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

Author: Mark Fletcher

It is time for newsagents to be able to purchase stationery from suppliers direct

For decades newsagents have had to purchase stationery through one or the other of the newsagency stationery wholesalers.

Even when the supplier rep has been in-store, written up the order and, on occasion, supplied stock, the ‘order’ has been turned back through the wholesaler – for a premium … kind of like a tax to support the warehouse.

This order turn back has been a tax on newsagents, making their purchasing cost higher, all in the name of supporting the newsagency stationery suppliers.

What has the order turn back approach achieved? Are the stationery warehouses stronger as a result? Have newsagents themselves benefited by paying a higher price for stationery, have they received some other benefit as a result? No, I think the approach has had its day, I think it has not achieved anything and, today, it only acts as a tax.

For newsagents to be competitive in stationery, especially, with branded stationery, I think we need to be able to purchase directly without any additional cost being imposed to support a warehouse that often does not add value to the transaction.

By dealing direct in some cases we will have access to a broader range of product. This will facilitate specialisation, helping to drive sales.

Suppliers don’t need to increase their costs by increasing in-store contact with retailers. Rather, they should ensure they have a best practice website through which newsagents can order and see new products.

In my own newsagencies my focus 100% is on national brands of stationery. I want to go deep for some brands, to ensure a strong visual story in-store and online. I am better able to do this if I can go direct.

So, yes, I think it is time for stationery suppliers to offer direct accounts to newsagents, to enable those who want to specialise and go deep with a brand to do so.

Sure, there will be some newsagents who still want to go through the warehouse, and they can.

The world has changed and how we buy stationery needs to change. As I wrote recently about GNS, the model needs a shake-up for it to have a future.

15 likes
newsagency of the future

Mocking of innovating newsagents is mean spirited

It disappoints me when I hear of a newsagent, a supplier or someone else connected with the newsagency channel mocking others who are innovating with a brand, product category or in some other way.

Those innovating in our channel ought be cheered, not mocked.

In my experience, those mocking tend to be people who are not innovating in their businesses. I suspect their mocking is a reflection of how they see themselves and their business. But rather than address the failure in their business they mock others so as to deflect from their own failing.

I recall an instance a couple foyers ago when someone mocked several newsagents for a move they were making. It turned out the move was the right one, delivering to them excellent results. The person mocking made no such move and missed out as a result. While that sounds like justice, it is not for there are some who listened and missed out too.

People mocking innovation need to understand the power their mocking can have. They should ar the very least pitch an alternative. Otherwise, the mocking can only be seen as mean spirited.

17 likes
Competition

Eight Wild Cards and Gifts stores for sale in NSW

Eight Wild Cards and Gifts businesses in NSW are listed as being for sale. In each ad is details of the franchise structure:

With a low franchise fee of 4% + GST, no marketing fees and a low franchise fee of $42,000 + GST we offer our franchisees our competitors simply cannot. The level of support we offer our franchisees is second to none, from training and store operations to stock selection, marketing and promotions, all of which is covered by the low 4% franchise fee.

Further on in the ad is this:

No other Card and Gift group offers the potential for profit equal to Wild franchisees

Wild is owned by the UK WH Smith group.

Researching online I found two businesses – a Wild and a Supanews – for sale in Queensland. Supanews is another franchise business owned by WH Smith. Another business had 18 Wild businesses listed.

I have no insight on what is happening here. All I know is the businesses are for listed sale.

This interests me because the parent company, WH Smith, is massive in the newsagency space in the UK. In Australia they are in newsagencies in a small way as well as transit and gift. I suspect they need/want more retail outlets here to justify their investment in the country.

This is a space to watch.

6 likes
Competition

Sunday newsagency management tip: how to avoid ransomware

Ransomware is affecting more and more newsagency businesses. Here is advice to help reduce the opportunity of attack and the impact if you are attacked:

  1. Ensure you use professional, up to date, virus protection.
  2. Ensure you have a good firewall with strong settings.
  3. Do not click on emails or attachments unless you are sure of the sender.
    1. Be particularly wary of ZIP files in emails.
    2. The ATO will not email you.
    3. Your bank will not email you.
    4. Australia Post will not email you, not like the example I have posted.
  4. Ensure all passwords you use are strong.
  5. Consider using an email filtering facility.
  6. Do not allow remote access to your computer unless you are certain of the person accessing.
  7. Ensure you have strong passwords. A strong password should include: some CAPS, some numbers and at least one special character. Check your password at: https://howsecureismypassword.net
  8. Change your password regularly.
  9. Run an up to date operating system.
  10. Have rules on computer use: no games, no online gambling, no porn, no personal emails.
  11. Have an overarching rule: do not open any email or go to any website unless you are certain.
  12. Use a cloud backup service like the Tower backup service. This provides the fastest recovery.
  13. Have multiple backup devices for additional protection.
  14. Do not use automatic file replication programs / facilities such as Dropbox or Google Drive. If a file is encrypted with malware / ransomware it will upload to the account and infect other files.
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Management tip

