Australian Newsagency Blog

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More questions about Hubbed following newsagency marketing campaign

Mark Fletcher
March 21st, 2014 · 9 Comments

The ANF endorsed and promoted Hubbed is being promoted to newsagents today via a six page note sent under the name of Hubbed and POS Solutions.  It reads like a joint promotion, with bold claims to try and drive interest.

For those not familiar I declare I own Tower Systems, the newsagency software company with 1,900+ newsagents as customers. POS is my competitor in that business.  They had around 600 newsagent customers last time I checked. I mention the numbers to provide context, not disparage.  But this post is not about competing with POS, this blog is not about my business.

This post is about questions newsagents should have after reading the Hubbed marketing material.

I do not want to see newsagents lose money on something that is not based on sound research. I am not saying that applies to Hubbed as I have not seen anything approaching research. If they have good research then they should share the facts.

On page one there is this claim: The ConnectPOS system is designed exclusively for newsagents top offer a new range of products and services to customers.  Newsagents already have access to parcel service and prepaid visa cards. Okay, bill payment is new but there is no commercial upside in that from what I can see.  They then say ConnectPOS provides growth with new products, services and increased revenue.  Why don’t they quote the growth achieved by the newsagents who have been running this for six months and more? The rumour is it’s not generating worthwhile commercial results. Only data we can verify can counter such rumours. I’d happily publish the data to counter the rumours.

When quoting newsagent results they need to indicate the terms on which those newsagents accessed Hubbed. It is important everyone can be certain all are on the same playing field.

The flyer on page 1 claims Hubbed also offer high commission to the newsagent with the cheapest prices to the customers.  maybe there is a reason others charge more and have a more modest commission structure.  I’ve been told by someone I’d expect to have good knowledge that Hubbed people met with representatives of a major logistics company who refused to deal with Hubbed because they model was flawed. I’d like to know if there is truth in this report.

On page two of the fax they say newsagents with Connect are selling between 10 and 30 parcels a day. They should publish the details of all Connect newsagents so this claim can be verified.

On page three is the claim that POS Solutions has worked exclusively with Hubbed to create ConnectPOS.  It is exclusive. Hubbed did not approach any other company I am told.  I am told the exclusivity arrangement is for no more than six months.  I’ve seen the integration. I think it’s pretty lame. But for a couple of keystrokes you could do this on any computer running any newsagency software.

Page three ends with – join the growing list of newsagents that are embracing POSBrowser with integrated ConnectPOS! Newsagents should ask for this growing list so they can verify the claim. Otherwise, it remains a sales pitch without evidentiary support.

Page five says: Over the years Newsagents have watched staple product sets that belonged to them in large part become commoditised with other retailers now taking the significant share.  While this is true, none of the Hubbed products are in this space so I am not sure why they would make the statement other than to sell through fear.

Fear is a massive factor here. Newsagents who are not great retailers want someone to fix their businesses for them. Hubbed is being pitched as this. But it will not fix a troubled business.  The only way for a newsagent to fix a troubled newsagency is for them to take control of their business, embrace change and plan in the budget, on the shop floor and through buying for a brighter future.  In my own newsagency my sales are up double digits year on year. I don’t have Hubbed or anything like it. I’m doing this on the back of flat traffic in the centre and extraordinary competition from small and large businesses.

Newsagency growth comes from future focused products.  Hubbed products and services are rooted in the past.

On page five they go on: other retailers are good at seeing what is in demand and taking advantage of it.  How does that connect to Hubbed? Other than the parcel offering that we can get through others too, what products and services are in high demand where demand is growing? Here is their fear pitch again.

Back to the issue of what newsagents have lost over the years and are losing today: lotteries, magazines and stationery. These are the key products lost. Where is Hubbed in any of these? Nowhere from what I can see. I make this point to underscore the fear they are using to encourage newsagents to go with them yet they are not offering anything to address the items in their fear mongering.

On the last page is a claim of a special offer from Hubbed and POS Solutions.  My own experience is that something that is exclusive is not as keenly priced as something that has competition.  If Hubbed really wanted to save newsagents money they would have made their platform more available than with only one company, they would have, from the outset, demonstrated an understanding of the commercial reality they write so much about in their marketing material.

Even on the best assessment, Hubbed will not generate the kind of return a newsagent can get from being a good retailer.

Between Jan. 1 and Mar. 13 this year in one of my newsagencies we have increased our plush sales $4,743.18 (ex GST). We are projecting an increase for the whole year of in excess of $35,000.00 in plush sales (ex GST). This will add $19,250.00 gross profit to our P&L from this category alone. There is a correlation between plush sales and gift sales and card sales.  The plush increase will, in fact, translate into close to $48,000.00 additional gross profit from the three categories.

Once you add in 18% year on year greeting case sale growth you have a wonderful business story despite the doom and gloom talk being used in this unfortunate flyer.

