Newspapers

I have been checking current sales efficiency for foreign language newspapers. The rating has not changed. On average, 78% of foreign language newspapers sold in newsagencies are sold alone. This is considerably higher than the sold alone percentage for capital city dailies. This inefficiency could reflect poor retail management by newsagents or; it could also reflect on the customers. Regardless, the situation needs to be addressed by newsagents. It’s time to radically shake up where we locate foreign language newspapers and how we merchandise them. Also, given the high browse/no sale rate it might be time to seal them in plastic.

That we sell foreign language newspapers is a point of difference. However if we are not leveraging beyond the single item sale they are of doubtful value to our business.

Reports around the Net today of Siemens joining Fujitsu and E-ink in demonstrating portable paper like electronic devices which could have application as newspapers. Fujitsu seems to be leading the field with its first (non newspaper) e-paper produce due for commercial release next year. These developments go beyond the e-paper watch demonstrated earlier this year in Japan.

Hmmm a portable electronic newspaper which folds like paper and is wireless enabled. Talk about disruptive technology.

Trade & Exchange Australia is six issues into its tabloid publication of classifieds. Line ads are free and the publication cover price has fallen from $2.50 to $1.00. Now they have written to newsagents suggesting that old copies be given away once a new issue arrives. Next to the Trading Post T&E is easy to overlook and it seems that’s what many customers are doing.

Good report from the BBC about UK publishers giving away DVDs to drive newspaper sales. Giveaways are only valuable, in my view, if they build the connect between the newspaper and the consumer. An unrelated gift serves no purpose other than a one off spike in sales.

I learnt early in business that you compete from in front and you do this by making sure that your product offering is better in the minds of your customers than any other. Newspaper publishers and their partner newsagents have an opportunity to make a significant move on this as they work through the issue of how and when to introduce flat wrap home delivery of newspapers.

There are at least five trials of flat wrap home delivery going on at present. One is being driven by News Corp. in Adelaide and the rest are being driven by newspapers. Despite the name, none is delivering a truly flat product. Each is delivered with one fold and while that is a big step forward from the tightly rolled newspaper, it is not flat.

Newsagents have an opportunity to take a giant leap forward by going truly flat and delivering to the front doorstep. My sense is that enough customers would like this service to justify a premium price. The bag used to carry the newspaper could also carry other items. Newsagents working together could leverage the doorstop delivery as a new marketing channel for companies wanting to get brochures, sample products and other items onto doorsteps first thing in the morning.

I know from my own discussions last year that newspaper publishers have the view that they own the bag. That is, that newsagents could not put anything else with their product in the bag, not even another newspaper. This is nuts as it denies newsagents an opportunity to be business like.

Newspaper publishers ought to consider allowing true flat wrap in return for removing the restriction of what can be in the bag with the newspaper and what advertising can be printed on the bag. They ought to also consider removing restrictions on what can be charged for such a premium service since the costs will vary from area to area. This is what deregulation ought to have been about – creating mechanisms for entrepreneurial effort.

Some newsagents will label my suggestion stupid. Maybe it is. However, with newspapers under so much threat from online and with home delivery under threat from an ever increasing number of retail outlets, one way newsagents can get a bigger piece of the pie is by reinventing their offering and providing a premium service such as that which I propose.

In addition to the current flat wrap trials I’d like to see a trial of true flat wrap with the newspaper in a bag and delivered to the door. For newspapers to compete with online they need to reinvent themselves not only in terms of content but also in terms of the customer experience. Hence my push for a true flat wrap product.

As a consumer I refuse to have my newspaper home delivered. I like a pristine newspaper as the publisher intended it.

The current flat wrap trial, while a welcome initiative, is not pursuing the ideal home delivery experience and therefore does not explore the opportunity for providing a compelling point of difference for home delivery of newspapers versus news online.

