The Guardian on The Saturday Paper
The Guardian has published an excellent piece on The Saturday Paper – it’s good to read more about this exciting launch and the people behind it and why they are bucking the trend and launching a print newspaper.
Stalking by text message
I was in Guangzhou China Monday and walking past a shopping mall on Tianhe Road I received this text message. Apparently, the retailer involved pays China Mobile a fee to send advertising via text to people nearby.
I thought this was pretty cool – marketing to possible shoppers near your store. TheI thought it could be annoying for locals if they pass by this or others using a similar service. Your phone could soon become clogged.
While our privacy laws here stop this type of marketing, I am sure that iBeacon and similar close range services will see retailers reaching into the mobile phones of those nearby to try and attract interest.
Understanding the new competitor: WH Smith
This photo shows the impulse item pitch at a WH Smith store in Melbourne. It’s compelling, driving customers to purchase multiple items, a blending of what we see in convenience stores here already but in a more traditional newsagency model.
As WH Smith rolls out more into Australia it will challenge the traditional Aussie newsagency model since they can bring to market benefits of their strength in numbers.
The danger in returning bagged discount magazine packs
This bagged pack of current (when released) issues of Elle and Cosmopolitan is tagged by the publisher as a topped return. If we did that we’d top the covers and return both separately. This could open us to a fraud allegation by the publisher owned distribution business. Instead, we return the whole bagged pack – to avoid any allegation of impropriety.
Maybe I missed something, maybe we could return the empty bag. I’d love to know how others handle returning these particular discounted bagged products – not the Express and Universal bagged packs with back issues, but these bags containing current issues of different titles.
Promoting People’s Friend Special
We are featuring the latest People’s Friend Special at the entrance to our main magazine aisle. People’s Friend is in our top three weekly magazines so it makes sense we promote this special. The promotion will drive incremental purchases and traffic. Tactical placement of a title like this in the simple stand as shown continues to be more successful for us that a billboard type display.
Making the most from magazine traffic
I never see magazines as a single item or single category purchase. The location of the category, promotion of other products in the category and traffic interruptors going in and coming out help leverage greater efficiency from the magazine shopper. This photo shows one example of a small step we have taken to drive sales of items to people browsing Australian Cupcakes & Inspirations. Even a simple small placement like the felt cupcake kit can help make magazines more efficient for us. It’s better we obsess about opportunities than drive magazines down because of all the problems with the distribution model.
You think the newsagency channel is changing?
If you think your newsagency world is challenged by disruptive and challenging changes, consider what optometrists are dealing with. Opernative is a startup business in the US offering online and app based eye tests – bringing to your desktop and tablet computer a service you hitherto had to go to a medical professional for. They are targeting a cost of $20 for an exam.
In newsagencies today we sell off the shelf reading glasses for usually between $9.95 and $29.95. Opernative fills the market between these cheap glasses and full prescription model except that they cover the majority of what an optometrist will offer today.
This move is relevant to newsagents as it illustrates the extent of change being wrought on traditional businesses by technology. It reinforces the importance of flexibility in your business plan. It reminds us that no business is insulated from disruption.
Newsagent frustration at Network Services invoice changes
Following off-topic comments here about recent EDI changed by magazine distributor Network Services, as promised I am opening a post here so newsagents can comment and through this provide feedback to Network.
This week, Network released EDI changes including the following (I have pulled this info from correspondence from Network – the image is the explanation sheet the provided):
No more multiple invoice numbers (Except for reorders sometimes)
No more pains for customers reconciling statements
Cleaner delivery documents
Changes in SA, WA, TAS and NT from 24th February delivery
- The number of Statement Reference Numbers in the delivery will be substantially reduced. However, it’s possible that a bundle may contain products charged on multiple Statement Reference Numbers.
- Stores will receive an Outlet Summary with their delivery, which is the key document to enable reconciliation to the monthly statement, as it groups titles by Statement Reference Numbers, and also identifies the bundle each title was packed in.
- DD2 file will remain sequenced in Statement Reference Number order, rather than physical packing order (as per above).
