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

Author: Mark Fletcher

Growing c-store competition for newsagents

Check out this recent article in one of the c-store retailer magazines. It speaks about being local and offering everyday items like cards, stationery. lotteries and more of what newsagents used to be known for. This is not the first article pitching a c-store model that is a newsagent model and it will not be the last.

IMG_2146

Traditional newsagent suppliers are embracing other channels as the size of our channel shrinks. The more this happens the more the traditional Newsagency shingle fades in relevance.

5 likes
Convenience retail

Did the News Corp. Marvel promotion drive success newsagents needed?

The recent Marvel promotion run by News Crop. was not the success expected according to newsagents I spoke with.

What was expected prior to launch to be a red-hot promotion was soft, delivering a bump but nothing like that necessary to justify the prime space taken and considerable investment in inventory.

Looking back, there are a few reasons why the promotion may not have worked for newsagents as expected:

  • Timing. The promotion had to compete with two Marvel partworks releases and a raft of other product releases that were more appealing to Marvel collectors.
  • Additional product support. News Corp. did some work on additional product but it was not enough for a store not in the Marvel space to reasonable play in the space enough to leverage the licence.
  • Poor communication. News Corp., ever secretive, refused the opportunity to engage early on with newsagents who are seriously into Marvel. Their executives preferred to play the usual News Corp.arrogant line of they know best and there is no knowledge a newsagent could add that could help. The reality is, in this instance, they were wrong.
  • Too low end. Marvel fans play at a higher end, a more valuable end, than the products supported y the News Corp. promotion. Age you sell a $1,000 figuring without difficulty after a couple of days of having the stock you are playing in a different world and serving a different shopper than that focussed on by News Corp.
  • The usual mixed message. This is the chestnut issue of the coupon. Is it collected or not? Some do. Some don’t. Shoppers get confused and angry. There is an easy tech solution to this if News Corp. ever wants to be smart abut these promotions into the future.

The Marvel promotion did not generate the traffic or revenue I expected in the stores close to me. This is despite best efforts in-store: prime location, good collateral, engaging display.

The return on investment is not enough from this promotion – ROI is the only way to asses this. I hope News Corp. management take a thorough look at performance at the store level as I suspect they will be surprised with how it performed given the costs to newsagents of engagement.

6 likes
Newspaper marketing

Sunday newsagency challenge: ignoring people does not make debt go away

The only way to confront a cash-flow problem is to speak directly to those to whom you owe money. Ignoring them will only make the problem worse. Having ignored them and then asking others to intercede for you way down the tracking disrespectful to your creditors and unfair to those whom you ask to run defence for you. Hiding and being silent is not a plan.

5 likes
Management tip

Sunday newsagency marketing tip: zoom in

IMG_2222Rather than the usual Facebook post about a magazine with a photo of the full cover of the magazine, zoom in and show something more interesting. The photo with this post is part of the cover of the current issue of Australian Gluten Free Life. While the whole cover looks terrific, this image could gain more traction on social media.

The best way to promote magazines online is to do so in a way that reflects well on your business. A photo of a full magazine cover will not differentiate your business. This zoom-in photo of what looks like an Iced VoVo is more interesting and tasty looking.

The more different your social media posts the more interesting for people connecting with you on that platform.

5 likes
marketing

Sunday newsagency management tip: tell the truth

A gripe among newsagent suppliers is the time and money spent re-sending inventory or other items newsagents say them have never received only to find, at some point down the track, that the goods were received.

Before you say I never received it, be sue you never received it.

I know from my own work with newsagents through my software company some have said they never received an email about a topic of importance and when I show them the MailChimp evidence they have received each email, opened them and clicked on some content links they still deny it.

If you are not sure, say you are not sure. If you don;t have a structured process for managing everything coming into the business from stock to collateral to emails, get the processes in place so your answers can be more truthful.

7 likes
Management tip

Promoting the drone at the newsagency counter

IMG_2196We have a Spectre drone unpacked and on display at the counter to shop off the prize one of our Father’s Day card customers will win next weekend.

This drone drive sales when people see it. Having it on show is more successful than referencing the prize on a poster.

