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

Month: June 2007

Magazine headers stand the test of time

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How is this for a bit of nostalgia? John Klemm from Mildura send me this magazine header which he has had in his newsagency for around twelve years. At Tower Systems we started creating these personalised magazine headers 15 years ago as a serving to our software customers. They were the first of their kind, long before the marketing groups and MPA got into the space. We created these headers for around 150 newsagents.

The idea behind the headers was to help customers differentiate between the sea of titles in newsagencies. From a software perspective we used the provision of the headers to drive better category management and title placement in Tower newsagencies. We saw this as an appropriate way for us to engage with our customers and demonstrate how point of sale software can be more than a glorified cash register.

The header for Small Business which John sent me last week has held up well compared to some of the headers I see in newsagencies today. It certainly says something about the quality of the computer printer and ink we were using at the time.

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magazines

Sudoku for Dummies, newsagency edition

sudoku_newsagency.JPGMy initial reaction upon seeing Sudoku for Dummies was that newsagents cannot compete on price with bookshops. Then the text, Australian Newsagency Edition, was pointed out to me.

Having a Newsagency Edition allows us to promote this as an exclusive title. It also stops price comparison.

Newsagents ought to actively promote their exclusivity with this book. We have the title in a good position next to our range of sudoku titles.

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Book retailing

Australia Post retreats from online bill payment

The Australian Financial Review today reports that Australia Post is scaling back its online bill payment service. While it is not good karma to rejoice at the hardship of another, I say good on Bpay for beating Australia Post in the online bill payment game.

Newsagents entered the over the counter bill payment space in 2003 in partnership with Bill Express. The Government owned Australia Post engaged in all manner of blocking tactics to stop the small business network from competing. One tactic involved a claim of intellectual property over the barcode billers printed on their bills.

Today, more than three years on, newsagent over the counter bill payment transaction volumes remain small compared to Australia Post. I would say that this is, in part, due to the aggressive stance taken by the Government business.

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Australia Post

Eftpos poll

I have setup a poll to find out how newsagents handle eftpos fees. Once you click vote the free polling software will take you off the blog and show the results so far.

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Uncategorized

Glam, the magazine of the future?

glam.JPGAs the stats in the graphic show, Glam.com is hot. According to commentators, Glam is not the #1 internet site./network visited by US women. Venture Beat has a full story about Glam and its success.

One must ask if Glam is the women’s magazine of the future? Is this what will replace Madison, Cleo, Cosmopolitan and Marie Claire? While just about everyone reading this will say no, the visitor stats to the Glam website speak for themselves. 17 million in a month is amazing readership.

The key to the success of Glam appears to be the 350 magazines, websites and blogs make up its content network. This provides content diversity.

Glam is demonstrating that here is an online audience and that advertisers want to connect with that audience. This will, naturally, see some advertising migrate from print media which targets the same audience, to online and, specifically, Glam.

Newsagents ought to take a look at Glam and compare it to magazines on their shelves. It is another reason newsagents need to be investing resources in navigating to the newsagency of the future.

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magazines

Treasures cards are a hit

treasures.JPGNever have I seen such excitement around a new range than I have seen with this Treasures range from For Arts Sake. We put this tall spinner of regular size cards and a small counter top spinner of gift cards into our new Sophie Randall Cards and Gifts shop last week and the reaction has been immediate.

While I was reluctant to bring in a spinner to what has, until now, been a spinner free zone, it is the best way to display the pop out cards. Browsers can easily see what they are buying without having to handle the product. Indeed, the spinner is one reason the interest has been so strong.

I was in the shop yesterday and was surprised at how many comments these cards attracted – particularly from women. They loved the detail and that they could browse the range without having to take each out to look at it opened.

The gift cards – not shown in the picture – are especially popular. The $4.95 price point is no barrier because, as one customer said, the card is part o the gift.

We did consider the Treasures card range for the newsagency but considered the card space there already at its peak in terms of range. Maybe in a few months we will fold out an existing range with this.

For the record, I have no stake in For Arts Sake. They have not asked me to write this post.

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Greeting Cards

Another post it type ad stuck on The Age

age_june23.JPGHere is the front page of the A2 section of The Age newspaper today – the post it type ad which is often on the front page of The Age is now on the front page of the popular A2 section.

I pulled the fellow post it type ad for HBA and it ripped the page.

I overheard a couple of wait staff at a cafe this morning talking about the stuck on ads. One said to the other: I hate these. I wonder how much longer Fairfax will continue with ads newspaper readers hate.