Sunday newsagency marketing tip: pitch to what people love

IMG_1941People love their dogs. Pet shop owners will tell you of dog lovers who spend more of their dogs than they do on themselves. Some retailers miss the opportunity of pitching to dog lovers in their gift departments, they miss the opportunity of shopper engagement. Dog lovers engage when they see gifts representing breeds they love.

In buying products for your store, think about your customers, buy for them, buy what they love.

4 likes
marketing

Sunday newsagency challenge: change weekly

Sketch out the layout of your shop on a sheet of paper. Draw a line across the front two metres. Commit to complete change of the pitch in this front two metres every week. Do this for a month. In most newsagencies, complete change in this frontline space weekly will increase sales. The challenge is the time involved and the need for fresh products to be pitched in the space.

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Newsagency challenges

Triple pack of discounted magazines from Bauer Media is a challenge

IMG_1907This triple-pack of discounted magazines from Bauer Media Thursday this week had newsagents scrambling for extra space in the magazine department as it is a new title, an expansion in the busy weekly title section.

The thickness of the bag containing the three magazines meant plenty of newsagents could not place all the stock they received into a single pocket. This increases the costs of carrying the additional SKU.

Also, the pack says new issues when the issue of Yours came out last week and the issue of recipes+ came out last month.

Bagged discount magazine packs like this are out every week in the UK. Not in large volume but there are out and in most stores I visited two weeks ago.

I hope we do not see them weekly in Australia. If we did I think the result would be to take purchases from other publisher titles rather than grow overall magazine sales. In this scenario newsagents would lose out.

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Bagged magazines

My magazine early return advice for newsagents

The early return of magazines is vital to the management of space, cash-flow and labour in the newsagency. My advice is that you not wait for a magazine to reach its recall date for it to be returned. Returning a magazine before the recall data is an early return or a supplementary return.

While not liked by magazine publishers, early returns are the only reasonable mechanism newsagents currently have for managing magazines in the newsagency over which they have control.

My advice is newsagents need a process to ensure early returns are done with consistency.

For early returns to work for you and for you to not deny your business magazine sales you could otherwise achieve, here is our best-practice early returns advice:

  1. Early return from your shelves.
  2. Early return at a time in the month designated for the process and not as titles come in.
  3. The early returns process needs to be completely separate to magazine arrivals into the business.
  4. Check for early return opportunities at least monthly, toward the end of the third week of the month.
  5. Do your early returns as a separate process to regular returns or putting new magazine titles out.
  6. Do not early return magazines the day they arrive. The only exception would be if you have been sent a magazine very late in the month and you are absolutely certain it will not sell.
  7. In my opinion, magazines should not be on your shelves for more than four weeks, unless they are continuing to sell well.
  8. Look out for the Magbook titles as they are expensive and usually sell in low volumes. We suggest early returning within the month of supply if they are not selling.
  9. Look out for the Beginners Guide titles as they are expensive and usually sell in low volumes. We suggest early returning within the month of supply if they are not selling.
  10. Look out for the Express titles as they are expensive and usually sell in low volumes. We suggest early returning within the month of supply if they are not selling.
  11. Look out for the AWW cookbooks as they have long on-sale periods and unless you are selling reasonable quantities each month you will not be covering the space cost.
  12. Check each title before you early return. For example, if you received 10 of a monthly and three weeks in you have sold two, you could early return four copies.
  13. Do not early return before week three of the month unless you have severe space issues. Giving titles time to sell could help you achieve more revenue.
  14. Ignore delayed billing in your early returns assessments.
  15. Treat early returning as a management issue. Whoever does it needs to be thoughtful in their approach and engaged so as to not deny certain magazine sales.
  16. If you find yourself regularly early returning a title, ask for fewer copies.

If you do early return leaving less stock that you would usually sell and then sell out – I think the distributor ought deny any request for extra stock.

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magazine distribution

Marie Claire helps launch Megan Hess card range

13957016_10153835776137947_914114215_nThe latest issue of Marie Claire ought to be featured by newsagents selling Hallmark cards as it features the card designs of Megan Hess, a respected Australian designer, who has designed a range of premium cards for Hallmark. The Megan Hess range is a fresh product though which we can reach card shoppers beyond what we often reach with the everyday card range.

