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

Author: Mark Fletcher

MPA trial results provided to ACCC

Magazine Publishers Australia on Thursday provided a copy of the interim report by Boston Analytics into the trials undertaken recently into the supply of magazines to several groups of newsagents. Here is part of the public statement from the MPA:

The pilot delivered on expectations with substantial increases in efficiency i.e. decreased rate of return (-17% in Pilot A and B vs. +2% in Pilot A and +1% in Pilot B historical and -2% in control groups). Based on the modelling work done by Boston Analytics, sales were expected to decline at an 8% given the amount of supply that was cut from the long tail. But the declines were higher than that with Pilot A and B delivering -9% and -11% declines in sales respectively. Excluding an outlier store that increased its sub agents, Pilot A delivered -12% which is quite similar to Pilot B.

The value of the trials changed with the closure of Network Services. The single distributor model – yes, I am not including IPS as their roster of titles is very small – is of itself leading to changes we are seeing and changes on the way.

I think the best time to assess where we are at with magazine distribution will be sometime after June this year. By then Gotch will be well settled with its expanded mix of titles and will have had time to talk with publishers, especially those publishers that provide considerably more inventory than ever sells for its is these publishers that drive the most significant and expensive over-supply.

I have been aware of the pilot results for several weeks and while they are interesting, I am more interested in a study that actively includes all publishers and not just the top three.

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magazines

Is this news on the front page of the Herald Sun?

IMG_9909People at News Corp. was unhappy enough with a question put by Duncan Storrar to Assistant Treasurer Kelly O’Dwyer on ABC TV Monday night to dig into his past for material for what looks like a smear campaign across the company’s mastheads.

Storrar’s question – You’re gonna lift the tax-free threshold for rich people, why don’t I get it? Why do they get it? – resulted in a poor answer from O’Dwyer that hurt her cause.

Today’s coverage by News Corp. appears to me to be designed to damage the reputation of Mr Storrar. It is a personal attack in page one of newspapers when there are far more important page one news stories.

Mr Storrar’s past has nothing to do with this story, it is not news. News Corp. is again using its newspapers for partisan politics. Shame on them.

Is this a newspaper we should censor and not put on the shelves today?

Fairfax is taking a different approach on this story, looking at the Q&A interaction as news.

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Uncategorized

Is the marketing ‘tax’ by Tatts on small business newsagents fair?

For decades, newsagents selling Tatts products had to pay for infrastructure in their business for promoting Tatts products. Such infrastructure included poster frames and other fixtures necessary to host marketing materials – posters, signs and the like. Tatts provided the posters at no additional cost.

Now, Tatts is set to levy newsagents a fee to fund management of content.

This fee for content by Tatts looks like a ‘tax’. It requires newsagents to pay for something they previously were provided by the company for free.

In the material from Tatts I have seen I have not found a reasonable explanation for the new fee, no adequate justification for the additional business cost.

Newsagents have no control over the marketing content, no say in products promoted, marketing style. This is a Tatts focused marketing channel with 100% Tatts controlled content. Given that the company marketing serves it’s own online sales as well as the retailer, and given Tatts used not charge extra for marketing collateral, unless I am missing something here, I think the charge by Tatts for content is unreasonable.

While this does not affect me as I do not have Tatts products in my newsagencies (by choice), I am concerned for newsagents I work with. I am raising this specific topic here today at the request of some of them as they are frustrated that this ‘tax’ is being applied without discussion or negotiation, that is apparently being done without pushback from those who claim to represent newsagents.

I know some newsagents have complained to politicians with little interest being expressed on the issue. This is unfortunate as any politician claiming to support small business ought to be actively engaged on this issue.

Since we are in the middle of a federal election, take a moment to ask your local candidates if they could lobby Tatts on your behalf abut this new ‘tax’.

There is no time like right now to get their attention.

While I am not happy at what appears to be an ureasonable cost for the DigiPOS infrastructure, I am more frustrated with this cost for the marketing collateral and that it is a percentage of sales. The costs to Tatts should not be a percentage so why charge small business retailers a percentage?