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Newspapers

Promoting magazines on an LCD screen

lcd_acp.JPGACP magazines make it easy to maintain a relevant slide show on our LCD display at the counter. We have had the LCD in place for close to two years and for most of that time we created our own display. It was time consuming. For the moment we have switched to the ACP slideshow and are enjoying the time saving.

What we – the newsagents now using LCD displays – need is an easier way of merging content from Pacific Magazines, ACP Magazines and other publishers we want to promote – and in a way which more easily allows our content.

Customers notice these displays and I am certain the products promoted will benefit.

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magazines

Partworks island on the dance floor

We have created an island display on our dance floor to support the Charmed, Fifi, Harry Potter, Felicity Wishers and Yu Gi Oh partworks. It’s in a high traffic area and is driving good impulse sales.

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While we also promote these partworks in the appropriate categories in our magazine area, we always find that we get more business with this high traffic promotion – especially while the TV commercials are running.

The island display is a little smaller that when we started as we have sold plenty of stock this past week.

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partworks

The newspaper home delivery subscription rip off

Newspaper home delivery in Australia is an addiction newspaper publishers cannot shake. They appear prepared to give away anything to get a customer on board. Then, once a customer has fallen off at the end of an offer, they go back with the same heavily discounted offer to win them back. With deals of 50% and more off cover price it is no wonder the home delivery deals are popular.

The problem is that small business newsagents are funding a disproportionate part of the subscription deals. Following my post a couple of weeks ago about newsagent concerns about the Home Delivery of the West Australian, I received several emails from newsagents in South Australia documenting the falling return achieved from home delivery of the Adelaide Advertiser.

Some Advertiser home delivery deals result in South Australian newsagents receiving 11 cents for the delivery. Out of this they have to fund delivery drivers, plastic wrap and other business overheads such as fuel, management time and collection expenses.

Years ago, the same newsagents would have received 25 cents plus a delivery fee of around 7 cents a day – 32 cents in total.

It is only since deregulation of the newspaper distribution arrangements, as instigated by the current Federal Government, that News Ltd has driven newsagent newspaper home delivery revenue down by, as the South Australian example shows, up to 65.6%. Newsagents cannot afford this. While News Ltd has been cutting newsagent revenue, wages, fuel and overheads paid by newsagents have risen.

Below is a table prepared by a newsagent showing the annual cost to South Australian newsagents of the News Ltd cuts in home delivery revenue. If the data feeding into this table is accurate, South Australian newsagents are $500,000 down annually. This is off the bottom line. Some have suggested to me that this analysis is conservative and that the numbers are worse.

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What is happening in the newspaper home delivery space and to newsagents in particular demands a Government inquiry. In 2004 I called for a Productivity Commission inquiry to follow up the impact of deregulation on the newsagency channel. This latest data out of South Australia and the evidence that newsagents are 65.6% worse off today than prior to the Government driven changes suggests an inquiry is warranted.

While some will say that the reduction in revenue is a result of competition I would observe that there is no competition for home delivery of newspapers. I’d also note that while News Ltd has been charging less and less for home delivery of newspapers, advertising rates charged by News Ltd have increased annually. News Ltd is covered – newsagents, who have no control over their revenue are not.

Small business newsagents have been disempowered by government deregulation and one has to ask whether that is good competition policy at work.

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Newsagency challenges

Calling poor customer service what it is

Last year, at the urging of Victorian newsagents using the POS Solutions software, VANA, the local newsagent association, facilitated a POS Solutions user meeting at the VANA offices. I complained at the time as the announcement did not provide any background as to their involvement in the meeting. The VANA announcement read like an endorsement by VANA. Since then, VANA has facilitated several more POS Solutions user meeting, the most recent this week.

VANA continues to be less than clear in explaining that they are facilitating the meetings because POS has been unable or unwilling to host user meetings in the past. This maintains the air of endorsement.

Tower Systems, my software company, has run regular user meetings since the early 1980s. We fund these ourselves. We have never used VANA offices or resources to facilitate them. Further, we actively support VANA in a number of ways on a pro bono basis.

As a financial VANA member I am disappointed at the implicit endorsement of POS Solutions and frustrated that people who should know better at VANA do not understand that their involvement – even in providing an office and sending an email – implies endorsement.

If POS Solutions lets newsagents down by not providing user meetings, so be it. It is their commercial decision. Newsagents make a commercial choice as to the software they use and that choice should not be propped up by VANA in any way.

Tower Systems currently serves in excess of 1,400 newsagents. My understanding is that POS Solutions serves around 700 – this is based in part on information supplied by POS Solutions to one of their clients late last year.

