Our public conversation
It is interesting to see the reach of the discussion we have in this place. Mediabiznet picked up the thread on magazine displays and published a story with the orignial post and a selection of comments.
National Newsagent Conference
newsXpress is hosting the National Newsagent Conference in Melbourne is October. Participation is open to all newsagents. This will be two days of great networking with newsagents and a conference agenda focused on growing stronger and more profitable newsagencies. Embracing change will be a theme of the world class speakers being brought in for the event. Click here for a registration of interest flyer. Click here for a copy of the conference registration form. Registrations are open now.
Disclosure: I am a Director of newsXpress.
Ben Cousins GQ issue popular
Here is the proof of the popularity of the Ben Cousins cover story on GQ magazine this month. At our newsXpress Forest Hill store we sold our initial allocation and quickly pulled extra stock from one of our other newsagencies until additional stock arrived from the distributor. The Ben Cousins GQ blog post I published here achieved 80 hits in 24 hours.
The placement of GQ above the Herald Sun on our newspaper stand has been a smart move. It is great to see a Herald Sun sale turn into a Herald Sun and GQ sale.
We need to seize opportunities like this, look at magazine covers and place according to what we know about our customers. We can bank the results.
Cairns newsagents positive on the future
I was fortunate to spend some time with newsagents in Cairns yesterday morning at the QNF regional conference. They are a cheerful and positive bunch, focused on building their businesses. It says something about their commitment to the industry, the QNF and their businesses that so many come out for the day of business presentations and networking. It may also relate to the beautiful part of the worl in which they are located.
Talking to some of the newsagents there reminded me of the tremendous diversity across our channel. Magazines I struggle to sell in suburban Melbourne sell out for them whereas magazines they struggle I sell out of. There was a good conversation of how we are not a one size fits all channel.
Newsagents cheaper than Coles
Check tickets cost 66 cents at my local Coles supermarket. This makes them considerably more expensive than many newsagencies. While Coles, and I am sure Woolworths, promotes great deals on brand name high volume items, there are other items which are expensive, like check tickets.
We could probably put together a shopping basket of ten common stationery items and compare our every day prices to the Coles everyday prices for the same items. I expect we would be cheaper.
While such price comparison may open a Pandora’s box, it could be key to showing your customers the value of shopping in your newsagency versus the supermarket. Take a wander around your local national brand supermarket and see if you have this opportunity to promote your low price credentials against them.
However, before you promote a price comparison, ensure that you are permitted to do this under the terms of your lease. I have seen a situation where tenants are not allowed to price compare against another tenant.
Empire magazine hits the spot
Empire magazine is going from strength to strength based on the sales data I have seen. It is certainly performing well in my newsagencies. We use it as a beacon brand to draw shoppers to the movies area of our magazine display. We promote titles round it which need support to find sales.
Building sales around a strong title is what we call our honey pot strategy, a strategy we us in several magazine departments to drive sales of weaker titles by using strong titles. It is terrific to have strong title like Empire in an otherwise challenged magazine segment.
I have newsagents who question me about our level of engagement aboout magazines. They say that for 25% all magazine publishers can ask for is for the titles to be put out on the shelves. My view is that right now magazines are a key point of difference for us. Embracing this is crucial is we call ourselves business people. The key is to leverage the magazine traffic into a more valuable shopping basket. This is the pay-off for the work.
Calendar season has started
Calendars have started arriving an they are selling, even at this early stage. We are getting them out as soon as they come in – you can’t sell stock from the back room. The race is to convert the value of the stock to cash before the account is due.
We have customers who have preordered from us on the basis of the extensive range we carried last year.
Our calendar sales were up 38% last year. We anticipate double digit growth this year based on our buying decisions and how the other key departments are travelling.
We do not plan on discounting calendars until 2010. This was our policy for the last calendar season and it worked for us – in the face of discounting in our centre.
Promoting Australia’s Open gardens magazine
We are promoting Australia’s Open Gardens magazine at the counter as part of our proven strategy for this title. If we repeat last year’s success, we will be sold out within a month. We will leave it on display at the counter for up to a week and the co-locate in our garden section and with women’s weeklies titles. In the third week we will promote the title with our newspapers. Few newsagents promote in this Australia’s Open Gardens way and they miss sales. Even though the cover price is $17.95, avid gardeners love this title. It is terrific to see a Saturday newspaper customer at the counter upgrade from a $2.00 sale to a $20.00 sale.
Newsagents with healthy gardening magazine sales ought to consider shifting this title to a prime location for a few days and see if they have the same success we expect. It’s a tremendous opportunity for us.
My only frustration is that the Australian Open Garden Scheme website does not promote newsagencies as a place from where to purchase the title. They could easily list all stores with the title or, better still, offer a search by postcode.