This looks and feels like a tax to me.

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Ethics

Newsagency of the Future: 2016 workshop dates

I have set dates for a series of Newsagency of the Future workshops for June. These will be followed with the release of a video version presenting the highlights from the pool of information I plan to cover. Here are the dates:

  • June 14 Perth.
  • June 15 Adelaide.
  • June 20 Melbourne.
  • June 21 Sydney.
  • June 22 Brisbane.
  • June 23 Hobart.

I will share a link soon for online booking. Participation will be free. each session is expected to start at 10am and run for two hours with plenty of time for questions and discussion.

I will explore overseas trends, changes affecting newsagents in Australia and outline why I think this channel has a bright future, in any location and any size store. The goal is to get more newsagents working on their future through a prism of optimism.

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Newsagency management

Free online seminar: Navigating online lenders – 10 questions to help you decide if this is right for you

With permission from Tyro, here are details of a free online seminar Tyro is hosting next week on navigating online lenders. Online lending is growing at a rapid rate and this is an excellent opportunity to learn about it:

Online lenders are shaking up the world of traditional business finance. From P2P lenders, marketplace lenders, online invoice finance to merchant cash advances – there are now over 20 online lenders operating in Australia alone. But is online lending right for you, and if so, which one is best for your business?

In this 30 minute online seminar, Australia’s very own Bank Doctor and small business banking advocate Neil Slonim will share the questions he uses to evaluate online lenders to help you determine which one to go with.

It’s a checklist you won’t want to leave home without if you’re considering switching to an online lender this year.

More about the presenter: Neil Slonim leverages 35 years experience on both sides of the banking fence to provide independent and practical specialist advice to businesses that are reliant on banks for funding and other services. His blog theBankDoctor.org is a Not for Profit online resource centre offering SMEs free information and tips to help them deal with the challenges of funding a business. theBankDoctor.org was recently recognized by SmartCompany as one of Australia’s best business blogs.

Register here – https://tyro.com/navigating-online-lending/

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Newsagency management

Relaying the card department in the newsagency

Two weeks ago we completed a relay for cards in the newsagency. While the business is only two years old, the time was right. We had good data to guide decisions, space options and a plan for a fresh approach, for a newsagency, to displaying cards.

Here is the main card wall. Note we have another bay of cards on the right, down the aisle and ut of shot.

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We had trailed these fixtures in the card department with success. Customers love them as they make shopping easy. We call our cards by showing more of the full front of each card.

The big difference of the re-plan is we have removed the gift bays we had in the middle of sections of cards as they were not woking as well as we needed. We felt a more complete and free flowing card display would be better for us.

One important aspect about this move is – the fixtures are easy moved, easily changed. They clip in and clip out. That’s right, there is nothing purpose built. I will never install purpose built fixtures in a newsagency again. If a shoplifter proposes this, look elsewhere.

Another important aspect is we own the fixtures. I think it is essential newsagents own their own fixtures as this provides maximum in-store flexibility.

Here is what the customer sees at eye level.

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And as they look down standing in the same spot, here is what people see.

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And this is another section of the card department, off the wall and to the right. On the back of this is wrap. We are not sure about the location of wrap., That may require work.

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This shows the placement and how we are using cards as part of our traffic flow plans, feeding card traffic into the magazine department at the back of the shop.

Our overall thinking about cards in this shop is that we want to promote range such that every shopper feels they will be satisfied for whatever card giving need they have.

In addition to what we see in the photos, we also have cards displayed off location, in non traditional card fixtures (this is important) as well as five card spinners offering diversified ranges that speak to different needs. These spinners are moved around to combat store blindness of customers and our team members.

I urge newsagents to look at the card offer, to ensure it is fresh, easily shopped and obviously satisfying for any card giving occasion.

Our channel sells close to 35% of all cards sold in Australia. We need to grow this. We can do this by being professional in our approach and by helping people buy more cards than they intend.

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Greeting Cards

News Corp. is asking newsagents in SA to give away a local newspaper for no compensation

News Corp. has taken on charity status with its request (offer) for retail newsagents in South Australia to give away the Messenger newspaper for free.

