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Australia Post shuns retail

post_closed.JPGAustralia Post demonstrated the benefits of government ownership at their Forest Hill (VIC) corporate store on Saturday. While other retailers in the centre embraced the VIP shopping night to promote the opening of Meyer, Australia Post, opposite our newsagency, was defiantly closed. The Minister responsible for Australia Post, Helen Coonan, says that Australia Post competes in the retail space without any benefits of government ownership. That they can get away with closing on Saturday as well as their usual closure on Sundays is proof that Government ownership has its benefits.

If Australia Post was serious about retail and did care about its customers they would embrace opportunities such as VIP nights. Instead they revert to their public service mentality and hide behind the Australia coat of arms.

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Australia Post

We are not car makers

Further to my post a week ago about Fisherman and Boatowner, the editor has gone to ground and is not expanding on his comments that the distributor, NDD, is to blame and that he did not mean to attack newsagents – not to me and others I have spoken with at least. The Fisherman and Boatowner situation, gross oversupply for many and undersupply for others, supports the claim that newsagents are treated poorly by the magazine supply chain – particularly in the long tail, titles outside the top 200 sellers.

No matter which KPI you use, return on investment, return on floor space, stock turn, or cash flow, smart newsagents are able to measure the cost to their businesses of the inefficiency in the magazine model. That they are denied the opportunity to make good business decisions about magazine supply is an appalling situation. Those presiding over the current supply model in the magazine distribution businesses ought to give entrepreneurial newsagents the tools to =run their businesses as they see fit – I suspect that the result would be an increase in overall sales.

Maybe Fisherman and Boatowner should close down – from retail at least. That newsagents are effectively funding the title by providing free shelf space and labour ought to be enough to see it removed from supply in all but the locations where it pays its own way. If such a move leads to the demise of the title so be it. I don’t see anyone providing financial assistance to keep struggling newsagencies open – we are not car makers after all.

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magazine distribution

Leveraging lottery jackpots

double_dip.JPGWe have lottery jackpots across all games in Victoria at present including the Wednesday game: OzLotto $8 million; Wednesday Tattslotto $2.1 million; Powerball $20 million; Saturday Tattslotto $21 million. Given past success we are running a joint game syndicate based on Powerball and Saturday. This allows promoting a $41 million first division pool. No matter how we mix then, syndicates sell well as punters appear to be happy to have more chance even if their piece of the pie is smaller.

Jarryd Moore makes an interesting comment about this at his blog, asking whether going too early with a jackpot hurts sales. Our experience is that it does in the short term but once you have built a good pool of syndicate customers it does not hurt. As for regular over th counter sales, we have not compared the impact.

UPDATE: We sold eight shares in 24 hours. Today we will add another syndicate.

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Lotteries

The blessing of Myer and Jennifer Hawkins

It has been forty three years in coming and today it finally arrived. Myer opened at Forest Hill Chase where our newsagency is located. Some say this brings the respect the centre deserves.

Myer has taken the space formerly occupied by Harris Scarfe and while they are a reasonable department store, the Myer brand counts for more. All day the centre has been crowded, long before Hamish and Andy and Jennifer Hawkins arrive to bless our good fortune. Here is the crowd from earlier today outside Myer:

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Up a level and at our corner of the centre, far away from Myer, we have been enjoying Christmas like crowds. The boost is most welcome following five months of poor traffic due to major construction all around us.

I guess what is interesting to me the most about the arrival of Myer is the talk of people – shoppers and people working in the centre – about Myer adding respectability as some call it to the centre. The morale boost among shoppers and store owners is bound to have a good knock-on effect for all businesses in the centre. we can’t wait! And all before Christmas! Between now and then a bunch of national brands new to the centre will arrive.

Being in a major centre leaves small businesses, such as newsagencies, at the mercy of the strategies of the leasing manager and the major tenants. No matter how hard a small business markets itself, it is difficult to overcome challenges of the location and the tenant mix. At Forest Hill at least we are looking at the best of times in our eleven years so far.