Network, through Netonline, can give newsagents something closer to the EDI experience they are used to. This is called the EDI late File option. Here is information from network again:
File creation begins at 6pm (Sydney time) the night before delivery, the file will then be available to you between 6.30pm and 9.00pm (Sydney Time)Quantities will match the quantities packed at the warehouse
The order of the titles in the delivery file WILL CLOSELY MATCH the order of your deliveries’ physical packing.
This is a new option that aims to streamline the process of physically receiving a delivery through closely matching the order of your POS labels to the order your stock is packed in.
While Network is big enough to defend itself, I’d note that back office magazine distribution software is a large and complex beast. Bending it to serve even the simplest change is expensive and challenging. Adjusting the software to serve newsagents is complicated by many voices seeking different changes.
Bill Express parent company OnQ news
I received a creditors report from the administrator of OnQ yesterday. OnQ is the parent company of Bill Express. Both companies were public companies. Both failed. In this latest report, the administrator proposes a deed of company arrangement through which a backdoor listing business would take control of the OnQ shell. Click here to read the latest OnQ administrators report.
This latest activity is a reminder of the mess of Bill Express and the tens of millions of dollars of newsagent funds lost.
You can read my posts about OnQ here.
Understanding the new competitor: WH Smith
WH Smith is expanding its newsagency footprint on several fronts in Australia including opening what look like more traditional newsagency businesses. This photo os from the WH Smith at Melbourne airport – before customs in the international terminal.
This WH Smith store is a traditional large-format WH Smith transit store. What you see is an excellent range of products in a well laid out shop, good signage and plenty of product deals.
In the newsagency space WH Smith has transit shops and high street shops. The two are different in focus but operate under a consistent brand.
Given the expansion of WH Smith branded stores, their launch of Zoodle and their reported takeover of Wild Cards and Gifts, WH Smith is a competitor on Australian soil, a competitor we have to take seriously.
What happened with your NW supplies this week?
Our supplies of NW were cut in the same week we received a stack of NW bagged with Woman’s Day. I can’t see why regular supply of NW would be cut unless they want people to buy the discounted bundle. As for the bundling – anyone watching how women’s weekly magazine shoppers interact with the product will know that browsability is important.
Understanding the new competitor: Zoodle by WH Smith
Given the increasing presence of WH Smith in Australia – they are opening more stores and have reportedly taken over Wild cards and gifts (I say reportedly since WH Smith has not made an announcement) – I am planning a few posts about them.
Zoodle is a kids retail format from WH Smith at Melbourne Airport in International Departures. The Melbourne store was the first Zoodle. It opened late 2012. the first UK Zoodle opened in February 2013.
Zoodle is an interesting shop – 100% focused on kids and those who shop for kids. It’s bright and fun. It featured international brands like Lego, Hello Kitty, Peppa Pig and Where’s Wally. Brands are vitally important in the kids market.
What’s interesting about Zoodle is that WH Smith has two other shops within a few metres of Zoodle yet this kids shop is stand-alone. While I am no expert, to me, their approach speaks to the value of retail specialisation in a separate format rather than including that format in a bigger store.
Using Disney Princess to sell across product categories
The Disney Princess brand topped the 2012 licencing franchise list as the brand generating the most revenue – sales in excess of $1B – according to industry newsletter The Licencing Letter. In 2013 it continued to play a vital role in the financial success of the Disney corporation.
This matters to newsagents because we have access to a range of Disney Princess product. We can draw together products from multiple suppliers and across multiple categories and tell retail stories that pitch our businesses as culturally relevant and appealing to an important age-group and those who shop for them.
Sourcing mega-brand products from multiple suppliers creating a compelling in-store pitch is another way we can attract new shoppers to our businesses and get existing suppers spending more.
Now if you are reading this and saying all your customers are old, ask yourself: do they not buy for grandkids or nieces or nephews?
The photo shows part of the Disney Princess range in my newsagency. It’s part of a newsXpress strategy developed with several suppliers.
Suppliers themselves don’t get together to pitch a licenced brand story, we need to source these opportunities for ourselves or through our newsagency marketing group.
There are many opportunities like Disney Princess around which we can grow a brighter future.
Excellent Daphne’s Diary sales
We are on track to sell out of the first issue of Daphne’s Diary we stocked – encouraging us to request more of the next issue. One customer I spoke with told me she would be back for the next issue. It’s special interest / fringe magazine titles that are most important to newsagencies and traffic retention / generation.