With only one more Tower Newsagent user meeting to go – Darwin July 12 – let me recap some numbers. We visited 23 cities and met with hundreds of our customers. Our investment in travel, hotel rooms, meeting room hire and the like, we invested over $50,000 in these sessions. We will invest a similar amount in the second round later this year. The most common questions related to user of Retailer 2. We have received 20 suggestions for changes in the software and we will look at these as we consider future updates. In the early 1990s, when our support was not as good as it could be, we would face angry customers at user meetings. This time around, as has been the case for years, we faced happy customers. We’d like to especially single out our Sydney customers for turning up over several sessions – they usually have the worst attendance record. This time around was huge improvement!

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newsagent software

Alpha boost

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Alpha magazine comes with a free Cadbury Boost bar this month. For a $2.50 magazine this is an excellent value giveaway – not that Alpha needs such a promotion to kick sales along. My only beef is the adhesive used to hold the Boost bar in place – they’re falling off.

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magazines

National Geographic bag of shame

natgeo.JPGThe National Geographic sells itself with stunning covers, usually. Some bright spark has decided that the cover is not as important as a two for one deal with the current issue.

The latest National Geographic has been delivered to newsagents in a plastic bag with a white sheet. At a glance it looks like an adult title. The bag of shame is a shame and will affect sales for this issue of National Geographic.

We usually place National Geographic in a good position – displaying the full cover. Not this time.

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magazines

Newsagents chasing fairness in lotteries matter

The story about the newsagent losing a case brought about by NSW Lotteries following fraud by an employee gets another run in the Daily Telegraph today. Newsagents in the meantime are getting stirred up, realising that they face being cut loose by NSW Lotteries should their lax major prize claiming processes let a newsagent down again.

I am told that the NSW Newsagents Association, NANA, overnight organised blanked coverage for NSW newsagents for fidelity and errors and omissions insurance in relation to their lottery agencies. NANA has been actively assisting in relation to this matter since before the case became public.

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Lotteries

Stung by cash change scam

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We lost $150.00 in a cash-change scam in my Sophie Randall Cards and Gifts business yesterday. This is a photo taken from our security footage. We have blurred the face on advice – something about protecting the innocent. Anyway, the scam was straightforward – seeking to change notes mid way through a sale. We should have known better. As a result we are adjusting our processes and improving team training to ensure this does not happen again.

The raw security video files, from four angles, are crisp and enable easy identification. We are providing the files to the Police this afternoon. We have also made these available to security within our centre.

I may load the video footage tomorrow.

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Uncategorized

Newsagency of the future: stationery

Another newsagent is chasing business online using Google AdWords. The third sponsored link down on the image below – Stationery Supplies – is for a newsagency in Victoria. They have put their stationery department online under a different shingle – probably because consumers think newsagencies are expensive. This is a gutsy and smart move. While some newsagents will not be happy they are competing outside their geographic reach, I say good on them. We have to get away from thinking about borders and territories.

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While using Google is expensive to attract business, it is essential if you want to build a client base quickly. This is what we did with our Inkfast business – we no longer use Google having established a big client base and good natural rankings in the search engine. Now, without any advertising or marketing expense, we sell between $30,000 and $50,000 in ink and toner a month on top of what we sell in our shop. Only rarely do we sell within our geographic reach.

What the folks at Stationers OnLine have done is show newsagents how a small business can compete against the likes of Officeworks.

Is this the newsagency of the future? Maybe, in part. Newsagents need to be entrepreneurial on their business decisions. This means backing yourself and taking risks.

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newsagency of the future

Productivity Commission inquiry into retail tenancy leases

I am pleased that the Federal Government has asked the Productivity Commission to undertake an inquiry into the market for retail tenancy leases in Australia. The press release from Peter Costello outlines what the Commission has been asked to report on:

the structure and functioning of the retail tenancy market;

any competitive, regulatory and access constraints on the market;

the extent of information asymmetry between landlords and retail tenants;

scope for reform of retail tenancy regulation;

the appropriateness and transparency of provisions in leases to determine rights when the lease ends and factors that are taken into account in determining rents;

and,
any measures to improve overall transparency and competitiveness of the market for retail tenancy leases.

While I think the Government has taken too long to call this inquiry, I welcome it as should all small business tenants including newsagents.

I know of newsagents with occupancy costs of 16% and above. With retail newsagent GP averaging 29% there is little room for wages and other business expenses.

Newsagents ought to participate in this inquiry – personally and through industry associations. The more submissions the better the Commission will be informed as to the facts. The Productivity Commission website has a page from where you can find out more about the inquiry and register interest in making a submission.

One area the inquiry could report on – if there are submissions – is head lease arrangements which have seen the sub tenants removed and or locked out for matters unrelated to the lease. In such cases, the lease is the mechanism of control and can be layered with an overhead beyond the traditional direct lease arrangement.

