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

Month: October 2006

Local news and how Australia is behind in the game

Great story in Fast Company about Rob Curley and his leadership in the hyper-local news stakes. Curly understands what local communities want and is using the Internet to deliver on that. He is makes content which is indispensable to its community – like any local newspaper. I reckon that local news is fading in Australia with centralised newsrooms and fewer resources closer to the action to report local events from a local perspective. Compared to what Curley is doing local newspapers in Australia are dinosaurs. The Fast Company article is well worth reading.

0 likes
Newspapers

Government disgrace over Australia Post and small busines policy

I’ve seen a letter from Communications Minister Helen Coonan to a colleague last week in which ducks and weaves about the impact the Australia Post is having on small business. When queried about the impact of the 850 or so Government owned stores, Coonan talks about Australia Post’s 3000 licenced owned post offices and completely ignores the government owned stores.

The government hides constantly behind the privately owned LPOs which it is the government owned stores which pull in the big dollars. It is the government owned stores which are sucking millions of dollars away from the newsagent channel. My own store is a perfect example. The government competes with me for the sale of stationery, calendars, greeting cards, ink and toner – none of which relates to, in my view, products and services allowed under the Act.

This government needs to wake up to itself. Australia Post is using the respected Australia Post brand and its government ownership to steal business from small businesses like mine. My profits are down as a result. This impacts the tax I pay. It impacts how many people I can employ.

The lack of interest by the Government on this matter is a disgrace.

0 likes
Newsagency challenges

Selling the newsagency after just three months

I was talking yesterday with a newsagent who has decided to sell their business. Nothing odd about that except that they have been in the business for three months. They say that the lack of control they have over their business is the reason. While I have seen this before, this instance is surprising. This person has successfully owned and operated retail businesses previously. They’re cashed up. They’re pro-active. It’s what they say are uncompetitive magazine rules and lack of control over core business activity which they hate.

Their newsagency competes with five magazine outlets nearby – three petrol/convenience and two supermarket outlets taking just the top selling magazines. He’s cool with competition but would prefer fair competition where he can choose his range as easily as his competitors. While he has sought to cull magazine titles to a more viable level he feels helpless to effect fair change in the supply model. Hence the decision to leave.

Any assessment of the magazine supply model would say that newsagents are disadvantaged. We need an easier way to control what we receive. We need more accurate scale out of new titles. We need fairer financial terms for titles which are to stay on the shelf for more than a month.

Unless the magazine supply model changes, more new newsagents will exit early and the channel will be the loser.

I appreciate that the supply problem is not just to do with magazines, however, magazines soak up the majority of the cash – I write cheques for more than $40,000 a month for magazines and half that is for product I return. Fix the cash-flow crisis and you create happier and more business focused newsagents.

0 likes
magazines

Newsagents eat their own again

Just a few months after signing agreements to unify newsagent associations, the national body, the Australian Newsagents’ Federation, had done a dummy spit and told newsagents in NSW and QLD to quit the state bodies and join the national body. The ANF says the NSW and QLD State Associations are duds. I’d copy the dummy spit email here if it were not, in my view, defamatory. In the same email, the ANF announces that ANF CEO, Rayma Creswell has resigned because of “her inability to continue to work with industry Associations representing NSW and Qld”.

The road to unified national representation of newsagents has been long and rocky. Every day the national and state associations continue brawling is another day of opportunity to those who compete with newsagents. The communication from the ANF could have been more professionally written and therefore more likely to be read and digested.

The ANF and state associations have signed agreements which lay out how they are to co-exist. Newsagents would be well served if all parties adhered to the agreements. In the meantime, the ANF Board could consider hiring a CEO with solid national association experience.

0 likes
Newsagency challenges

OK missteps in launch

It’s the second week of OK! in its weekly format and if other newsagents are like me the magazine arrived without posters. This means we won’t allocate promotional real-estate to push the title. Compare this to Famous, the Pacific Magazines weekly – this week, as usual, I received 6 posters, enabling my team to build a good display for the product.

0 likes
magazines

Halloween now an ‘official’ season

bloghallow.JPGA year ago at newsXpress we decided to invest in Halloween this year in terms of marketing collateral for our stores. Some people thought we were nuts and that our planned group-wide $25,000 – $35,000 investment in marketing collateral was nuts.

Patting ourselves on our backs it’s pleasing to see activity at Movie World on the Gold Coast, Australia ZOO and in Better Homes and Gardens in a Halloween feature. The newsagent connect is that we sell materials for decorating the home, school or workplace and we have a range of Halloween products such as cards that light up, severed hands, candy baskets, cobwebs, witches brooms and face masks. In my own shop we have not encountered one negative customer comment.

Disclosure: I an a Director of newsXpress, a national group with 95 newsagent locations.