The drone  fits with the demographic we are targeting in the business. It is better than the usual old boring Father’s Day gifts and prizes.

4 likes
newsagency marketing

News Corp. wrong to call credit card surcharges on Opal top-up sneaky

News Corp last year ran a report by Benedict Brook, Commuters paying out hundreds in surcharges to top up travel smart cards, in which they claimed:

PUBLIC transport users across Australia could be unwittingly shelling out hundreds of dollars a year on sneaky surcharges to use travel smartcards such as Opal, Myki and Go. But it’s in one city that travellers are most affected — a situation that is only likely to get worse in the New Year.

The hidden costs are being levied by some retailers every time someone uses a credit or debit card to top up their travel smartcard, despite the fact stores already receive a commission for every recharge.

Had Brook done the job you expect of a professional journalist, he would have discovered that newsagents are paid a commission of only 23 cents for a $10 top up and 45 cents for a $20 top up. Our of these fees News Corp. appears to think newsagents should fund the processing costs including credit card fees.

If a customer uses a premium card linked to a frequent flyer or similar program, a $10 transaction could cost more than the commission.

Given the appalling treatment of small business retailers like newsagents by state governments in slashing commission on transport tickets it has become essential for small business newsagents to charge a credit card processing fee to recoup the cost of card processing.

While the repot is from late last year, I have only just seen it thanks to a newsagent colleague bringing it to my attention. They charge a modest surcharge to cover the cost of the card processing. They point out to me they can’t check the exact fee for each time of card as time does not permit. Their suggestion is a flat 50 cent card processing fee. That seems reasonable.

Supermarkets and national c-stores don’t charge a fee. They must be cross-subsidising the fee costs from elsewhere in their business. Sam business newsagents don’t have the capacity to cos-subsidise.

News Corp. should take more care with stories like this. It is wrong to claim it as a sneaky surcharge. The article should have included quotes fro newsagents, giving them an opportunity to explain the costs of taking cards, putting some facts in front of the situation – rather than the emotive pitch that disrespects these small family run businesses on which News Corp relies to support their products (for a low margin too).

15 likes
Ethics

Newsagents now in on the discount magazine

IMG_2994.JPGNewsagent franchise group Lucky Charm is running a three Bauer weekly magazine titles for $9.99 offer for people who have signed up to its points based loyalty program. My understanding is this is a national Lucky Charm promotion, mandatory on all businesses in the fifty location group.

The only ways this promotion is financially beneficial for the retailers are if it achieves incremental revenue that flows beyond the duration of the promotion and if participating newsagents are funded at 25% of full individual title retail price.

A risk is the Bauer magazine title promotion churns what would otherwise be purchases of other magazine titles. There is no benefit from such churn in my opinion other than to Bauer. The newsagent certainly does not benefit unless there is some payment from Bauer.

While a participating newsagent may use the promotion to attract traffic, I can’t see the benefit for Bauer if this does not achieve incremental business. Churning purchases from a nearby sub agent or newsagent is no real long-term gain.

The hurdle to get the deal is old-school in my opinion in that you have to sign up for a loyalty program that is points based. Such programs are considered old-school by loyalty experts now given the loyalty fatigue among shoppers.

But is this the new normal from Bauer. Bundle purchase offers not only at airports and in supermarkets but in newsagencies and even sub agents? Is this the Bauer plan – to never charge full price again? Or is it like Coke: this week the discount is in group A, next week group B and then group C.

Again, the only benefit is if there is incremental business. The latest circulation figures don’t indicate any benefit but who knows, deep in the data the folks at Bauer may have found something they like.

Now if you think this post in sour grapes toward Lucky Charm, not it’s not. I don;t want this bundle deal in newsagencies I own. I don’t this it is a smart offer is it does not respect the magazine department or the newsagency overall. Magazine publishers need people consciously purchasing a magazine for content and not because of price.

13 likes
magazines

Committing to newsagents and the Australian newsagency channel

With the number of newsagency closures and the retreating of some suppliers to newsagents, I felt compelled as the owner of newsagency software company Tower Systems to write recently to newsagents reaffirming my commitment to the channel.  I took the step as a note of positive affirmation.

