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

Melbourne Observer a hit

Melbourne Observer is a solid performing independent title in my newsagency. It’s customers are loyal, delivering good sales every week. This week there has been an excellent kick thanks to the 56 page tribute to radio man Keith McGowan. Take a look at sales in my newsagency over the first three on-sale days compared to the average for the last month:

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While the Melbourne Observer would not be on the radar of many newspaper and magazine publishers, in my newsagency it is an important title because of the loyalty of its readers and the efficiency of the baskets in which it is purchased – rarely do people come in and purchase the Melbourne Observer and nothing else. It’s an example of an independent local title doing well.

Ash Long and the folks at Local Media, the publisher of Melbourne Observer, actively support and promote newsagencies and this is another reason I am happy to support the title.

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Newspapers

Spruiking the Tattslotto superdraw and magazines

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We brought in our spruiker (Brian) today to promote the $22 million superdraw and the discount social stationery in the photo. Brian also promoted New Woman and the free umbrella, New Idea and the free pedometer and Burke’s Backyard and the free tea lights. While the superdraw and stationery spruiking worked brilliantly, as I expected it would, promoting the magazine giveaways worked better than expected. Sales spiked thanks to connecting the three giveaways. Our feeling is that it worked well because of the quality of these specific giveaways.

We’ve used several spruikers over the years. Brian is the best. He is professional and robust without getting customers offside. He’s our preference every time. Part of the success to the magazine promotion today is due to the connection of his pitch with our customers.

In case you’re wondering about the $5 social stationery sale – part of the landlord make good for the upheaval caused by the construction is a free outpost. Rather than extend current product into the mall we brought in this social stationery range and have sold over 1,100 units in three weeks.

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marketing

We fail the copying challenge

copier.JPGWe are lousy at driving efficiency from our photocopying service. Close to 70% of sales involving copying are single purchase sales. That is, 70% of the time customers get copying and nothing else.

While the margin on copying is excellent, it is the lack of efficiency for the business which concerns me. Here is a service which 50% of the time involves us helping the customer yet we fail to achieve any up-sell. Worse is that surrounding our copier is no up-sell message. It’s an unbranded bland part of the store.

So, we’re on a mission to change this. We are going to dress our copier area, develop several up-sell strategies and measure the success or otherwise of our efforts. Our mission is to drive appropriate add on sales with our copying customers. We don’t do enough copying to create a whole new counter. Rather, we want to make the existing single copier contribute more valuably to the business.

We are not alone in failing to leverage our copier to its full potential. Most newsagencies I see sales data for show equally inefficient copier sales – 70% and more of sales are copying and nothing else. And in many of these newsagencies, copying is in the top ten sale items every day – so opportunities for growth abound.

Over the next few weeks we will make a series of changes. I’ll report back here on the results.

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Newsagency challenges

Building stationery around brand names

While their competitors switch to house brands for stationery, newsagents have an opportunity to develop a point of difference around established brands. At the same time, they could inform customers of how superior established brands are compared to house brands. Such a pitch, built around quality, would resonate with consumers.

Brands like Post-IT, Scotch, Spirax, Uniball and Collins are respected. It would be easier to build their stationery sales around these brands than to invest in newsagent house brand product.

Stationery customers are becoming wary of cheap imports from China. They understand that lower quality is a hallmark of lower priced house branded product. This is why smart newsagents are pursuing branded stationery items.

I was talking with Jim O’Toole, a regular commenter here, in Albury on Tuesday and he gave me the example of scissors and staplers. In his Rutherglen Newsagency in each of these two categories the well known branded product outsells the house brand by a long shot – to the point where the viability of the house brand has to be questioned.

This branded product issue is important for newsagents. What do we stand for? If it is quality then we ought to more robustly embrace brands which manufacturers spend millions developing and promoting.

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Stationery

The Form – no strings

I picked up a copy of The Form – the new free racing newspaper from Fairfax – this morning at Sydney airport. No requirement to pick a Sydney Morning Herald as well. While the airport is an unusual case with Qantas offering free newspapers at departure gates, some newsagents tell me they cop flack when they tell customers that to get the freebie they have to buy the ‘parent’ product. It was the same when News Ltd launched Alpha. Eventually newsagents allowed people to purchase Alpha without requiring a News Ltd tabloid purchase.

If Fairfax really wants The Form to reach its potential it needs to set it free to find its own audience.

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Newspaper marketing

Lottery jackpot burnout?

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Some newsagents have mentioned that sales in the $22 million lottery superdraw / megadraw are soft, citing too many jackpots in recent times. Certainly the $22 million is not as alluring as $30 million. Also, the Saturday winner usually has to share their prize with ten or so others whereas Powerball goes off to one winner.

