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

Author: Mark Fletcher

Delayed billing support in newsagency software helps reduce early returns and make magazine more viable

The comprehensive delayed billing support provided in some newsagency software packages is helping newsagents and newsagency employees make more informed decisions around how to manage some magazine titles.

From the indication of the barcode label of delayed billing (see the photo) through to the proper management of delayed billing at seven key tough-points in a newsagency, newsagents are better informed about a title subject to delayed billing.

While the most obvious indicator of delayed billing is on the magazine label, this is just the cosmetic step. There are more important places where delayed billing is indicated and managed in the business, using the software.

While not all newsagency software programs handle delayed billing in this way, any of them can since they all have access to the same data.

The more complete the solution the better for newsagents and magazine publishers.  The latest comprehensive software developments, released last year, provide magazine publishers with another mechanism with which they can challenge the early returning of their titles on the day of release or close to the day of release.

I urge newsagents to use the new delayed billing facilities – beyond the information on the magazine label.

Range is vital to our pitch as magazine specialists. Delayed billing can make some titles we range more viable.

Publishers of longer shelf life titles, greater than a month, should take note of this and consider delayed billing as a means of combatting early returns and providing newsagents more reasons to treat your titles differently.

The extensive delayed billing enhancements have been delivered at no cost to newsagents, publishers or magazine distributors.

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magazine distribution

What are you doing for Chinese New Year?

Since we don’t have lotteries in any of my newsagencies, Chinese New Year is not the focus for it was where we did have a newsagency with lotteries.

I’d be interested to hear what newsagents are doing locally to connect with the season?

The season lends itself to cross promotion with local Chinese restaurants, Chinese community associations and others. Engaging with it in a co-operative way could open your business to a more valuable connection with customers who themselves embrace the season.

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newsagency marketing

Essendon AFL club drug story a lesson in media consumption in today’s connected world

Like many Victorians today, I have been closely following the story about the use supplements by the Essendon Football Club. While the newspapers had the story it was old news by the time ink hit newsprint last night. Crikey provided genuinely fresh coverage in its email news bulletin at lunchtime.  I’d rate Crikey’s report by Andrew Crook as the best coverage so far.

I was on the road through the day and found Twitter to be more useful, and entertaining, than radio.  I was flicking between 3AW, ABC Local and SEN. Indeed, the radio coverage felt tired compared to what I could access through Twitter. The challenge, however, with Twitter is reliability for news. Sure the fun tweets are a hoot but when it comes to news you need to check around before you believe something that’s explosive.

I’ve not seen TV coverage but I suspect it would be tired as well in part because of AFL connections but also primarily of lead times.

This story has many twists and turns and many players (excuse the pun). This is where social media works best because of the broad range of contacts who could have the tiniest bit of information. Yes, it can lead to less than accurate information being published. It can also lead to better and faster news coverage. We have to be our won filters.

My phone was the best delivery medium for the day thanks to access to Crikey and Twitter.

Print news publishers can protest all they like about fact checking and our desire for curated content.  Immediate access even part of a story is more important for  some news stories than a more objective piece you can wait hours or days for.

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magazines

Do newsagencies have a future?

I am questioned several times a week by potential newsagents and existing newsagents about the state of the retail channel and its future – at the individual business and channel-wide levels.

Last week I received an email I share here:

I got your contact details from the Australian Newsagency blog as I am looking at taking on a newsagency that recently closed and was wanting to get some information support to assist with my decision making process. I don’t have any previous newsagent experience but I have some retail experience and my background is accounting to a fairly senior level in corporates.

Everything I read indicates that newsagencies are a declining business but I was hoping to get access to information that would support my analysis and provide ideas to ensure that a business would have the best opportunity to be successful.

My correspondent asks common and good questions.  Here is my response. I share it here to reflect publicly my thoughts on this.

Newsagency businesses can be excellent businesses or dogs of businesses. It all depends on what you make of it.

The traditional newsagency is dead there is no doubt about that. by traditional I mean a mix of low margin products, relying on others to drive traffic.

If you create a business that is fresh, offering what local shoppers want and with a retail feel that is relevant it will do well. The keys are to be in control and own the business as a retailer and not as an agent.

This is the future … newsagents stopping being agents and becoming retailers, best practice retailers in a tough, competitive but fascinating world of retail. These are our days to shine, to reinvent our businesses to become fresh and exciting, to the swatch of retail – they turned the dying watch business around and made it desirable and highly profitable.

