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

Month: April 2008

The Mars / Wrigley marriage

Wow, if the merger proceeds they are likely to become what the Motley Fool calls a confection powerhouse. Newsagents are challenged when dealing with these mega FMCG suppliers: Mars, Wrigley, Cadbury. We want to have their products because they are what consumers know yet we cannot negotiate terms which enable us to be truly competitive.  It’s a catch-22.

The alternative is to go with second and third tier brands. That does not work unless they have a local connection and or are of superior quality.

At the small business end of town we have to provide a point of difference beyond service to enable our businesses to grow as much as they are able. The difference has to be reflected in our products and since we cannot do it on price, for most items, we will have to do it on range.

This Mars / Wrigley merger, if it proceeds, will encourage some thinking newsagents and other small business operators to look around for a product based point of difference in the confectionery area. We are playing in this space in two stores with some success but it’s too early to share details at the moment.

I’m not advocating blocking the merger – they can do what they like. I’m just musing about implications.

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confectionary

US newspapers at 62 year low

Alan Mutter’s analysis of the continuing slump in circulation of US newspapers is sobering.

Based on the record 3.5% drop in daily circulation reported today for the nation’s largest newspapers, it appears that average daily circ this year will be no better than 50 million. If so, that would be the lowest level since 1946, when daily sales averaged 50.9 million, according to statistics provided by the Newspaper Association of America.

I know that from newsagent sales data, over the counter sales are down year on year to January 2008.  City and suburban newsagents and down 3.8% while rural and down 3.1% – using unit sales (and not revenue) as the measure.  This data is from a benchmark study of 89 newsagents.

The pressures US newspapers are under will hit here.  This is another reason Australian newsagents need to be looking at their model.

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Media disruption

Announcement to newsagents

What follows is the text of an fax sent to all newsagents this morning:

With more than 300 electronic voucher / recharge products available today, eziPass a great offer for newsagents.  Commission on many products is higher.  There is no long contract to sign and no extra equipment to install.  All you need is broadband in your shop and a current model thermal receipt printer.

SIGN UP NOW! Go to www.ezipass.com.au and click on retailer sign up button.  Complete your details and follow the advice on the form.  This is the fastest way to get eziPass running in your newsagency.

HOW YOU USE EZIPASS. For the 1,500 Tower Newsagents, eziPass is available from within the point of sale software. For non Tower newsagents you will be given free stand alone software to run on as many machines as you want.  The commissions and other financial arrangements are the same for Tower and non Tower newsagents.

EXCLUSIVE ST. GEORGE BANKING DEAL AVAILABLE NOW.  We have negotiated very competitive terms with St. George Bank / Bank SA for newsagents.  These terms are available for the integrated point of sale solutions as well as the stand alone terminal.  To establish St. George as your Eftpos banking provider please call them on 1300 137 524.  Tell them you are a Tower newsagent  – this will ensure you get the negotiated rates.Â

OPTUS AND VODAFONE. We are being inundated with calls from newsagents asking when we will have Optus and Vodafone recharge on eziPass.  Today, we cannot answer that question.  We are working on getting Optus and Vodafone to eziPass on several fronts.  The larger the eziPass network the stronger our negotiating position.  The best help you can provide is to sign up today for eziPass.Â

TELSTRA. Telstra recharge products are available now through eziPass.  The newsagent commission is 8%.

FREE WEBINAR – FIND OUT MORE ABOUT EZIPASS. Book now for one of our free webinars – Friday May 2 at 11am and 2pm.  Each webinar will run for about  45 minutes.  You will need access to a phone (for a toll free call) and broadband for your computer to see us and what we present.  Book your free place by emailing bookings@towersystems.com.au.Â

EZIPASS CONTACTS: General support: 03 9524 8000 or email support@towersystems.com.au;  Director: Mark Fletcher 0418 321 338 or mark@towersystems.com.au

SIGN UP NOW! Go to www.ezipass.com.au and click on retailer sign up button.  Complete your details and fax the form.

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Bill Payment

The morning rush in Hong Kong

standard_street.JPGIt is fascinating watching the commuter rush here in Hong Kong. You soon see how The Standard has become so successful with its free newspaper – excellent locations at all high traffic transit positions. Their people are easy to spot and they are good at what they do. It’s all about fast and efficient distribution.

Watching the process this morning it’s clear to me that in large cities with enough commuter traffic the free morning newspaper model is better than a paid model. Being free you can cut some costs out of the supply chain – at the publisher end as well as at the retailer / distributor end.