We’re creating some excitement in our store through our Syndicate wall. This is what we have to do with these ‘scheduled’ superdraws – create syndicates and therefore some excitement. Our view is that it’s a matter of having a broad range of product which connects with the interest in luck among various ethnicities.

Our customers are voting with their wallets. Now all we need is to win!

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Lotteries

Is MX evolving into a real newspaper?

mx_may24.JPGI may be jumping at shadows on this but MX, the News Ltd free daily newspaper, seems to have evolved into more of a newspaper. The edition I picked up in Sydney this afternoon appears to have more local hard news than what I saw two months ago. It’s still a light read but feels like it has more substance than last time I checked. If I am right and there is more real news content I’d like to know if the Melbourne and Brisbane editions have evolved as well.

I could read today’s copy and pass fifteen minutes or so whereas other editions I have looked at kept me interested for a minute or two.

If this is a trend – to make MX more of a newspaper – then I’d say it makes sense. Even though as a newsagent I would have concerns, from a News Ltd perspective a more valued product will deliver better advertising results.

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Newspapers

Burke’s Backyard back

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Good to see Burke’s Backyard back and getting star treatment now that the show is coming back to TV. While sales have been okay while it’s been off air, ther magazine will benefit from on air support. We’ve been given extra stock this month because of the sales kick expected with the product giveaway accompanying the title.

Garden and related titles are strong despite the drought and stronger interest in Burke’s Backyard ought to help the overall category.

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magazines

Promoting ABC magazines

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Limelight, Life Etc, Collectors and Gardening Australia from the ABC are strong magazine titles in their respective niches and therein lies a dilemma for the retailer. We’re driven to display each title in its appropriate category yet I suspect they would equally work in an ABC themed display stand. Such a display might see multiple titles purchased if, as I suspect, the titles are purchased sometimes for their ABC connection than the pure subject matter.

Take Collectors for example – it should be located at the back of the shop in the collectibles / antiques area. However, the TV show on which it is based is interesting to a broader audience that such an isolated category – yet I cannot justify display space for the limited quantity of this one title.

We might have a crack next week at an ABC themed display grouping the some of their titles together and therefore help the newer titles like Collectors find an audience.

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magazines

Emap titles on the block?

The news that Emap is contemplating selling Australian titles needs to be considered in the context of the turmoil for the company in the UK. Add to this the moves surrounding some of Time Inc’s Australian titles and newsagents seem set for some changes in the magazine space – but rather than reacting to these moves, business minded newsagents ought to exert more control for themselves.

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magazines

The Australian Horticulture subsidy

horticulture.JPGAustralian Horticulture is struggling. We sell, if we’re lucky, one copy a month. It’s not paying its way. The Rural Press website says the titles has 4,507 ABC audited paid circulation January to June 2004. I received three copies this month so it cannot be in that many newsagencies once you account for subscriptions.

This is the type of publication I’m talking about when I pitch here that newsagents need more equitable terms. I can’t keep losing money of Australian Horticulture. I don’t need the title to give my newsagency credibility as a magazine specialist. I’d gladly carry the title if I was being paid for real-estate and time but without such compensation, the title is not worth it.

Australian Horticulture has a lifeline in the form of newsagents providing the retail presence at no cost. As one who is paying for this subsidy I feel it is right to question the worth of the title.

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magazines

Single copy magazines

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In retail, the saying stack em high and watch em fly is often pitched as a good strategy. There is evidence that this works with magazines. An issue can sell very well until you have one or two left and they will sit until the recall date. I have seen this happen where an issue has sold all but one or tow copies on the day of issue.

There are plenty of magazines titles for which we receive just one copy. Romantic Homes and Victorian Homes – the two in the middle of the photo – are single copy titles for my shop. It’s a problem because the pocket costs me the same whether it holds one copy or eight copies. Customer behaviour is such that these single copy titles are not likely to sell.

The distributor scale out algorithms are such that I am likely to be supplied for months, possibly years, before the title is cut.

So what’s the solution? My view is that if I am due to get a single copy then don’t send me any. However, I accept that such an approach denies the title the opportunity of building a customer base. Maybe I have to be flexible. The answer might be a scaled commission. If I am to receive one or two of a title, my commission ought to be, say, double. This gets my attention and demonstrates that the publisher is keen to work with me as I find customers for their title.

It could be that sending more titles is a solution. A smart distributor would cut in some areas so the title can be better supported elsewhere. While they say they do this, I am doubtful. A trial project built around a few titles could be established to test various approaches and find one which equitably serves publishers newsagents and distributors.

The current approach of all newsagents receiving titles in single quantity is disrespectful and financially expensive for newsagents.

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magazines

A dog of a ‘magazine’

excel.JPGThis Excel magazine is a dog, it should not have access to the newsagent retail network. Sales data, not supply and return data but sales data will support my claim that this title ought to be killed off.