Tatts fails to promote its retail network
Tatts expects (requires?) its retail partners including newsagents to promote online and over the counter purchase of its lottery products through its mandated shop-fits and the marketing material its retailers are required to display and distribute. Tatts does not reciprocate with its own marketing spend. Take the current Facebook campaign – it seeks to drive online sales. It would be easy to include a locate your nearest outlet button but Tatts does not do this as it makes more money from online sales as the recent Credit Suisse report indicated.
Every time Tatts advertises its lottery products it should also promote its retail network and make finding nearby retailers easy.
The retail network is important to Tatts yet the company fails to demonstrate this in its actions.
Matt Handbury out of Hubbed?
I’m told that Matt Handbury is no longer involved in Hubbed – the bill payment and parcel business he actively promoted as the future of newsagency businesses for more than a year. I am also told that the ANF no longer has its 5% stake in Hubbed but that Hubbed moved into the ANF offices in early January this year.
I am not aware of any formal announcement being made about any of these or other reported moves. A check of the Hubbed website and blog indicates that Handbury is no longer involved.
Given that newsagents have been asked to sign long-term finance contracts to ‘finance’ equipment and or software, one could argue that they are stakeholders in the Hubbed business since these finance contracts, in turn, release funds, working capital, to the Hubbed business. Has any of this money been used to buy out Matt Handbury and if so what is the impact on the financials of the Hubbed business.
Handbury was quoted in a range of media stories in 2013 about how Hubbed would save newsagents, that it was the future. His connections and history were used to gain traction with newsagents, newsagents respect him. Now that he is gone I wonder of some who signed up will have second thoughts.
Hubbed is pushing its parcel operation more than bill payment. Anyone considering Hubbed for its parcel operation need to talk to the people at the newsagent owned N Parcel and the privately owned Parcel Point – do your due diligence comparing Hubbed to those other free offerings. I say this because several logistics people I have spoken with say the Hubbed parcel model is not sustainable in the long term.
Given what appears to be its continuing investment in the Hubbed business, the ANF ought to make a full statement to newsagents so that they are better informed prior to signing any contract in relation to Hubbed. My understanding is that VANA and NANA are yet to endorse or support Hubbed in any way.
Anyone with more information on Hubbed, please share your comments here.
Excellent display unit promoting Yours in Coles
The Coles supermarket a few metres opposite my newsagency has this excellent floor display unit promoting Yours magazine from Bauer Media.
It’s been suggested to me that Coles is being paid a fee by Bauer for the placement of this unit. Regardless, the display unit gives Coles a competitive advantage over my newsagency, it reinforces Coles as a more relevant and engaged popular magazine destination than the competitor newsagency.
Every time publishers favour Coles or Woolworths with a better display unit or a better offer they help show off these businesses as being better than us.
Every customer who switches their regular magazine purchase from a newsagency to a Coles or Woolworths is dilutes the viability of our channel as magazine retailers. Take this out a few years and what do newsagencies look like without magazines? Dead.
The next time a publisher representative considers a promotion, focus on newsagents. We are more likely to invest something of ourselves in your promotion whereas our much competitors will only give you what you pay for.
Are magazine publishers and distributors listening?
Social media catches SA newsagent and would-be MP
The Advertiser reports how social media posts by a SA newsagent and Liberal Party candidate for the state election pitch him as rude and offensive. The story is a reminder that posts on social media are like sharing your thoughts through a megaphone that remembers forever what you have said.
Sunday newsagency marketing tip: buy for your business as a marketing activity
One of the most effective ways newsagents and other independent retailers can compete with much bigger competitors is by buying stock with more care. If you look carefully in major retail outlets, it is rare they have the full range of the same brand of products you might stock.
A big retailer will jump on a movie franchise merchandise opportunity, for example, but often they will not stock more than a few SKUs. Newsagents can tap into a broader range and tell a better retail story – and use this to attract shoppers to the store.
I have seen national retailers take on a brand we stock but only take on a quarter of the SKUs available, allowing us to be more of a destination for the shoppers committed to the brand. often, too, they want to be out of these products in a few weeks whereas we can make money over a longer period.