Here’s the website for the News Corp. flat wrap trial: wraptrial.news.com.au

FOOTNOTE: Newsagents were forced in the 1990s in purchase and use rolled wrap machines. These machines have struggled to cope with the increasing thickness of newspapers – especially thre Saturday and Sunday offerings. Many newsagents would be carerying equipment on their books with a value of around $5,000. The (folded) flat wrap machines range in price from $5,000 to $25,000. Newsagents would need some guarantees on publisher commitment, on bag advertising, in bag insertions and weight to make the move worthwhile.

It’s interesting reading stories in newspapers about their future. In the last few months there has been exponential growth in coverage on convergence and disruption affecting mainstream media and, in particular, newspapers. This piece by Michael Sainsbury and John Lehmann in The Australian on the weekend is a good example. Six months ago such a piece in a newspaper was rare. Today it is common. What has changed is that newspaper proprietors are now seriously engaged in building their online offerings. This can be tracked back to Rupert Murdoch’s speech in April to the American Society of Newspaper Editors.

While the sample size is small I’m tracking a year on year sales fall for the Trading Post of 15% across several newsagencies. This could be explained in part due to online competition, other competitor products and poor promotion for the product. Regardless, the retailers involved and Trading Post need to arrest the situation. If it is broader than these few newsagencies then Trading Post needs to act fast.

For years now The Age newspaper in Melbourne has run its Annual Short Story Competition. This year’s competition closes today. While it’s too late, I realised last night that this is a missed opportunity by The Age and their retail network of newsagents. Instead of giving away DVDs, CDs and drink coasters to drive sales, I reckon they would have been better off involving newsagents in the Short Story Awards and building the community connect at the heart of the awards. While harder work and of less broad appeal, an in-store promotional campaign built around the Awards says plenty about the newspaper and its community connect.

Kudos to Fairfax for publishing this comment piece by Alan Kohler about Fairfax being trumped by PBL in their purchase of carsales.com.au. Kohler opens the column with: “It takes a kind of desperate courage to embrace your enemy and perhaps John Fairfax has never been quite desperate enough to entirely embrace the internet.” Further on he says Fairfax suffers from “incumbent paralysis”. I’d agree. Fairfax has stumbled along the road to online and the effects of this will be felt not only in the company but all along their supply chain. Whereas for decades they have been the classified leader, now they have to react.

Customer reaction was good yesterday in my part of the world to the new tabloid format for real-estate in Saturday’s Age. Formerly spread across two broadsheet and one tabloid parts, the new combined tabloid size stapled offering is a welcome effort to evolve the newspaper. Saturday is the biggest day for The Age and real-estate advertising is a key reason for this. While I’me sure many will be frustrated with the change, I suspect that they have got it right. It’s good to see a newspaper publisher investing in the product as opposed to sales spike generating giveaways.

Wise and Young is a blog worth reading if you want to understand younger consumers. Take this blog entry about newspapers and how to make them more appealing to young people. Here are the key points Levi Brooks makes in this entry:

1) Get your articles, content, etc. in to the hands of the youth (be it real world or online) – Why not have more news stands on campuses? Why not offer free newspapers on Sundays to college students? Get your product in to their hands, even if it means giving it away for free, and get them hooked.

2) Brand your newspaper as being smart and fresh – The youth are attracted to fresh and up to date material. Newspapers do provide fresh content, but the feelings evoked when purchasing a newspaper is stale and old-world.

3) Keep their attention – I’m not saying newspapers should turn to yellow journalism or mock magazines, but do something that would keep the youth’s attention span. Providing more youth friendly content and progressive articles that challenge the norm are a place to start (which the AP is trying to do with this new service).

4) Tie in with Online Services – MySpace and Facebook provide journalists a prime delivery method to the youth. Murdoch owns MySpace and I have no doubt he’s going to merge his news empire to the online space, but he better give the users complete control over what content they see. Facebook is a great place for newspapers to deliver content to the college group.