This does not make sense to me at all.

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If you think this will attract traffic it will not, in my opinion.

News is asking newsagents to provide a service. This massive company ought to have the decency to offer fair compensation.

I would be shocked if any newsagent says yes.

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Ethics

Magazine space allocation and placement in the newsagency

Space allocation for magazines in retail newsagencies today is vital to managing the return we receive from this challenges category. Cutting space allocated is almost the only management action we can take to reduce overheads. The risk, however, is cutting space and driving revenue and the return lower than it should be.

My advice on cutting magazine space is to do it with the right fixtures that allow you to display more in less space, fixtures that make use of previously dead space in the newsagency to thereby reduce the ‘cost’ to the business.

This photo shows the magazine department in one of my newsagencies.

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On the back wall you can see the full face display. This works well because the sign above the display draws people in. It tells magazine destination shoppers to head here. Each title gets one pocket. The fixtures are deep enough to accomodate this.

The double-sided display in the foreground of the photo currently has higher volume titles. The fixture is in three parts and each pocket is deep. Pocket depth is important as it enables us to not waterfall and thereby fit more titles into less space and this is key to managing costs for the low-margin category. This fixture enables full face display of plenty of titles and half and third face display of others.

All of the fixtures we use are movable, re-configurable. This is also important as it allows changes to magazine space allocation and placement without having to bring in external resources.

Nowhere in our magazine space to we have old-school flat-stack fixtures. I think they waste space – however, given the volume some stores receive I understand they are essential to managing placement of floor stock.

The fixtures we are using are modern. This is important to me as it makes a pitch about the business and magazines themselves.

Newsagency shoplifters have a lot to answer for in that even today some are promoting purpose made old-school magazine fixtures. That should have stopped five years ago. My advice to newsagents on magazine fixtures: never have anything purpose built. Never.

Flexibility is key – flexibility in floor placement, space allocation and title placement in the fixtures. This is all part of managing magazines for success.

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magazines

Beware those spruiking federal budget moves

The federal budget handed down last week was not a budget in that parliament was prorogued before any bills relating to initiatives in the budget could be enacted. No, the budget was part of the election platform for the Liberal / National Party government. This is why we ought to disregard any supplier or would be supplier touting budget initiatives when encouraging us to purchase from them. Unless the benefits are legislated they may never happen.

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Ethics

Check where you are pitching Family Circle

IMG_9751Take a look where you have Family Circle as this is a magazine people will purchase on impulse since it is not out every month like clockwork. I find it works well in a full face placement next to weekly magazines and next to sister magazine title Better Homes and Gardens.

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magazines

A walk around newsXpress Southland

Here is a video I shot Saturday at my newsXpress Southland business. Sorry it is a bit sketchy in parts – I was trying to avoid customers as I walked through the store. The goal of the video is to provide a sense of layout, commitment to branding, guidance of traffic flow and that this is not a traditional newsagency.

newsXpress Southland from mark fletcher on Vimeo.

This is not your average newsagency. Performance wise, it is tracking at 12% year on year growth and most of that growth is coming from products with a gross profit of 50% or more, often items you would not find in a newsagency.

This is a new traffic business, chasing non traditional newsagency shoppers across several demographics. The business has been open two years. It is the only newsagency in the large Westfield centre. The previous newsagency, a nextra branded business, went broke.

I don’t get to this business often. It is run under management, excellent management. What I saw Saturday was an optimistic business embracing opportunities outside what are usual for our channel. It made me very happy.

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Newsagency management

Sunday newsagency management tip: train your employees

Too often I hear newsagents criticise employees for decisions they have made and mistakes in dealing with customer situations when the criticism more fairly rests back with the employer for poor leadership. By poor leadership I mean lack of training or the absence of a policy.

Unless your employees know what you want them to do or how you want them to handle any situation, what they actually do may be more on you than on them.

