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

Month: March 2010

Is the ANF still negotiating a relationship with Corporate Express?

In November last year I blogged that I had heard that the ANF was close to announcing a relationship with Corporate Express.  I questioned this reported move in the context of newsagents owning GNS.

Newsagents own Group Newsagency Supplies (GNS) and the majority of Australian newsagents purchase their stationery from GNS. I would have thought that a closer relationship between the ANF and GNS would be good for the newsagency channel rather than working with a competitor.

I thought (hoped) the ANF discussions with Corporate Express had ended with no deal.  I am hearing from a couple of people that such a thought (hope) was premature.  Why the ANF would be trying to negotiate any commercial deal is beyond me.  They are an industry association.  Commercial deals have no place at the ANF – remember Bill Express.

Further, why the ANF would want to deal with an organisation which competes with a $100 million a year business which is owned by newsagents makes no sense at all.  GNS is ours.  It is an asset to the channel and ought to be used to its fullest to strengthen our channel.

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Newsagent representation

Unravelling the Bill Express mess

The Age continues excellent coverage of the investigation into Bill Express today thanks to Mark Hawthorne’s work.  In addition to the Supreme Court investigation yesterday which shed light on cash leakage from the business in early 2008, Newton Chan pleaded guilty in the Magistrates Court to manipulating the share price.

What a mess.

Newsagents and others connected in the channel who questioned the structure and operation of Bill Express from late 2005, two years after the business started, were put down by the ANF.  Despite evidence requiring investigation, the ANF remained steadfast in their support of Bill Express because of a deal signed in 2003.

Even though the deal between the ANF and Bill Express was only a heads of agreement (and based on no due diligence by the ANF), the Directors of the day chose to not challenge Bill Express out of fear of legal action by the company.  This kept newsagents in the dark.  The most concerning period for this was 2007 through 2008.

Had the ANF listened to concerns raised by its members and acted, newsagents could have saved millions of dollars and the Bill Express mess could have been exposed a year earlier.  But that’s all water under the bridge.  I mention it today as a reminder that associations and business do not mix.

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Bill Express

Nice message with foreign language Easter cards

fhn_easter_cardnote.JPGI love this note we received from with our foreign language Easter cards earlier this week. They apologise for being late, remind us that they have not increased prices and have a bit of fun around Easter.

It’s a welcome change from usual dry supplier communication.

The foreign language Easter cards will probably sell out again this year.

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Greeting Cards

Promoting the Official F1 Grand Prix program

fhn_f1_mar2010.JPGWe are promoting the official program to the Official F1 Grand Prix Program at our main newspaper stand.

I was reluctant to give over such a premium location to poor margin product – this was supplied by our distribution newsagent – but decided to try it for a few days to see what happens. The cover price is good and adding this to a newspaper sale is reasonable.

The poster looks visually soft to me, it does not have the visual cut through I’d expect for such a product.

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magazines

Ready for tears on the Gold Coast

img_3417.jpgNewsagents on the Gold Coast may need to be ready for tears this weekend with another publisher offer.  This time, Gold Coast Titans tattoos are available on presentation of a coupon in Weekend Bulletin.  The article (click on the image for a larger copy) says that tattoos are available with every copy sold in newsagencies.  The big question is whether newsagents will be given enough tattoos for every copy they receive.  The other challenge is handling copies sold in newsagencies versus elsewhere.

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Newspapers

Promoting Gardening Australia at the counter

fhn_gardening_australia_mar2010.JPGWe started promoting the latest issue of Gardening Australia at the counter between our two busiest registers on Wednesday. Sales have been excellent with most sold from the counter location and not the gardening location. The free DVD is a key factor in the excellent impulse business. Unfortunately, the publisher only provided a couple of posters so we created the rest of the collateral ourselves.

We will leave this display up for the weekend.

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magazines

Bill Express public examinations take us behind the scenes of the collapse

Mark Hawthorne from The Age will be tweeting live from the Supreme Court today where public examination is underway of key players in the collapse of Bill Express. Follow Mark on Twitter at CollinsSpencer.  It is unusual to have a live news feed, via Twitter, from the Supreme Court.