Here is what I said in my letter:

Here are our commitments to you:

  1. We will not leave the newsagency channel. With more than 1,750 newsagent customers today we are here for you.
  2. We will fight for you. Beyond our software, outside of support, we will help with supplier issues, business strategy and other challenges you confront.
  3. No locked-in support. Taking support coverage is optional. We never block access to your software if you choose to not take support coverage.
  4. Lower support costs.
  5. Fast support. Most calls are handled when you call. If not, we call back fast.
  6. Easy management access. The leadership team of Tower Systems is available if you need them. We take customer service seriously and personally.
  7. Updates when you choose. You are in control of when you load updates.
  8. You are listened to. We offer the only transparent, user driven, software enhancement suggestion service. All our customers are listened to.
  9. Regular user meetings. Around the country, in city and regional locations – we offer free face to face training and networking through the year.
  10. Free training. Long after you install our software you have access to free personal training to refresh knowledge or provide training on new facilities.
  11. More integrations. Our direct links to Xero, Magento, Shopify and more mean you have more direct link options to help you grow your business.
  12. Business management insights. We can look at your business performance data and provide a personal analysis of what we see
  13. The Tower AdvantageTM. Our professional and friendly help from training to support to business advice. We are not your average software company.
  14. Owner access. Our owner, Mark Fletcher, is easily accessible: 0418 321 338.

You can purchase our software, lease it or even rent it by the month. You choose the path most appropriate to your needs. We make doing business easy.

END.

The channel is in a period in its life where change is the order of the day. This is disrupting many. One goal of my note was to say here is stability on which you can lean as you navigate changes.

Personally, I think there is a bright future for engaged newsagents who are embracing and chasing change. Revenue and GP growth are achievable. It’s hard work but it can be done.

15 likes
Newsagency management

The Examiner is better value that The Age on weekdays

IMG_2161In a comparison of news content and pages, the $1.60 I spent on The Examiner in Launceston yesterday is better value than the 60% more for The Age.

Comparing the two newspapers yesterday, page by page, from a local consumer perspective The Examiner is the better newspaper in my opinion – but the value at $1.60 is questionable … I don’t spend the money and we can see from circulation data fewer people do.

The challenge is falling ad revenue for papers is causing cost cutting and this is resulting in thinner papers, fluff filled papers. Ad revenue is falling because news is old by the time it is printed. For a print product to be purchased it has to have value.

Based on news and analysis consumption trends today, sufficient value is not there a print delivery seven, six or even fixe days a week. Except for a locally focussed product. I suspect newspapers like The Examiner have a better chance at a longer print life because of their local focus. The key is to find more ways to fund expensive local journalism.

4 likes
Media disruption

John Oliver on the importance of professional journalism

John Oliver passionately explains the importance of journalism in a democracy and explains the risks for democracy as print newspapers close for digital editions. You’ll need to use a VPN to place yourself in the US to get access to this as access to geo-blocked: https://www.youtube.com/watch?v=bq2_wSsDwkQ I have watched the whole thing and found it most compelling.

The video includes excellent fact-based graphics to explain the situation.

Screen Shot 2016-08-24 at 8.24.22 AM

8 likes
Media disruption

Has the popularity of the AFL licence fallen?

IMG_2140Several newsagents have commented to me that revenue from AFL cards is down this year on last year. While decline in AFL licence product revenue this could be a function of the number of outlets with the cards, it could also have to do with other retailers offering them.

I have noticed the AFL collector cards in every petrol outlet I have been in recent months as well as in c-stores. It feels like they are in more locations than in the past.

But maybe AFL products are not as popular as they used to be. Coles appears to be having trouble selling its AFL licenced micro figures and other items in the stand showing in the photo I took a couple of days ago. They now have AFL licenced product at the front of the store, discounted – and not only in this store.

The goal with licenced products is to get in and get out while the licence is hot. Products selling quickly is important for collectors too. That so much stock appears to be left with Coles is not a good look. But the Coles problem could be to to with this specific range.

