Author: Mark Fletcher

Sales of this month’s issue of The Monthly are double recent months at my shop. I wonder if it is a reflection of the polling results today showing Kevin Rudd as the preferred Prime Minister over John Howard.

The Monthly’s sales, being a relatively new title, are cover driven. This is why we try and place it where the whole cover can be seen as opposed to the usual magazine fixturing. For the first week of on sale the best location seems to be above The Age in our newspaper stand. We’ve tried placing The Monthly with our weekly newsmagazines without much success.

What prompted me to look at sales data is today’s cover story in The Age – when I saw it and The Monthly together.

Better store design can fix cash flow problems for newsagents.

I am currently working with eight newsagents on cash-flow challenges which mainly stem from magazines. In some cases the cash-flow problems have come about by poor management by the newsagent and in other cases magazine distributors are to blame. I’m not an expert, but I do have access to significant industry wide data through my software company and can apply that to gain an understanding of the problems.

In one newsagency, the overall sell through rate of all titles from each of two magazine distributors is 45%. That is, 55% of all magazine stock sent over the course of a year did not sell. The combined cash-flow position for the two distributors in the newsagency in question is in excess of $25,000. So, taking into account retail real-estate, labour to manage the titles and invoices and credits and the newsagent is $25,000 worse off for having this stock.

There is no excuse for this behaviour given that both companies have sales data which would tell them the negative financial impact they are having on the newsagent. They are ignoring their own data. Some reading this will say the newsagent can cut the title from what they receive. This is not how magazine distributors operate. Every newsagent has evidence of distributors agreeing to cut a title only to find it or a similar title added to supply in a few months.

This photo from my shop illustrates part of the problem newsagents face.

We have two big aisles of magazines. It takes up 40% of our shopping centre based floor space. This is how newsagencies have been laid out for years. Chunky magazine display space. We’re the magazine specialists, of course we will give plenty of real-estate to the department. Distributors know that and they scale out accordingly.

Our shops are designed to take a huge range without displaying it in the best possible light.

Newsagents need to reduce magazine shelf space by as much as 33%. Until this is done and suppliers formally notified in writing, the supply model will not alter. Magazine distributors have shown collectively that they are not capable of managing our real-estate so we must. Of course, we should have been doing this years ago. But we trusted our partners and we trusted our shop designers – these designers have a lot to answer for.

Most newsagents won’t reduce magazine space because they think they have nothing to replace the stock with and because, despite the issues, magazines are easy – no stocking, pricing or ranging decisions. So, laziness and lack of entrepreneurial spirit stops the problem most complained about being addressed across the channel.

The entrepreneurial newsagents will win. Some are active today and history will recognise them as visionary.

Too often we’re our own worst enemy.

With so much visual noise in newsagencies it’s hard for publishers to cut through. The folks at OK! have hit on a good idea with this counter unit. The key is to have product nearby for impulse purchase.

Magazine publishers are building extraordinary online traffic for established print brands.

Last year the Magazine Publishers of America published the Top 10 Websites Associated with Magazine Brands as collated by the Media Industry Newsletter. The growth experienced by some of these magazine websites is extraordinary. Take Vanity Fair – pageviews up 64% November 2006 over October 2006; unique visitors up by 65%. That’s extraordinary growth. Other magazines are experiencing similar: Premiere; Popular Science; Time; In Style; Men’s Health.

What’s interesting yet not unexpected is that many of the titles experiencing extraordinary growth in online traffic are experiencing flat or falling sales over the retail counter. Take Popular Science: 1,055,038 unique visitors. Great online growth while at retail the science category in retail is falling – down more than 10% in 2006.

Magazines are not dead. Many titles are using their online presence to stay in touch with readers as well as attract people new to the brand. Some categories are fading and the retailer challenge is to balance real-estate up to reflect this.

The launch of Windows Vista is not as well supported by magazine publishers as previous Microsoft Windows upgrades.

As of today, Australian newsstands have one dedicated Windows Vista title plus APC and PC Authority with good Windows Vista coverage.

This lack of Vista product may be sue to delays in local distribution of overseas titles or due to the decline in the computer title category in favor of accessing more timely information online. If Vista rolls out like iTunes titles, we will have three or four in the next few months – too late to capitalize on the considerable interest today.

UK newsagency Baxters has launched a website selling magazines. Onlinenewsagent focuses on selling single copies – offering same day shipping of over 3,000 titles. They even have some Australian titles available.

Newsagents across the country have setup feature displays for the latest issue of Ralph magazine as part of their commitment to in store promotions. Our display has offended some customers. If any more complain we’ll take it down. While we need to promote the diverse range of titles we carry, there is no point in getting our most regular and valuable customers, women 35 and older, offside. Part of the problem for us is that our feature display areas are right next to our women’s magazine area.

I was talking to the owner of a petrol outlet and asked why they don’t do displays like this. His answer was blunt: what and upset half my customers? No way. I suspect that the newsagent displays will hel;p boost sales in these non compliant petrol outlets.

I want to promote Ralph and other men’s titles – I’ll find a better wan to do this without our core customers.

As part of the magazine shuffle I blogged about yesterday was the move of Notebook and Real Living from the interiors area to the high traffic women’s area. These are hard titles to locate. Their covers suggest interiors but inside they cover a broad area. They are like several other new and refreshed titles which cross segments and make placement challenging.

We’re not sure that this is the right location – only time and data will tell us if the move is right. The challenge is where do they belong if not here?

Sales of health magazines are booming, growing more than 10% in 2006 compared to overall magazine category growth of just under 4%.

Responding to this growth and the opportunity of several new titles, we have broken with traditional newsagent magazine layout thinking and moved the Health category to better real-estate.

Our health titles used to be wedged between wedding and children’s titles. Now they are located near the top of our busiest magazine aisle and next to the popular food section. The move helped us address a location dilemma – the placement of food titles which focus on health such as the Better Homes Diabetic Living.

A side benefit of the move is people finding new titles when they get to an area their favorite titles used to be. Given the frequency of customer visits many become store blind so changes in magazine locations can boost sales.

Newsagents tend to see magazines as set and forget products. In some respects, with 1,300+ titles in stock, moving categories can be too daunting to contemplate. Our simple move took two hours of researching and planning and another hour and a half to execute. It was like playing a puzzle game, moving block by block and sometimes going backward until the goal was achieved.

The move is less than a week old so it is too early to assess any impact. We’ll measure carefully and adjust as guided by sales data.