Any newsagent who has recently complained about their landlord, especially a shopping centre landlord, must make a submission to the inquiry. To pass on this opportunity to have your voice heard would make your complaints a waste of breath. Get involved newsagents – this is your opportunity to be heard.

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Newsagency challenges

UFOlogist magazine out of this world

ufologist.JPGDo the math with me. 10 copies of UFOlogist magazine. Cover price $7.95. My buy price $5.96. On-sale period – three months. My real-estate and labour costs per pocket per month are close to $4.00 meaning that I need to sell two copies a month to break even. I am luck to sell two copies in three months. UFOlogist does not work for my newsagency on these numbers. Indeed, I suspect it does not work for the vast majorities of newsagencies receiving the title. A fairer arrangement would be billing based on sales – the distributor has our sales data and could easily handle this. Alternatively an agreed performance threshold of a 50% sell-through under which I am paid regardless.

These are the matters on which magazine distributors agree in their discussions with the Magazine Publishers of Australia in determining KPIs for magazines. In the meantime we will fight title by title for fair treatment including fair scale out based on sales data and not the cash requirements of the distributor.

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magazines

Is there a magazine overload at Financial Year end?

Talk to any newsagent and they will complain that magazine distributors overload them with stock in the last week of the month and even more so in the last week of the last month of the Financial Year.

To help newsagents determine if this actually happens to them, my software company early last year released a report which tracks magazine supplies by distributor by week of the month. Here’s a small portion of the report (I have obscured the newsagency name):

supplier_arrival.JPG

Our analysis of this data from several newsagencies shows that one distributor is ahead of the pack in loading the last week, delivering 33% of their stock in the last week and in time for the end of month billing.

To be fair I would note that distributors do not always have control over when magazine are distributed with publishers the other key players in this timing.

By providing this reporting tool last year, Tower Newsagents were able to deal with facts surrounding end of Financial Year magazine scale out. In some cases I know that newsagents were able to negotiate fairer arrangements.

This report is an example of how newsagents can use technology to be better informed and therefore more factual in their public comments. It also drives newsagents to use their technology as more than a glorified cash register.

To the 1,400 Tower Newsagents my message is be vigilant and use the tools in your software. Check the report and please let me know if you have been overloaded in the last week or two of June 2007.

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magazines

Starved of Delicious magazine

delicious_july07.JPGNDD demonstrates their magazine distribution prowess again today sending just 15 copies of Delicious magazine. As I blogged here last month, this is a 50% cut and we will, again sell out. What demonstrates the genius of the folks at NDD is that the extra copies of the June issue which we asked for a while back arrived today – the same day the new issue arrived.

NDD likes to have it both ways. They grossly oversupply with low volume titles and undersupply a successful title like Delicious. If they want to kill the sale of Delicious in my newsagency then they are going about it the right way. I will contact the publisher and ask what they think.

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magazines

Signs, signs, everywhere signs

recharge.JPGI was in a newsagency recently and counted eight signs directed at customers – not including promotional posters. Of the eight, five were negative – this is not a library, no bags, do not ask for credit. One was promoting an offer but was in the same font and style as the negative signs and would, I suspect, have been viewed as negative.

We have as few signs as possible in my newsagency – certainly no negative signs. The best sign is the one photographed at each register point. It promotes phone recharge and generates good business. Since we can sell recharge from each register it is an easy and fast upsell. The small sign at eye level at each register is an excellent opportunity to connect our newsXpress branding with the phone card offer – an ideal win win. It is he sort of sign newsagents need as opposed to the negative stuff.

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Customer Service

MySpace the biggest threat to newspapers?

That is the question considered in this piece by Erik Sass at MediaPost. Sass refers to a report released last week by the World Association of Newspapers. The text of the WAN announcement can be found here. The headline finding from the WAN funded 10 focus groups in 10 countries researching how young people get their news is:

Young people perceive traditional media as more accurate, trustworthy and reliable than new media, but many get most of their news and information from another source entirely — family and friends.

The full report can be found here.

The relevance of this report for newsagents is that we rely on newspaper sales – anything which affects, today or into the future, newspaper sales is relevant to us and must b factored into our business planning. What mainstream media is experiencing is generational change. The community, particularly the younger community, is moving from an aggregated media platform to no platform as such.

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Media disruption

Find It online classifieds surge

Find It online classifieds now has 17,301 live ads, 11,120 of which are for vehicles. This is an ad medium which will save Australians millions and generate revenue for newsagents – for no capital outlay.

I am backing Find It as a means of helping newsagents tap into online revenue and find commercial relevance from the online world.

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Online classifieds