This is why buying products needs to be seen as a marketing activity. Buying carefully, focussing on brands, listening to trends and leveraging gaps in what your major competitors are doing presents newsagents with commercially valuable and sustainable opportunities.
Good buying can be more valuable for your business than an expensive marketing campaign. It can draw more shoppers thanks to word of mouth. It can get current shoppers spending more because what you have is unique or at least looks unique. It pitches your business as relevant to a trend or fashion today and that lifts your business from being perceived as an old out of touch business.
So, next time you are buying stock for your shop, pause for a moment and switch gears – you’re not buying stock, you’re investing in the future of your business, you’re buying to better, more effectively, market your business.
Sunday newsagency management tip: you owe your business the truth
We small business owners can be a pretty delusional bunch: blaming others for our own lack of business planning, expecting suppliers to create our future, complaining about an injustice or wrong but not acting to remedy the situation, expecting suppliers to give us big business terms while failing to match the big business benefits.
Too often, how we see our small businesses is through eyes of our own spin and fiction. Too often, the truth about our situation is missing.
A newsagent I was talking with a newsagent recently complained about how poorly products from a supplier were performing. Sure enough, year on year sales were down. However, for more than half the period we looked at they were out of stock. The newsagent had failed the supplier. This is the truth in their own business data. On showing this to them they said I was on the side of the supplier. After a while they looked at the data and wondered why replacement stock had not been ordered. They did not have any process in place for ordering stock based on sales. Next, they blamed the rep – it was their view that the supplier should have sent a rep to keep the business replenished. But there was no arrangement or agreement with the supplier about a regular rep visit.
We are not victims we we in small business retail often play the victim card.
We have to embrace responsibility for our businesses. This means we need a current and relevant business plan. We need management and operational structures that ensure our business pursues the plan. In practical terms in the context of the story above: the newsagent should have been reordering based on sales, a team member should have been delegated to manage the product category. The business should never have been out of stock of something that was selling well. Had this been the case they could have achieved an additional $5,000 in revenue in three months.
Yes, a supplier rep visiting could have seen and addressed the lack of stock. However, reps are expensive and more suppliers are cutting their field force since this is a cost of business for them dealing with small business. It’s a cost that can make us an uncompetitive channel for suppliers. This is why we need to take a more professional approach to ordering stock.
There is truth in our own business data. Each of us needs to use this and based our business decisions on it. Relying on others is not a plan. Relying on our gut feel is not a plan.
Our future is up to us an the best guide to that future is in our business data.
Blocking traffic can drive sales
We moved the floor display unit promoting the Pacific Magazines win a car promotion to partially block one of the entrances to the business Thursday. It’s worked a treat – delivering more sales of the promoted titles. That’s Life and Who have especially benefited. I think the incremental sales have been as a result of the new placement of the unit and the simple marketing message. Watching customers tells us its working at attracting traffic from the mall in front of the business.
I like this display unit as it enables us to promote magazines on the lease line without giving up too much space to the low margin category. In addition to promoting these Pacific Magazines titles, it unit acts as a sign-post proclaiming: magazines here.
Insights into the ACCC and how they could help newsagents
ACCC Chairman Rod Sims, provided an insight into the activity of the ACCC in a speech this week at the CEDA conference. Early in the speech he shared some useful stats:
Each year the ACCC receives roughly 160,000 complaints and inquiries. From this pool we have to make a judgment on which matters merit an investigation. This process narrows our scope to about 500 initial investigations, around 140 of which are then conducted at an ‘in-depth’ level.
This activity directly or indirectly sends warnings that often instantly change behaviour. A simple call from the ACCC can be very effective.
From this activity we take around 35 cases to court each year, accept around 30 court enforceable undertakings and issue infringement notices in around 30 matters.
Further on, he talks about unfair contracts for small businesses:
Last year, we looked closely at unfair contract terms. Following the ACCC’s intervention, a range of businesses amended their standard form contracts, removing potentially unfair terms.
This discussion ended with:
There is more work for us in relation to unfair contract terms and we will be taking further enforcement action.
I urge newsagents to read the whole speech.
I wonder if anyone representing newsagents has provided the ACCC with a copy of the magazine distribution contracts and asked for these to be considered against the contracts provided to our competitors. I expect that any comparison would show the newsagent contracts as unfair and anti-competitive.