Launching The Classic Clint Eastwood Collection
We are promoting The Classic Clint Eastwood Collection partwork (launched yesterday) at our counter – ready to capitalise on the TV advertising campaign when it kicks in. We expect this be a successful partwork given Clint’s current popularity across several generations.
Partworks continue to drive destination business for newsagencies thanks to the TV advertising. I just wish they had better online support for newsagents who get behind them – so consumers could find locatiosn near to them from where to purchase.
In anticipation of questions I am likely to get from this blog post, not all movie titles have been released yet but I expect them to include: Dirty Harry, Unforgiven, Magnum Force, Outlaw Josey Wales, heartbreak Ridge, Kelly’s Heroes, The Enforcer, Pale Rider and The Gauntlet. These are the titles in the UK edition of the partwork.
New newsagency opportunity
I am aware (through the developer) of a new newsagency opportunity in an outer eastern suburb in Melbourne. The new centre, due to open late this year, will have Aldi, Dan Murphy, Chemmart and Nandos in addition to the planned 300 sq metre newsagency. There is plenty of free parking right in front.
If this is of interest to you, please make contact with me.
Melbourne Gift Fair wrap up
The Melbourne Gift Fairs come to an end today. While there has not been as much in the way of new product that we wanted to see, some excellent deals have been on offer. Plenty of suppliers were prepared to negotiate on terms, making taking on new ranges more appealing from a cash-flow perspective. Suppliers who are sensitive to the cash-flow challenges of retail today are more interesting to newsagents keen to expand their floor stock – especially in the lead up to Christmas.
One frustration is a few suppliers who refused to permit their products to be places in newsagencies. While this is their right, it demonstrates an ignorance of what a newsagency can look like today.
Gift fairs always present excellent margin and range opportunities – crucial opportunities in building a healthier newsagency, crucial opportunities in pursuing change.
A good time to start a newspaper
‘This is a Fantastic Time to start a newspaper’ published by Gerson Lehrman Group is well worth reading. Written from a US marketplace perspective, it argues that now is an excellent time to launch a newspaper. The artline lists several reasons for this. The last reason is the one which interests me the most: Technology and innovation will change the business model.
We don’t see this in Australia yet, but it will come. Our challenge is to be ahead of this wave by have alternative traffic generators in our businesses, shop firts which serve us and not one or two suppliers and an overall business model which leverages our position through the change with existing important suppliers like newspaper publishers.
The article is another call to action for it, not just about newspapers but about the newsagency model more broadly.
We start by cutting out inefficiencies in our businesses. This means stopping some decades-old practices. If a product or service is not profitable. Stop. No contract can force you to lose money.
We need to look ahead, over the horizon and not back at old practices.
We will make our own luck through this transition.
Ducks and chooks attract customers
Given the interest in my post last week about the chook on the cover of Burke’s Backyard magazine (Don featured chooks in his TV segment on ACA on Friday night BTW) I thought I’d write about Australasian Poultry. This magazine is a good example of the special interest titles we sell in newsagencies. These titles are important to us – they are our point of difference in the magazine department, they drive habitual sales and they are a growing category. I know from postcode data that customers are prepared to travel further to purchase special interest magazines. I know from basket data that special interest magazine customers are more likely to purchase more magazines. There are two compelling reasons for us to embrace the special interest segment. This is why I am expanding selected categories.
Newsagents should visit Melbourne Gift Fair
Newsagents in Victoria should take time out of their businesses and visit the GHA and Reed Gift Fairs in Melbourne starting today and running through to Wednesday. You will see product allied to what is sold in newsagencies today as well as many completely new lines and categories. I was talking with the GHA (Gift and Homewares Association) yesterday and they confirmed that the number of newsagents attending these fairs increases each year.
Gifts are a fast-growing category for newsagents. I have seen newsagencies go from $10,000 in sales from gifts in 07/08 to $40,000 in 08/09. The margin, depending on your buying and pricing policy, is usually around 50%. The key to success is careful buying and knowing your customer – oh, and that you may not be your customer.
It is also important to have a price management policy – knowing how long you want to hold an item and how you transition the item through price points to move the stock.
I know a bit about the fairs because my software company, Tower Systems, exhibits. This year, like last, we are at the Showgrounds location. We find it worthwhile because of the number of newsagents attending and because of our growing gift shop customer base.
Powerball $80 Million Jackpot day
Based on sales already this week, I expect today to be a monster day not only for lottery sales but also for other product we are pitching around the lottery offer. We are most fortunate to have another opportunity like this so soon after the OzLotto jackpot and to have additional lottery kacpots to sell – like the Oz $20 million and the Saturday Lotto $20 million.