The geographic spread in Australia and our small size makes the free morning newspaper more challenging for publishers. While they can get city workers, it’s in the suburbs and country where they would be challenged. However, in the US there is one publisher doing very well with a free home delivery model. These are trends newsagents need to remain across.

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Newsagency challenges

Free Comic Book Day

More than 40 US and Canadian comic book publishers have got together to support Free Comic Book Day 2008 by offering free samples at participating comic book stores. This is a brilliant idea! Comic sales are down and there is no better way to attract new interest than a national campaign based around a free offer. The day is timed to coincide with the opening of the Iron Man movie in the US. ince the start of Free Comic Book day, more than 15 million free comics have been given away.

It is great to see publishers, distributors and retailers all behind this. Brilliant!

Many times over the last six years I have suggested to Australian magazine publishers, ACP, Pacific and Lovatts that they offer free sample product through newsagents. None has been interested enough to act. Lovatts offer free samples through their website but not through the retail network. If we want to grow the magazine marketplace we need to attract people and the free offer worth trying. I have been astounded each time the publishers ignored the idea – here’s a retailer wanting to grow the marketplace and they are not prepared to take the risk.

The opther suggestion I made was that publishers like Lovatts, with their timeless crossword product, provide giveaways for newsagents to use on weeks like the last one when lottery traffic was through the roof because of the OzLotto $40 million jackpot.

We could give away samples as part of a National Magazine Week. They have one in the UK and understand it’s a ripper of a success.

I’d expect most newsagents to wholeheartedly embrace a national magazine promotion which supported by publishers. I’d expect the return to far outweigh the cost. Meanwhile, kudos to comic publishers in the US and Canada for their entrepreneurial initiative.

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magazines

Innovation, investment and newsagencies

The April 28 issue of Business Week lists the 25 Most Innovative Companies as compiled by the Boston Consulting Group. It’s a fascinating read. What stands ot from reading the article is the commercial value of investment in the business.

  • Apple has rocketed to #3 in the smartphone marketn because of innovation which came our of investment in the business.
  • Google is, well, Google, the leader in online search. Lasst year they increased R&D spending by 72%.
  • Wal-Mart is turning itself around by investing in sustainability.

Check out the full list in Business Week for yourself. Some of the companies on the list have faced life or death challenged. They invested their way out to a brighter future. This spoke to me and the challenges newsagents face – except that we are not investing our way out. Our shop fits are, for the most part, not changing. Our product mix is, for the most part, not changing. Our margins are, for the most part, where they were twenty years ago. Our operating costs are worse.

How great would it be for Australian newsagents to be judged the most innovative retailers? For that to happen we need to boldly act and invest – in our own businesses and collectively.

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Newsagency challenges

eziPass update

Even though I am in Hong Kong I have been in close contact with the Tower office about the fall out of the increasing difficulties Bill Express finds itself in.  We have been swamped with calls today about eziPass, how to sign up, whether Optus and Vodafone will come on board.  I have prepared a fax tonight which will go out tomorrow sharing as much as we are able at the moment.  This fax includes the 1300 number newsagents can call to access the amazing St.George / Bank SA rates we have negotiated for newsagents.

Newsagents wanting to get live with eziPass need to go to the website and click on retailer signup.  Complete the form and follow instructions for returning that for processing.

There is no doubt that our growing network of 450 – 500 newsagents has got suppliers interested.  I am fielding calls from businesses keen to offer their products through eziPass – some are saying they did not deal with Bill Express because of the cost of loading new products.

By signing up for eziPass you are showing to suppliers that you want a recharge / electronic platform in newsagencies.  Remember, it’s free and there is no long contract.

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Bill Payment

Hong Kong Gift Fair

gift_fair.JPGWith close to 4,000 exhibitors from 40 countries and booths covering 78,000 square metres this is the biggest gift fair in the world. From 9am the floors were packed with people looking for products. While there is junk, there are many good items worth considering.

While I am here looking for gift related items, I have found myself looking at products which may work in newsagencies which we do not carry today. Some good new opportunities to expand our retail offer and to leverage the lower manufacturing cost of China production.  The booths here are packed with items we would not see at newsagent trade shows in Australia.  And the prices!

As is always the case with Hong Kong trade shows, it’s a huge eye opener. Secretly, I like listening to the questions European and American buyers ask – fascinating!

