A blog on issues affecting Australia's newsagents, media and small business generally. More ...

Super Food Ideas sells with lotteries

super_food.JPGWe have been experimenting with different titles in this tiny space next to one of our lottery registers. The best performing title in this impulse space so far is Super Food Ideas. We sold five copies on the weekend from this location alone. Not bad considering that each was an impulse purchase. We achieved usual sales from the regular location of this magazine.

Other titles which have done well here include That’s Life, Take 5 and People’s Friend – think demographic and the anchor product of the space, being lotteries.

Passive up selling using space like this is hard work because it is another task to check daily. However, it is essential in this competitive marketplace.

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magazines

The Monday magazine pitch

In response to people who have asked to track how we promote magazines at the front of the shop, here is today’s pitch.

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I will try and remember to post a photo of the changes we make on Wednesday.

While there is a risk in grabbing sales without driving people into the shop, we decided there is more to be made from impulse purchases from people leaving the centre (we are at an exit) who would otherwise not have purchased.

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magazines

Last season for street directories? Tom Tom, Navman take over?

navway.JPGThe inevitable has happened with the folks behind Melway, Sydway, Brisway street directories promoting their Satnav offer, predictably called Navway, in a flyer (see photo) inserted in their directories. This move coupled with the falling prices for Navman, Tom Tom and other Satnav devices means the old street directory is, well, old.

While some newsagents will be angry that they are being used to promote a product to be purchased elsewhere and even remove the Navway flyers in the street directories, it is more important we focus our attention on what we replace street directories with next Father’s Day and Christmas. Right now I cannot think of a killer single product. Instead, I’d look at creating a more complete male gift package – a bit like you see at Myer and David Jones around Father’s Day time. But something which can be prepackaged, brought in just for the season and works as an impulse purchase.

It is equally important we are careful with order quantities since it will take longer to sell stock and larger retailers are likely to discount more heavily.

Street Directories have been good to newsagents. The have provided a good male gift. Unless we get into the Satnav space, the directory business is downhill from here.

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Newsagency challenges

Bennelong poll in newsagencies

bulletin_aug14.JPGSales of The Bulletin this week may offer an indication of the popularity of Maxine McKew, the Labor candidate for the Prime Minister’s seat of Bennelong. In my newsagency we will sell out. This is rare for The Bulletin.

While our base is low, selling out is a surprise – it demonstrates that there is interest in the Bennelong contest. The news coverage of the Bennelong battle would be helping too.

Covers are critical to sales of The Bulletin. It is not a destination purchase in many newsagencies. We certainly take the opportunity to display the full cover and not just the masthead.

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magazines

Australia Post chases Officeworks, Harvey Norman and Dick Smith

ap_aug07.JPGOfficeworks, Harvey Norman and Dick Smith are the go to businesses when it comes to home / small business technology such as printers.

As much as I wish newsagents were in the mix they are not since we have ignored technology for the most part except for our recent focus on ink and toner – more fool us.

It seems that Australia Post is interested, again, in technology product, particularly printers – if the latest promotion is anything to go by.

The Government owned Post Office opposite my newsagency is promoting the High tech, low prices flyer. They are using the pulling power of the respected Australia Post brand built on the protection of a Government controlled monopoly to compete with commercial businesses.

Here is what the Australian Postal Corporation Act 1989 says about ‘incidental’ (non postal) services Australia Post may offer:

16 Functions—incidental businesses and activities
(1) The functions of Australia Post include the carrying on, within or outside Australia, of any business or activity that is incidental to:
(a) the supplying of postal services under section 14; or
(b) the carrying on of any business or activity under section 15.
(2) Without limiting subsection (1), the functions of Australia Post include the carrying on, within or outside Australia, of any business or activity that is capable of being conveniently carried
on:
(a) by the use of resources that are not immediately required in carrying out Australia Post’s principal or subsidiary function;
or
(b) in the course of:
(i) supplying postal services under section 14; or
(ii) carrying on any business or activity under section 15.

On the back page of the flyer is a range of consumable items which I sell. That my own Government is competing with me in this way demonstrates how out of touch it is with small business.

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Australia Post

Stationery brands in newsagencies (pt 2)

I have received considerable offline feedback following my post earlier this week about our new display around the Scotch brand. The month common questions is: where can I get the range since my warehouse does not have this? The question has come from various states and not just one warehouse.