The Megan Hess range with the latest Marie Claire is a terrific cross-category opportunity for us.

4 likes
Greeting Cards

Newspower announces another rebranding

Newspower has rebranded for the fourth or fifth time with an announcement earlier this week. It has also announced a new level, Newspower Go. This is like Newspower level from some years ago – more discipline, better deals.

While I think Newspower does need to change, parts of the announcement are problematic in my opinion:

Newspower has undertaken significant research across not only the Newsagency industry, but the broader retail sector and as a result Newspower has developed key strategies to deliver Newspower a stronger future.

Newspower ought discslose to its members the detail of the research and the detail of the resulting strategies as the organisations track record is not great – to give confidence that they have a good plan and that the plan is based on sound research.

NewspowerGo stores will be in targeted locations, designed to attract and engage with younger shoppers; Generation X and Millennials – those that will become your customers into the future.

Gen X and Millenials are newsagent customers today. Strategies to attract them were needed years ago. There are newsagents enjoying terrific success with these generations.

Stay tuned – the first NewspowerGo stores are scheduled to be opened later in the year.

This makes the an announcement that there will be a further announcement. Newspower is coming at this transformation very late. They should have stores running now so the announcement earlier this week was here – come see it live.

We are entering a new era of growth and development and as part of the launch of NewspowerGo we have also refreshed the branding for Newspower. Newspower was established over 20 years ago and is the Largest Newsagency Marketing Group in Australia and our brand is strong.

Newspower has, from what I understand, user 600 stores. This is down from something like 1,200 stores a few years ago. considerable decline in numbers does not represent strength. If I was leading Newspower I’d pull back from talking about size and focus on stabilising member numbers and then achieve growth before talking about growth.

I am a director of newsXpress, a competitor of Newspower. The weakness of Newspower in recent years has hurt more than Newspower and member businesses, it has hurt the channel. This is why Newspower has to get it right, why they have to fix their situation to drive the viability of member businesses. The rest of the channel is depending on it.

Newspower should start by developing its own ideas. I had to ask a Newspower staffer leave a confidential invitation-only session I was speaking at recently. I only realised they were there soaking up commercially sensitive ideas when someone else pointed it out. I wrote to Helen Dowling about this on June 17 and am yet to receive a response.

Our channel will benefit from strong competition between all of the marketing groups. The key word is competition. Competition has its roots in being difference, not copying. It benefits from being first with initiatives, not years late.

Historically, Newspower’s biggest challenges have been a weak uninspiring board, GNS controlling key marketing seasons and control at the state level on what is done under its name. For the future to be bright these three things need to be addressed.

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Leadership

Growing revenue in the newsagency

One reason I bought my first newsagency in 1996 was to put into practice for myself what I was telling newsagents. It was an invaluable experience and continues to be today. Here is a video I have just shot where I talk about another of my newsagencies today and what can be achieved in a competitive situation .

I am sharing this not to gloat but to reinforce that newsagents can grow their businesses and attract new shoppers. It takes planning, based on business data and with a focus outside the usual walls of a newsagency business.

The outcome I hope for from the video is more newsagents pursue change … for growth.

Note: the newsXpress logo is on the first shot as the business I am talking about is a newsxpress business.

17 likes
Newsagency management

No surprise as Coles reveals small format moves

Coles Supermarkets yesterday revealed a fresh approach to small format it says will target c-stores like 7-Eleven. This was inevitable given how closely Australian supermarkets follow UK trends. UK supermarkets have been doing this for years, introducing small format stores in high streets, competing with c-stores and local newsagent businesses.

Walking down the main street in UK cities and towns you see three, sometimes four, supermarket brands operating small format businesses.

This is one of the reasons I say a c-store model for newsagents is not a smart move. Supermarkets are well-resourced.

Newsagency businesses are too small and too under-resourced to compete with the players already well established in the convenience space. I am certain newsagents cannot win against the power of the slurpee and the might of Coles and Woolworths.

8 likes
Competition

Terrific slim newspaper stand

IMG_1830If you are ever at Sydney airport, check out this slim newspaper stand at the c-store on the ground floor level of the nanas terminal, next to the baggage carousels. While it is not attractive, it is ideal for the job: small footprint, easily moved and able to hold stock on the bigger newspaper days.

1 likes
Newspapers

The Bauer Media $1 Woman’s Day offer frustrates newsagents

image1Further to my post last week about the New Idea $1 a week subscription offer, Bauer media has been running such offers for a while. Their most recent was a Woman’s Day $1 an issue offer.