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Gifts

Impressive free newspaper in Hong Kong

standard_hk08.JPGThe Standard in Hong Kong is one of the best free newspapers I have seen. It easily beats mX – but it’s chasing a very different market, the early morning commuter here in Hong Kong. Today’s edition is 48 pages. While it has some puff pieces, most of the coverage is real news – a train crash in China, a full page on the Austrian horror story and five pages of sports. It’s not filled with the celebrity gossip you see in many other free newspapers. Given the amount of time for reading a morning newspaper, The Standard is satisfying. As a newsagent, I wouldn’t like to see a free newspaper like this in Australia.

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Newsagency challenges

Why discount cards right now?

342.JPGI checked the John Sands card offer at an Angus & Robertson more closely yesterday – it’s a three for two deal. Buy three Mother’s Day cards and you pay for two. Discounting Mother’s Day doesn’t make sense – it is one of the best card selling seasons of the year. A&R must be discounting to try and pull sales from the more traditional card retailers like newsagents and card and gift shops. While A&R can do this, it’s an odd strategy. But what would they care – I suspect John Sands is funding the deal.

I am concerned this steep discounting will educate customers what to expect during popular greeting card seasons from A&R. They did it with their Calendar Club offer for calendars and hurt calendar margins for years. If they keep this up for cards we will feel the impact in newsagencies.

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Greeting Cards

Mindfood at the counter

mindfood.JPGWe’re taking a different approach with the second issue of Mindfood, this time promoting it at the counter in the space usually reserved for titles which come with a free gift.Given that the title is being launched with no advertising budget we have to be more creating in chasing consumer interest.

With a title like this, one which does not neatly fit into a single category, we’re up for trying various locations until we find one which is viable for us. We figured that with Madonna on the cover this issue of Mindfood is sure to appeal to a wide demographic and, hopefully, drive impulse purchases.

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magazines

Opportunistic magazine retailing

mortgage_2008.JPGYour Mortgage, Money and other titles in the mortgage / personal finance space have come into their own with the credit crunch and increasing interest rates. To leverage the fear around increasing mortgage rates we are placing these titles in a more prominent position so people who would have an interest in the issue but not the overall category see them and, buy.

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magazines

eziPass and Optus and Vodafone recharge

Following the growing challenges facing Bill Express / Dialtime and their apparent loss of Optus recharge product from their platform, we have been inundated with calls about when / if we will get Optus and Vodafone recharge on eziPass.

There is no doubt that the more newsagents registered for eziPass the stronger our pitch to these two vendors.  With 300 products live already on eziPass we have a strong offer.  We will add to that prepaid Visa product soon which will be competitive with BOPO.  We will announce more on that in the next few days.  The contracts are signed.  We are going through technical testing of the link.

But back to Optus and Vodafone.  We are working on this and have been for weeks.   We are not sure if the difficulties for Bill Express make it easier or harder.  While it sounds cliche, watch this space.

I am flying to Hong Kong late tonight but will continue to work on this from there.

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Newsagency challenges

Newsagents acting on Bill Express

The following was posted as a comment to one of my posts. I re publish it here to bring greater focus to the comments. The writer is discussing follow up to a meeting of newsagents in Sydney about Bill Express:

News Letter (follow up Newsagency Auburn meeting)

Re: Bill Express

We will take this opportunity to express our thanks to everyone who to took part in Auburn Meeting to show their support for the action against Bill Express.

1. We will go to ACCC next week

Until now, we have more than 50 newsagents who has signed up to complain Bill Express through ACCC and 30 of them want to take legal actions.

We consulted a lawyer about procedure of ACCC and court action. It is far complicated than our imaging. At ACCC, after they received complain, they will collect information first, talk with other party and negotiation with them. If fail, ACCC can take court action if they think we have a good case.

We collected a lot of evidence in the meeting. We will organize them and sent to ACCC with new newsagents list at next week.

2. NANA invited us join the legal actions.

NANA board invited us for a meeting last Tuesday and discussed the join together for a legal action against Bill Express.

Different with ANF, most board member of NANA are also newsagents. They have same problem as us.

NANA is an association who have expertise and more experience. They consulted with good layer and were advised that newsagents have a good case. They will set up special fund for this legal case. According to the chairman of NANA, legal cost for each newsagency will be around $250-500. But more newsagents sign up, the cost for each newsagency will be lower.

NANA told us there are no ‘FREE RIDE’ which means if you do not sign up, NANA won’t represent you in the court.

3.What you need to do now

1. We encourage you to give us your e-mail address. It is hard for us to send fax to each one of you. You can leave your e-mail address to camperdown@gmail.com

2. The court action is the base on evidence. We need to provide to NANA with more evidence. In the Auburn meeting, you already showed a lot of evidence but we need more. Open our mind to find more. For example, yesterday board member of NANA sent us an email attaching a newsletter clearly showed that Bill Express had misled us in market subsidy. If you have good evidence you could send a copy to us at following address.

