Dear Minister, no AWB defence please
December 5, 2006
Hon. H. Coonan
Minister for Communications, Information Technology and the Arts
Parliament House
CANBERRA ACT 2600
Dear Senator Coonan,
I refer to the November 23 letter from Natasha Maclaren-Jones, an Assistance Adviser in your office, responding to my letter to you of September 26.
Ms Maclaren-Jones has done little more than find a vague off-the-shelf letter spinning about Australia Post and typed in my name. She has not responded to my letter.
So that you may not claim an AWB style defence, I ask that you revisit my September 26 letter.
It is important that you know what your policy in relation to Australia Post is doing to small business. It is important that you know how Australia Post is interpreting the Act you passed to serve its profit purposes, and therefore the Government’s, by taking revenue from small businesses like mine.
Every day, at newsXpress Forest Hill, we battle with a Government owned Post Office for the sale of items which until a few years ago were not sold at your Post Offices. Now, thanks to the power of the postal brand and their monopoly on postal products, you are landing customers in your shop for a fraction of what I can land them in mine.
In 1999, your Government facilitated the deregulation of newsagencies. You took away our exclusivity and allowed others to cherry pick our top selling magazines and newspapers. As a result, newsagencies like mine have been left with a supply model which is fundamentally flawed and a significantly higher customer acquisition cost. Your deregulation has left newsagents severely disadvantaged.
I agree that deregulation of the supply of newspapers and magazines was appropriate. However, since you did not put in place any review process, you do not have data to show what a mistake you made and how much you have hurt this small business channel. Good governance requires you review the impact of such significant deregulation on the 4,600 family businesses affected.
Australia Post has seized on the deregulation you brought about and now your Government is profiting from these regulatory changes.
I do not want you to have an AWB defence when newsagencies close down or go broke.
I do not want you to be able to say “I was not advised about thisâ€. This letter and my earlier correspondence advises you.
Deregulation of newspaper and magazine supply, while necessary, went too far and left newsagents with a model which burdens us with costs far greater than our competitors.
Australia Post is selling products which fall way outside what is permitted under the Act. Their Last minute gifts catalogue, which was released yesterday, provides proof. I have enclosed a copy for your information.
Australia Post is looking more like a newsagency every day. Newsagents cannot compete because we do not have the exclusive postal product which drives people to Post Offices. Australia Post is abusing its exclusive postal products and government ownership to the detriment of small business newsagents.
These are policy matters and go to heart of the Government’s small business credentials. I urge you to act for your small business constituents and not just the an enterprise the Government wholly owns.
Sincerely,
Mark Fletcher
Director
Springfield Consulting Pty Ltd trading as newsXpress Forest Hill
Newsagents versus Supermarkets
The That’s Life recall today was an ideal opportunity to compare the compliance of newsagents with supermarkets. Newsagents I spoke with had it off the shelves from early morning while some supermarkets reportedly were still selling That’s Life at lunchtime. Newsagents are often told we/they lack compliance yet here is an example of them leading the way. We should be proud.
Magazine Cash Flow problems for newsagents covered in today’s Australian
Sally Jackson, writing in The Australian today, in a story about ANF CEO Rayma Creswell withdrawing her resignation, reports on my study – The Cash Flow Impact of Magazines in Australian Newsagencies. Do a search in the archives of this blog on magazine cash-flow and you’ll find several postings about what the study revealed. By marrying hard evidence of an unfair magazine supply model with robust representation, newsagents can expect to see progress on this problem. The challenge is to get newsagents engaged to provide the evidence they have in their businesses of this problem.
Calendar turnaround
A year ago I declared in this place that calendars are stuffed. Today I am writing to say that I was wrong. Well, sort of. Last year, we went big on calendars and encountered early discounting in our centre with a Calendar Club (from the Angus & Robertson group) outpost. This year, we have a more modest range and no Calendar Club outpost. Last year we had to discount from late October to be competitive. This year, we are still selling at full price. Revenue from calendars so far this year is up more than 25% on last year but with only 33% of the range. We will sell out and probably without discounting at all.
The calendar space we have not entered is the one taken by Australia Post from newsagents – the Steve Parish and similar scenery based calendars.