As I have written recently, offers such as this are a slap in the face to newsagents. The 77% off cover price and free delivery are compelling to price-sensitive shoppers.

Weekly sales churn indicate readers of these weekly titles are price-sensitive. Whereas in the past 65% of purchases on a Monday would be Woman’s Day and New Idea togather, today, that number is often under 30%. I think this is because people are more conscious about what they spend on this type of content.

The more intense price sensitivity today is a key reason for us to be frustrated with and concerned about the $1 subscription offer for the weeklies.

Another difference today compared to years ago is that today there are no borders between types of consumers. By this I mean all offers are more accessible to all people.

For example, a subscription offer pitched to a specific target group to attract their engagement is easily promoted more widely in the mainstream community. Newsagency shoppers are aware of the $1 an issue subscription offers. Indeed, I know of several instances where customers have pointed to the $1 offers recently put about in commenting how much money newsagents make.

A sub offer of, say, up to 50% is okay in my view. I understand it. I don’t like it but I understand it. 77% off with free postage is nuts. It disrespects us and those who shop with us. It speaks to an important focus for the publishers, the same publishers often telling us how important we are to them.

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Competition

What is wrong with the News Corp. Rewardle loyalty offer for newsagents?

News Corp. is asking newsagents to install an iPad on the counter as part of a newspaper loyalty offer connected with the Rewardle loyalty program. Rewardle has also been pitched to newsagents by the ANF (no ALNA).

I have seen the Rewardle terminal in several newsagencies. In each case, the newsagent said yes to the terminal to be installed because it is free.

Here is what I think is wrong with this News Corp. promotion and why it is not good for a newsagency business.

  1. It is not free. This Rewardle loyalty program requires prime space on your counter and your time for engagement.
  2. It is visually noisy. The Rewardle terminal on your counter promoted News Corp. offers, drawing attention from other products at the counter.
  3. It is selfish. The News Corp. Rewardle program is focussed on newspapers. Newspapers are not your business. The best approach to loyalty is a whole of business approach where customers have rewards they can spend elsewhere in your business, hopefully discovering product opportunities they had not considered before.
  4. It is not your future. There is no upside in print newspapers. Right now we are in the end-times for print as a delivery platform for news, news analysis and comment. There is no upside from here. Everything News Corp. is doing is about connecting with and leveraging customers to their digital platforms. Engaging with this Rewardle loyalty offer facilitates this goal of News, it is about their business needs far more than it is about your business needs.
  5. It is not smart. The limited data available to newsagents does not facilitate whole of business decision making.

Regardless of the newsagency software you use, my advice for newsagents is to leverage that for a whole of business loyalty offer. You need to be in control. You need a loyalty offer that serves your needs for your complete business. You need a loyalty offer that nurtures customer engagement for your future beyond a print news product.

The key focus of newsagents right now has to be on business transformation. By transformation I mean attracting new traffic by resetting the business from the shop floor out, pitching new products with a fresh approach to merchandising backed by a customer service experience that is unlike you would have experienced in a newsagency of the past. I don;t see the News Corp. Rewards loyalty program as serving this need.

The News Corp. Rewardle offer is not about transformation. Indeed, I see it as distracting from business transformation.

What I have written here can also apply to other brand or supplier specific loyalty offers as they focus on the brand or supplier ahead of the newsagency business.

Any loyalty pitch in your newsagency needs to be focused on your business, the whole of our business. You need to own the loyalty program so you are able to drive its focus, track the rules and ensure the reward for your customers is exactly what is right for your business.

Just because something looks bright and shiny and is free does not make it good. That may have been the case in a newsagency of the past. It is certainly not true for a newsagency of the future.

32 likes
marketing

GNS needs to be transformed for a bright future for newsagents in stationery

The leadership team at GNS ought take the opportunity of the departure of the organisation’s CEO to consider the future of the business, to undertake an honest appraisal of recent years and lay out a plan relevant to the future rather than pay homage to past.

Stationery retail and wholesale has changed. Newsagencies have changed. Retail has changed. And while GNS has changed, it has not changed enough. I think this is why the organisation is confronted by the most important challenge of its history, the challenge of survival.

Rather than appointing a new CEO right away, the GNS Board needs a plan, they need to demonstrate they have the leadership skills necessary to guide GNS to a future.

While you could argue the Board needs to hire a new CEO to come up with a new plan, in that scenario the Board needs to be prepared for a new CEO to ask for a new Board. That is where I would start. I’d want a Board dominated by high-calibre strategists who bring fresh eyes and perspective to GNS. I’d ensure the number of newsagents or ex-newsagents on the Board is in the minority.