Camperdown Newsagency
150 Parramatta Road, Camperdown. NSW 2050.

3. More newsagents needed. Please send this letter to your friend newsagent and ask them to join us!!!

Please register and sign up!

Name of the N/A_________________________________

Address _______________________________________

Bill Express Merchant ID ________________________

Tele _______________________Fax__________________________

e-mail address _______________________________________

I want to join with other newsagencies to talk legal action against Bill Express.

Please fax or email to follow address;

Jim Zheng. Camperdown N/A 02 95162151 camperdown@gmail.com
Clement Deng. Asquith N/A 02 94762968 asquith@live.com.au

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Bill Express

Grazia already here

grazia.JPGGrazia is being launched here by ACP Magazines very soon so it’s odd to see the UK edition being air freighted in and distributed through newsagents. It happens with other titles so why not with Grazia I guess.

I’m happy at the moment as having the imported Grazia it starts to educate consumers about the title. I’ll be concerned, however, once we have the local edition as this will be confusing.  This is what happens now with OK!.

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magazines

Bill Express jitters re Optus

The trading halt announced by Bill Express this morning has newsagents nervous. The rumor is that they are set to announce the loss of Optus mobile phone recharge off their Dialtime platform. I put this to Bill Express management last week and they denied the rumor. 3,500 newsagents are waiting to discover the next chapter in the Bill Express story.

Update (14:00) since posting the above I’ve received calls from three newsagents and two suppliers saying that Optus has pulled out of its supply agreement with Dialtime / Bill Express.

Update (15:00) Optus/PPS has faxed newsagents advising that Optus has stopped supplying recharge product through Dialtime / Bill Express.

Update (16:00) Bill Express has emailed its merchants advising that they do not accept the action by Optus/PPS.

Update (18:00) The ANF has advised newsagents to hold tight until Friday.

In the meantime we’re getting newsagents signing up for eziPass – with 300 products ready to go it’s a viable alternative.

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Bill Express

Stock turn and stationery

refills.JPGGraeme Day delivered a presentation at the Queensland Newsagents Conference last week about how to measure financial health of your newsagents. He talked about stock turn as one measure and return on investment (ROI) as another measure. It was an important presentation for newsagents who want to get the most from their business. A walk through many newsagencies will show that most newsagents don’t focus on these measurements.

Newsagents often neglect to undertake stock performance measurement – even though their point of sale systems do much of the work for them. I see this when I analyse performance data from newsagencies. It is not uncommon to see stock turns of 1 or less in the stationery department – that is, selling the quantity on hand of an item once a year or less. This is loss making.

Stationery needs to turn between five and seven times a year to be profitable for a newsagent. This can only be achieved with diligent management. It begins with careful buying. Too ften newsagents are fall under thge spell of good sales reps and buy on a deal without lookuing at the performance o the item or similar items in-store. Buying more stock for a discount is not smart is the stock turn does not support such a move.

Th most successful stationery items are the consumables, such as the pen refills in the photo. Wile they are not at the glamor end of the category, they sell well and deliver for the business as good stock does.

This is one reason why I am not a fan of sales reps visiting newsagents – their goal does not always match the business goal of the newsagent. This is why back rooms are often too full of stock and why all too often stationery is left of the shelves in the shop to gather dust and not much else.

The analysis of people like Graeme Day is helpful for newsagents, attention should be paid by those who want truly successful newsagencies.

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Stationery

Free training for newsagents

Tower Systems has scheduled more 1 hour online training opportunities for newsagents. We’re trying Wednesdays following feedback from our users:

  • Wednesday, 7 May 2008 11:00 AM Magazine Management
  • Wednesday, 7 May 2008 2:00 PM Stock Re-Ordering
  • Wednesday, 14 May 2008 11:00 AM Magazine Management
  • Wednesday, 14 May 2008 2:00 PM New User Training

Any newsagent is welcome to participate. Book by email: bookings@towersystems.com.au.

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newsagent software

Great use of post it notes

Check out the WebUrbanist site for some excellent examples of art created from post-it notes.  I especially like the ideas which invite participation from passers-by like in the photo below.  This is something which could work on our window.

post-it-note-to-do-list-mural.jpg

The site is a great resource of ideas for newsagencies wanting to make a statement in the post-it space.  A brilliant display makes your newsagency noticeable to people who might otherwise walk on by.