We have done some more work on our Scotch story. Here is where we are at today:

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While there is plenty more work to do, already the broader offering is working for us.

Brands offer newsagents a wonderful point of difference opportunity. It is important that our suppliers – wholesalers – support brands and allow us to engage in this point of difference.

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Stationery

GNS Market Fair (Victoria)

GNS Market Fair (VIC) started today in Melbourne. Tower Systems has been exhibiting at this trade show it started in 1982 or 1983. Back then desiko ran the event for VANA and Victorian newsagents. This is the first year GNS has had complete control over the event. We’re at stand 1.

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These trade shows are a good opportunity to connect with existing customers and help others make the switch – this is why it is good we are away from other software companies. Already, by lunchtime, we’re generating excellent interest.

While I remain disappointed that GNS banned newsXpress from the event, it was good to see so many newsXpress members there this morning.

With my newsagent hat on I talked to a couple of suppliers displaying product which is not available through GNS. If we are to champion brands, our wholesalers need to carry the range.

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Stationery

Angus & Robertson losing spin battle

I feel for Angus & Robertson and the battle of spin being waged against their desire for a commercial relationship with publishers of books which do not pay their way. Regulars here would see the parallels between the A&R view and what I write about magazines which are cash-flow negative for newsagents. The difference between A&R and newsagents is that A&R has more control over the books they carry on their shelves.

With retail rent increasing at least 5% a year, it is natural that retailers are looking at how make every square metre of retail space perform to its optimum. Sure a good retail business has balance, light and shade, high traffic and browse space, high margin versus lower margin …

I do not see the A&R position as being anti literature or a move against Australian authors and publishers. It is about making sure their retail outlets are viable.

It is not up to A&R to prop up under performing titles just as it is not my job as a newsagent to prop under performing niche magazines. No one will prop up A&R or my newsagency.

I would like to see journalists delve deeper into this story and not just trot out spin as the story as has happened over the last two days. At least Crikey has provided balance in their coverage.

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Newsagency challenges

The Age defiles itself

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Stuck on top of the coat of arms on the masthead for The Age newspaper is this garish post it type ad. It defiles the newspaper brand. This ad also seeks to take sales away from retailers and shift them to home delivery. As a retail only newsagent I am not happy about this. Given the evolving financial model for home delivery it is not ideal either since newsagents are carrying more risk from these publisher deals. That aside, my main issue is with the desecration of the masthead.

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newspaper masthead desecration

Trading Post masthead written down

In case newsagents needed clarity of the impact of online advertising on print read this about the Trading Post :

As at 30 June 2007 the carrying value of the Trading Post mastheads was tested for impairment based on value in use. This test resulted in an impairment charge of $110 million being recognised in the financial statements. The impairment arose as a result of increasing competition in the traditional print classifieds market, challenges in the highly competitive on-line classified market and the risks associated with new initiatives.

A note on page 3 of the preliminary financial report for Telstra for the year to June 30, 2007 published yesterday.

On page 82 of the 304 page document is this:

Mr Trujillo said Trading Post print classifieds disappointed due to the rapid changes in the market, while online classifieds continued to grow.

Newsagents need to change their businesses just as Telstra is changing focus at the Trading Post.

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Media disruption

Men and traffic directions

ubd.jpgIt fascinates me that UBD and Melways publish their new street directories at Father’s Day time each year. What does this say about the male refusal to ask directions? Hmmm.

While sales may guide the timing, I am certain some fathers would appreciate a less predictable gift. That aside, we have placed our UBD stack on the dance floor near the newspaper stand. Our Melways will be placed next to them when they arrive today. We know that if we do not move this stock in the next three weeks the next opportunity in Christmas.

The challenge, of course, is that every retailer under the sun will have the new editions of UBD and Melways. Newsasgents need to be corporate and bold in their approach to win the business.

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Uncategorized

Hiding the Vogue cover girl

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This month’s Vogue magazine is a good example of why newsagents need to look at the best approach tom magazine display. The photo above is how Vogue is represented in traditional magazine fixturing. The top third of the cover is shown. While you can see the masthead, there is no view of the beauty of the cover.

vogue_cover.JPGHere is the cover in all its glory. Now I can see that the cover girl is Alice Burdeu, winner of Australia’s Next Top Model. The whole cover will sell more copied of this magazine than the top third.