Learnings for us have been: choose your range carefully, don’t be greedy, display product with the consumer in mind and make an informed decision about whether to outpost or not. We have been fortunate to have access to Michelle Caia, the calendar category manager from newsXpress, who has guided us this season.
So, are calendars stuffed? Sort of. I know of some shopping centres where heavy discounting means no one is making any real money. This cannibalisation of what should be a strong category through Christmas is nuts.
Sunday Age Hicks campaign gains traction
The campaign started by the Sunday Age and maintained with solid coverage this week to build support for bringing David Hicks home is gaining traction with readers – a couple of customers mentioned it today, saying they had emailed support to the newspaper as requested. It’s campaigns like this which are important to newspapers. Sure they polarise – but they also show a heart and help drive a story.
Housekeeping
Hover over any link in the blog and see a snapshot of the site. I discovered the facility through Online News Squared.
Two old ladies deliver the spirit of Christmas and make us laugh
Two ladies at our counter on Saturday reminded me of the difference between an independent small business retailer and a mass merchant. They put a smile on my face and the faces of those around me including other customers who watched as they played with and giggles at these stamps which light up when you press them down.
These ladies, in their seventies, were taken back to their childhood and recounted stories about Christmas. Even though our counter was busy they were in their own world, enjoying feeling good about Christmas and that we let them play with all the stamps to find the ones they wanted.
While a couple of Scrooge like customers frowned because they had to lean over the ladies to pay for their newspaper or some other purchase, most were happy to see them happy. Their playing led others to purchase the stamps but that’s not the point. In hindsight we could have moved them on, pressured them to buy or shifted them from the counter. It never crossed my mind. I was delighted to see their delight and proud we had something which made them so happy.
They told us a couple of stories we would have otherwise not heard and that’s what this is about, it’s what independent retail is about. It’s not merely a transaction. Independent retail businesses, like newsagencies, are part o the social fabric of a country. We are places where stories are told and traditions are shared. A world of mass merchants would be a cold and heartless place motivated only by riving the share price. So the stories don’t put money in the bank – sometimes that does not matter.
Newsagents across the country have stories like this – moments where stories and feelings come ahead of transactions. Customers like the personal attention and we need to remember that. We need to resist becoming like the mass merchants for if we do, we’ll miss moments like I saw in m newsagency on Saturday.
Is the future of books that they are free?
Cory Doctorow writing at Forbes.com thinks so. Check out Lulu – they publish over 1,000 new titles each week.
The future of photo journalism
In his post, The Demise of the Professional Photojournalist, at the Centre for Citizen Media Blog Dan Gillmor writes how mainstream media cannot keep up with the media creation and access tools we have today but that photojournalism itself is alive and well regardless. He cites the recent abuse-by-tazer and Michael Richards (Seinfeld) racist attacks from the stage as examples of what traditional media companies are up against.
Gillmor’s excellent article is required reading for newsagents prior to developing their next business plan.
More magazines which ought to be euthanased
Sales for these and similar titles are plummeting. Down more than 25% this year. People interested in looking for businesses, property and acreage to purchase look online. These titles and others similar lose money for us every month. The publishers must be losing money too – unless their advertisers do not know that sales are way down.
We are about to do the second cull in preparation for releasing space for our layout changes in the new year.
No one body approves magazine titles having access to the low cost newsagent distribution network. We let all and sundry access our key asset without cost. It’s nuts!
In the two weeks to the close of business tonight, unit sales of Christmas cards and wrap in our shop are up 26% compared to 2005. Other categories are tracking growth less than half that. By going big and bold with cards is paying off. We are having exceptional success with Hallmark boxed cards.Newsagent anger at Bill Express
20/01/07 UPDATE. The concern expressed below has been well addressed by Bill Express announcing a sales game for newsagents. More here
Bill Express is launching its new BOPO card through newsagents and is them for in store training. Newsagents are required to take the training. We said no in my shop and were told we have to be trained – even though we have already done BOPO card transactions and have mastered more complex processes. Would Bill Express charge each Coles outlet for similar training? I suspect not. Newsagents are angry at what some say will be a $200 hit on their business for training which is not needed. Given the volume of discontent, I would not be surprised if Bill Express backs down and delivers the training free of charge.
