NDD cries foul on Alpha
AUSTRALIAN NEWSAGENCY BLOG GETS IT WRONG
Incorrect information has been reported in a recent Australian Newsagency blog, alleging that NDD ignores retailer supply level requests for Alpha when in fact retailers were invited to review their supply in NDD’s e Newsletter on 7th April. The blog also suggests ‘lack of control’ by retailers has resulted in ‘some’ closed NDD accounts – an opinion that is unspecified, unsubstantiated and incorrect.
This is what NDD sent out to newsagents overnight. They are responding to my April 7 blog post. It is a surprising statement from the company. I approached NDD last year to have them stop supplying me with certain titles. They refused. Indeed, I have a stream of correspondence on this with the company. This is what caused me to blog as I did.
Through my work with other newsagents I have more examples of NDD refusing to stop supplying titles when requested by newsagents. Newsagents have also told me that they closed their NDD account because of this issue.
While NDD can make any claim they like, their claim that I got it wrong with what I wrote about Alpha is, itself, wrong. The way for NDD to fix this is to agree to every request from newsagents to cut supply of titles.
Newspaper and magazine distribution changes in the UK
The Financial Times reports on changes in the UK around the distribution of newspapers and magazines.
We ought to expect structural changes globally in the distribution of newspapers and magazines as publishers look for ways to improve efficiency and increase or at least protect sales.
While not on the scale of the UK changes, the changes about to flow here in Australia around the new XchangeIT platform will separate newsagents into those moving forward with magazine distributors in pursuit of efficiencies from the shop floor right back to magazine publishers and those standing still with more manual and less flexible processes.
Take5 tips book gets lost
The Take 5 tips book sent with our magazines a week back is lost in traditional newsagency magazine fixturing. Since we do not have a regular book department there is nowhere else to put this one-off publication. We ought to be asked about specialist publications like this because sending them to many newsagents is a waste of money – I took it off the shelf after I took the photo.
Green Living launched
The launch issue of Universal Magazines’ Green Living went on sale yesterday. The product looks good. It strengthensour green magazine segment – an overdue move here in Australia. I’d expect several other titles to beenfit from this. I am frustrated that we were not provided marketing collateral with which to launch the new title in-store. While merchandisers are said to be on the road with this, it should have been provided when the stock arrived as that is when we allocate promotional space.
This long (two month) on-sale makes us a financial contributor to the launch. This happens all the time with new titles. It is part of what makes newsagents appealing to publishers – we fund them into our space.
One day, I hope, we will pay publishers only for what we sell at the end of the on-sale arrangement. Better still, we pay only for scanned sales – I’d be happy to pay weekly for this – publishers would get their cash for sales much faster than happens today.
I hope Green Living is a success. We need to build a stronger green magazine segment.
4WD magazine does not move
The Complete Aussie Guide to 4WDs has been a dud title for us – zero sales in eight weeks. Rather than persevere in an over-serviced category, we are returning 100% of what we received early. We have carried the cost of this stock, funded the real-estate and labour and now will cover the freight cost of shipping the failed stock back to the distributor.
This title is not alone in delivering such a poor result nor is my newsagency alone in experiencing this. I suspect that at any point in time the newsagency channel has millions of dollars of magazine titles on our shelves for which a single copy will never be sold.
I want to control what I receive. I can with Gordon and Gotch and it works well for me, for Gotch and for their magazine publishers. The control gives us a stake in the outcome. If they offer me a 4WD title I need to be sure since all of our available space is allocated and given that the category performs at a less than average rate. I make decisions on the whole category and not just on what one distributor sends me.
Do we need more cookbooks?
I was surprised to see Marvellous Mince arrive in-store this week. Published under the Woman’s Day brand, this $6.95 cookbook is from ACP Magazines, publisher of the successful ACP cookbooks which retail in newsagencies for $12.95.
If more cookbooks are released under the Woman’s Day banner we will need to reallocate space – a challenge in dealing with some publishers and distributors.
This is a good example of where the channel needs to manage access. Since we don’t do this, any titme which wants shelf space can get it. We lose because we carry under performing titles for far longer than any retail competitor would.
I’ll support Marvellous Mince but I will be on the look out to reduce my exposure elsewhere in food to balance the cost of the new title.
Ethical shopping guide popular
For some reason we were not allocated any copies of The Guide to Ethical Supermarket Shopping by distributor NDD. This is a pity because we missed plenty of sales. It featured in The Age a few days after release – this is the first we had heard of it, when customers asked us for it. While we now have stock, it is frustrating that we had to chase The Guide to Ethical Supermarket Shopping yet have no challenge in receiving titles which do not sell. I shake my head some days at the magazine allocations process.