Newsagents carrying more than 500 titles and their retail designers need to look at their magazine fixtures. This has happened in Europe and now is the time for Australia.

We need to demonstrate that we are magazine specialists with best practice magazine fixturing.

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magazines

Draft Battle magazine fails QA test

drift_battle.JPG

Drift Battle is sent to newsagents as a one-shot. That is, recycled product with no apparent history and no apparent future. A few weeks ago we received a stack of these, each looking different but sold as the one product. In the bags are old copies on the magazine. On these old copies are their old price labels. This confuses customer. Including our price label, we have four price points showing to customers!

These recycled Drift Battle packs take our magazine offering down market – many of the copies in my shop are not of merchantable quality.

This product ought to have failed a quality assurance inspection and therefore have never been sent to newsagents. I have decided to early return all stock because it does not meet our standards.

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magazines

Sales Based Replenishment trial

I have been fortunate to be involved in an exclusive sales based replenishment trial involving ACP products being supplied to a group of newsagents using Tower Systems software. This is the second such SBR trial involving newsagents. In the first trial my store was one of then trial sites. This time, they are located in NSW and QLD.

While I will not breach confidentiality with details of the trial, I would note that UK experience with SBR is such that newsagents can expect to see more of this model in the future – supply over the course of an on-sale period based on sales data. Overseas experience is that retailers and publishers are pleased with the outcomes.

Good data is crucial to SBR working. Good data comes from a commitment from the newsagent and software company to compliance. While compliance is a tough road, the rewards are good through more accurate supply and early access to trials such as SBR and other initiatives. Yeah, I am blowing the Tower Systems trumpet with this post – so I should, Network/ACP came to Tower because we have an excellent community of compliant newsagents.

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magazine distribution

NDD to move magazine distribution to First Fleet

My May 4 blog post suggesting that magazine distributor NDD is about to go with First Fleet for logistics in Victoria and New South Wales was accurate. The robust denials from NDD executives three months ago appear to have been hot air as they are expected to announce tomorrow that they are moving magazine packaging and distribution to First Fleet by the end of this month.

This decision has many implications for newsagents. It makes other parts of the distribution channel less viable, reduces delivery days – a possible 6 day a week distribution (important for extra supply, fixing mistakes and also if the titles run late from the printers) – to a 1 to 2 day a week distribution. The new people at NDD are behind this move from what I hear – although the spin will be that this is a good move for publishers and newsagents and that all of NDD is behind it.

With the announcement, NDD loses a key point of difference and this can only add to the challenges of their business model.

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magazines

Scotch, an anchor brand in stationery

scotch.JPGThe rebuilding of our stationery offering has begun with this new display of Scotch tape from 3M. While our tape range has been good, it has not been brand focused and this has meant a mixed message to our customers.

We selected Scotch after researching the various consumer brands, the breadth of their range and the marketing behind the brands. Scotch won on all fronts.

Having made the decision to focus on Scotch we needed to find a supplier who could match our commitment. Too many newsagent stationery suppliers do not commit to brands as much as we want – making creating brand centered displays challenging.

What we have on display now of Scotch product is about 70% of where we want to be. Once we are satisfied, we will be framing and capping the range to boldly proclaim the brand. Then, we will move onto our next brand focus in a different category.

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Stationery

Expensive magazine billboard space

bay_coastal.JPGJeff Webster is probably a nice bloke. His Fitting Out for Bay & Coastal Fishing magazine demonstrates his passion for fishing. So, this post is not a crack at Jeff of his magazine as such.

I am losing money from Fitting Out for Bay & Coastal Fishing and cannot justify carrying it. My sales data proves that yet NDD sent me 3 copies yesterday and expect me to keep it on the shelves for six months. I might sell 1 copy and if I do and adhere to NDD’s request, I will have lost $18.52 supporting Jeff Webster’s business. This loss takes into account the cost of real-estate and labour for the title. It does not factor in the cost of cash given that I will have paid for the copies sitting on my shelf for months.

I’d expect that more than half the newsagents receiving this title are losing money by carrying it. While small publishers want newsagents to carry their niche titles, newsagents cannot afford to provide free billboard space. It is uneconomic.

