Check out this blog post from “Hugh” about being told off by a newsagent for browsing magazines. Of all the newsagencies Hugh had to walk into he chose one where the newsagent yelled at him for doing what many newsagents want customers to do. We welcome browsers at my newsagency.
Last year NDD sent us 64 copies of bargain shopper. We returned 34. Some weeks later they sent us another 40 of the same issue and we returned 30. Some weeks later they sent us 29 and we returned 18. In all, 133 supplied and 82 returned – a 38.3% sell through rate. Fast forward to this week, NDD, a company claiming to be magazine distribution experts, sent us 75 copies of the 2007 edition of Bargain Shopper.
This is unconscionable conduct by NDD. There is no support in our sales data, data they also have, to support such a scale out. In my store alone this title is costing me $559.68. Based on my sales history I can expect to return more than 60% of stock supplied. This means I will have $447.75 of my cash being held by NDD purely for their benefit. The cost of this cash, the real-estate taken and the cost of labour wipes out any profit from the title.
It is appalling that my newsagency and thousands of other newsagencies are being abused by NDD in this way. It is this behaviour which is killing our channel. I will lodge a complaint with the ACCC about this conduct. Hopefully other newsagents will as well.
While I will also early return the half of what I have been supplied and make a case to NOT pay for this excess stock, it is appalling that my time is wasted with this activity.
It’s January and time to process the return of unsold magazines from last month. I am hearing from newsagents that Network, the PBL magazine distribution business, is not wanting all last month’s unsold titles back yet. For example, in several cases, stores have been asked to return one week’s returns for Woman’s Day from December 2006 but no the others. This means the stores carry the cost of unsold product an extra month.
If the reports I have received are accurate and if it applies nationally, the bottom line benefit to Network could be over $2 million. That’s money sucked out of newsagencies, small businesses which cannot afford such a cost.
TV Guide sells over the counter for US$2.49 and, as of this week, is available online for US$1.76 per issue through digital magazine vendor Zinio. It’s logical that TV Guide titles move online but, hey, as a retail newsagent I don’t want to lose these sales. Ah, change…
The Zinio TV Guide offer could be better – truly interactive. It could use the program guide as a navigation aid to drill into stories one would usually expect to find in other titles. Now, that would be disruptive.
Fleur Layden at the Courier Mail has the story claiming that the Trading Post division of Telstra owned Sensis is in discussion with Australia Post about an escrow arrangement to offer buyer protection for expensive items.
While I don’t see this move as them taking on eBay, it would have been courteous if Trading Post had talked with newsagents, their more natural partners. While sales of the Trading Post have tanked, we all still carry it in our stores. Partnering with Australia Post is flawed because the 863 or so Government owned outlets are open 25 hours a week less than newsagencies.
To take on eBay, Trading Post needs to be more competitive on price, provide tools for better quality ads and address eBay’ weaknesses such as ticket scalping.
The theft of home delivered newspapers is a worldwide problem as this blog post by New York resident/writer/journalist Dimitry Kiper shows. No matter whether you’re in rural Australia or high rise New York, there are tight ar*se people who prefer to steal a newspaper than buy one. In our small newspaper distribution round it used to cost us at least two or three newspapers a day – newspapers our distribution people were certain they delivered.
I wish there was a way we could humiliate these petty criminals. Two hundred years ago people were transported from England to Australia and a life of hard labour for stealing less.
I found Dimity’s blog post courtesy of Jeff Jarvis’ BuzzMahcine.
We will offer free WiFi access from our newsagency in Forest Hill Victoria on a trial basis from Monday next week. We’re working up promotional material which provides context for the trial. Part of our pitch will be that we’re helping our customers go beyond the pages. It will be interesting to see how it goes.
Forest Hill is way out in the suburbs of Melbourne. It is not a commuter heavy area so I’m not expecting huge numbers. This trial is more about seeing whether such a trial has any value in the ‘burbs.
Oops. I reckon that’s what execs connected with Marie Claire will be saying when they see their product on in newsagencies this month. Check out the photo to the left. It’s a waterfall display of Marie Claire product in traditional newsagent magazine fixturing.
These free sunglasses hide the brand. They also require considerably more real-estate to display the product.
