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

Month: April 2008

Visiting Harvey Norman Ofis

ofis_bag.JPGAs I blogged Tuesday I visited the new Harvey Norman Ofis stationery business in Auburn (NSW) on Tuesday.While it’s not fair to assess a new business which is barely a few days old, this is a Harvey Norman enterprise. These people know retail. They have time to get this right. Given their size and the bucket of cash available to support the new enterprise I think an early days assessment is fair. Their marketing suggests they are ready for such scrutiny.

I went to Harvey Norman Ofis expecting to see a next generation model of stationery and office retailing., something which would make put them ahead of OfficeWorks, the main national brand player in this space today.  I didn’t see that. far from it. This was a clone of Officeworks. No generational change.  Nothing special.

The customer service was exceptional and the feature displays attractive but the core of the business was nothing special. Laptops were laid our like Officeworks and Harvey Norman. Ink and toner the same. I wanted to see innovation driving sales. Instead, the focus in on creating a sense that this is the place for a good price deal. There is nothing new in that. Especilly when the prices are not amazing.

As I said, the customer service was excellent. If this is maintained then that is a huge point of difference with Officeworks.

The store itself felt, well, bland. The pink logo is the strong visual but even then it’s only in the uniforms, plastic bags and at the front. In-store signage, which may be temporary, was not the bold message I expected.

To support the opening they give you a brown paper bag and anything you can fit inside during your shop you get 15% off. While it’s not a new idea, the execution at Ofis is good – I was offered the bag three times and told to fill it up. I know the idea has been used in at least one stationery outlet in the US with good success.

So, what does Ofis mean for newsagents? If Harvey Norman is committed for the long haul, and I am yet to be convinced of this given what I saw, newsagents need to be prepared for more competition in the stationery space. We need to get back to basics – the best range, keen prices, exceptional service and marketing our offer outside our four walls.

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retail

Boredom busters too late

boredom_buster.JPGLike plenty of other newsagents I ‘m sure, we received a box of recycled Simpson comics. The bag has the banner – Boredom Busters. A month ago the banner would have made sense.  They are too late for school holidays now. It’s a lost opportunity.

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magazines

eziPass now available for all newsagents

Applications for the eziPass electronic voucher platform are now being processed from newsagents who to not have the Tower Systems software. Tower users can access mobile and other electronic vouchers from within point of sale. Others can load some free software and access the eziPass products from any computer. The new sign up form can be accessed here.

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phone recharge

Beating Big W on price

bigw.JPGWe were pretty excited to discover that one of the books in our book sale is in the latest Big W catalogue and that we beat their we sell for less price. Our price is 19% lower than Big W – and we still making a good margin. Sure it’s only one product – the feeling is good in this small business. We will bask for a moment. The photo is from the Big W catalogue.

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Book retailing

Removing middlemen from a bank deal

There is a bit of noise around about alternative bank deals for newsagents. This has sprung up after I announced the deal with St.George and Bank SA.

Key to supplier relationships like this is the understanding who makes what. Banks offer sign up fees as well as a commission on transaction fees. I have rejected these to ensure the best deal for newsagents. There is no middleman.  For too long there have been too many middlemen taking a piece of what newsagents ought to make.

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Bill Payment

Success with The Art of Knitting

art_knit_36.JPGThe Art of Knitting continues to be a great partworks success for us at Forest Hill. We have eleven committed putaway customers and, thankfully, we get all the stock we need to satisfy their orders. To be in this situation by issue 36 is excellent.

We’re not so luck on some other partworks. Under-supply means putaway customers cancel orders and we either lose the business or go into the backorder black hole and lose time, money and our reputation.

Partwork publishers, the importer and distributors need to look at our numbers for The Art of Knitting and understand the scope of the opportunity if they get the model right.

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magazines

Shunning the free monthly

mothers_mat.JPGCopies of a new free monthly, Melbourne Mothers Matter, were left at the front of our newsasgency overnight. No advance advice, no cover note, just the product.

While Melbourne Mothers Matter looks good, we don’t have space for the freebie – twice the size of a magazine and does not fit the fixturing.

Also, why display a free title next to paid-for magazines carrying the same or similar advertisers?

I know I could argue that I should have the free title but financially it does not work for me. What I have on the shelves today is working. This is a business after all.

To their credit the publisher agreed to take us off the distribution list when I called them.

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magazines

Fairfax launches The Vine for Gen Y

The Vine is a news and information website for Gen Y from Fairfax.  This is a very smart move and should open an excellent ad revenue demographic for the company.  The interactive facilities of the website are an excellent aspect of the offer.