An alternative model would be a marketing payment to newsagents for their billboard space coupled with delayed payment for the stock.

My newsagency is well satisfied with fishing related titles. I can afford to cut this one and have returned the stock to NDD with a request to not supply again. I should not have to ask this since the sales data held by NDD shows that supply of the title would lose money for my business. They have an obligation to not put me in this position.

The problem for newsagents is that there are hundreds of titles like Fitting Out for Bay & Coastal Fishing. The continues supply on such uneconomic terms is unconscionable.

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magazines

Publisher anger at payment request

Fairfax Digital has a report about Angus and Robertson requesting co-operative funding to ensure lower performing titles are viable for their retail network. Given the cost of real-estate and labour it is appropriate that books deliver minimum returns to Angus and Robertson.

The same is true for magazines. I know from my cash flow research that over 60% of all magazines are cash flow negative. Newsagents have requested co-operative funding but such requests have been refused. Once day a group will move and maybe then publishers will look at the newsagent channel as a partner should.

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magazines

Emporium magazine drowns newsagents

emporium_2.JPGIssue #2 of Emporium magazine – the house magazine promoting Myer stores – arrived today and it appears that the sales data we have provided the distributor, NDD, has counted for naught. We sold 3 copies of Issue #1. NDD gets sales data from us daily and while they have cut us from 25, the 17 supplied is way too many.

I would accept 8 copies and this is what we will ask for next time – but my question is why should I have to ask when state-of-the-art technology as designed by NDD ensures that know that 17 is gross oversupply. I’d call it unconscionable conduct as it continues serial abuse of the newsagent channel.

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magazines

Heavy magazines

ohs.JPGFurther to my posts here about the OH&S issues with heavy newspapers and the risk of employee injury if publishers and newsagents do not address the problem, research ought not be undertaken on magazine bundle weight. The stack in the photo arrived this morning bundled together. While we do not have scales we feel it weighed around 15kg – but we may be wrong in our estimate. The bundle was the heaviest we received and, in our view, way too heavy. Maybe we will get some scales and start keeping track of this.

UPDATE: We have purchased scales and will now record the weight of heavy bundles.

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magazines

Driving Father’s Day card sales

We are giving away a BBQ to one lucky customer as part of our Hallmark Father’s Day promotion. What the photo of our windows does not show is the effect of the faux flames the have created on the BBQ. It’s drawing people into check out the great range of cards and to drive sales – even at this early stage in the season. The photo below does not do the display justice – phorographing through galss never does. See the fan in the forner – it is fanning the ‘flames’.

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Father’s Day is known as one of the softest card seasons. Our goal with the BBQ giveaway, brighter product displays and other in store displays is to build the season and reinforce our newsagency as a go to card destination in the area.

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Uncategorized

Work on your newsagency with me

I am hosting three business round table discussions to provide an opportunity for Tower Newsagents to work on their business. At these free sessions each participant will be asked to discuss their business and business challenges in the context of a common set of reports produced from the Tower software.

Our goal is to help our customers use our Retailer software to make better business decisions. The sessions are planned for: Melbourne (Elsternwick) – Tuesday Aug. 28 at 10am, Brisbane – Wednesday Aug. 29 at 10am and Sydney (Miranda) – Thursday Aug. 30 at 10am. These sessions are free and will run 2 hours. Book only by email: bookings@towersystems.com.au. We will confirm all bookings.

We may open this to people not using our software who are interested in seeing the Tower difference first hand.

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Newsagency challenges

Not all blue sky in Townsville

townsville_sky.JPG

I spoke today at the QNF newsagent’s conference in Townsville. While far removed from some of the challenges of their capital city colleagues, newsagents in Townsville face other challenges. One is coping with an inflexible magazine distribution system when it comes to seasonal peaks and troughs. I heard stories of insufficient magazines in summer and too many in winter. It was the same in Cairns two days ago. It is a frustrating situation which is denying newsagents and publishers vital sales of magazines.

The other issue in focus today was partworks subscriptions and newsagent frustration at how we are used to drive subscriptions by promoting gifts not available in our shops. It’s a perennial issue but one which could be resolved with some will.

FOOTNOTE: I took the photo outside the conference venue this afternoon. It has been a while since we had a blue sky like this in Melbourne.

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magazines