Stress Buster a good fit for Australia Post
This is one Australia Post product I am not going to complain about. It’s appropriate they sell a Stress Buster to their customers. In fact, it’s an essential customer service. What with the long lines and poor customer service in their Government owned stores their customers need some relief.
I noticed that the Stress Buster has sold very well at the Post Office opposite my newsagency.
Jokes aside, this product is yet further proof of what the Government policy is letting its wholly owned Australia Post get away with.
Christmas 2006 Marketing Tips for newsagents
Here are the marketing tips we have provided to newsagents for this Christmas season. We publish Christmas tips annually to newsagents using Tower Systems software – as part of a broader marketing tips program. I publish them here for anyone to use, modify or abuse in any way they choose.
CHRISTMAS ART
Give your windows over to the kids for Christmas – have an art contest. Give the winner a certificate – it’s about recognition more than money. The art entries, on the Christmas theme, hanging in your window will provide a community connect and add warmth.
DONATION BOX FOR A LOCAL CHARITY
Talk to a local charity and offer to put a collection box at your door for customers to make a product donation which fits the needs of a local charity. Include photos of work the charity does. Invite the charity to let its contacts know what you are doing.
EMBRACE THE SEASON FROM YOUR DOOR
Change your floor stock as much as you can. From just inside your door have your first offer, then another followed by another – each with a Christmas theme and a compelling deal. Design your store layout for Christmas success, let it do your selling for you.
CREATE A TOP TEN
People love lists. Book and music retailers (online and retail) use them to great effect. Create a top 10 for your shop. You could even start with a Top 3 for under $10 or a Top 3 for under 15 year olds etc. Create the list or lists and update them each week. Put the list in a prominent place and locate the top performing stock nearby.
SHOW PEOPLE WHAT TO BUY
Create space to display Gifts for Mum, Gifts for Dad, Kris Kringle Gifts. If space is short create one display for a week and replace it with another the next week and so on. Plan in advance what you’ll recommend and create a flyer to give to customers with your recommendations/promotions. If you can’t create a full on display you could use bookmarks or some other tag to indicate that an item is a recommended gift for MUM or for DAD.
EMBRACE HAPPINESS
Have a staff meeting. Talk about Christmas and how important it is to customers and the business. Get employees to ‘buy in’ on the season and how it’s a time to be happy. Be generous – hand out gifts to your team. Be happy yourself and commit to a happier workplace. It’s infectious. Customers enjoy a happier business. Through the busy period bring in treats and find other ways to maintain the happiness.
REST
Schedule enough time for rest. Recharge and make your days more successful.
COUNTDOWN
Create a H U G E handmade countdown calendar – behind the counter. 20 sleeps to go, 19 etc. Put this on badges if possible. This could be a point of some fun.
SERVICE, SERVICE, SERVICE
Christmas is stressful for shoppers. Be sure to have extra staff on hand to help reduce the stress and help your customers buy their gifts in your shop.
Political commentary at Australia Post about the Siev X?
Who Sank the Boat? is a children’s book promoted on the front page of the latest Australia Post catalogue. It was also a question many were asking on hearing of the sinking of the Siev X in international waters and en route to Christmas Island on October 19, 2001 – killing over 350. There is a website dedicated to unanswered questions about the Siev X.
How many Mustang magazines is too many?
Based on sales in our shop we need two mustang titles. While Mustang lovers might disagree, they are not paying for our real-estate. Committing these five pockets means $17.50 a month in labour and real-estate. To break-even on that we need $33.65 in sales. Some months we achieve that, other months we do not. While I can cut the titles, the way the magazine supply model works is that replacement titles find their way onto the shelves and I will soon be at five Mustang titles or more.
Magazine distributors need to understand that it is at the fringe end of magazine titles, like Mustang titles, that newsagents carry an unfair cost. Consumer interest is over satisfied. Someone needs to have the guts to either kill local titles or NOT import some of the rats and mice overseas titles.
Newsagents are nuts for allowing this to go on. Maybe we ought to decide on a category and declare a national strike against several titles – not putting them on the shelves and choking importers/distributors of sales. Hurting at least one supplier in the hip pocket like this is the only way – if it were legal.