My newsagency is in a shopping centre with 300 other shops, several majors, many gift shops that sell plush and several specialist large card shops. Yes, it is a very competitive environment. With flat foot traffic in the centre.

The future of the channel for good retailer newsagents is bright because we can make it so. We can create strong, growing and profitable newsagencies by being good retailers where we have control through what we stock and how we merchandise it. It starts with us choosing to be a retailer and not an agent. Next is you taking a realistic view of your business and building from there.

I acknowledge that some newsagents will like the Hubbed approach and will benefit from it. If you think this is you, I urge you to do your homework and be 100% satisfied with all you are promised. If, once you have done this you like what you see, go for it.

20 likes

Category: Hubbed

9 responses so far ↓

  • 1 P // Mar 21, 2014 at 3:02 PM

    Gee you really don’t like Hubbed this may well work good for some and not so for others Lets fix over supply first that would work for ALL newsagents

    2 likes

  • 2 Clive // Mar 21, 2014 at 6:39 PM

    I would like to know the stats on how many ANF/NANA/VANA/QNF members who are on the board and who have newsagencies also have hubbed.

    I had one come into my shop to sell me hubbed and when I asked if they have it in their shop they said “no, but we may have to bite that bullet one day.” Um REALLY.

    2 likes

  • 3 KMc // Mar 21, 2014 at 7:13 PM

    I am really wondering what the fuss is about. Hubbed seems to be a very late attempt to cash in on a consumer need that has almost run it’s course.
    Agency business with low commissions won’t pay wages and rent in this day and age. The whole subject is totally uninteresting and hardly worth a passing thought.
    Like it or not our business model is now a specialised retail model. That means stocking and promoting medium to high margin product lines, with range, assortment and price points that attract customers and provoke purchase decisions.
    It means pro actively thinking for ourselves about our businesses, and not passively waiting for someone else to do the thinking for us.

    19 likes

  • 4 john // Mar 22, 2014 at 9:55 AM

    Clive,
    my understanding is that both VANA and NANA have not endorsed the Hubbed model, and they advise members to have legal advice and understand the contracts if the newsagents wants to sign

    3 likes

  • 5 Peter // Mar 22, 2014 at 11:14 AM

    John,
    that was not what was said by NANA at meeting within Newsagents in Wagga Wagga 2 weeks ago. The CEO of NANA was publicly endorsing Hubbed to us and was not receptive to issues some of had with Hubbed. It should also be pointed out that the CEO is the Board’s responsibility and does what the Board wants.

    It appears that POS solutions is right behind Hubbed while Tower (Mark Fletcher) is not, which is relevant to this blog and Mark does not hide his affiliations etc, Personally I totally agree with Tower’s position here.

    It is stated Hubbed will give me 3 things.

    1 of which I already have with ezipass.

    2 Bill Payment via the Bpay route. Bpay has well and truly reached its zenith and is now clearly in decline as more and more people and quickly switching to EFT (which is still free). Further the return on Bpay and extra customer charges will make it noticeably costlier for the consumer.

    3 Parcels which I can now source from other sources besides Hubbed.

    At another meeting this week it would appear about 10 % of Newsagents in my area are going to Give Hubbed a go. I wish them the best of luck and I hope I am proved wrong on Hubbed for their sakes but I doubt this will happen. However if it does I will have to eat humble Pie, which I believe will be extremely unlikely.

    And finally a lot of People and organizations set them selves saying we are the best of the best just trust us. I am not necessarily including Tower in this, It would be nice to know what ANF and NANA our getting out of this I suspect this will influence people when voting for the Boards in these organizations. It will certainly influence my voting and I suspect the current boards will not like that.

    5 likes

  • 6 Keith // Mar 22, 2014 at 12:21 PM

    I doubt the claims about bill traffic and doubt they can sell parcels for less that Australia Post yet give me more profits.

    3 likes

  • 7 Mark Fletcher // Mar 22, 2014 at 1:36 PM

    Peter I am not against it as much as I want transparency from the ANF as well as an explanation of the business case data rather than marketing spin.

    I’ve said here before, I would never get in the way of newsagents who want to run Hubbed. This includes in paying for an integration with the Tower software – as I have done for many other newsagency suppliers.

    While I agree with your assessment of the Hubbed offerings, I’d not block others who want to try it.

    4 likes

  • 8 Peter // Mar 22, 2014 at 2:51 PM

    Mark,
    your answer raises the obvious Question why is integration into Tower Software not on offer like POS solutions.

    2 likes

  • 9 Mark Fletcher // Mar 22, 2014 at 10:48 PM

    Peter, as I’ve noted Hubbed did not approach Tower. They approached POS and did a exclusive deal with them that, as I understand it, runs out in a few months.

    The integration I have seen is not a big deal, not complex. Anyone using Hubbed can use it on any PC regardless of the software they are running.

    3 likes

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