Missed opportunity with Jobs Guide 2009
We received Jobs Guide 2009 this morning. It is published by the Department of Education, Employment and Workplace relations. The Jobs Guide has a sell price of $26.95 and is not due for return until the end of January 2010. These are not terms which are small business friendly. Especially for a print product which is unnecessary – given that all content is available online.
And while on their website, it should list that the guide is available from newsagents.
Sales Based Replenishment works
Despite criticisms in some ill-informed quarters, the Sales Based Replenishment program being driven by ACP Magazines and Network Services is working. I have first-hand evidence. Woman’s Day sold very well at Forest Hill on Monday last week, more than usual for a Monday. SBR noticed this and provided more stock – thus avoiding a certain sell-out by the end of the week. ACP wins. We win. We did not have to do anything to trigger extra stock.
Through the newsagent software company I own, Tower Systems, I have been involved in SBR since the first trials began in 2005. This latest incarnation is by far the best.
The experience with Woman’s Day this week is evidence of how proper use of point of sale software can help a newsagency increase sales.
When Take 5 magazine goes missing
Half our Take 5 supply was missing on Wednesday and Network Services was unable to correct this Thursday so we miss out. The magazine distribution model does not deal well with missed magazine deliveries, especially in odd delivery weeks like around Easter. We have customers who are frustrated. I am frustrated.
Every Take 5 sale lost as a result of this is an opportunity for a customer to try somewhere else. We estimate that we will lose between 40 and 50 sales as a result.
Drowning in Street Rodding magazine
Magazine distributor NDD must know something we don’t because they increased our supply of Street Rodding magazine by 50% despite us selling less than half the last issue. NDD gets our sales data daily, they would know that it is unlikely we will sell the 50% extra stock. I don’t blame the publisher, Graffiti Publications,this is an allocations issue.
Newsagents featured in Mediaweek article
Mediaweek this week publishes an interview with me about the newsagency channel and how I came to be involved. Click here to see a full copy. I appreciate the time James Manning took to understand some of the challenges newsagents face and the complexities of our business model.
Given the readership of Mediaweek, hopefully the article will facilitate a greater understanding of why we newsagents act as we do on some issues.
Our best asset is our network of retail outlets yet it is our most misunderstood and underutilised asset. The Mediaweek article puts this opportunity on the table again. Hopefully, publishers and other suppliers engage.
NDD likely to block newsagents on Alpha magazine
I know from my own experience recently with magazine distributor NDD that they are unlikely to respond to requests from newsagents that they not supply Alpha. I wrote to NDD asking that they not supply certain titles. They threw up all sorts of barriers and eventually refused to give me permission to control the titles I get for my newsagency.
If NDD follows the same approach for newsagents who ask to not be supplied Alpha we could find ourselves forced to take Alpha. It is this lack of control which has led some newsagents I have spoken with to close their accounts with NDD. I guess they have exercised the ultimate control.
It should not come to this. If I am expected to carry the risk of stock in my newsagency then I ought to have absolute control over the stock I carry. It is my money after all. NDD appears to have forgotten that. Just as News Ltd has forgotten that it was newsagents who made Alpha the sales success it is today.
Alpha magazine coverage spreads
Posts and comments here about Alpha magazine and the plans of some newsagents to boycott the title have been covered by mUmBRELLA, a respected site covering media and marketing in Australia. I especially like that they have also published the picture showing how one newsagent converted the Alpha stand into a New Idea stand.
It is good to see the newsagent stand against a supplier get broader coverage. This is a challenge for us because Fairfax and News would never publish the story.
I’d urge newsagents to continue to engage on the Alpha issue. Let your News Ltd representatives know what you think, comment on Alpha posts here, If you move Alpha, put a sign up advising your customers why, If you remove Alpha altogether, be sure to let News Ltd know why.
As I noted in an earlier post, what News Ltd has done to newsagents with Alpha is un-Australian. Personally, I consider it to be unethical. We need to have the balls to maintain our rage. If sales of the magazine suffer, advertisers will notice and News will become engaged.
Now if only newsagent associations would get behind this issue.
Interest in the Australian magazine system
I have been talking over the last few weeks with people in two different countries about the Australian magazine distribution system. They wanted to know specifically about EDI standards and how compliance is driven. In each case, their country is considerably behind Australia in terms of management of supply – invoices are manually processed, returns are manual and credits can take three months or more because of this.