Here are some everyday queries for which you need to provide training or have a policy and suggested processes:

  1. A customer returns a product without a receipt. 
    1. Ask the customer when they purchased the item. Use your software to list instances when the item was purchased. Ask the customer roughly the time of the purchase. Find tin the list on the screen. Ask the customer the method of payment used. If that matches you are good to go, if not – say you will keep the item and have the owner contact them. If your software it is easy to find previous purchases based on an item in the purchase.
  2. A customer asks where they can purchase something you do not have and you know a competitor has the item.
    1. If it is a direct competitor near you say sorry, we can;t help.
  3. A customer complains they were given the wrong change.
    1. Go to your CCTV footage.
  4. A customer breaks an item.
    1. They pay for it.
  5. A customer asks you to put something aside for them.
    1. Use your computer system to get name, address, mobile number and an id (usually driver’s licence) code.

There are many more customer encounters you could cover. Us you do not train every employee, if you do not have appropriate policies, what your employees do comes down to common sense and you cannot expect them to share your common sense.

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Management tip

Newsagency marketing tip: buying for marketing

IMG_9792 (1)Sourcing this Prince DVD reprint last week was a deliberate marketing decision. While we mourn the passing of Prince along with many, we are retailers. Key to our success is finding products to stock that people purchase on impulse. This means buying tactically and leveraging our buying through marketing. It means engaging with suppliers more likely to respond quickly to opportunities. That is what happened here with the Prince DVD, one of three Prince products on our aisle-end display.

Immediately we had secured stock of the DVD and before it arrived in-store we promoted it on social media, outside our four walls, letting people know and connecting our business with their interest to have something to remember Prince with after his passing.

Small businesses can move faster on opportunities like this than business. But we have to be proactive, we have to chase suppliers. If we leave it to most suppliers, but the time they get to us community interest is more likely to be satisfied.

My marketing tip today – react to major news stories with buying and leverage social media for out of store promotion of what you buy.

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marketing tip

Fairfax CEO on the performance and future of Fairfax, and future of daily newspapers

Fairfax CEO Greg Hywood yesterday delivered a presentation at the Macquarie Australia Conference in Sydney. The content is available online through the ASX website.

Below are some excerpts from the published material followed by my comments:

Over the last four years we have reset the 185-year-old Fairfax. We are now a modern media business that is diversified and ready, willing and able to be part of the future.

The strategic priorities and opportunities for each of our businesses feed into our Group strategy, which is to ‘transform, grow and invest’ to drive long-term performance.

We have delivered a 26% reduction in annualised publishing costs (that is $400 million).

At the same time, our digital and print audiences have never been larger, reaching 12.9 million Australians and 3.2 million New Zealanders, as well as 2.2 million radio listeners.

While it could be tempting for newsagents to be critical here from their perspective, I think a more helpful take-away is the focus on cutting costs and pursuing revenue from other sources. These are mission critical moves for newsagents. Newsagents need to set their 140 year old businesses (that’s how old the channel is) on a similar path – cutting costs and pursuing other revenue sources. Many of us have been doing this for years now.

Over the last four years, we have reshaped all aspects of the way we operate. We have built a stronger, more diversified, digitally-driven business that is leaner and more agile.

We have never shied away from the fact that we are on a print to digital journey. We have prepared our business to minimise

Newsagents need to be on a similar journey, replacing traffic for old products with traffic for new, replacing traffic for agency products with traffic for new.

The reality of media today can be summarised in four points:

1. Consumers have wholeheartedly embraced digital, as reflected by the rising use of search engines, social media as well as going online for news and information. Print is steadily declining but still attracting valuable audiences. Already around 70% of our Metro audiences reach us via digital means.

2. Print advertising and circulation revenue continue to decline. Digital display advertising and circulation alone cannot provide an offset.

3. Mass circulation print products involve a high level of fixed cost, notwithstanding the reduction and variabilisation we have achieved over the past four years.

4. Technology and systems costs to support legacy print and digital infrastructure have grown over the years, creating complex and expensive support requirements.

In short, failure to address the old – the traditional model – is not an option.

These are points we need to read again and again. In short, the points come back to: spend less on the parts of your business that are shrinking, chase new traffic, not acting is not an option.