While the offer is good, the execution is poor. The publisher would have been better served providing newsagents sunglasses to hand out from the counter. In fact, this is what some newsagents are doing – it protects the giveaway product from damage and almost certain theft. While this initiative by newsagents takes time, it’s an example of them protecting the product and better serving their customers.
Suppliers complain about lack of compliance from newsagents on a range of fronts. Here’s an example of lack of compliance by a supplier.
Emma Riley Welsh is the first born of Simon and Julie Welsh. Simon is one of the software developers at Tower Systems. Click on Emma’s name and you’ll be taken to the birth notice Simon placed at our Find It our new online classifieds business. Birth Notices at Find It are free. This includes photos, video and sound. Newspapers ask the family welcoming a new born to fork out $50 to $70 for an old style birth notice. The guestbook also allows well wishers to make the Birth Notice living. This birth notice is another example of Web 2.0 at Find It.
In addition to selling almost 1,000 of these newsXpress calendars in our shop, we mailed 1,000 to our customers last week. The reaction has been fantastic, amazing, better than we ever expected. Customers have been coming in each day thanking us for the gift and our letter. Actually, we’re overwhelmed with the kind words coming back to us from across the counter.
The toughest part of retailing has been newsagents and book selling, where sales dived throughout 2006, with a 4.5 per cent drop since June. Mr Ganz said many of their sales had been cannibalised by supermarkets.
There are signs retailing is becoming increasingly polarised.
“Top-end and bottom-end retailers are doing well but those focused on the vague middle market are struggling,” said Andrew Cavanagh, of the Australian Centre of Retail Studies.
So reports David Uren in The Australian today. I know of newsagents who would agree with the report and others who would disagree. I’d like to see the data for city versus regional / rural and shopping centre versus high street and a comparison of socio-economic areas.
The newsagents doing well, and there are many, are those who make their businesses stand for something, where they control the business. We have to be bold, not necessarily big, but bold in making a statement about what our business stands for. The more valuable we are to our customers the more they will spend.
We must create our own businesses and turn our backs on the businesses our suppliers created for us more than 100 years ago.
Internet speed issues aside (due to the Dec. 26 earthquake) it’s good to see PCCW offering free WiFi access at Hong Kong airport.
As I noted here a few weeks ago, I’d like to see the Government roll out free WiFi access across Australia,. Newsagents would make ideal hotspot points. I’m sure you’d find the 4,600 business owners keen to support such a national project.
A smart country needs a smart infrastructure and free WiFi wound provide an excellent backbone.
While I don’t hold much hope of any politician understanding the importance of a national free WiFi network, I remain amazed that free WiFi is NOT available in our major airports. Instead, the owners prefer to use WiFi as another revenue opportunity. Most major international airports offer free WiFi. Not ours.
I really like the look of this Relay shop at Hong Kong airport. It’s efficient in its use of space and easy to shop. Being shallow there is none of the dead space at the back of the store we often see in shopping centre newsagencies.
Given the average shopping centre rents for newsagencies of between $900 and $2,000 a square metre and given our lower than average retailer margin (28% – 32%) it is time we thought more about our footprint. Sure this Relay store is not as impressive as a 250 sq metre store but I bet the return on floor space is better.
I know in my shop that only 20% of our total store traffic gets to the back 50% of our space. We have tried all manner of displays and promotions. Next time I think I’ll be looking for a shallow but wide shop.
How great would it have been to have this fella in our stores leading up to Christmas and the launch of the Happy Feet movie. He could have been the prize in a giveaway. His presence in store would have been a magnet for the kids and kids at heart. The little penguins can be landed in Australia for just over $1. I reckon they’d retail for $9.95. The big fella could be landed for around $200 – the expensive stuffing is the killer.
This is an example of how we could better tie in with blockbuster movies and events – using stuffed characters and similar items for in store promotion and offering smaller versions for sale. It takes planning and being in the know about upcoming events.
It’s too late now for the penguin but the mainland China based manufacturer I spoke with yesterday already knows what they will focus on in 2007 based on planned movie releases.
McDonalds stores in Hong Kong are being used as distribution points for a free daily newspaper. Check out the orange stand in this photo.