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Newsagency challenges

Boosting Donna Hay

donna_hay.JPGNothing against Donna Hay but the magazine bearing her name does not sell that well in our newsagency. The Donna Hay kids issues, however, sell exceptionally well. So, the brand is not the problem with our sales.

Looking at food titles generally, Delicious sells well (sells out since our supplies have been cut) as does Gourmet Traveler. Donna Hay is the weakest of the mix yet we receive more copies than the other two – ah the magazine supply model starving and drowning all at once.

We are planning a promotion for the next issue of Donna Hay to reintroduce the title to our customers. This will happen at the same time we relay our food related titles – it is time for a major rethink of how we display the range. We want a better point of difference.

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magazines

Famous makeover

famous_redo.JPGFamous magazine has had a makeover and as a result it stands out better when in the mix on the shelf with competitors Who and NW.

We are going to use our magazine loyalty program to support the new look with a double clip option on Famous next week. While the merchandiser has created a good in-store display I feel that an over the counter offer to draw attention to the new look could help more.

The offer will also remind our team of the new look – it is hard sometimes to keep up with the changes in product at the counter.

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magazines

Prince flips the model, goes free with a newspaper

With print media and the music industry both chasing rainbows online it is interesting to see Prince giving away 3 million copies of his new CD, Planet Earth, with The Mail in London this weekend. Here is what his website has to say, in part:

Always a musical innovator and icon, Prince is once again leading the charge into a new music distribution landscape, redefining tradition and setting new precedents. As well as having taken the innovative step of giving copies of his new album “Planet Earth” away with concert tickets to his London O2 dates, Prince has new plans of putting music directly into the hands of fans. In association with the Mail on Sunday publication, Prince will deliver his new album “Planet Earth” to nearly 3 million readers in the UK on July 15th.

This plan has shocked the music industry and set local retailers into chaos causing major controversy about the new future of music retailing as presented by Prince.

Kenyon Farrow makes some good points about the move by Prince at his blog.

While a free CD from Prince will not, of itself, alter the commercial fortunes of newspapers or music, it will be disruptive enough to get music and newspaper bosses looking outside the square as they navigate their future in challenged marketplaces.

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Media disruption

Why stop at the Trading Post and Google ACCC?

The announcement yesterday of court action against Google and the Trading Post by the ACCC has shocked many. The case appears to centre around the names of businesses which compete against the Trading Post appearing in the title of sponsored links (ads) for the Trading Post on the Google website. In plain English, people using Google might see, say, company A, click on that expecting to get to company a and find them selves at company B.

How does this connect to newsagents? Earlier this year, as I blogged here previously, RSVP, the Fairfax owned business, paid for a campaign with an affiliate of Commission Monster which targeted my 3loves site. Here is how it looked on a Google search:

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3loves is a social networking site connected with Find It, the online classifieds model created to provide newsagents with revenue from online classifieds.

The scam against 3loves appears to be similar to what Google and the Trading Post are charged with.

People searching for 3loves were presented with what appeared to be a link to the site. When they clicked that they were taken to Google. Now I don’t know if Fairfax had any knowledge of this. What I do know is that they were the beneficiary of the action – or at least their RSVP site was. Fairfax approved the use of Commission Monster. Commission Monster manages its affiliate relationships. Each of the companies involved ought to have known about campaigns like that which benefited Fairfax by targeting my 3loves site.

My question is, if the ACCC can take Google and the Trading Post to court, why not Fairfax and the other parties involved – plus the scores of others who have engaged in similar tactics? I doubt that the Fairfax press would out their involvement in something similar to the current ACCC action.

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Online classifieds

FiFi breaking

fifi_broke.JPGFiFi’s World is a very popular new partworks magazine. Sales are very strong – thanks to the target audience (young girls), the school holiday launch and a good TV campaign.