0 likes
marketing

Abusing the end of the month

I have now seen data from enough newsagents know that we are overloaded in the last week of the month with magazine stock. In one case, one supplier provided 37% of all stock in the last week. The problem with this is that the newsagent had no idea this was coming because titles were either one-shots or imported. The newsagent turns up to work last Wednesday, sees the problem for the first time. They have 30 days to pay for this stock bonanza. What other business operates like this – hitting small business within five days of the end of the month, all so conveniently within the billing cycle.

Newsagents are in the middle of a cash crisis and unless there is fundamental change in the magazine supply model – such as loading the last week of the month – more newsagents will close or exit the channel early.

Through my software company we have given newsagents a reporting tool to track the cost of end of month overloading. Hopefully some will use this to prove the behavior I have described.

0 likes
magazines

More Herald Sun CD woes

Sunday. 11am. We’re out of the Herald Sun encyclopedia CDs. Customers are angry. We start writing up backorders in a book. Between our newsagency and the next one open are ten closed newsagencies. It’s nuts we do not have more CD stock.

0 likes
Newsagency challenges

We turned away 50 customers today

The Herald Sun is running an excellent CD promotion over five or six weeks. Today, due to lack of supply of the promotional CDs 50 customers who came into our shop wanting to buy the CD turned and walked out. It’s the first thing they ask. We know from experience that if we say yes, at least half grab the CD and make other purchases. The knock on effect of lack of supply is significant. Beyond the 50 lost customers another 60 ordered the CD on backorder. This takes a couple of minutes per order – another significant cost for micro margin product.

I love the promotion. Blind freddy would have known that it would be exceptionally successful. I wish the scale out was more appropriate to need. In my case, being open all weekend, I need more than a high street newsagency.

0 likes
Newsagency challenges

Halloween a great success

bloghalloween2.JPGHalloween has worked exceptionally well for us. Three days to go and we’re out of all but a few items. We have used the promotion to broadern our offering in toys and allied items. What’s made it easy for us is the marketing material from newsXpress. Wandering through my centre today and with a fair perspective, ours is the best display – the photo only shows part of the story. There is no doubt that the theatre of Halloween works in retail.

0 likes
Uncategorized

Is POS Solutions the leader in magazine management facilities for newsagents?

POS Solutions, in marketing material to newsagents last week, claims that their POS Browser software is “a leader in magazine management”. I am not sure how they measure leadership. To me it means providing state of the art facilities which help newsagents achieve better commercial results from their magazine category. This means better supplier interfaces, better stock control, better over and under supply warning facilities and better business performance tracking. Oh, and being first to market.

Newsagents switching to my company, Tower Systems, tell me they switched because they want better magazine management facilities than they had in POS Browser.

POS has only recently passed industry compliance tests – two years after their competitors. Sadly, they have left, by my estimation, 70% of their users behind since the cost of moving from the POS DOS software to the POS Windows software is prohibitive.

Are the POS claims to be “a leader in magazine management” accurate. In my view they are not. POS Solutions is not a leader in this or any other area of newsagent operation.

POS Solutions names newsagents in their brochure – I wonder how they feel about the software they use? How do they feel that they have been held back for more than a year from sending magazine returns data electronically? I know from my own newsagency that this alone delivers hundreds of dollars in benefits a month.

Caveat emptor.

Disclosure: I own Tower Systems.

0 likes
Newsagency challenges

News Ltd flip flops on newsagents in South Australia

A week ago News Ltd’s Adelaide Newspapers refused to use newsagents to raise money for the Steve Irwin Wildlife Warriors charity. They preferred to deal with BP. They also ignored newsagents for their robot sales promotion – another exclusive through BP. Next week, they flip flop and use newsagents to push their Moments In Time publication – ignoring BP; or is BP ignoring them? Moments In Time sells for $39.95. Stocks were delivered to newsagents this week. Newsagents were billed this week even though the title does not go on sale until next week. Sales history suggests a sell-through of 40%. This will leave newsagents cash-flow negative for three months – three critical months. If Advertiser Newspapers is so keen on dealing with BP why not foist this book on them? News Ltd needs to decide where it stands with retail newsagents. In my state of Victoria it is a healthy and mutually respectful relationship. In SA, newsagents are being abused.

0 likes
Newsagency challenges

Conference season: Sydney and Vienna

I’ve booked to attend the Media and Broadcasting Congress in Sydney next month. The program looks excellent. Graeme Samuel is speaking on Media Mergers: Competition or Consolidation. There are CEO level speakers from Yahoo7, ninemsn and Crikey among others. Tony Hale, the CEO for the recetly formed newspaper works. I want to understand more about the challenges my humble newsagency will face in the disrupted world.