On the future of the GNS business itself, I suggest implementing changes to make the business more efficient, relevant and future-focussed. I have canvassed most of these ideas with GNS in the past.

But before I get into the ideas, I acknowledge some of these are radical. The thing is, GNS is in a challenging situation right now because the organisation has not kept up, it has not been disruptive or radical. I’d go as far as to say the challenge confronting GNS today is for survival.

Today, there is no time for the old model. The future of the supply of stationery to newsagents is generationally removed from the GNS model today.

Here are my suggestions.

  1. Close cash and carry. This is a small small business service that is not worth the financial overhead. While some will criticise this, I suspect an analysis of the numbers will show it is not worth it.
  2. Cut the rep team. Sales reps for wholesalers of commodity products like stationery cost a business $100,000 a year or more allowing for salary, super, on-costs, vehicle and travel expenses. These reps need to achieve at least $2,000,000 in revenue a year to cover their costs. Allowing for holidays, training days etc, each rep would need to write at least $10,000 in orders every day just to cover their costs. Reps are a cost big business competitors do not have on the same scale. To be competitive, we need a lower cost base.
  3. Establish a state of the art call centre. Skilled in telesales. Some handling incoming sales calls but with the majority handling outbound calls.
  4. Develop a brilliant website for retailers to make ordering easy and pitching new products easy. Include in this site an auto-replenishment facility to help newsagents maintain stock of regularly moving items without the labour overhead of reordering. This technology has been around for years. I have seen it help several retail channels leverage terrific success.
  5. Develop a brilliant customer-facing website retailers can leverage for stationery sales for newsagents. GNS has had too many goes at an e-commerce solution and each time it has not even reached mediocrity.
  6. Develop an IT infrastructure to facilitate drop shipping of orders of appropriate size from suppliers to newsagents. While this would require volume that most newsagents could not meet, those that do could benefit from even better prices.
  7. Develop a newsagency stationery performance dashboard. Let newsagents easily see what stationery is selling in their area. Let them compare their stationery performance with the national, state and regional average, by category and by brand, easily.
  8. Retreat to one state of the art warehouse. This frees the capital in the various properties around the country, the labour associated with its current warehouse network. At the same time, establish a better shipping infrastructure.
  9. Develop a strong stationery brand (not sovereign) for newsagents to use for stationery in-store. Commit a percentage of all revenue to marketing this sub brand nationally. Done properly, this will rally newsagents, regardless of the brand of their newsagency, behind a national unifying brand. Good marketing will reposition our channel in terms of the stationery offer.
  10. Get the house brand right. The Sovereign brand is not respected. The house brand should be the brand mentioned in point 7 above.
  11. Reintroduce trade shows. Once a year. Capital cities. This helps replace the closure of cash and carry.
  12. Establish an office of strategy. Undertake research that is relevant to GNS and to newsagents and share the results with newsagents to help better inform their planning decisions.
  13. Communicate better.

I don’t see this list as complete. It is where I’d start, urgently. Steps beyond this list would depend on what is discovered through the process.

Our channel will have somewhere between 2,000 and 2,500 newsagency businesses in the next year to eighteen months. GNS needs to be structured to deal with this, so these businesses can grow stationery sales.

70 likes
Newsagency challenges

Sunday newsagency challenge: be different this Father’s Day

Many retail businesses will be out in the community with Father’s Day offers from this week on. The promotions will most likely have a sameness to them. My challenge today to newsagents is to be different this Father’s Day. Come up with a never before used approach to promoting Father’s Day. Get noticed for this and not the same old Father’s Day cards and gifts you are expected to carry.

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Newsagency challenges

Sunday newsagency management tip: insert a roadblock to your buying

Too often I see newsagencies holding stock that does not sell, wasting capital, space and labour. My advice today is to review how you buy and to insert a delay or barrier to the process. Appoint someone else who must sign-off before you place an order. Their job is to challenge you, slow you down and test whether your decision is the right decision.

Buying is a tough job. Get it right and it can power a retail business to terrific success.

6 likes
Management tip

Sunday newsagency marketing tip: what products not to market your business with

Your marketing message is more likely to gain traction if it is fresh rather than promoting something already well promoted. I see no value in promoting outside the business weekly magazines, lottery games or newspapers, unless there is a unique approach you can take that ill get your marketing noticed for your business.

Large front of store, front window or other marketing of these products is a waste in my view as all you are doing is adding your voice to the many voices already out there.

7 likes
marketing
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