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

Month: April 2008

Bill Express down

Our Bill Express terminal was down all yesterday. We called the Help Desk and all we could get was a recorded message saying they were undertaking an upgrade. It’s odd to take a retail network down during trading hours. This doesn’t happen with other online retail networks – lotteries, banking and the like.

Given the continued fall in the Bill Express share price, 66% over the last three months, and the mixed messages they are giving to newsagents about the status of contracts following their removal of financial subsidies, it is only natural that newsagents wonder about the future of the network.

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Bill Express

Promoting fresh in magazines

just_in_apr08.JPGWith over 1,000 titles in an average newsagency it is a challenge for consumers to know what is fresh and what is not.

In the crafts, crossword and special interest categories I encounter people all the time asking when a title came in or if it is the latest issue.

newsXpress has come up with an industry first, an idea to help newsXpress newsagents show customers what titles are just in.

The newsXpress branded bookmark in the photo is placed in a small selection of new titles in categories where consumers are most likely to have the question about what is new. The crossword title is a good example. With many Lovatts products on the shelves, people in front of our display can see that BIG Crosswords is just in.

Things like the bookmarks are another way we differentiate ourselves from other magazine retailers including other newsagencies. In an open marketplace even the smallest difference like these bookmarks can mean a customer choosing to return to us for their magazines.

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magazines

News Corp expansion

The Guardian has an excellent report on the latest expansion drive by Rupert Murdoch’s News Corp. – they are offering to purchase Newsday – and a view of the growing reach of the company. It’s interesting in the context of News’ expansion in acquiring strong print brands while at the same time expanding online.  For a braoder summary on what the expansion may mean, click here.

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Newsagency challenges

What’s for dinner tonight?

dinner_tonight.JPGOur team at Frankston has created a magazine display around the theme of What’s for dinner tonight? It’s next to one of our registers at the counter.

Watching people interact with the display soon shows the importance of these local in-store display around themes. It acts like a speed bump, enough approaching the counter take notice of the display and some of those pick up a title and some of those buy.

While the display is not the prettiest in the world, it is a call to action and it works in delivering sales – that is the measure that matters to a retailer.

Too often we create attractive displays which act as a billboard and not as a sales driver. We need to create displays which generate sales in our stores.

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magazines

Changes in the A&R model?

I noticed an Angus & Robertson bookshop with a card display at the front of the shop. I’ve never seen cards in an A&R store before – but maybe I have missed them. The display of John Sands cards is right at the front. Later, a colleague newsagent told me the A&R near him has cards, Cadbury chocolates as well as Cool Ridge water. This represents a shift in range for A&R. Whereas in the past the offer has been book focused, it now has more newsagency type lines. The question is how far the changes will go?

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Newsagency challenges

Beware of credit / debit card transaction rates

I have been deeply involved in bank eftpos bank rates for a few weeks, talking to several banks and getting deeply into the deals they offer to retailers.  Every day has been a discovery of something new about the intricacies of bank charges, where money is made and by whom in the fees levied against retailers for processing credit and debit cards.

This space is changing rapidly.  Some banks are introducing new fees based on the type of card being presented by the consumer for a transaction.  One sale could have a debit card fee for the newsagent of .7% and the next could have a fee of 1.5% or more.

It does not make sense to me that the retailer carries the cost of the more expensive cards.  If banks want to chase these customers they ought to carry the risk.  While they will say they carry the risk already, it’s not enough if I as the retailer have to cop a 100% penalty on the card fee.

The agreement reached with St George Bank / Bank SA means a common fee regardless of the card used.

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Newsagency challenges

Show mummy the money and me

mummy_money.JPGShow Mummy the Money is the kind of independent magazine I had in mind when I wrote my blog post about helping independent magazines a week back. We received the new title yesterday – but no support material. The website for the magazine is packed with information. This could have easily been adjusted to help newsagents promote the title.

At the website I found the publisher pitching for subscriptions ahead of promoting newsagents. The page with this gives off a mixed message about price, even more mixed than I usually see around subscription versus retail offers.

The website also lists newsagents stocking the title. The static list is cumbersome to navigate – I ought to be able to enter my postcode and the site lists my closest newsagent stockist.

On the title itself, the magazine distributor has coded this to be placed in the parenting section. While this makes sense, Show Mummy the Money is the kind of title which is better launched to people who do not usually shop the parenting section – among the weeklies or, if the space is available, at the counter.

What newsagents need to make Show Mummy the Money and other new independent magazines successful is not much. To properyl launch this title I’d like to have been given:

  • Cover run-ons.
  • A product information sheet for my team.
  • A poster or two.
  • A competition to focus my mind on promoting the title.
  • Inserted putaway cards to help build our business as opposed to subscription business.

Publishers need to treat newsagents as partners. We are investing our labour and real-estate to support this new title. We’re taking considerable risk – for the opportunity to make 25% of cover price. It’s reasonable for us to demand support from the publisher.

