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

Month: March 2011

Fighting the banks on their anti small business EFTPOS fees

Newsagents need to gear up for a fight with the banks on the new EFTPOS fee regime.  Otherwise Coles and Woolworths will have the advantage of not having to pay the 5 cents (or more) transaction fee wel will face with the recently announced changed.

The EFTPOS fee move is all about the banks looking for other fee opportunities.  In this move, they have a fee which is difficult to understand and somewhat removed from the consumer.  By hitting some retailers (the weak and generally disorganised) and not others (the big and very organised) they are giving big businesses an unfair advantage.

What are newsagents going to do about this?

If we do not fight, many of us will probably absorb the fee as another cost of business. Those who do not risk negatively impacting customer goodwill.

Our fight should / could include:

  1. Lobbying local federal members of parliament.
  2. Complaining to the Banking Industry Ombudsman.
  3. Complaining to our banks.
  4. Moving our business to a smaller more friendly bank.
  5. Running a national and unified across the counter campaign – to EVERY newsagent customer.
  6. Calling talkback radio to get the story on the agenda.
  7. Picketing outside Coles and Woolworths head offices.
  8. Joining with other retail groups and bodies to unite on this common cause.
  9. Writing to newspapers.

TYRO is a focal point on this issue since so many of their retail customers are small businesses.  I am confident that they will also provide suggestions of how newsagents can engage on this topic.

This is not an issue which newsagents should leave to the next person to deal with.

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EFTPOS fees

Melbourne Home Design + Living set to sell out

mag-melbournehome.JPGThanks in part to the excellent display at the counter the latest issue of Melbourne Home Design + Living is st to sell at out at one of my newsagencies.  As of last night we are at a 77% sell through in under a month.  We have ordered more copies as we are confident that the title will continue to sell.  I have blogged about this title several times, noting that it works best when the full cover is on display.  This means getting it out of the usual magazine fixturing – as you can see from our display at the counter.  I hope that other newsagents who responded to my blog post about this title earlier this month are having similar sales success.

We can achieve incremental sales of magazines is we are observant about new product and tactical in placement and promotion.  This means we promote titles we think we will sell rather than necessarily promoting what we are told to promote.

One of the best ways to market any newsagency still is to professionally and energetically run a diverse magazine department.

PS. ‘diverse’ does not have to mean large – i.e. above 1,000 titles.

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magazine distribution

Phasing out postage stamps?

Newsagents with post office agencies may be interested to read about the move in Denmark  where people can text the post office for a code which is written on an envelope instead of purchasing a stamp.  The BBC report says that Sweden is also considering the move.

I don’t see Australia Post moving to this any time soon unless they want to divert focus away from their retail network, especially their government owned stores.  Personally, I’d encourage Australia Post to do anything possible to reduce traffic to their government owned stores.

My personal issues with Australia Post aside, the mode in Denmark does make sense.

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Australia Post

ACCC win on photocopy paper price fixing

The Federal Court last month ordered Singapore based Asia Pulp & Paper Co Ltd  and a related Indonesian company, PT Indah Kiat Pulp and Paper Tbk to pay penalties totalling $4.2 million for fixing the price of photocopy paper  supplied to Australian customers. Click here for the ACCC announcement.

I can’t find out the brands of copy paper this relates to. The case interests me for a couple of reasons:

  1. The continued focus of the ACCC of anti competitive behaviour.  This is an important function of the ACCC as there are certainly business people out there who are happy to collude in order to protect their business.
  2. The case is a reminder of the challenges in the copy paper area.  Margins are wafer thin and it is difficult to win business on price.

I am glad the companies got caught and were penalised.

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Ethics

Leveraging the photocopy customer with Better Homes and Gardens

bhg-copier.JPGWe have placed the bright Better Homes and Gardens display unit next to our copier in pursuit if our goal to achieve greater efficiency from copying sales.  Photocopying, while delivering an excellent margin for most newsagents, remains the least efficient when analysing sales basket data.

Between 65% and 80% of sales including photocopying are for copying alone.  That is, customers come in, get their copying done, pay and leave.