Ten years ago if Fairfax wanted to tap in to the equivalent of today’s Gen Y they would have launched a new newspaper or magazine.  Gee how times have changed.

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Media disruption

Unfair magazine KPIs

I am trying to help a newsagent get approved by a magazine distributor for processing magazine returns electronically. The distributor says no because the newsagents has only sent sales data for 50% of the trading days of the month.

Fair enough, the newsagent should be sending sales data every day. However, this is a one-sided relationship. The magazine distributor imposes tough KPIs on newsagents on sales data, invoice payment, displays etc and accepts none in return. They are supplying some titles which sell through at less than 30% yet the newsagent has no mechanism to use against the distributor.

Let’s play this scenario through a bit. The newsagent fixes processes at their end and does send sales data through every day, they are then permitted by the magazine distributor to process returns electronically. What happens about underperforming titles? Nothing.

This is a one-sided, unfair relationship. A magazine distributor treating newsagents as partners would have used the electronic returns request as a carrot rather than a stick.

The magazine distributor ought to stop managing newsagents by blackmail and start treating them as business people.

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magazine distribution

Leveraging newspaper home delivery

stepper.JPGThe Big Stepper is a machine which could strengthen the viability of distribution newsagencies.

It is a device which facilitates easily adding other product(s) to the newspaper package prior to delivery.

While there are challenges with newsagents adding product to the newspaper prior to delivery in existing newspaper contracts here in Australia, smart publishers will engage with newsagents if they want a viable home delivery network in Australia.

The current situation of publishers controlling all revenue points for newsagents and accepting no responsibility for business costs such as fuel and labour must change if newspaper home delivery is to be appealing. Something like The Big Stepper could be very interesting in improving viability. A more viable home delivery business will attract more entrepreneurial operators and this must be good for newspaper home delivery.

Warren Hannon, President of Stepper Inc in the US sent me details on his Big Stepper product and while I have not seen it first hand, it looks very interesting, certainly worthy of consideration. I understand a couple of newsagents in Australia have purchased this unit.

If I was still in the newspaper home delivery business I’d be looking at opportunities like this to leverage my key asset, my customer list, for more business opportunities.

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Newsagency challenges

Distributing news

The New York Times has a fascinating article by Brian Stelter on how young people consume and distribute news.  It looks at this through the prism of the current US primary election process.  It makes a case that for this generation, the medium has changed.

As the last step in the old media supply chain this article speaks to newsagents.

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Media disruption

Crossword competition hots up

crossw_apr08.JPGIt is good to see the heightened competition between the Puzzler and Lovatts brands in newsagencies. 

The fight for the best shelf space, in-store promotions and counter offers for crossword / puzzle titles is healthy and provides newsagents with choices they would otherwise not have.

Puzzler and Lovatts dominate a strong category for newsagents and the heightened competition between them can only grow the success of the category.  Smart newsagents will review their space allocation for crossword / puzzle titles and find ways to have more facings seen by more eyeballs.

In each of my stores, outside of the traditional crossword / puzzle display, we have key titles from Puzzler and Lovatts on display next to or very near women’s weekly titles such as New Idea and Woman’s Day.

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crosswords

National pricing

Aldi, the supermarket chain, is introducing national pricing.  This is a bold move in the supermarket space.  But it makes sense.  Lower ad costs, consistency etc.  I’ve been surveying newsagents recently and the difference in pricing across 4,600 newsagencies for basic items like A4 pads, envelopes, staples etc is considerable.  Even among marketing groups, for most categories, there is little consistency.

Sure, Aldi stores are corporate stores.  That certainly makes it easier.  Others will follow and we will be left to decide if we play the game too.

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Newsagency challenges

Online training for newsagents

At Tower Systems we have scheduled more free online training opportunities for newsagents:

  • Tuesday, 15 April 2008 10:00 AM Magazine Management
  • Tuesday, 15 April 2008 2:00 PM Stock Re-Ordering
  • Thursday, 17 March 2008 10:00 AM Magazine Management
  • Thursday, 17 March 2008 2:00 PM New User Training

Each of these sessions runs for 60 minutes, longer depending on questions. Access is free. All you need is broadband and a phone – for a toll free call for audio.  Book by email, please email bookings@towersystems.com.au. Even if you to do not use Tower Systems you;re welcome to participate and see how this online training works.

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Customer Service

A timely magazine re-issue

Gordon and Gotch sent us more copies of the Melbourne Wedding & Bride. Even though it is an inch and a half thick and difficult to display, we sold out first time around and should move the extra stock without a problem. It’s good to see the system working for us.