The only people making money off this title are NDD, the distributor, and the publisher. For the publisher it’s a low cost venture – same old content regurgitated and a black and white print run. For NDD it’s a fee for service. Newsagents are being abused, again.

I’ve early returned the copies I received today as I have more appropriate product to display in its place.

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magazines

Pedometer giveaway drives New Idea sales

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The free pedometer with this week’s New Idea is working well as the above sales decay graph for my store shows – it’s comparing this week with the average of the last three weeks. We’ve been a construction zone since March so sales are down. It’s good to see the kick this week.

We look at sales decay data for all the major weeklies every few days to measure the success or otherwise of our magazine co-location efforts. It also helps, as is the case here, with tracking the impact of publisher driven promotions.

As far as magazine giveaways go, this pedometer is excellent – useful and timely.

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magazines

Find It online classifieds growth

Our Find It online classifieds site now has 14,000 online classified ads including 162 current Garage Sales and 8,500 vehicles for sale. Visits and pageviews for Find It continue to grow with Google and Yahoo pushing the site further up in their rankings. All newsagent ads including business listings, employment ads and products for sale are free.

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Online classifieds

NSW newsagents anger over News Ltd ‘deal’

Further to my post at the weekend, more newsagents are finding their voice on the move by News Ltd to take margin from newsagents. News Ltd, for its own purposes, is running a marketing campaign to promote home delivery of the Sunday Telegraph. Without consultation with newsagents, News is expecting them to partner in absorbing costs association with the special deal. This means newsagents with home delivery customers paying full price now lose the delivery fee – making less for the same service. Other newsagents with regular over the counter customers are seeing them converted into far less profitable home delivery customers.

At least one group of newsagents is investigating whether there is a complaint which could be made to the ACCC because of what they claim is unilateral action by News Ltd which is detrimental to their businesses. Given that this is a NSW specific issue, I suspect they will consider their options in the Industrial Court, a forum which newsagents have used previously.

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Newsagency challenges

Is it time for adult magazines to go?

I’m thinking of getting out of adult magazines. Not because of an issue with selling what some might call pornography – each to his/her own I say. No, my concern is that adult magazines like Penthouse, Playboy and Hustler are no longer paying their way.

Take Penthouse for example, sales of Penthouse in my newsagency are poor – the sell through rate is 30% at best for the last year. Given the cover price, at this rate I’m not making money. If I get out of Penthouse then the others probably go as well. I’d keep Picture and People but not the others.

My view is that I need to get out of titles when they are no longer viable rather than waiting for a publisher to decide this.

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magazines

We’re saved, the Government finds small business!

Thank God for an election year! Like bees to a honey pot the politicians are attaching themselves to any issue which may deliver a vote or two. Yesterday, the issue was small business and the Government came a running with open arms! Well, years of neglect have made this small business owner somewhat frigid. I’m not feelin the love.

This is the same Government which owns the biggest single threat to small business newsagents – Australian Post. The Government has knowingly permitted, even encouraged, Australia Post to expand its government owned retail network into space previously served well by newsagents.

The proposed changes to the Trade Practices Act, while welcome, do nothing for the credentials of the Government as long as they permit their wholly owned Australian Post retail network to stalk newsagents.

The Government’s line, eloquently put through Communications Minister Helen Coonan, is that Australian Post needs to diversify to remain commercial. That’s nonsense. Take a look at France, Austria, Great Britain and the US. We’re pretty much on our own in permitting a government owned retail network to pursue small business competitors as Australia Post does.

Yep, small business policy at work. Not!

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Australia Post

Fin spin

The magazine industry’s spin doctors were working hard late last week, trying to find some good news in the Roy Morgan research readership figures for the last 12 months to March 31.

In most cases they failed. The Morgan numbers contained few bright spots for most consumer magazine publishers, prompting the usual dark mutterings about flaws in the Morgan system.

Page 21, Australian Financial Review, May 21. All the magazine industry was doing was singing from the same hymn book the newspaper industry has used for the last few years.

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magazines

Thanks for the compliment, I think

I noticed in a Google search today that the folks at News to Business are paying for an ad to appear when people search with the string “newsagency blog”. While they are paying for the newsagency term as well, testing of other valid words with newsagency come with nothing – telling me they are specifically targeting the blog. I guess its complimentary to, in part, market your business based on a blog.

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Uncategorized

It never rains…

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Not content with causing major in-store water problems Thursday and Friday last week, the landlord and builders sought access to my tenancy Saturday at 6am to pour one of the two new concrete columns necessary in my space as part of their refurbishment. The 6am start became a 9am start. The ‘minimal’ disruption to be business became major when they roped off a third of magazines, all stationery, newspapers and our photocopier.

The only reason I agreed to Saturday works was their commitment to a 6am start. At 9am our shop should have been a hive of activity. Instead, customers were being turned away.

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Newsagency challenges