Newsagents should follow Mark’s tweets and stay across this fascinating story which caused tremendous disruption and cost to our channel.

In other Bill Express news this week:

  • Julian Little, former Director of Bill Express and point person between Bill Express and the ANF is working in Dubai on, yep, a bill payment project. Mark Hawthorne at The Age reported earlier this week that the liquidator will seek an arrest warrant for Julian Little if he refuses to leave Dubai and appear at the public hearing.
  • Yesterday, questioning in the Supreme Court surrounded cash transfers to Australian Private Networks (APN).  In June 2008 I noted that APN was then 95.5% owned by Telecards Asia and that Telecards Asia was owned by Sandro DiDonato – a many closely associations with plenty of businesses in the Bill express universe.  The Age has more on the APN questions.

While newsagents really only want to know if they will be pursued for the equipment leases and what they can do with the old Bill Express equipment, the extraordinary public examination currently under way will shed some light on what went wrong and offer a reminder why industry associations are better off not getting involved in commercial activities.

The ANF led newsagents into Bill Express, strongly recommending they take it on.  The ANF had not undertaken any due diligence.  When the business went south in 2008, the ANF let newsagents down with no advice followed by poor advice before finally offering the right advice.

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Bill Express

Newsagents love Gotch magazine supply initiative

Last year, Tower Systems, my software company, introduced a magazine supply adjustment initiative with Gordon and Gotch.  It allowed newsagents to make adjustments at a more logical time and place in the business than any other adjustment opportunity available to newsagents.

At the recent round of Tower Newsagent user meetings newsagents have told me how much they like the facility.  By eliminating the need to call the call centre or use a website, they like being able to see the need for an adjustment, action it immediately and receive confirmation from Gotch.  In a couple of cases they say this is saving an hour a week.

The mission for all newsagency software companies is to focus on time saving opportunities.  Cutting the time involved in managing magazines is crucial to the viability of magazines in our newsagencies.

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magazine distribution

Not another kitchen magazine!

classic_kitchens.JPGUniversal Magazines is using the goodwill (or apathy) of newsagents with the launch of a new title (for us at least) yesterday. Classic Kitchens arrived in-store and required re-jig of space allocation to make way for this new title. Like other Universal Magazine titles, we received too many copies and are expected to keep these for three months. You won’t see this title in our major competitors because they are smart enough to dictate their own terms. We are not so smart.

I expect that Classic Kitchens will be loss making for all but a few newsagents, probably forever. The supply model – volume and long on sale – make it cash flow negative, especially in a shopping centre situation where you are paying more than $1,000 per square metre in rent.

While Universal may have used sales of other titles to determine the scale out for this new title, such a model does not take into account the limited space in newsagencies nor the cash flow costs of servicing a new title.

The only way newsagents will stop this is if we take control of our network and introduce a gatekeeper, a magazine czar as I have written previously.  We need Universal to jump through hoops before supplying a title to a newsagency for the first time.  The current magazine distribution system is too easy.

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magazine distribution

Good iTunes card sales at the counter

We are finding iTunes cards are an easy to offer item at the counter.  Having a display at the register is key to getting this impulse purchase business and extending the value of the basket.  Look at the supermarkets, they have iTunes at each register for a reason.

Greeting cards are the items most often purchased with iTunes cards.

Adding a $50 iTunes sale to a $4.95 card makes it a considerably more valuable sale without having to carry stock.

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Newsagency opportunities

Covering Dynamic Business

dynamic_business_cover.JPGThe cover of the latest issue of Dynamic Business magazine (out today) is partially obstructed by a post-it type for Telstra stuck on the cover. While it’s for a good cause – the Telstra small business awards, it’s a pity to see the cover of a magazine obstructed in this way.  My other concern with this issue is that our supply has been increased withoutjustification.

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magazine distribution

Doubling supply of Farms & Farm Machinery

farms_machinery.JPGI’d be interesting in hearing from newsagents about their supply of the latest issue of Farms & Farm Machinery which came out today. Our supply was doubled (from four copies to eight) without any justification in our sales history. I can’t see any reason for the increase in supply.