As I have written here many times in the past, we are constantly looking for ways to drive impulse purchases among copy customers.  The placement this week of a Better Homes and Gardens impulse unit is another example of this. I chose Better Homes and Gardens for a number of reasons:

  1. It has universal appeal across gender and age groups.
  2. The cover looks stunning (tempting) as usual.
  3. The magazine is well supported with its own TV and radio shows.
  4. The display unit is bright, especially when placed next to the industrial colours of the photocopier.

Since this is found space – that is, space not used previously in this newsagency – we plan to run Better Homes and Gardens here for the next three months to see what we can achieve in terms of incremental business.  We also have the magazine in its usual location in our home and living section as well as with our weekly titles.

I’d urge newsagents to try the same with this title.  It responds well to additional promotion, especially in high traffic impulse locations such as the counter, with newspapers and elsewhere.

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magazines

iPad 2 sales astound

Analysts in the US are expecting the iPad 2 to sell 600,000 units in the first weekend.  The Apple distribution model has been adjusted to include more retailers.  It will be interesting to see how this plays out in Australia.  Newsagents and others who said the iPad was a passing phase are being proven wrong.  This new distribution channel is getting bigger by the day and publishers understand this.

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Media disruption

Leveraging local festivals to drive magazine and other sales in your newsagency

Given the range of products we sell, newsagents can really leverage local festivals to drive sales.  I am talking here about festivals which get good media coverage.  In Adelaide, the Womad festival this weekend is an excellent reason for South Australian newsagents promoting music titles.  In Melbourne, the Food and Wine festival is an excellent opportunity for Victorian newsagents promoting, well, food and wine titles.  In New South Wales, newsagents could be promoting tattoo and Body Art titles because of the Sydney Tattoo & Body Art Expo and VaVoom Festival.

Each of these is a wonderful opportunity given that newsagents sell magazines appealing to those interested in the festival. I know form my own experience that you can have success even if you are out in the suburbs and away from the festival centre.  We achieved an excellent lift in food titles as well as caravan titles by connecting with and promoting events which were quite some distance from our newsagency.

More newsagents should connect with local festivals and leverage the media coverage associated with them.

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newsagency marketing

Children’s Birthday Cake Book selling well

birthdaycookbook.JPGOur sales of the Women’s Weekly Children’s Birthday Cake Book, the reprint of the cookbook from 25 years ago, are excellent.  Our team moved the display so that it is in front of our new party department, next to children’s cards.  The photo shows what shoppers see as they enter the store next to our greeting card wall. This display is working a treat.  based on customer feedback, I’d expect sales of this cookbook to continue for some time.  The nostalgia appeal is high and this is driving good word of mouth – we see it!

Kudos to the people in ACP who decided to reprint a 25 year old cookbook.

If you have the title and are not doing anything special with it, I’d encourage you to have a crack – create a display and shine some light on this classing cookbook.  I’d expect it to sell in any newsagency situation.  Only Newsagents and Big W have the title at the moment.  The rest don’t get it until June.  I’m certainly making the most of the opportunity in my newsagencies.

There are people and groups in the newsagency channel who say that magazines are a waste of money and space.  While I would agree for some titles, there are other titles off of which we can make excellent money and drive traffic.  This Women’s Weekly Children’s Birthday Cake Book is one such title, as was the Slow Cooker cookbook last year.

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magazines

Groupon discount magazine offer

groupon-foodmag.jpgCheck out the offer New York Groupon subscribers received this week: $12 for 15 issues of Food & Wine magazine, delivered. A very nice deal indeed.

While there is a huge difference between the magazine distribution model in the US and what we have here in Australia, the use if Groupon to drive subscription sales is interesting.  When Australian coupon sites do take off, expect to see magazine offers like these.  It’s what I would do if I were a magazine publisher – it is not smart to rely on one distribution channel, such as retail, only.

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magazine subscriptions

Promoting photography titles

mag-photog-0311.JPGWe have created this mini in-location display to drive a lift in sales of photography titles.  It is a small promotion where out photography titles regularly sit, at the end of one of our magazine aisles.  The display is designed to let shoppers know that we have photography titles and that this is where they are located. Simple and effective.  The display will be up for a week.

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magazines

Trifecta of winners at NSW/ACT newsagent awards

Congratulations to the winners at the NSW/ACT Newsagent of the Year Awards announced Wednesday night in Sydney.