Rating magazines online
Thanks to Jeff Jarvis’ BuzzMachine I found a report rating the online presence of top 50 US magazines by The Bivings Group – a firm that develops online programs for corporations, associations, advocacy groups and others. They say magazines are don g better than newspapers:
Despite their failure in terms of Web features, it should be recognized that magazines have taken on a more effective general strategy than newspapers when it comes to the Internet. Instead of replicating printed content online, as newspapers do, magazines have made efforts to publish unique, Web specific, and easily digestible materials on their websites.
I’d agree in that magazines are reinventing themselves online. Check our Vogue Australia, Girlfiend, Playboy, Zoo and Better Homes and Gardens. Their online models extend their offline products.
Once you read the report from the Bivings Group, read Jeff Jarvis’ advice for magazines.
Magazine publishers are finding new customers online and while this, in Australia is not noticeably to the detriment of over the counter sales, there will be an impact one day. Newsagents are best advised to plan for this today – especially in terms of the low volume high labour and retail real-estate cost titles.
The magazine cover design / retail display disconnect
Here’s another example of where traditional magazine racking in newsagencies is leaving them behind supermarkets, petrol outlets and others where magazines are displayed with the full cover showing. Newsagents and their shopfitters have to address this if they (we) are to be the magazine specialists.
Christmas window display
It’s a challenge to draw together the range of Christmas related items. The result below is thanks to a window dresser we bring in for the season. Tomorrow I’ll post photos of what he’s done inside the shop. The idea of using lights in the newsXpress Christmas bauble is one I picked up in London a couple of weeks ago.
Ashes cricket pins a belated success
The Ashes cricket pin collection promotion for the Herald Sun did not take off as we expected. As the photo shows we have plenty of stock – even more than shown. Then, over the last few days, people have been coming in wanting the whole set. It seems the series needed to get started before kids got into the game. Yesterday for example, we had several parents with kids in tow wanting the set.
Newspaper promotions lose money for newsagents
The encyclopedia promotion with the Herald Sun of almost two months ago was a huge success. Lack of stock meant we took more than 300 backorders. The backorders finally arrived late last week and it took three and a half hours to sort and label everything. We will make $30.00 gross profit from the sale of these promotional items. The labour cost of sorting the goods was $77.00, counter time in taking and following up the orders $100.00 and follow-up phone time and costs an additional $50.00. We’ll lose close to $200.00.
These promotions are fantastic in that they support the newspaper brand. Newsagents are paid too little for the work involved and newsagent cots escalate out of control when publishers underestimate the success of the promotion. Throw in the customer anger hurled at newsagents who have no choice but to blame the publisher and you begin to wonder about the overall benefit. To my mind it begins and ends with scale out. Publishers need to work harder at getting this right. Newsagents ought to be given a fairer commission by the publisher as well.
Australia Post employs a spruiker to lure customers away from my newsagency
There was an Australia Post representative, a Government employee I am guessing, out the front of this government owned post office handing out flyers to people walking between the Post Office and my newsagency. The postal related items he was spruiking: Binoculars, Deluxe Wine Set, Family Picnic Pack, Stadium Seat Gift Set and a Thermo Pack. These are items the Federal Government would have us believe are incidental to Australia Post carrying out our postal service. They are items the Government would have us believe help Australia Post fund a better mail service. I am not as gullible as the Government.
The photo shows their commitment to postal services. You need to navigate shelves packed with cards, calendars, soft toys and plenty of Christmas gifts before you find a small counter for postal forms. To actually conduct any postal business you need to wait behind the truckloads of people buying cards, calendars and all these other items.
When is the Government going to wake up to the fact that on its watch this Corporation which it wholly owns is ripping millions of dollars out of private enterprise – especially small business? When will the ACCC realise that Australia Post is abusing its advantage? When with the AGCNCO realise that Australia Post is abusing its Government ownership?
This use of a spruiker is a new tactic in what has become a bitter battle in my centre for newsagency type sales. They price compete on basic newsagency lines. Now they are luring customers away from us and to their store.
Newsagents switch computer system in big numbers
The pie chart below breaks down the newsagency sites installed by my software company, Tower Systems, over twelve weeks to yesterday. 50% have come from one competitor, 25% are greenfield locations and the rest spread between 3 competitors. To lose close to 20 clients in twelve weeks must be hurting one competitor. The newsagents have all switched for common reasons. While we knew we were doing well, we have not been watching enough to know how well.