Before I get to Sydney I will be in Vienna for Beyond the Printed Word – a conference on digital publishing for newspaper publishers. I’ll get to hear about innovation from around the world by publishers pursuing opportunities online. My interest is more from the perspective of the Find It online classifieds business and what we could learn from publisher experiences.

0 likes
Uncategorized

Tracking sales of OK! Weekly in its launch week

blogokmag.jpgI’ve seen sales data for OK! from twenty newsagencies to the close of business last night which suggests the title is tracking well. On average, after three days trade, a 20% sell through. The peak is a sell through of 75%. The strongest sales, for the stores providing such data, were yesterday.

OK! is a very different weekly and it will take time for consumers to warm to this. In my own shop, where I can get into the guts of the data, I can see that OK! has sold more than NW and Famous. I’d expect it to pass WHO. 30% of the time it’s been sold alone, meaning 70% of sales have been with another product – usually another weekly magazine.

I suspect one outcome of the launch to be a shift in on sale days for at least one other weekly, maybe two. But I’ve predicted that before and it didn’t happen. Maybe I am projecting because of the real-estate, promotion space and labour challenges.

0 likes
magazines

The last Wednesday of the month

In researching magazine supply patterns in several newsagencies I am seeing deliveries on the last Wednesday of the month which are between 10% and 50% above average for a Wednesday in dollar value. Timing of supply is part of the cash-flow challenge newsagents face. Unless distributors take more care in supply cycles they will kill the retail network which is so good to them.

0 likes
magazines

How to not raise money for Wildlife Warriors

blogwrist.JPGThe folks at the Adelaide Advertiser decided to use BP outlets to sell their green wrist bands instead of newsagents. Data I have seen suggests that this was a mistake. I know that newsagents in Victoria and New South Wales actively promoted the fund raising – many sold out of the bands and raised good amounts for Wildlife Warriors. From South Australia I have heard of between 35% and 70% of the bands being returned. Whoever decided to use BP for this fundraiser obviously was not focused on raising the maximum amount possible.

Publishers have a perfect channel in newsagents for all masthead related promotions. The more the use the likes of BP the less interest newsagents will have in publisher needs and the less successful their masthead related will enjoy. The SA Steve Irwin green bands are a perfect example.

0 likes
Newsagency challenges

Another online lottery competitor disrupts the retail network

The re-energised OZ Lotterties business looks interesting. Their website is enticing and makes buying easy. Given the success of the Tattersalls website it will be interesting to see how this goes. The site itself is better than the Tattersalls offering from a user perspective in my view.

Lottery related traffic is important to newsagencies. Take this Thursday for instance. The $12 million Powerball jackpot will give my store a traffic boost of 20%. If I lose some of that to online there are flow-on effects. So, the time to plan for this is now. Online lottery businesses will only grow in number.

0 likes
Newsagency challenges

Competing with the gorilla Big W

blogawwcook.JPGWe have launched our campaign for COOK, the 600+ page cookbook from ACP. I blogged two weeks ago about how Big W was spoiling the party for all retailers by selling COOK at cost or within cents of it. We let Big W play their gorilla game and run stocks low before launching our own offer. While we are discounting the title more than we planned, the gift certificate offer keeps the discount spend in store and, hopefully, builds loyalty.

Our display has been up for four days. Sales are good. Most have been an add-on to an existing purchase. We’ve located the display near our cookbooks to drive sales within the food category.

What I like about this offer is that it broadens our appeal – something newsagents need to do more of.

0 likes
Newsagency challenges

The business of charity and why pink is not pretty

Despite dudding newsagents last month by placing their Pink Ribbon magazine exclusively with Woolworths, the National Breast Cancer Foundation is, through its commercial partners, is pushing other Pink Ribbon products on newsagents. We are being asked to sell pens, pads, bands, badges – all manner of products. It is disappointing that the NBCF is yet to respond to my complaint and complaints from other newsagents about their exclusive Woolworths deal. I emailed them on September 24 and have not received a response. The deal with Woolworths and the lack of dialogue with newsagents following complaints is causing newsagents to reject Pink Ribbon products.

There is an unpleasant smell about how commercial the Pink Ribbon campaign has become. The Woolworths deal could well be a tipping point. It makes me want to know exactly how much of what I pay for a Pink Ribbon branded product goes to breast cancer research. If it is less than 20% then I am better off making a cash donation to a less commercially connected fund raising body.

My shop recently raised $250.00 in direct donations for the Steve and Terri Irwin Wildlife Warriors Foundation. There were not gimmicks. 100% of what was raised went to the charity. No sexy posters. No exclusive deals. This was grass roots fund raising for an excellent cause. Maybe the NBCF could cut out the corporates and get back to basics. In the meantime I’m not stocking Pink Ribbon products.