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magazines

Coles selling laptops

I noticed in a Coles supermarket recently that they are selling Acer laptops.  This is the Aldi effect.  Aldi pioneered selling items like laptops, DVD players and the like in their supermarket aisles.  Now, it seems, Coles wants in on the opportunity.

While newsagents tend to stay away from these items, I know of several who are having good success with these.  In Western Australia a couple of weeks ago one enterprising newsagent told me of the great success he was having with DVD players, printers and a range of electrical items for the office.  he has made some smart moves and is reaping good rewards.

It all comes down to finding out what is possible in your business.  We find out what is possible by playing outsidethe traditional newsagency model.  Who’d have thought thatwe could sell more ink than regular stationery in our businesses?

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Newsagency opportunities

Tiger Woods on Vanity Fair, finally

tiger_woods.jpgWe are giving the long awaited Vanity Fair issue with Tiger Woods on the cover feature treatment with placement above our newspapers.  It’s not a magazine many of our customers hunt for so it makes sense to get the cover in front of as many eyeballs as possible given the news coverage of Tiger over the last three months.

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magazines

March newsletter promotes a range of products

newsletter_mar2010.jpgClick here to see a copy of our March 2010 in-store newsletter. We distribute this from a stand at the front of the shop as well as to customers when they shop with us. The newsletter features products which are promoted elsewhere in the business – either in catalogues or on the in-store radio. It covers various categories – key to balancing the business.  We also have a version of the newsletter which we use for email marketing to our database.

We started producing an in-store newsletter many years ago. We have found it to be a useful part of our marketing plan.

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newsagency marketing

St Patrick’s Day products in Frankston

frank_stpats.jpegOur team at Frankston is enjoying excellent success with their St Patrick’s Day display. It’s looking a bit thin now with hats, glasses and other items selling well. While St Patrick’s Day is a tiny season, seizing all of these opportunities makes us to go-to place for them. It’s a good point of difference which customers will remember.

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Newsagency opportunities

Interesting approach to bagged magazines

A newsagent in Sydney places all bagged magazines together where possible.  In the motoring area, for example, they had a row of eight bagged titles.  Some were away from other titles in their segment – motor cycles for example.  Each title was given a single facing.  I liked the look and the idea of connecting bagged magazines in this way.

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magazines

Managing magazine space allocation

We take care in managing space allocation for the top selling magazine titles in each category. We push back against a (deliberate or unintended) land grab by a publisher which may give them an unfair advantage. If a title is packaged with free products we work hard to ensure that its competitors are allocated the same number of facings in its regular location – even though it may get extra attention in a feature display.

With more magazines including free gifts, or so it seems, managing space allocation is a challenge. If left unchecked, some titles will get more space just to accommodate the larger packaging. While this helps their sales, it hurts competitor titles and this would not aid the health of the overall magazine department.
We need to be thinking of the whole category or department in our space allocation. We need to balance space so that all key titles have a fair shot.

I’d encourage newsagents to walk through their magazine department and look at space allocation. Are there titles being given more space than competitors because of the space required to accommodate the free gifts? If so, pull the space allocation back to give all key titles in a category a fair shot.  You are paying the rent after all.

The health of the magazine department in our businesses is reliant, in part, on the balance of the mix of titles. Our space allocation decisions can alter impression shoppers have of our mix. Hence the need for us to make sure that we are allocating space based on what we want to achieve and not just to accommodate gifts which are packaged with a title.

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magazines

Promoting Easter in the newsagency window

fhn_easter_window_2010.JPGWe are promoting our Easter range of chocolates, soft plush and gifts in our window facing into the mall at Forest Hill. We also have the three prizes up for grabs in our easter colouring competition on display in the window.  We have four additional Easter displays in the shop.  Over the last five years we have grown Easter significantly.  While cards and eggs are the top selling categories, we are seeing excellent growth in gifts and and books.  It’s in our top five seasons of the year thanks to hard work from our store team and suppliers who support us.

Our book sale catalogue draws plenty of new traffic and our brilliant product displays drive the effiency of this traffic for us.

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visual merchandising
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