The problem is that many newsagents are having to refund customers who return folders which have broken. The importer tells me they are going back to the UK publisher to seek replacement stock. With some newsagents reporting a 50% product failure rate the rectification cost could be extraordinary. I’d note that my shop has been lucky, we have a less than 10% failure rate.

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partworks

Big W to rollback magazine prices?

Big W at Mittagong in New South Wales is a concept store for the group, a place where they experiment with and refine ideas before rolling them out nationally. At Big W Mittagong you will see a professional and broad stationery offer dominated by national brands – essential for unlocking money from the brands for fixtures, rebates and marketing funds. There is also a compelling greeting card offer, well signed with the John Sands brand.

It is the magazine display which would interest most newsagents – many magazines in their display are on rollback prices, discounted. Rollback pricing is a feel good offer consumers love – look at what Coles are doing at present with rollback pricing on grocery items. I know from working with the magazine club card for the last three years that magazine buyers like a deal. The rollback strategy will work.

Big W Mittagong and the similar concept stores for Officeworks, Target, Coles and Safeway will all show that these big business competitors we so often complain about invest heavily (as do their suppliers) in navigating change. They experiment, gather data, tweak and ultimately find the model which they run with nationally.

While it would be easy for a newsagent to walk in, see the magazine rollback price offer at Big W Mittagong and get angry. the reality is that there is nothing stopping newsagents making similar strategic moves. It starts with us being entrepreneurial, exerting more control over our businesses and stopping busy work – things we do for the sake of being busy.

PS. Check out the Big W website and how they are promoting the new Harry Potter book. There is a clock counting down its arrival. Nice.

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magazines

Promoting outside the shop

Apparently a My Business magazine ad playing on Australian Newsagent Satellite Radio yesterday promoted the title as being available in newsagencies as well as by subscription. This would be like the CSI producer running an ad on Channel 9 saying it is available for download elsewhere. My Business would do well to revisit their ad copy for in-newsagency ads.

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magazines

Fat wedding magazine

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Take a look at the Wedding and Bride – it is four times the thickness of Australian Women’s Weekly. One more page and it would not squeeze into traditional newsagent magazine pockets. While it is an impressive publication, space allocation is a challenge in an already full wedding segment in newsagencies. We are playing with co-location next to our high traffic women’s titles for a week to see what happens. It is wedding season after all.

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magazines

Supporting diabetes week

Ben Kay has come up with an excellent promotion in support of Diabetes Week at my newsagency.

Ben, the manager of the newsagency, has brought together a range of titles including the excellent Diabetic Living from the Better Homes and Gardens team at Pacific magazines and Annette Sym’s Symply Too Good cookbooks to create this excellent display.

In the middle of the display Ben has placed information sheets takes from the Diabetes Australia website.

It is this kind of local marketing which newsagents can use to better connect with customers and to demonstrate to publishers their relevance.

Diabetes does not attract the glamour and glossy marketing support of, say, breast cancer at Mother’s Day yet it affects so many. What Ben has done in our shop reflects well on the cause.

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magazines

OH&S and newspaper home delivery

The current situation, in my view, is unsafe and modifications to the weight, dimensions and volume of papers distributed per person need to be reduced to provide a safe system of work.

This is from the Nery report – an ergonomic assessment of the manual handling of newspapers by newsagents in South Australia by David Nery. The study was commissioned by the Australian Newsagents’ Federation and the resulting report published in July 2006.

My understanding is that the Nery report was provided to News Ltd shortly thereafter. I was given a copy in November 2006 by someone not encumbered by any confidentiality agreement.

To my knowledge there has not been any change to the weight of newspapers – meaning that on some days people are delivering newspapers which are of an unsafe weight. Nery pulls no punches when we says:

There is also, in my opinion, and as outlined in the South Australian Occupational Health, Safety and Welfare Regulations (1995) an obligation for the manufacturers of the newspapers, News Corporation in this case, to provide a product that is safe to handle by the members of the Australian Newsagent’s Federation.

I am concerned for newsagents and their employees and hope that this post may add to pressure on publishers to address the problem of overweight newspapers and the health and safety of those working with them.