Distribution is key for free daily newspapers as recent experience in London shows. That this publisher in Hong Kong is using McDonalds says something about their target demographic and the need for free daily newspapers to use distribution channels different to traditional newspaper channels.
While as a newspaper retailer I don’t like seeing newspaper product available through another retailer, I accept that it is a consequence of the challenges facing newspaper publishers. These free daily newspapers are critical to their revenue model – just look at the success of MX.
Virgin Mobile, an Optus company, yesterday advised newsagents that commission on the sale of Virgin mobile phone recharge product is to be cut again. What used to be profitable business for newsagents is now of questionable worth. Consider this, a recharge transaction takes between one and three minutes and newsagents make, on average, a dollar gross profit. Once you allow for card fees and overheads it is, as I say, questionable business.
Virgin has a responsibility to answer the following questions for newsagents:
Has Virgin cut the commission it pays to Coles, Woolworths and Australia Post?
What commission is Coles, Woolworths and Australia Post on? (I ask because of evidence published here last year of Vodafone paying Coles 16% when it cut newsagent commission to 5%.)
Has commission to wholesalers and any other middlemen between Virgin and newsagents been equally cut?
What is Virgin’s justification given that its profits are strong and given that newsagents do not have any means of reducing the cost of providing the service?
Under corporate responsibility at the Virgin Mobile website, there is nothing about fair treatment of its retail network or respect for those who have helped build its brand.
I understand that commissions on telco recharge are falling globally. This does not make Virgin Mobile’s move acceptable. Newsagents need to achieve a fair return on labour for all services offered.
The lemming like approach of telcos to drive commissions down and down, once newsagents have invested tens of thousands of dollars in equipment to be able to do the recharge, is disrespectful. If their profit situation demanded it, okay, but it does not. Companies like Virgin have been happy to use newsagents to gain market share and now it is achieved they cut newsagents out of the game.
How socially responsible is that?
JPG Magazine has cleverly reinvented itself as a community driven publication. Yes, the website exists to gather content and voted to determine the content of the printed issue. Winning photos are published in a bi-monthly print magazine and get US$100 plus a free one-year subscription. While it’s not new, this idea of letting the community vote on content, it is new in the magazine space. It makes for a very dynamic product which, in theory, should achieve excellent sales. So, the website feeds the magazine which, in turn, feeds the website.
Here’s an example of how newsagents are poorly served by some of their suppliers.
Today, in Hong Kong, I met representatives of company which manufacturers Wiggles products under licence. The range is ideal for newsagencies especially since we sell the Wiggles magazine. The range lends itself to the plan-a-gram approach where all stores have a consistent range and retail message. Unfortunately, our main wholesaler for this type of product does not take the range. Rather, they choose two or three items and this is all newsagents see as being available and, more often than not, pass on the products. It becomes self defeating.
This is a missed opportunity. The success of our retail channel depends on smart buying. From what I have seen today, those buying for us are not as smart as they could me. We ought to have this Wiggles range, and other ranges from the same company, and ‘own’ the space.
Our range of magazines and greeting cards opens newsagencies to demographics which we can leverage for other sales. This is where those who buy for us ought to focus their attention – on products which complement the unique newsagent demographic.
An average 7 Eleven store in Hong Kong has between 200 and 300 magazine titles – many more than you will see in a 7 Eleven store back in Australia. They’re displayed as shown in the photo:
Many magazines are sealed, even non adult product. The manager I spoke with told me this was to stop people reading them. Not all stores I saw had the magazines bagged this way.
While Hong Kong leads the world in many areas, magazine retailing is not one of them based on the displays I have seen. However, considering that they carry barely 20% of what you see in an average newsagency maybe they are leading. They control their range so it must be working for them.
Rafat Ali at PaidContent reports that Plastic Logic, developers of flexible plastic content readers (plastic newspapers maybe?) has received US$100 million in venture funding.
The company will use the money to build a factory in Dresden, Germany to make the display modules for electronic reader products…these flexible active-matrix displays can be fabricated like the pages of a book and used to display downloaded content of books or newspapers. It will start production in 2008.
I talk here about newsagents facing a tsunami of change. The Plastic Logic funding will fuel part of that tsunami.
