly was announced as magazine of the Year and Magazine of the Launch of the Year last night as voted by newsagents.

Zoo is proving to be a good add on sale – to newspaper purchases especially. Basket efficiency is helped in our case by a great stand the folks at Zoo organised for us – this has been placed next to our newspapers. I think the key is to get Zoo away from Picture, People and similar publications as they seem to be browsed by different consumers.

One question doing the rounds of the ANF newsagent’s conference on the Gold Coast yesterday was about the future ownership of NDD magazine distributors. Some seem to think there will be a change of ownership in a matter of weeks. Others are more wishing for change given the performance of many of the NDD titles – data from my newsagency and many others I have seen show NDD delivering the worst overall sell through rate for newsagents.

Newsagents place extraordinary faith in magazine distributors. Poor scale out decisions can cost the small business channel millions. This is why there would be strong interest among newsagents if NDD were to change hands for such may represent an opportunity to drive a more commercially viable relationship.

NDD was the centre of much discussion among newsagents attending the conference – many lamenting the cost to their business of the preparedness of NDD to supply through the channel titles which are not commercially viable on current terms at retail.

If interest in the in store display for this month’s Ralph magazine is anything to go off, the launch of Ralph TV should be a hit. Our display is drawing plenty of attention. I appreciate that some customers will take offence. I have to balance that with the knowledge that competitors such as supermarkets, petrol and convenience outlets are not likely to display this material and sales are therefore likely to be strong.

I am sure there will be guys asking us to keep the posters for them once we take the display down.