0 likes
Newsagency challenges

Why Super Fitness is a dud magazine and ought to be killed

blogsuperfit.JPGSuper Fitness exemplifies what is wrong with magazine distribution in Australia. It is proof of how the magazine distribution system disadvantages newsagents and starves them of vital cash.

Super Fitness’ cover price is $34.95. It has a return date more than six months from now. It’s production quality is poor – the cover is hard card material meaning after one browsing it will look second-hand. It’s playing is a crowded and well serviced category. It has high theft appeal – due to cover price and its subject matter.

I received one copy of Super Fitness yesterday and decided to return it immediately. I am not prepared to risk the $34.95 with just one copy on the shelf. To accommodate this title I would have to remove another and I’m not prepared to do that for what looks to be a dud product. Also, it would be the most expensive magazine in the category and, I suspect, act as a magnet for shoplifters.

The way magazine supply works, I will pay $26.21 for Super Fitness next month. I will get my credit for the copy I returned a month later. It’s cost me the $26.21 for a month. Multiply that by several hundred titles and you see the cash cost to my newsagency of similar dud titles.

In newsagencies, publishers have access to a low cost low risk retail distribution channel. Newsagents are idiots for continuing to support dud titles like Super Fitness. It is time for us to charge for access to our network and to make publishers accountable for what they produce.

Thanks to deregulation, magazines are supplied direct to all of my competitors. Consumers benefit from greater choice. The hidden side of deregulation is that only newsagents are supplied titles like Super Fitness – and in a way which makes is very difficult to control the supply of these titles equitably. Supermarkets, convenience stores and petrol outlets will not carry Super Fitness. They control what they receive. Try as I might, this control over my business remains a dream.

Someone should take Super Fitness out the back and put it to death. The few titles I receive like this the better.

0 likes
magazines

OK!, now for the real-estate challenge

It’s great having new weekly magazine on the shelves. The challenge is finding the space to do it justice. OK! went weekly today with what looks to be a good first issue. Woman’s Day, New Idea, TV Week, NW, WHO and Famous have their space locked in. To accommodate OK! in my own store we have had to trim an adjacent category – we have cut several under performing titles. Newsagents will have to do this if OK! is to get real-estate in the high traffic area.

OK! has a great website supporting the magazine.

It might be a coincidence but both NW and Famous have come out today with covers using more black than usual – they stand out in the usually colourful section of the women’s weeklies.

0 likes
magazines

We are a dumping ground for UK and US crossword magazines

blogcrosswords.JPG

This graph illustrates how the Crossword magazine category is drowning in imported product. While data from a sample of newsagencies shows that Australian titles account for 75% of sales, imported product accounts for 64% of titles. 10% are homeless. In my newsagency, before I culled imported titles, they took up 60% of available real-estate. Most newsagents rely on distributors to manage their range. Distributors don’t talk to each other about range, leaving most of our 4,600 newsagencies over supplied.

With three magazine distributors needing to keep their engines fuelled with stock, titles cut by one distributor are soon picked up by another. This happened last year and the titles we all thought would not be imported again are now being supplied to newsagents – despite appalling sell through rates. With newsagents only getting paid if they sell a title it’s cheap system for publishers and distributors at the bottom end of the market.

Australia is a dumping ground for some overseas crossword publishers. The only way to stop this is the establishment of a joint industry taskforce involving magazine distributors and newsagents – a pooling of resources to ensure that junk titles do not find a way to abuse the efficient newsagent channel.

0 likes
magazines

Good News and bad News, how News Ltd treats newsagents differently in two states

blognewscd.JPG

The Herald & Weekly Times is running a great encyclopedia CD-ROM promotion on weekends at the moment. It’s boosting sales and promoting the newspaper as being concerned about building knowledge. The scale out of CDs has been handled well and we have good marketing collateral to enable us to promote. Wins all around.

In SA, as I blogged a few days ago, the story is different. There, Advertiser Newspapers is about to run what will be an very successful promotion where readers will build a robot over weeks. The promotion is to run exclusively with BP and On the Run outlets. Newsagent are the losers.

The H&WT and Advertiser Newspapers are both owned by News Ltd. News wants its newspapers in as many outlets as possible. It also tells newsagents that they remain its key distribution and retail channel. Yet News executives in seem to disagree on the value of the newsagent relationship.

Why News runs its promotions differently, through different retail partners, is a conundrum. If there is an issue with newsagents, talk to them and demand it be fixed. Don’t turn your back on the channel as has happened last year in SA and is about to happen again as this will only make matters worse. The newsagent channel is an asset to News and ought to be nurtured as such.

My newsagency is open 7 days a week. I comply with all News’ requirements. I promote their offers aggressively. If the H&WT was to run a major retail based promotion in a channel other than newsagencies I’d have to consider a commercial response. News either believes newsagents are their key channel or not.

Photo from Herald Sun website.

0 likes
Newsagency challenges