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magazines

Newspaper mugs

paper_mugs.JPGWe are experimenting with these newspaper mugs in a couple of our newsagencies.  Each mug features a letter of the alphabet.  On the mug as well as on the box is a bunch of trivia connected with the letter: unusual words, famous people, the kind of person you could be, the origin of the letter … tons of stuff to make the mug more usefull than those we often see based around a letter of the alphabet.

We like the mugs because of the newspaper theme, they look like a natural fit for a newsagency.

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Gifts

Blocking browsing

two_wheels_bag.JPGSomeone needs to remind the folks at News Magazines that guys like to browse motor bike magazines. Bagging Two Wheels – just so you can move out of date stock – will not help sales. It will frustrate browsers and cause trash in newsagencies because some browsers won’t be stopped. When I saw the bagged product yesterday I was inclined to open the bag and put just the current issue of the magazine on the shelf.

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magazines

OzLotto jackpot for newsagents

40_million.JPGNewsagent suppliers reading this blog would be well advised to leave newsagents who sell lottery products alone over the next week.

The OzLotto $40 million is the best jackpot opportunity we have had in a long time.

Each of us ought to be throwing every ounce of energy we have at additional sales – our stores will be filled with people who only buy tickets when an opportunity like this arises.

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Lotteries

Update on Winter Favourites

winter_fav1.JPGOur display of the Winter Favourites magazine / cookbook from ACP Magazines about which I blogged here a week ago has generated a 72% sell through rate in seven days.

We will sell out with at least five weeks left of the on-sale period. I’m happy with that and won’t be chasing any extra stock.

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magazines

Unhealthy inbreeding

As I was preparing for my presentation to the Queensland Newsagents Conference yesterday on the Entrepreneurial Newsagent, I pondered how incestuous our channel was.  While networking with fellow newsagents is important, too much of this works against us. 

Hiring from within, newsagents leaving to work for suppliers, vice versa … too much of this makes us unhealthy as we feed of each other’s insularity.  

I suspect we are more likely to find more useful ideas by socialising outside our channel, by attending non newsagent trade shows and non newsagent conferences, by visiting other retailers and by working with people with no newsagency experience.

Just as we can become store-blind about our own businesses, we can become channel-blind as to opportunities which we ought to consider.  The only way to break this is to mix more with people outside our channel.

While it was great to catch up with colleagues in Queensland yesterday, for our own future, a more innovative view of the future, we need to cast our eyes far and wide.  Here are a few of the points from slides I covered in this part of the presentation:

  • Spend more serious time outside your shop
  • Visit your competitors, not newsagents but others
  • Visit other retailers, really out of the box retailers
  • Trawl the Internet, for non newsagent related business tips
  • Read about retail
  • Visit non newsagent trade shows
  • Hire from outside the channel
  • Engage a business angel (usually a retired person) with retail (non newsagent) experience
  • Spend less time at newsagent dinners and more networking with non newsagent business owners
  • Enroll in training outside the channel and disconnected with newsagent suppliers
  • Visual merchandising training
  • Retail management training (Harry Friedman)

Don’t get me wrong, I am all for newsagents networking.  My sense, however, is that we will get more value, for our future, by networking more outside our channel.  Fresh ideas (fresh blood) will strengthen us.

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Newsagency challenges

New marketing initiative for newsagents

My software company, Tower Systems, yesterday announced exclusive partnership with Kachingo, a new in-store marketing initiative for newsagents.  You can read more about this here.  I expect that newsagents will hear plenty about Kachingo in the next few months.  It provides a genuinely new marketing opportunity for newsagents and their suppliers.

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newsagency marketing

40% kick in OzLotto sales

We asked our team to help drive OzLotto sales in last night’s $30 million jackpot. The result was a 40% kick in sales from the previous week when the prize was $25 million and from which we saw a 50% kick from the previous week.

Ben, Con, Toni and Jane, our full time team, did a tremendous job as did our casuals. Jason, our manager has double movie passes to hand out as a reward. Around two thirds of the growth on the previous week was achieved as add-on sales through over the counter conversation. No gimmicks, no challenges, just a comment about the $30 million.

Now that OzLotto jackpotted again we will kick the game up a notch.

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Lotteries

Queensland newsagents enjoy a laugh

steve_davis.JPGDavid Stephenson has consulted to to top publishing organisations in the USA. His expertise has seen changes in thinking in supply chain logistics, use of EDI and addressing oevr and under supply.

That is, in part, how David was introduced a keynote speaker to the full room at the Queensland Newsagents State Conference this morning in Brisbane.

David Stephenson is character created by Steve Davis, a comedian hired by the QNF to open the conference this morning. he was very funny. You can see the text of the presentation here.

It took a while to realise that David was not who he said he was. Some of what he was saying was real: that new media is challenging the traditional newsagency business model and that the current magazine supply model is flawed against newsagents.

It was great to start the day long conference with such an enjoyable presentation and that alone the way, Steve reminded us some truths about our businesses.

In among Steve’s humor were some important messages for the magazine distributors in the audience: we need EDI returns ASAP, we need engagement on how our existing suppliers are playing in the online space and we need to cut costs out of our supply chain.