  • 2011 NSW/ACT Distribution Newsagent of the Year. Highlands Marketplace Newsagency. Craig and Jennifer Boyd.
  • 2011 NSW/ACT Retail Newsagent of the Year.  Green Hills Newsagency.  Allen and Brenda Kavanagh.
  • 2011 NSW/ACT New Technology Newsagent of the Year.  newsXpress Young.  Ted and Kate Loader.

These businesses are beacons in their respective communities, operated by newsagents deserving of the kudos and recognition each award brings.  They do the newsagency shingle proud.  Congratulations!

I’d encourage other NSW/ACT newsagents to visit these businesses.  You won’t be disappointed.

I am proud to note that each of these businesses relies of software from my newsagency software company, Tower Systems.

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Newsagency management

Newsagent refused supply of the Winning Post

I know of a retail newsagent who cannot get the Winning Post.  their distribution newsagent, who operates a competing retail newsagency, says it is not  title for sub agents.  No amount of representation has been able to change the situation.  The retail newsagent has direct magazine accounts but not for newspapers.  Each week they turn away Winning Post customers.  It would appear that this is what the distribution newsagent wants.

The distribution newsagent should be penalised for this behaviour in my view.  You are either a distribution newsagent or not.

One alternative for the retail newsagent is to encourage those looking for the publication to migrate online.

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Newsagency management

Making Dolly look sloppy

sloppy-dolly.JPGThe Dolly Poster Book attached to the back page of the latest issue of Dolly magazine is making the product look damaged and less appealing.  Stuck half way up the back page so that it sits above the magazine on the shelf, the Dolly Poster Book weight is too much for the back page to bear and soon, Dolly stock looks like that in the photo.

Get a line of these in a row and the display looks messy.  The only way to stop this happening is to fill the pockets of fairly conventional magazine fixturing.  I’d prefer to be able to display the product more creatively so that the full cover can be seen and the title more easily browsed.

Dolly is not the only title to stick a heave giveaway on a light back cover which cannot take the weight.  I wish that production people within magazine publishing businesses would take note.

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magazines

Customers love the in-store newsletter

in-storenewsletter.JPGWe have been producing an in-store newsletter for years.  We have it at the counter as well as on a stand at the front of the store, on the lease line.  Customers love this newsletter, we often receive complimentary comments.  What is even better is the sales impact we can usually track with products and services promoted in the in-store newsletter.  We connect promotions in the newsletter with promotions in-store.  As A5 version of the newsletter is sent with accounts and slipped into customer bags a coule of weeks of the month.

While the in-store newsletter we use today comes each month from the newsXpress newsagency marketing group, other newsagents can easily product their won using Word or any other document production tool.  I’d encourage newsagents to produce a monthly newsletter.  It deepens the consumer connect, works with in-store promotions and gives the business a marketing tool for attracting business customers and proactive suppliers.

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newsagency marketing

Finally we can promote The Monthly

mag-monthly-0311.JPGNow that we we finally have some decent stock of the latest issue of The Monthly, we have a small display up with our newspapers.  This is what we would have preferred to have done from the first day of on-sale but, as I blogged a few days ago, there was no bump in supply recognising the likely interest in the Julian Assange story.  When it comes to magazine distribution it seems that noting changes – when we should get a bump in supply we often do not, when supplies should be reduced they often are not, when we want extra stock there usually is none.  Ugh.

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magazines

Promoting Motor magazine

mag-motor0311.JPGWe have setup an in-location display to promote Motor magazine.  This is just inside the entrance to our men’s magazine aisle – shoppers see the display as they enter and leave the aisle.  We will leave the display up for a week as long as it is generating business.  We watch these things and if there is little or no traction then we replace the display for something which is likely to be more successful.  In-location displays continue to drive good business.  they also attract shoppers deeper into the magazine department.