In 2004 while on the Board of the ANF I pushed for that organisation to call for a Productivity Commission Inquiry into the deregulation of newspaper and magazine distribution in Australia. Such an inquiry is as essential today as it was then for the Government, publishers, distributors, newsagents and consumers to understand the implications of the policy of deregulation. The handling of heavy newspapers is one example which could be cited.

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Newsagency challenges

Famous tights

Customers have been asking if our newsagency is giving away a free pair of tights with Famous as is being promoted at Safeway. We’re not and I am okay with that as I know publishers need to offer premiums at different times in their various channels. What is interesting is that we are being asked. I see this, in part, as a consequence of our Magazine Club Card, a loyalty program which is pulling customers who would traditionally purchase their magazines at a supermarket.

Our comeback to the question is what’s a pair of tights when you can get a free magazine.

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magazines

Online classifieds and newsagents

This letter is being mailed today to all newsagents inviting them to take a stake in Find It online classifieds.

Central to the Find It offer for newsagent is the guarantee of 100% commission on vouchers sold by newsagents to customers wanting to place ads online. There is also a guarantee of trail revenue.

There is no capital cost for newsagents – no financial commitment whatsoever – and the commitment to a profit share remains.

Find It aims to help Australians save millions from online advertising. All but three ad categories will be free and it is from these three that newsagents stand to make good money – if they actively support find It online classifieds.

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Online classifieds

Inspiring newsagents

The Source, a newsagency of the future in Melbourne has received excellent coverage in Inside Retailing. Newsagents ought to read the article and visit the store.

While the future the owners of The Source are pursuing may not be for everyone, their choices are bound to inspire newsagents to consider their own plans for the future.

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magazines

Theft reduction tips for newsagents

At Tower Systems last week we released some theft reduction tips for newsagents. You’re welcome to download a copy here. The tips have evolved from our work with newsagents and police on a variety cases. While a single sheet does not do the issue of theft justice, it is a start for many who ignore the threat – to their financial loss.

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Ethics

Free coupon newspaper

smart_saver.JPG

Smart Saver is a compelling yet unconventional free newspaper. There are no stories, opinion pieces or photos one usually finds in a newspaper. Smart Saver is 100% advertisements, coupons to be precise. The copy I picked up today from a City Convenience Store in Sydney is the first I have seen. Eight pages of coupons from national businesses through to local business for products ranging from fast food to dry cleaning. Backing up the print edition is access to the coupons online.

What is interesting is that Australians are not known for their use of coupons – but, hey, we were not known for our love of fast food a few decades ago.

The distribution model through the convenience stores is also interesting – particularly their branding of the newspaper under the masthead.

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Newspapers

The case for a magazine czar

fishing.JPGThe photo shows the fishing segment of the magazine range in my newsagency as at this morning. Next to these two columns we have another two columns of boating magazines. The photo and my posts over the last two days about Fisherman & Boating serve as evidence supporting my call for newsagents to appoint a magazine czar to approve all titles which have access to our retail and distribution network.

Until we take control of this and respect our network as the asset it is, we will continue to experience oversupply and undersupply or magazines.

The Coles, Woolworths / Safeway, BP and Mobil petrol outlets get what they want in terms of magazines because they manage access nationally. That newsagents do not is, in part, our own fault. It leaves us disadvantaged. This is why we must appoint a czar and require all magazine publishers and distributors to deal with us through the czar. Sure distributors would not like this. It does not suit them having us control our labour and real estate assets.

Given the Forest Hill demographic, my newsagency is over serviced for fishing magazines. The problem is that no one distributor would know this as they would only look at their sales data. That suits their model. It does not suit niche publishers but they are too small to do anything about it.

I am across the discussions between magazine publishers, distributors and the Newsagents’’ Federation of magazine KPIs. The KPIs agreed thus far do not address the issue.

Until newsagents take control we will continue to experience problems such as those with Fisherman & Boating.

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magazine distribution