It should surprise no one, and certainly not us, that the seven-day-a-week publishing model will eventually give way to weekend-only or more targeted printing for most publishers. We are already seeing this happening offshore.

Quite simply it is likely that one day, the viability for newspapers on current trends will run out. It isn’t going to happen overnight – but eventually it will.

The question for newsagents is: are you ready for this? Are you ready for the decline in daily traffic that will result from the end to the daily newspaper? Are you ready to no longer be the habit-based retail stop-off? The ramifications beyond newspaper sales could be extraordinary.

Material reduction in printing and distribution costs resulting from significant reduction in newspaper publishing frequency. We expect increased industry cooperation on printing and distribution.

Distribution newsagents take note.

Screen Shot 2016-05-06 at 2.09.29 pm

This slide on page 19 of the presentation document is telling. There is no denying the trend re print circulation reported by PWC and included in the presentation by Fairfax – and seen in our own benchmark studies.

I like that Fairfax is transparent about what it is doing and why and that it has been for some years. Presentations like the one to which I refer above can inform newsagents for their own plans, and this is what I hope happens.

Sure, it would be easy for newsagents to complain about Fairfax for a various reasons. I think time and energy would be better spent learning from their plans and considering this information when making our own plans for our future.

If you have not significantly changed your newsagency in  recent years, what should this Fairfax presentation encourage you to do:

  1. Cut operating costs relating to print media products. This means less floorspace but not necessarily less range. It also means driving supplier efficiency.
  2. Chase new traffic. This means finding new products to attract people in your area who do not shop with your today, promoting these products outside your business and creating an in-store experience that is contrary to a newsagency in-store experience.
  3. Change your management practices. You no longer own and operate a newsagency.
  4. Cut off dead wood. Stock, people expenses – anything not helping you pursue the goals of your business need to be eliminated, urgently.
  5. Have fun. Change is an opportunity for excellent fun in-store.
14 likes
newsagency of the future

Unmerchantable magazines

Here are photos I have been sent by newsagents of magazines they received yesterday. The stickers on the covers are from other newsagencies where these magazines failed to sell.

Publishers ought to ensure we receive clean, fresh and merchantable stock.

13151696_10153388596757003_7478777668711859347_n 13179171_10153388594502003_2708613884958905814_n

IMG_0207 (1)

IMG_0208-1 (1)

5 likes
magazines

Happy: a terrific niche music and arts magazine looking for distribution

happy-mag_issue2Happy magazine is a start-up Aussie magazine serving a niche in the music, art, culture space. It is genuinely unique and comes from a place of passion of the creative team behind the title. However, like any indie magazine start-up, the challenge with Happy magazine is how to reach people who will buy the magazine. There is no newsagent distributor relationship in place.

Any magazine specialist would like to have Happy in the range.

Talking with the editor last week, I said I would write about Happy here, so newsagents are aware of the title and so you can comment on indie titles like this and how you might engage with them.

Many publishers visit here to check the temperature of the newsagency channel, please share your thoughts.

Here is the intro email from the editor:

Hi Mark,

Many thanks for the chat a moment ago.
Happy has been an online publication since 2013 and here are some stats on that:
In Jan we launched a very small but extremely well received A5 magazine: http://store.hhhhappy.com/
We jumped very quickly into the territory of 200+ paid annual subscribers but now feel to progress the publication we need to develop our sales department and get it in front of more eyes.
Our team is small and sales focus almost entirely on industry contacts, labels, releases etc.
If you’d like any further info by all means let me know!
Cheers
Radi
7 likes
magazine distribution

Selling the traditional UK newsagent

traditional-newsagents_1000X750For perspective, check out this “traditional newsagents” for sale for £74,950+sav. The ad caught my attention as it really is a traditional UK newsagent business, away from the centre of town and still with a range of magazines and, by the looks of the photos, an opportunity for cards. This is the kind of newsagency business in the UK I’d buy if I was in the market as the base is flexible enough for potential growth through change. Take a moment and scroll through the photos on the ad. It is interesting to compare with similar high street newsagencies in Australia.