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magazines

Tyro makes it case on the EFTPOS interchange fee announcement

Jost Stollmann CEO of Tyro sent me an email today with an interesting perspective on the EFTPOS interchange fee announcement yesterday.  I share it here as it is relevant to newsagents who compete daily with Coles and Woolworths.  Here is what Jost had to say:

Now it is all in the open. The banks, Woolworths and Coles have agreed on a new EFTPOS fee regime. The two big retailers continue to get paid by the banks an interchange fee of 4 to 5 cents for EFTPOS transactions whereas all the other Australian retailers get slapped with an estimated average 11 cents fee increase per EFTPOS transactions. Instead of receiving also the 4 to 5 cents as up to now, they have to pay 5 cents for a standard EFTPOS transaction. EPAL also charges a new scheme fee of one cent to the issuer and one cent to the acquirer. The volume is big. The Australian EFTPOS system processes 2 billion transactions per year. The facts:

1. According to yesterday’s Australian Financial Review, Woolworths and Coles have confirmed that they are not impacted by the EFTPOS fee increase because they process EFTPOS transactions directly with the issuing banks on the basis of bilateral arrangements. So they will continue to receive a rebate for each EFTPOS transaction based on the 4 to 5 cents interchange rate that the card issuing banks pay to them.

2. The rest of the merchant world has to expect higher EFTPOS fees from 1 October 2011 on. EFTPOS Australia Payments Limited (EPAL) has reversed and increased the EFTPOS interchange fee by 9 to 10 cents. It has added 1 cent scheme fee charged to issuers and 1 cent to acquirers. When banks pass through the cost increases, merchants have to decide whether they absorb the cost increase, raise prices, surcharge EFTPOS transactions or limit ETPOS acceptance.

3. Banks as well as Woolworths and Coles are in the enviable position to receive up to 5 cents per transaction to fund the EFTPOS technology upgrade of their central systems and to support their bottom line.

4. 325,000 merchants with 700,000 terminals, from Harvey Norman to the corner store, will have to worry about and pay to upgrade their EFTPOS technology. Their terminals have to be upgraded and/or swapped out to accept EFTPOS EMV (chip) and contact-less cards. They will have to motivate and pay their software vendors to integrate new EFTPOS functionality into their point of sale software or web sites.

The payment space is complicated, but Tyro works tirelessly to create transparency for the media and advocate fairness for the merchant community. This fee regime is not aimed at making EFTPOS competitive and ensuring its long term survival as claimed.

This is what Woolworths general manager for financial services, Dhun Karai, had to say to the AFR: “The likely threat for other merchants is that to provide revenues to the banks, they will be slugged with higher merchant service fees on eftpos which will diminish the attractiveness of eftpos in comparison to scheme debit cards.” She said Woolworths and Coles directly processed transactions with the issuing banks, which meant they faced no impact from the change.

So, this new EPAL regime is all about raising bank fees with the dire consequence of making EFTPOS less attractive for merchants to invest into and to offer to their customers. Merchants now suffer a significant competitive disadvantage compared to Woolworths and Coles. Cardholders will ultimately pay with higher prices, less competition and availability.

Recent demands that banks absorb the interchange fee is beside the point and naive. It would mean that the big bank issuing side raises fees and big bank acquiring side absorbs the same fees. They could have resolved that with internal accounting. The interchange fee is the problem, because it is not exposed to competition. No retailer or association is able to negotiate the interchange fee with his bank. This bank fee increase has to go! It is unjustifiable and untimely.

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EFTPOS fees

Cheap copy paper ad covers newspaper masthead

smh-090311.JPGI was shocked at Sydney airport this morning to see this ad from Staples offering copy paper for $1.99 a ream covering the masthead of The Sydney Morning Herald newspaper.  The Fairfax advertising department have once again accepted payment for the trashing of what was a venerable brand.  I feel for the editorial people in Fairfax.

I have been banging on here about these masthead covering ads for a few years and generating little interest from newsagents.  Today, I have received more than 25 emails and text messages from newsagents about this Staples ad.  It has hit a nerve.

Staples is the old Corporate Express.  The US stationery giant purchased Corporate Express last year.  Staples is, in my view, the best stationery retailer I have ever seen.  I have been in more than 30 of their US stores and have been impressed almost every time.  Check out their website, it’s brilliant.  In fact, while Corporate Express still trades in Australia under that name, they are using the Staples name for their renewed onlne push – hence this ad.