Gifts, magazines and books are all benefiting from the bonus lottery traffic.
Newsagent suppliers would be well advised to stay away today from newsagencies with lotteries.
Lottery jackpot season continues
OzLotto did not go off tonight meaning that next Tuesday the first division prize is $20 million. This is on top of the Powerball $80 million this Thursday and the saturday Lottto superdraw of $20 million. All these jackpots are greate sales but challenging in terms of competition between the games. Given the TV, radio and print coverage, we are focusing on the Powerball jackpot as this is what is bringing more traffic in.
Ben 10 partwork series in newsagents now
The Ben 10 partwork series launched yesterday is an excellent opportunity for us to appeal to a young demographic. The popular Ben 10 character is well known here. Newsagents should take a moment and research Ben 10 online – the more we understand the appeal the better equipped we will be to promote the partwork. The partwork series includes new missions, comic strips and character fact files – we certainly need to understand what all this means.
What is most interesting about the Ben 10 series is that it includes a unique trading card collection.This is more than a usual partwork.
The key to success with Ben 10 is to get customers to commit to a putaway – paid for in advance for at least three or more issues.
The key to failure of achieving the full potential is inadequate scale out management from issue 1 through to at least issue 6.
Taking on more magazines
Given the success we have with British weekly magazines, we have expanded our range to include several more titles. Gordon and Gotch has been particularly helpful through this process of identifying titles and providing a process through which we can test them in our store.
Newsagents tend to take what they are given and complain about getting too much stock. While I complain about this as well, I also look for opportunities for expansion of the magazines we carry. The process is easy, especially with the folks at Gotch who can list titles by segment and let you determine your supply quantity while you feel your way.
I like pulling new magazines to our businesses rather than relying on the push system. We see opportunities based on what sells from other departments and also from customer feedback.
Powerball jackpots to $80 million
Lottery retailers and enjoying a tremendous run with jackpots lately. Tonight, Powerball jackpotted. Next week, division one of Powerball is worth $80 million. OzLotto has jackpotted too and it is worth $15 million on Tuesday. Plus we have the Saturday Lotto superdraw on August 1 for $20 million.
The Powerball $80 million jackpot means the focus of the next seven days shifts. The opportunity is too great to miss. It starts tomorrrow morning with dressing the shop and ensuring that we make the most of lottery traffic as well as converting non-lottery traffic into lottery sales.
The most crucial activity for newsagents with lottery products is to ensure that non-lottery departments benefit from the lottery traffic.
Counter placement for TV Week works
I was surprised to see that one of our team had placed TV Week on the counter after I left the newsagency on Monday. I am a bit anal about things like this and did not expect a change to be made. I need not have been concerned – in just two days, the placement at the counter resulted in a measurable sales lift for TV Week. Getting an extra few sales of TV Week is an opportunity to remind these customers about our newsagency for the regular purchase.
We can’t place TV Week on the counter every week – nor other titles we want to feature for that matter. However, some titles respond better to this placement than others. This week’s experience suggests to me that TV Week can be added to the list of titles which respond well.
Melbourne Australia’s worst capital city for newspapers
Crikey published a story yesterday about the dearth of newsagencies in Melbourne. It’s true. Melbourne is the worst-serviced capital city in Australia when it comes to newspaper and magazine range. As I commented to the journalist writing the article, I suspect that high rents, poor margins and static retail prices are the key factors in play here.
Crossword promotion opportunity
With more newspapers getting out of printing puzzles, there is an opportunity for newsagents to better promote the crossword range.
Mediaweek program covers magazines and newsagents
Click here to go to the Sky Business website where a video of the Mediaweek program from Thursday July 16 is available. The focus was magazines and the role of newsagents. I was a guest on the program along with Eugene Varricchio, Group General Manager – Retail & Distribution, for ACP Magazines. It was good to participate in such a public discussion which respected the role newsagents play in magazine distribution and sales.
More newsagents benefit from electronic returns
The trial of the new XchangeIT platform and associated initiatives by magazine distributors has expanded this week with more newsagents engaged. Being able to process returns, regular and supplementary, electronically and receiving an electronic confirmation almost immediately cuts magazine management time and improves cash-flow.
This is the most significant magazine management change (opportunity) for newsagents in years.
Powerball $30 million jackpot opportunity
The Powerball $30 million jackpot is an excellent opportunity for us to leverage our learnings from the recent OzLotto jackpot. This is what we are doing in our newsagency – we have made upselling easier, introduced a staff incentive and dressed the store to promote outside the lottery area. We are certain that these and other changes which worked with OzLotto will work for the Powerball $30 million jackpot.