Home' The Channel Magazine : August 2009 Contents National Newsagent August 2009 15
presenting the product in a way that
accounts for how consumers shop for
magazines in that outlet. Destination
purchase behaviours demand a different
retail execution than do impulsive
purchases. Both are critical to maximising
“Retailers, newsagent or not, want
consistent service at terms that are
competitive, taking into account their
investment, potential and required return.
To stock magazines, retailers and suppliers
have two options: Direct supply or through
a subagent — both have pros and cons.
Any legitimate assessment of the relative
strength of the two models must take into
account the retailer’s point of view,”
What is the economy of opening
more and more direct outlets and
David James (DJ). The bottom line is the
consumer is king. The economy of sales
for all products is about being in the
strongest position you can be in the outlets
where your target market shops. Any
retailer who builds healthy traffic volumes
has a powerful asset.
Overall, the number of direct and
subagent access points has remained
stable over the last 10 years. There is no
one-way street where subagents convert
to direct supply or new accounts
proliferate. What does change is the
composition of the retail network; stores
upgrade, downgrade, open and close
constantly based on changing consumer
habits and retail strategies.
Why not focus on the newsagents
as your sub distributor?
DJ. Subagents play an important role
in maximising sales, especially in those
outlets where magazines are not central
to their customer offer. Accordingly,
subagent distribution is a focus. There
are at least two subagents for every direct
agent in Australia. Only newsagents are
offered subagent distribution rights.
What is valid and what is not about
DJ. Subagent distribution is the right
solution in some situations, but not all.
Again, the driving factor is consumers and
having the right offer and retail execution
to convert consumer traffic to sales. As
new consumer behaviour evolves new
opportunities emerge, often within the
Late in 2008, 150 Woolworths petrol sites
were added to the subagency network.
Until then these outlets had never stocked
magazines. A little more than six months
later these subagents now collectively
generate $500,000 in sales across eight
titles as well as newspapers. As the titles
stocked are bought largely on impulse we
absolutely believe these outlets are driving
In recent years hundreds of independent
supermarkets have moved from full
account to subagency status. In these
sites it’s felt that distribution agents, using
local knowledge, can extract a superior
sales outcome than was previously the
case. With the right mix of terms and
services it can be an arrangement that
meets the subagent’s needs.
These are just two macro examples of
situations that play out on a daily basis.
At a local level subagent distribution can
profitably meet the needs of all players. We
encourage distribution agents to work with
their subagents on an ongoing basis and
together strike the right balance of service
and terms that works for both parties..
AN EXTENSION TO THE NEWSAGENCY BUSINESS
National Newsagent asked some convenience chains how they valued the
newspapers and magazines in their outlets and what they expected from
Most value the extra sale from the newspapers or magazines, they insist that
their customers are different customers to those stopping at the newsagency and
to service these customers they need publications on time, if the newsagency is
to retain the distribution rights.
United Petroleum has 230 stores and National Merchandise Manager Jeff Rogut,
said the service from newsagents some of his members receive is good and in other
cases not so good.
“There are some excellent newsagents who give sufficient quantities of magazines
and great service whilst others regard subagents as a bit of a nuisance instead of
as an extension to their business.”
Rogut said he is meeting every day with confectionery, food, milk and bread
suppliers keen to be in the United Petroleum stores but there appears to be little
interest from magazine publishers.
“Some research indicates magazine sales are falling in P&C outlets; you’d think
they would want to talk to us,” he said.
Reg Johnson comes from a newsagency background and now co-ordinates the
United Convenience Buyers group for 1200 convenience stores. Johnson says
newspapers and magazines are an important part of the convenience mix. He said
most members were happy with newsagent supply, as long as it was plentiful and
”No one’s rushing to become a newsagency. Dealing with publishers makes the
oil companies look like good guys,” he said.
Johnson said he thought the delivery-only model worked best as the separation
of retail and delivery functions means it is in the interests of the delivery agents to
look after subagents.
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