Staples has excellent strategies for connecting with big businesses and small businesses.  It is in the small business space where they could do some damage to newsagent stationery sales.  Again, check out their website.

Newsagents – the stationery business you thought you had is not guaranteed … now more than ever. 

Copy paper for $1.99 is a shock and awe price.  Hopefully, newsagents will now take notice of Staples and of these insidious post-it type ads which are damaging newspaper brands.

I bet that newsagents are ripping the Staples ad off their newspapers.

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newspaper masthead desecration

Did your supply of Inked magazine quadruple this week?

inked.jpgA colleague newsagent has experienced a quadrupling of his supply of Inked magazine this week.  That’s right, supply from Network Services jumped from 4 to 15.  We cannot see any apparent reason for such an increase.  So, I am interested to know if any other newsagent experienced such an increase.  Click on the image for a screen shot from the Tower Systems software for the newsagency – you can see the supply and return data for the last six issues of Inked magazine for this newsagency.  There is no apparent reason for such an increase.

I know this happens often with both magazine distributors.  They say there is a reason – a promotion, a glitch or a mistake.  Yes, always a reason, always an excuse. Magazine distributor representatives need to understand that it is not their retail real estate, labour or cash put at risk by such ‘mistakes’.

If you received an increase in supply of Inked, please let me know.

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magazine distribution

Another not so Ultimate magazine from Media Factory

Newsagents, have you seen the Ultimate Guides to the iPhone and iPad?  I have not received these but have been told that if you look at the content you will see that it has been taken from other Ultimate Guides titles from Media Factory – making the content neither new or ultimate.

As I indicated yesterday, the line of recycled content being pumped out from Media Factory and pushed through to unsuspecting newsagents continues to grow.

This is a business which arose from the ashes of another publishing business which collapsed owing hundreds of thousands of dollars to Network Services.

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magazines

Promoting Cosmpolitan magazine

mag-cosmo-0311.JPGWe are promoting the latest issue of Cosmopolitan with this simple aisle end display which faces onto our dance floor.  The display is adjacent to our card department and our female cards in particular.  We think about adjacencies when creating displays, particularly between product categories.  For example, we are keen to get card customers purchasing magazines and vice versa.  While this happens naturally in newsagencies to a certain extent, we are always looking for opportunities to push this further.

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magazines

A trashed magazine from Media Factory

website-builder.JPGWhat a piece of trash Ultimate Website Builder is. This supposedly new title has done the rounds. Copies we received had two price stickers half ripped off. The product looks second hand. Click on the image to see a larger version and the ripped price stickers.

Inside the covers it does not get much better. The content is not new. It certainly is not ultimate in any way. Here is another title of sausage factory content from Australian publishing house Media Factory. The Jim Flynn company which takes cheap overseas content, probably sourced for next to nothing, and barely dressed up as fresh content.

Check the titles from media factory – one Editor.  This says something a out the content.

The Ultimate Website Builder title is, in my view, a sham, certainly not deserving of the title or the new moniker.

It galls me that Network Services requests a full copy return. What? … so Media Factory can send it out again. This is appalling. If the publisher wants full copy return they should fund this – our labour and the additional freight.

Newsagents are being a used with this title.  Maybe this is the title to test the suggestion by some that we have o obligation to return non ACP product as full copy returns.

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Ethics

Report on Auckland Gift Fair

I was fortunate to spend two days at the Auckland Gift Fair earlier this week. It was a big event, over six large halls at the ASB Showgrounds. While there was some crossover between the Australian Gift Fairs and the Auckland event, I was surprised to see greater diversity of product in Auckland. First up, they had more locally made products. Here in Australia similar items tend to be treated as tourist items. In NZ, they are more mainstream. The other difference was the mix of homewares in the gift space. It seems that more gift stores carry a selection of homewares products.

The hot product categories from what I could see, based on floor representation, are: scarves, candles – all sorts, homewares, glassware including innovative local glassware and children’s products.

The mood of the business owners was upbeat, the well known Kiwi can do attitude was evident on the trade show floor, particularly around conversations regarding the impact of the Christchurch earthquake.

It was terrific stepping outside the usual Australian Gift Fair mix for a fresh perspective on the channel.

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Gifts
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