In ym own case, AFL products have done well – the Hallmark wrist bands and team song buttons and cards. Plus the Korimco AFL range, especially the team mascots. So I suspect overall interest in AFL licenced product is strong and that challenges relate either to the supply money (the collector cards) or the product (the micro figures).

Regardless of the reason, what I see happening in the marketplace will make me more conservative about plans for next year.

Gordon and Gotch will need to allow newsagents to be specific in placing product requirements as the scale out model does not work in this changing marketplace, especially when return costs are so high for this specific product. Gotch could do this easily if they had reasonable technology in place. As things stand today, they don’t – their newsagent facing technology is appalling, damning small business newsagents to a ridiculous waste of time in managing inventory from Gotch.

5 likes
Newsagency challenges

GNS announces cessation of cash and carry business

GNS today announced to newsagents the cessation of its cash and carry business. As I covered here in a comprehensive piece recently, this is one of several important changes the business needs to urgently make to remain relevant.

Here is today’s announcement:

Over the past few months, we at GNS have been constantly reviewing our business model with respect to our service capacity and processing efficiency around the Cash & Carry service. Mid last financial year, GNS successfully implemented a transition of service change from Cash & Carry to a formal ‘Pick Up & Pay’  service in our Perth operation centre. This service protected the C&C price for customers, but made way for important warehouse logistics changes to better drive efficiencies.

Whilst the Cash & Carry model has been effective in the past, its relevance and efficiency has declined as the market has declined, hence calling for significant change in order to allow GNS to continue providing a compelling value proposition and true wholesaler benefits to our market.

Consequently, after months of further analysis and review, GNS would like to formally advise our customers that the current Cash & Carry service in Sydney, Melbourne and Brisbane will cease on the 18th September 2016 and be replaced by a formal ‘Pick Up & Pay’ service. In the coming weeks, we will provide further information around the changes and important aspects of the procedures to facilitate the transition. We will also be arranging a final Cash & Carry warehouse clearance sale in all eastern states on the weekend of the 17th and 18th September, so stay tuned for more details.

This service transition will enable the commencement of important logistic changes over the next 12 months, that will improve our main pick-and-deliver service, which makes up the majority of our wholesale activity. These changes include:

  • The introduction of a new warehouse inventory management system which will include warehouse relays based on product movement, automated receiving on PDA to improve inventory flow for sale of goods, PDA stocktakes to increase the volume of inventory verification checking, and pick location scanning and PDA replenishment to improve processing accuracy.
  • Implementation of a customer showroom that provides support in the way of product knowledge, sales opportunities and a meeting place for industry benchmarking.
  • Commencement of system centralisation to establish a national approach to our customer account management, WMS system processes and central customer reporting, such as consolidated national customer statements.

We understand that for some customers, a transition from Cash & Carry to ‘Pick Up & Pay’ can be uncomfortable. This is not a small undertaking and this level of change is not easy, but it is absolutely necessary for our business if we are to stay focused on building and improving our service.

In the coming months, you will start to see these key tasks kick-off. As part of the project, we’re committed to keeping you informed and involved as we implement these improvements. We will provide regular communication to ensure you know what’s going on.

7 likes
Newsagency challenges

Small business retailers win on ethical employment compared to big business

Small business retailers including small business newsagents could leverage the negative press about Coles having underpaid its workers and the 7-Eleven scandal of employee underpayment.

These recent scandals are examples of big businesses behaving badly for they represent institutionalised behaviour designed to treat employees unfairly.

While not all big businesses are the same, Coles and 7-Eleven have high profiles, they would be considered respected brands by Australians. The scandals ought to negatively affect the performance of their retail outlets. However, their size and ad spend enables them to trade on without impact.

I think we in small business have an opportunity to speak about the systematic poor treatment of employees by any big business caught. We should say shame on them and remind our community that in small business it is more personal with employees closer to the boss and more empowered and able to address any pay anomaly.

When someone buys a magazine from a newsagent rather than a 7-Eleven the customer can have more certainty about the employee terms, the fairness of pay and that the newsagent is not engaged in a roster con that sees employees paid half or less than the law requires.