While I have serious issues with our magazine distribution model, it is cleasr from talking with others that the Australian system is nowhere near the worst in the world. That said, it does not stop me wanting the AAustralian magazine distribution system to be better and fairer to newsagents. I want to see costs for newsagents reduced, supply which more closely matches sales and better ranging control so that we carry a commercially viable range and not what three distributors separately think we should have because it suits them.
Mediabiznet reports on call for magazine supply adjustment
My March 22 blog post calling for urgent adjustment to newsagent magazine supply has been picked up by mediabiznet – an information soruce for media and marketing industries. It is good to see the issue of magazine oversupply, especially imported titles, being covered by others. I wish they had linked to the original blog post as it provided more details on why the adjustment is necessary.
Podcast changes newsagent opinion about sales based replenishment
I have received some excellent feedback from newsagents who have listened to the first newsagency industry podcast which was published by Mediaweek last week and in which I participated. The most significant feedback has been around ACP Magazines’ Sales Based Replenishment program. Several newsagents commented to me that the podcast changed their opinion about SBR and that they now support the initiative.
I like SBR because it relies on good use of technology in newsagencies. The reward for newsagents is eliminating sell-outs, especially for monthly titles which experience an unexpected spike in sales.
The podcast helped explain the benefit as well as some of the history to the latest incarnation of SBR.
Promoting Annette’s Sym’s Symply Too Good cookbooks
Like many other newsagents, we received many copies of each edition of Annette Sym’s Symply Too Good To Be True cookbooks on Friday. While I suspect (hope) that the Network Services magazine allocation system made a mistake, we are trying to make the most of the situation by creating a display at the entrance to our main magazine aisle. We have dressed an old stand and given it over entirely to Annette Sym’s popular brand. I certainly saw customers browse products from the stand today after they had made their selection of another title elsewhere in the aisle.
Looking at the photo now the only issue may be our placement next to the Darrell Lea stand. Hmm…
News Ltd forgets how important newsagents were to Alpha
News Ltd was singing our praises prior to the launch of Alpha magazine and telling analysts how important we were.
“That positioning in newsagents is a massive advantage,” he says. “And the strength of the newspaper brands gives that instant imprimatur, gravitas and authority.”
Phil Barker, Managing Director of News Magazines was quoted in The Australian on April 28, 2005.
We need to understand the importance of our real-estate and run our businesses accordingly. While the opportunity to do this nationally has well and truly passed, we do have an opportunity through other communities – such as marketing groups which have levers of discipline.
What News has done with Alpha is a wake up call. Only time will tell if it did indeed wake us up.
Overloaded with patchwork magazines
The photo shows three of the packs of patchwork magazines from Express Publications. This is a perfect example of oversupply. The titles in the packs are similar. They demand space for an already well-serviced segment. Given the packaging and quality of the products themselves I’d regard these as junk – sent in the hope of theft or, maybe, purcahse by a less discerning consumer. having to deal with poor selling packs like these from Express soaks up our time and cash, away from more profitable magazines.
The magazine distribution model is in need of urgent review. I was hopeful that the ACCC questions about this might lead somewhere. I am now concerned that this appears unlikely.
ANF lets newsagents down over Alpha
The ANF made its first statement about the Alpha magazine situation today and said, well, not much. Indeed, they reported the facts as we know them but proposed no action on behalf of members. Newsagents can now add disappointment with the ANF to their disappointment with News Ltd on the Alpha mess for it seems that a week after the Alpha announcement, the ANF does not have a plan.
To those inside the ANF who complain about what I have written here I’d say that this blog post recording another ANF failure to lead could have been easily avoided. Newsagents are angry. Your constituents are angry. Ask what they want of you and do it. This is what newsagents expect from an association – to have their views robustly represented.
No wonder News Ltd thinks it can get away with treating newsagents in such a poor way.
Warning to newsagents over Alpha magazine action
Newsagents ought to consider taking care in what they say publicly about their plans to remove Alpha magazine from their shelves or block sales in some other way. I have heard that questions are being asked about whether newsagents are colluding to harm the sales of Alpha. If questions are being asked, I know this will be enough to scare off some newsagents. Newspaper publishers are good at scaring newsagents. It is why we accept making less in real terms today than we were making ten years ago. Many of us are like deers caught in the headlights – too scared to take care of ourselves. Publishers know this about us.
That said, I have received more calls from newsagents who are removing Alpha. Many of these are newsagents who supported the title through the launch, believing that News was committed to supporting newsagents.
If it were not illegal I would actively promote a boycott and encourage newsagents to practically demonstrate their anger at being treated so poorly.