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newsagency marketing

Promoting OzLotto $40 million

The LIFE BEGINS AT $40 MILLION banner we have across our entrance is certainly attracting new customers into our newsagency for tickets in the $40 million jackpot. In addition to this we have posters at our counter and elsewhere as well as some enticing syndicate products. We back this at the counter with a reminder of the jackpot. So far we are on track for our self-established sales target.

40mill.JPG

Secretly, we hope OzLotto does not go off so we can try some of the wild ideas we’ve been thinking about if it jackpots to $50 million. Given that OzLotto is more likely to be won by one person, the jackpot seems to be more real than other lottery games. Here are some of our ideas:

  • Dream. Dressing the shop and our team in crazy Hawaiian outfits, connecting with the dream theme of travel. Backed by appropriate in-store music.
  • Bling. Dressing all the staff in bling from head to toe, really crazy looking. Backed by music including: Luck be A Lady Tonight, Money, Money Money Money, If I Were a Rich Man … and so on.  (Make sure you have paid your APRA fee.)
  • 50 ways to spend 50 million. We’ll ask our customers to vote on the list of ideas we post.
  • Pot of gold. We’ll turn the counter into a pot of gold and have a rainbow pour from the ceiling into the pot.
  • Pass it on. Ways you could use 10% of $50 million to change the world for some people.

Another reason we’d like the jackpot to continue is the flow-on benefit for Mother’s Day card sales. Already over the last few days we have seen an earlier than usual kick and I’d suggest this is, in part, due to the jackpot.

Now if only magazine publishers gave is something to give away to this extra traffic to educate them about magazine we sell.

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Lotteries

Frustration with newspaper bumper editions

It is Saturday, I have just paid my second lot of $2.20 for The Age this week. The bumper concept, to this consumer, is a crock!There are sections in the paper today that were there yesterday, I had already read them so I didn’t pick up those sections. I couldn’t help but think of the waste of paper.

My newsagent, Sue, was apologetic – she felt embarrassed to have to charge Fairfax’s price.

This is a comment posted by a consumer at the Tower Blog in response to a post about handling Anzac Day bumper editions. Customers who bought The Age Friday and came in to buy Saturday’s newspaper were frustrated. Some enough so that they bought The Australian instead.

While the bumper edition approach may suit the publisher, it does not serve the needs of the newspaper consumer.

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Newspapers

Promoting Australian Women’s Weekly

aww_may.JPGLike everyone involved in the title, we’re concerned about the future of Australian Women’s Weekly. While no one will talk about it publicly, sales are in a slump. Customers tell us it’s because of the product itself, people say it has lost its way with its key demographic.

AWW remains the most redeemed title selected by customers using our Magazine Club Card where we giveaway a magazine if you buy eleven within eight weeks.

While ACP settles in the latest changes to steer the AWW ship, we’re taking a different approach with promoting the title – this month we have it right at the front of the shop, over our lease line in fact. We used to do this for single titles years ago but moves away from it because of the cost of the space.

The display in the photo has been out for most of the week and sales have been good. We will maintain the single title display s long as it works.

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magazines

Boxing Mother’s Day

hipp_wrap.JPGIn our Frankston newsagency the team has created a display of funky boxes and bags for packaging Mother’s Day gifts.

In the middle of the dance floor, the bright display is drawing attention to our offer and showing a range people would not often see in a newsagency.

As with any retail display, the key is an appropriate canvas on which to work – the blue tablecloth is ideal for the colour of the boxes and bags we have on display.

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Gifts

Burke’s Backyard promotion

burkes_may08.JPGEven though the latest issue has been on sale four weeks we have placed Burke’s Backyard on display at our counter space – reserved for titles with a good free gift. We figured the free seeds needed another push, hence the display we put up yesterday for the long weekend.

This display at the counter needs to change more frequently given the number of customers who visit several times a week. We were changing the display once a week. Now we are more likely to have a Monday to Thursday display and another from Friday to Sunday. This will depend on whether we have magazines witch free gifts we consider to be valuable and relevant to our customers.

In the meantime, hopefully we’ll move some of the Burke’s Backyard stock we have this weekend.

UPDATE: Saturday @ 3pm – five copies sold off the stand so far.

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magazines

Tattersalls kiosk closure hurts

The Tattersalls kiosk outside our Frankston newsagency was closed yesterday when the rest of the centre was open from 1pm.  Their closure was odd because of the $40 million OzLotto Jackpot.  They would have done well.  Instead, their closure meant people walked to the lottery outlet on the other side of the centre – this happens to also be a newsagency.   We rely on the Tattersalls kiosk as much as they rely on us.  Their closure, again, let us down.

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retail
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