4 likes
Newsagency for sale

UK start-up newspaper closes after two months

The New Daily, a national newspaper launched in the UK two months ago, is to close. Here is brutal commentary from Jeff Jarvis, respected American journalist and journalism professor:

It is most unfortunate that every time this happens, journalists suffer job losses or at least disruption. But enough with the Quixotic attempts to preserve a dying business model that we know is dying. First there was the News Corp. tablet app that was going to preserve our God-given right to package the news and get paid for it. Dead. Then came the Orange County Register’s doubling down on print. Bankruptcy. Now there’s Trinity Mirror’s new print newspaper New Day. Folded. 

Yes, I argue that we must innovate. But sorry, these are not innovations. these are exercises in nostalgia. Innovation would be using new tools in new ways to serve people as we could never serve them before.

So, yes, I’m sorry for the disruption to the journos in this latest case but I cannot help chortling at the comeuppance to this effort to restart the Brigadoon Daily, doomed from the start.

I like Jarvis’ directness. I also agree with him. The future of news is about news and not the medium. Too much time is spent by too many on the medium while the future slips away from them.

1 likes
Media disruption

Officeworks evolving and posing increased challenges to newsagents

I visited several Officeworks businesses in Melbourne and Sydney this week to assess changes in-store. I decided to do this following media reports of planned expansion.

In each store I found a layout that made sense and shopping easy, an excellent range of brand and generic products, a feeling of good value in the pricing, engaged staff on the shop floor keen to help and easy access to help through local training.

Most important of all was the personal pitch in-store. While the brand is national, the promotion of local people, in that business, who can help makes the pitch more personal and local.

Here is a pull up banner that greeted me at the Pitt Street Sydney store a couple of days ago:

IMG_9709

What is newsagents who are focussed on stationery did this, had a pull up banner of themselves or a team member, personalising the pitch of customer service out the front of the shop or near the entrance.

While this banner is more targeted at the technology customer, it could work equally with stationery as there are many options, many choices to make.

Sure, you would hop your customers would know you, but unless everyone in the town or region shops with you they do not know you, so promoting the people in the business is an important and regular activity.

Also at the entrance to the store is this sign:

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Plenty of newsagents I know offer free delivery for stationery, especially in regional locations. However, most do not promote this. Officeworks consistently promotes it.

Inside the store, in the stationery department, regularly they promote impulse purchase items outside their usual location. Like these Sellotape Sticky Dots:

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Using a simple clip-strip, they are making a more valuable pitch to shoppers in the aisle looking for calculators and pencils. I do this type of thing in my newsagency, leveraging destination shopper visits to greater value by promoting items one would not usually find in a destination aisle.

Their approach to pens is easy, too. This photo shows part of one side of a double-sided stand. Selecting is easy as is testing the pens.

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The simple Try me! message is terrific. In newsagencies we usually have a small pad stuck on a wall. At Officeworks they have long pads, on a small bench, and they invite trying. This simple move shows a more customer-focussed approach on their part.

Outside the shop, on the front window, is this sign that reinforces a key message: shopping with us is easy and can be done at any time.

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While I get that many newsagents love to hate Officeworks and that we all have our bad stories about Officeworks, that they are expanding ought to concern us as this shows they are winning with customers and that is all that matters.

Yes, their prices are higher than their marketing suggests. In my view, that ought not be your focus.

If your stationery sales are up year on year then maybe you don’t have as much to work about. However, if your stationery sales are flat or declining year on year, take an objective look at Officeworks. Some of what they are doing could work in your newsagency, even on a smaller scale.

There is plenty Officeworks is getting right. The purpose of this post is to encourage you to treat them seriously as a competitor, to learn from what they are doing and to encourage you to create a better stationery pitch in your business.

7 likes
Management tip

Next time you buy gifts for your newsagency

A newsagent called yesterday angry a gift supplier they had purchased from for years has started supplying a pharmacy nearby. The apparent promise of exclusivity has been ignored with a there is nothing in writing comment.

If a rep or agent makes such a claim to you, get it in writing and make it clear this commitment is essential to you doing business with them.

6 likes
Ethics
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