So, are we dying? yes, the current old school model supported by some dinosaur operators. The new approach is thriving. I am seeing businesses with excellent growth. Those who complain the most about the current model and question the optimism of others will often be from the old school. Beware.

In taking on the new business, focus on traffic drivers, margin drivers and basket builders. These three combined are our future.

I’m happy to expand the discussion from here…

One of the challenges we have as a channel is how we talk about the channel – in our businesses, with family, with friends and to others we pass along the way. Too many talk the channel down. Too many who have exited or are about to exit complain.

The future of the channel is vital for those here today for the long haul and for those coming into it tomorrow. They (we) are the future. What we make of it is up to us.

In all of the challenges we face today are opportunities. I see many newsagencies doing very well. Yes, some are failing and doing poorly.

Overall, I’m optimistic.

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Newsagency management

An example of the value of partworks

I checked our sales numbers at the weekend to see the performance of the Cake Decorating series. In a week we sold more than 30 copies.  This is by issue 20, well into the series.

While we have been helped by certain supply, for which I thank Network Services, we have driven the success with good placement and co-location.

Beyond the sales of Cake Decorating itself, our sales of baking and cake decorating titles are up, there is a solid knock-on effect of a successful partwork series.

While some shoppers get putaways, most come in a purchase off the shelf. Since we are in a shopping centre with more irregular shoppers than a high street or rural newsagency this makes sense.

Cake Decorating is a valuable success for us.

That said, not all partworks are as successful. The key is to fully embrace every opportunity as it’s the only way to learn if a new title will work for you.

Footnote: Herein lies the schizophrenia of the newsagent / magazine distributor relationship.  Yesterday I complained about network sending me a fishing title I had no hope of selling (kept it for six weeks and it didn’t sell) and today I praise them for helping me achieve excellent sales week in week out for this port work. We inhabit a strange space.

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magazine distribution

Promoting What’s For Dinner?

From the excellent title through to simple pitch on the cover – Quick and easy weeknight solutions, What’s For Dinner, the New Idea brand extension, is an excellent title to pitch.  We have it with our weeklies, between our two major daily newspapers and at the counter. I think it’s a title we will easily sell on impulse – hence out considerable activity supporting the title.

I’d urge newsagents to promote this title while it’s fresh and while it’s getting some terrific supporting marketing.

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magazines

Leveraging one-off deals to make a price pitch

We are always on the look out for end of line and other special buy opportunities with which we can make a value-based pitch at the front of the store, to attract traffic from the mall.

Our latest value-based offer is these heavily discounted Parker pens we found. While the stock is a couple of years old, they still work fine and come in nice packaging.

We find that the dump bin approach works well for this type of stock in our store. It does not detract too much from the overall front of store message yet presents a magnet for people in the mall looking for a good deal. Within the first four hours of putting these out we sold seven pens. This is nice basket-building revenue.

We took care to create a sign at the top that reflects value more than discount. We presented the stock in such a way that supports this too – neat, organised. yes, we have a pack open. No, they will not be stolen. We track inventory carefully and theft is rare in this business. This is in part due to the time team members spend on the shop floor.

Beyond attention to detail through shop floor execution, the key to success here is getting the right stock at an excellent price. This is where direct supplier relationships are crucial. Here are my suggestions:

  1. Ask your reps – sometimes they have end of line stock with them.
  2. Negotiate – sometimes the starting price is not what they will sell for.
  3. Plan – try and have a terrific shop floor deal at least once a month regardless of the seasons you are running.
  4. Manage the offer – don’t keep it out for too long, consider moving on price to quit the stock.
  5. Target margin – we look for at least 60% for floor offers like this as part of our overall business GP goal.
  6. Target basket builders – products regular shoppers will find easy to add to the item(s) they visit you to purchase.
  7. Target new traffic – make sure the offer will also attract new shoppers to your business.

This Parker pen meeds all these goals and it’s working a treat.  We were able to acquire plenty of stock to keep the offer live for two weeks. This is our goal.  We were not given special treatment with the offer. As I mention above, the key is to talk with reps, to cultivate relationships.

Click on the image for a larger version.

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Newsagency management

Tasmanian Fishing News is not the right title for my Victorian newsagency

I can’t see any reason we would have been sent Tasmanian Fishing News by Network Services. We’re in Victoria and while fishing magazine sales are okay they are not at a level where we would expand titles – certainly not to include a title like this covering another state.