Wise and Young is also the name of the a communications agency Levi and his partner run in the United States.

editorsweblog.org carries a story about Sudoku and reports that’s now being used in 140 newspapers globally. They link to a story on CNN Money which poses the question: Can the popular Japanese number puzzle save newspapers or is it just a passing fad? Based on our Australian experience over the last six months I’d say it’s not a fad. Sudoku continues to grow without impacting crossword sales. The key is to engage newspaper publishers, magazine publishers and retailers in marketing strategies which add more people to the Sudoku craze.

The Oregonian is facing tough times like many newspapers. This weekend they launch, as they call it, HIGH DEFINITIAN NEWS. While I can’t tell from here what this rebirthed newspaper looks like, it is refreshing to see a newspaper publisher working on its product to strengthen relevance.

The crikey.com.au coverage on newspaper circulation tactics has been getting coverage at Andrew Landeryou’s blog. The best way for this to be dealt with is through full and frank disclosure – before it gets too much coverage in the blogosphere – the place your more likely to see accurate coverage on such a topic.

crikey.com.au has been running stories about newspaper circulation tactics used by our two major newspaper publishers News Ltd and Fairfax. Fairfax are receiving the most recent attention as a result of the pallet loads of newspapers offered free to people attending sporting events, gymnasiums and the cinema.

I own a newsagency and make a living selling newspapers. My success is tied to the value of the mastheads. The more newspapers given away the lower the value of them masthead in consumer eyes. This is a practice which ought to stop not only because of the devaluing of circulation figures but also because of the damage it is doing to businesses like mine.

If the newspaper has a price tag of a dollar then sell it for a dollar. If it is to be free then make it free for everyone.

This game being played at present is nuts and Australia’s independently owned small business newsagents are suffering as a result.

Newsagents are angry but will not speak up publicly because of fear of retribution.

Newspaper sales basket penetration 2003-2005, 120 newsagencies. Source: Tower Systems.

Newspapers are losing their importance to shopping centre newsagents according to our analysis of three years of sales data from 120 newsagencies. This research covers 8 million shopping baskets worth of data.

The fall could be due to newsagents not promoting newspapers as well as they used to; overall falling newspaper sales; or newspapers now being sold in other outlets such as petrol stations, supermarkets, coffee shops etc.

No matter what the reason, the figures are concerning. My theory is that shopping centre newsagencies are showing the fall because that’s where the most significant competitor action is. Take my shop at Forest Hill in Victoria for example. We now have newspapers in Big W, Starbucks, Coles and Safeway as well as my own two newsagency outlets.

Publishers treat their retail outlets differently. Newsagents are full service and provide the best in store display and over the counter support for newspapers. They are a core product. Other outlets offer newspapers as the add on and treat them as such in terms of real-estate and promotional support. Yet newsagents are recognised for their effort by publishers putting product in more and more outlets.

The publishers are wrong to pursue growth or at least stem circulation falls by putting their products into other outlets.

Newspaper sales are challenged, there’s no doubt about that. Going into more outlets with a confusing value proposition message (i.e. Starbucks you can get The Age for 50 cents whereas at my newsagents 30 feet away it’s full price) only hurts sales.

Newspaper publishers ought to reduce outlets and focus on building a mutually valuable relationship with small business newsagents. They could immediately boost sales by offering a reward for consumer loyalty. Newsagents would get behind this. The result would be retail customers purchasing the newspaper more days in the week than at present.

Publishers have put tremendous effort into chasing home delivery customers over the last 10 to 15 years and neglected loyal retail customers. By association they have neglected retail newsagents. The home delivery marketplace has a high acquisition cost and a high churn whereas retail does not. Over the counter sales are about convenience, comfort and service. A smart publisher would reward newsagents for delivering on these and boosting sales appropriately.

Newspaper sales growth can be achieved if the publishers engage with newsagents, reward consumer loyalty and reward newsagent success.