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magazines

AFL JSquad magazine in Australia Post

aflj.JPG While the JSquad magazine website says it’s available at newsagents and K-Mart, a colleague spotted the magazine in an Australia Post Post Shop last week. Not a newsagency which is also a Licenced Post Office, no, a full on Post Office.

Post Offices don’t sell magazines but not for lack of trying. For years there have been reports of Australia Post pursuing magazine publishers to have their products in Australia Post retail outlets.

Magazines, newspapers and lottery products are the last categories from newsagencies to be targeted by Australia Post.

Australia Post is a government protected monopoly. My view is that through its 865 or so government owned retail stores it has strayed way beyond the brief permitted by the act of parliament under which it operates. If it does bring magazines into its mix it will be time for newsagents to rally to stop Australia Post using its protection to hurt small family businesses.

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Australia Post

Making the pole the hero

frank_soft.JPGOur Frankston newsagency has a pole right near the counter, a big ugly pole.

We have tried several approaches to hide the pole and or work around it. In each case we were making excuses. We found that by embracing the pole, making it the hero, it works for us beautifully.

Last week we made the pole a feature of our new plush display. We kept access either side easy and this helps our customers see the new range. This was important since we are positioning ourselves outside the traditional newsagency range – if we had buried the plush inside the store, we risked losing focus.

This display is seen by everyone. It demonstrates we’re evolving the business, makes the newsagency look more appealing to kids and a place parents can find gifts.

The display is important on another front, in pursuing an excellent rang of plush we are pursuing a better margin, better than average for a newsagency. Plush is not the only new category we are pursuing as part of our margin play, it’s a start.

Once we take the plush display off the pole we will replace it with something else which continues to respct the pole as the hero.

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Gifts

Intralot inches closer

The folks at Intralot are well into the process of briefing Victorian newsagents and other interested retailer about their offer.

We are into the final countdown to the most significant change in the distribution of lottery products in Victoria in decades. There will be new retailers and new products.  Several existing produce will cease.  retail locations in existing retailers will change by necessity and new retailers will sell some lottery products.

The battle about Intralot is yesterday’s fight.  Today the focus has to be on the opportunity the change brings.

I see the arrival of Intralot and the repositioning of Tattersalls as an opportunity for every newsagent to reinvent their lottery offer, to exploint the publicity and advertising and to re-engage with shoppers about our in-store offer.  So, outside of everything Tattersalls and Intralot will do, we will engage and leverage the change for the maximum potential.

What does this mean?  Better in-store displays, more local promotions, education aimed at our demographic and more fun!

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Lotteries

Where we will end up

“We have one certainty – we can never be sure where the industry will end up,” Murdoch said in a Gaston Hall address about the changing face of media. “It is true that technology is changing accepted ways of doing business. It’s making us work harder for our customers.”

Newsagents ought to read what Rupert Murdoch said this week at Georgetown University in the United States.  We need to be thinking and talking as much about our future as Rupert Murdoch and his competiors do about newspapers.

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Media disruption

Designing the shop fit

I’ve spent considerable time this week working on plans for a new shop. We are six versions and still going.

The devil is in the detail as this is where the business works or fails – how much sock you can placeper qsquare metre, how it is displayed, whether your directing traffic appropriately and, most important of all, how easily you can reconfigure the shop without changing the shopfit.

The problem with many newsagency shopfits is their inflexibility.  From magazine stands to card fixtures, we need to ability to turn the layout on its ear without having to bring in tradespeople to make construction changes.

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Newsagency challenges

Promoting Burkes and Better Homes

We are featuring Burke’s Backyard and Better Homes and Gardens at the counter at Forest Hill this week.  They are a good fit and often sell together.  Having just one in the display does not maximise our potential – hence the dual display.  The photo below shows not only the display but where it is in terms of the counter and access to the busiest of our two magazine aisles.

burkes_better.JPG

From this counter position there are several counter offers, the magazine stand and, behind that a Girlfriend feature display and to the right of that our Women’s Weeklies magazine category.

The Burkes / BHG display will change Monday, being at the counter we need to move displays through every five to seven days otherwise customers become store blind.   We will still co-locate these two titles elsewhere, just not at the counter.

We do this work because we want to achieve growth in sales of these and other titles we promote, not because we are paid a fee by a magazine publisher.  Publishers need to understand the differences between newsagents and their other retail channels.  Newsagents can be more entrepreneurial if they are rewarded for growth.  Th only alternative is we put a price on our space and charge fees like Coles and Woolworths.  Publishers would scream.  Th current situation of no fee and no incentive for growth is unfair on newsagents.

We will still do what we do in my newsagencies because we are retailers – I just wish we were rewarded for above average growth.

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magazines
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