The key is whether we make genuine progress on these challenges. We’ve left to suppliers in the past. If we (newsagents) act in unison we can force change in our favour.

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magazines

What happened to the postal service?

fiery3149.jpgAustralia Post’s Mothers Day brochure demonstrates how far the government owned retail outlets have strayed from the services they are required to offer under the Act.

There are gift cards, books and all manner of Mother’s Day items but no stamps or postal services.

The Act permits Australia Post to get into other areas if they incidental. This Mother’s day flyer is hardly incidental. They are using the postal service brand to take business from private businesses like newsagencies.

I hope that Stephen Conroy, the new Minister responsible, takes a careful look at Australia Post and best practice in the area of a national postal service.

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Australia Post

Bake burns newsagents

bake_book.JPGMore fool us I guess. We took on the Bake cookbook published under the Australian Women’s Weekly brand. We knew the majors would have it but did not expect Big W to sell it at 50% off. Yes, more fool us I guess. The folks at ACP would know the deal done with Big W when offering this title to newsagents. Rather than us looking expensive, again (and as usual) we could have been given a deal to allow us to compete or have been warned off. rather than looking expensive, Bake in our newsagency is now a true loss leader.

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Book retailing

Promoting property and investing titles

money_invest.JPGProperty and investing is the theme of our magazine category feature display this week. The photo does not show the detail in display at the top – it’s a montage of banknotes and looks good in person.

We’re anal about changing this display weekly, it’s a Monday morning task.

I am interested that a couple of publishers have suggested that we should feature their product in this stand. I’ve explained it’s not about a single title as such but more about bringing a category to the fore which would otherwise not feature at the counter.

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magazines

The entrepreneurial newsagent

“… as an industry, many of us have been remarkably, unaccountably complacent. Certainly, I didn’t do as much as I should have after all the excitement of the late 1990’s. I suspect many of you in this room did the same, quietly hoping that this thing called the digital revolution would just limp along.” Rupert Murdoch, speaking April 13, 2005 to the American Society of Newspaper Editors

I was reminded of this quote over the weekend as I prepared for a presentation I am giving tomorrow to the Queensland Newsagents State Conference.

Rupert Murdoch’s speech was a seminal moment in newspaper publishing. The complacency of which he spoke was replaced by frenetic activity within News Corp. and other publishing companies around the world. While they have invested considerably in online and print businesses in the years since, it is the online investments which draw the most attention.

It is interesting comparing the activity of newspaper publishers since April 2005 in pursuit of new revenue streams with the activity of newsagents over the same period. Most newsagents continue to be complacent about the disruption occurring to the supply and retail models on which our businesses are based.

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Media disruption

Spin off magazine glut

take5_cook.JPGWe appear to be getting more cookbooks and crosswords under magazine brands from other categories than ever before. Like the Take 5 Easy As 1 2 3 title. These spin off magazines are squeezing the traditional titles in these categories. Wheras in the past we’d try and promote these add-on products near the ‘parent’ title. Now, with so many, it’s a challenge.

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magazines

Promoting Notebook magazine

notebook_counter.JPGNotebook magazine has been featured as our counter magazine since Saturday. It’s orking, sales are up.

On a good day, I’m pleased with the sales our efforts in this space generates. On a bad, it annoys the crap out of me that we do this for free while other magazine retailers are paid for access to such premium space. Billboard space in newsagencies has a value which publishers don’t recognise – and we let them.

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magazines

Mixed messages from Bill Express

On April 10, Bill Express wrote to both of my newsagencies which have the service, advising a new revenue structure and threatening early termination fees should I seek to exit the contract early. On April 18, I received a fax saying that my contract had come to an end and that monthly payments have ceased and that they will put a new contract to me shortly.

The problem with the second fax is that it effectively varies the terms of the original contract. It appears that the six months notice and automatic roll over is no longer in play. I’d need to check the original contract but I suspect that Bill Express owes me money back dated to when the contract ended a couple of months ago.

Part of the problem for newsagents about the Bill Express mess is the various contracts and subsidies associated with the service. That and the inability to get anyone from Bill Express to respond to calls, emails or letters.

I have lodged a complaint with the office of the Small Business Commissioner in Victoria and sought to have this matter mediated.

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Bill Express

Australia Post expensive for ink

ap_ink.JPGOur newsXpress Hot Ink pricing beats the ink offer being put about by Australia Post government owned stores.

Where we can’t beat the protected Australia Post retail network is in cost of traffic generation. Their monopoly over postal products and the brand recognition and traffic this brings means customer acquisition costs less than in newsagencies. This is what the ACCC should look at when they review cross-subsidisation within Australia Post.

The photo is of a two page flyer Australia Post is distributing at the moment. While the deals are not that great, that they come out under the Australia Post brand will take some ink business from us.

I hope that the new Federal Government engages more on this issue that the previous Government. They need to decide whether it is acceptable that the retail network they own and protect is used to take revenue from independent small businesses.

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Australia Post
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