From the Plastic Logic press release:
“Our displays will enable electronic reader products that are as comfortable and natural to read as paper whether you’re on a beach, in a train or relaxing on the sofa at home.†stated John Mills, Chief Operating Officer at Plastic Logic. “Wireless connectivity will allow you to purchase and download a book or pick up the latest edition of your newspaper wherever you are and whenever you need it. The battery will last for thousands of pages so you can leave your charger at home.â€
“Even in this age of pervasive digital content, our research shows that consumers are very reluctant to read on laptops, phones and PDAs,†said Simon Jones, Vice President of Product Development at Plastic Logic. “We still carry around enormous amounts of paper. However, people are making less room in their lives for the weight and bulk of paper and are becoming more sensitive to the environmental impact of printing to read. We believe there is a substantial unfulfilled need that Plastic Logic can meet by making digital reading a comfortable and pleasurable experience.â€
This tsunami of change is an opportunity for newsagents. Now is the time to grab the surfboard and lead your business through change. Take control and choose your future.
Newsagents are not alone in their frustration with the BOPO card launched a couple of months ago by Bill Express. David Vennik blogs (loudly) about his experience. While David’s post, in my view, is over the top and unnecessarily obscene, it demonstrates the risk of blogging to companies and, at the same time, the value of the medium for lovers of democracy.
Newsagents are less colourful in their complaints about BOPO but just as angry over being charged up to $200 for training which lasts no more than a few minutes.
When I did the Google search which brought up David’s blog post, I also found this post at the Multiple Sclerosis Peer Support Community. That link pointed me to this discussion about BOPO at the Whirlpool forums. Fascinating.
Back to the newsagent issue with Bill Express and BOPO. Bill Express needs to listen to newsagent complaints and reconsider their decision to charge for the training. As their partners, newsagents deserve better treatment.
7 Eleven stores in Hong Kong have a great newspaper display out the front of the shop. Apart from a few street vendors, they dominate the retail of newspapers and magazines in the city. These newspaper displays are excellent. Since their shops are only 30 and 40 sq metres they’re not trying to draw people that far in off the street. The size of newsagencies in Australia makes drawing people in essential.
By the way, check out the height of the store. Like a lot of convenience retail here, you take the least amount of space possible.
Residents and visitors to Hong Kong know how much we have come to rely on bandwidth in our daily lives – it’s in short supply and has been since damage caused by the Boxing Day earthquake. Far away from the skyscrapers which cover Hong Kong cables were severely damaged and this has reduced bandwidth available in the region. Hong Kong has bee hard hit. East Asia Media News reports the situation well.
Slow internet speed means people are rationing what they do online. It’s a drought of bandwidth and there are implications everywhere: from business to individuals. Even getting emails through is a challenge despite what authorities say. In my case I wanted to complete some banking and what would usually take a minute or two back home was a game of hit and miss over three hours.
While bandwidth is not a natural resource, it is as important to our lives. Many purely online businesses do not have a fallback for extended periods of outage or bandwidth shortage. I was in a shop today where they are connected to the head office for all transactions and have gone manual because of speed and reliability. People using Skype have been hit particularly hard. There are stories of prices going up if you want more bandwidth. There is also some frustration that businesses are given preferential treatment during the day.
Back in Australia we are in the grip of a dreadful drought and life with water restrictions is normal. Here in Hong Kong they are living with restrictions of a different kind. Both resources are crucial to daily living and it is not until they are in limited supply that you realise how much you waste.
I have go to now. Bandwidth is precious.
It stands to reason that when three greats of cricket fans will want to get a hold of the magazines featuring them. ACP’s Inside Cricket featuring Shane Warne on the cover has done exceptionally well as did Alpha last month for News Ltd. While McGrath and Langer are greats of the game, it is Warne who sells magazines. Oh, and newspapers for that matter.
We have used the focus on Warne to draw attention to the range of cricket and other special interest sports magazines we sell. The sports category is surging as a result.
Newsagents need to be opportunistic like this every day. While we create feature displays around single titles as requested by publishers, we can also do well by creating feature displays based on major events and feature a range of titles. This better demonstrates our point of difference over others selling magazines.
Even though he has returned from the game Shane Warne will sell newspapers and magazines for years to come, thankfully.