Sure any campaign or comment would neb negative. that is because 7-Eleven and Coles have acted negatively, unfairly, to their employees as the media and other reports have revealed. Their actions ought to have a significant cost to their businesses. We can help share our stories, comparing these stories to what it would have been like at Coles and 7-Eleven. We can do this to uphold small business retailers as good employers.

While it is possible there are unethical small business employers out there, their size means they can do less damage than a big business with a work force in the thousands or tens of thousands.

7-Eleven promotes their $1 barista coffee and Coles promotes that their prices are down. One way to cut prices is costs. Labour represents the first or second highest operating cost in a business. Underpay your staff and you can offer cheaper prices. It stands to reason.

In my opinion small business retailers should talk about the issues more, making the most of the bad behaviour of Coles and 7-Eleven.

11 likes
Ethics

A tough day at the office for Pacific Magazines as some magazines cease print editions

Pacific Magazines has today announced the closure of Your Garden magazine, the move to digital only for Bride to Be and Practical Parenting and the end of the licence for Prevention, which will see Pacific bring to an end its publishing of the title.

These are tough decisions, affecting the lives of many. Pacific is not alone in adjusting its magazine publishing business in response to market conditions.

Here is the announcement from the company.

Screen Shot 2016-08-22 at 1.42.11 PM

This announcement is a reminder to newsagents to ensure they are developing sustainable traffic drivers for their businesses as the disruption to print is not only affecting publishers.

4 likes
magazines

Why are governments handing taxi drivers compensation for deregulation?

I was shocked to hear the number $800 million bandied about on radio in Melbourne Friday as the amount that may be paid to Victorian taxi drivers in return for deregulation in the face of competition from Uber. Any amount paid to taxi drivers is wrong in my view.

Then, I discovered the $20K reportedly paid to NSW taxi drivers and the $100M transition package for Queensland taxi drivers.

It reminded me of the hundreds of millions of dollars a year compensation for the TV networks from successive federal governments so the TV networks could deal with technology changes, right at the time of increased competition for them.

Back in 1999, small business newsagents had their exclusive territory ripped from them by the Howard government. No compensation was paid. I estimate that at least $500,000,000.00 was wiped from the value of the newsagency business assets as a consequence of the deregulation. I suspect the cost was more than the $.5B I estimated.

Some of the write down is being felt today as long-held businesses are sold.

Yet no compensation was paid to newsagents.

Compensation had been paid years earlier as the federal government forced the sale / closure of pharmacies as Australia had too many.

But no compensation was paid to newsagents.

The newspaper publishers and magazine publishers at the time offered no support of small business newsagents in pursuit of compensation. Some of those parties involved were robust in representations to government seeking compensation for TV networks.

Bow we see the generosity of state governments, conservative and labor, to taxi drivers to help them deal with deregulation.

Newsagents have every right to feel aggrieved.

On the politician side those around at the time of deregulation said newsagents were poorly represented. Maybe so but I would have expected greater care for newsagents than taxi drivers given the role back then of the local newsagent in the community versus the role of and respect for taxi drivers today.

With this latest taxi driver news it is clear newsagents were dudded. While there is nothing for today;s newsagents to gain, it is a reminder of how useless politicians are when it comes to representing their constituents. They look after themselves and their closest mates first followed by those who they feel could do them harm. Newsagents never made it into that top three.

If I had a say, I’d pitch that taxi drivers get no compensation for deregulation. You can’t have a free market, a global market and offer compensation. But, then, we don’t have a truly free and global market – only when it suits vested interests.

22 likes
Newsagent representation

Sunday newsagency challenge: trim labour costs

Labour cost in a newsagency should be between 9% and 11% of revenue where revenue is product revenue plus commission from agency lines. Labour cost should include fair market costs for all who work in the business. If your labour costs are outside this band and if your overall gross profit is average, your business is falling behind. My challenge today is to review your labour costs in pursuit of lower costs.

6 likes
Newsagency challenges
Trending Articles

Fairfax changes approach to TV Guide, disrespects newsagents

Published on April 20, 2011

What do you think of the Powerball changes?

Published on February 16, 2018

IPS releases new magazine contracts

Published on June 21, 2011