We had the title for six weeks and sold nothing. All this has done is suck cash from us for use internally by Network.

And publishers wonder why newsagents early return. Here is a reason.  Network has failed me and the publisher.

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magazine distribution

Promoting Grand Designs Australia

We are supporting the latest issue of Grand Designs Australia with this half waterfall placement in the usual location for the title and placement, at the weekend, with newspapers and at the counter.

While sales aren’t quite where we would like them to be, they are building. I like the title as it plays to our magazine specialist pitch and acts as a good beacon in this segment.

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magazines

The Allure magazine success story

Anyone interested in the changing economic models for magazines and the success of some titles over others should read the analysis published at Mashable about Allure magazine, a Conde Nast title. It’s a multi platform success story, a beacon success story other fashion title publishers are sure to be studying.

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magazines

Hello Chris Bowen, welcome to small business

We have a new Minister for Small Business in the federal government from today. Check out Chris Bowen on Wikipedia and at his own website.

Sadly, like many small business ministers from both sides of politics before him, Chris has no hands-on small business experience.

Political parties need to understand that one way they can engage small businesses is to appoint a minister with real-life small business experience. They also need to appoint someone with the time necessary to do the portfolio justice.

If small business is as important as politicians say they they can demonstrate this with an appropriately skilled minister who has enough time in their schedule and a sufficiently strong voice to represent what we keep being told is a vital part of the Australian economy.

In this situation, where the minister has no small business experience, I’d like to see his time invested in genuinely connecting with small businesses, on the shop floor, in the back room and engaging in a practically way that leaves a meaningful impression of the challenges of small business.

For example, I would love Chris Bowen, our new minister for small business to:

  1. Understand the damage the government-owned and protected Australia Post retail shops does to our small business newsagencies every day.
  2. Understand cost to us of the protected banking system in terms of exorbitant transactional fees and unfair terms for small businesses.
  3. See and feel the competitive pressure from the supermarket duopoly.
  4. Realise the high cost of retail space in Australia compared to elsewhere in the world.
  5. Understand the cost of penalty rates we have to pay when there is no penalty to the employee for working the hours they prefer.
  6. See the inflexibility of some aspects Fairwork.
  7. Learn why many of us do what we do and would probably not choose any other business.
  8. See the impact we have and value we bring to our local communities.
  9. Understand why small and independent retailers are important to the country economically, socially and environmentally.

I am sending a letter to Chris Bowen welcoming him and covering these points.

Newsagencies provide an excellent place for any politician to learn about and understand small business. A week in our businesses could help them meet more local constituents than they would meet in a week of door knocking.

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Australia Post

The Homespun magazine Anzac connection

I like the connection with the Anzac spirit on the cover of the latest Homespun magazine. It’s something newsagents could support – for quilters and others who would like to make something special to connect with Anzac Day this year.

We are doing several things: educating our team members about the title, ensuing the full cover is on display and featuring it in display (next week).

Whereas other retailers will see this as a product to sell, we see it as something some our customers will appreciate long after purchasing the title from us. Our job is to help them see this.

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magazines

Sunday newsagency marketing tip: use coupons to bring customers back

Coupons are big in the US. They are understood and well entrenched in shopper culture – from large retailers to small. It is hard to go into a US retail business and not receive a coupon or some other mechanic for bringing you back into the shop.

Coupons are becoming more widespread in Australia. Woolworths, for example, is using them regularly on shopping dockets – not the shop a docket type but these ones are printed on the same side of the receipt by their system.

While I don’t think we here in Australia will get to the Extreme Couponing craze as evidenced in the reality TV show, I do think there are opportunities for small and independent retailers like newsagents to use coupons or coupon like flyers and promotions to bring shoppers back.

The keys are:

  1. Make the offer financially compelling.
  2. Have an expiry.
  3. Make the coupon attracting – with some elements of a banknote.
  4. Don’t just hand the coupon, mention it in the sale.
  5. Give away a coupon to every shopper.
  6. get a key supplier engaged to share funding of the offer.
  7. Cheerfully give away the coupon value or bonus when it is redeemed.
  8. Try it several times and measure results before you decide if couponing is for you.

Okay, so no one nearby your business is using coupons? Being first can be fun, valuable and informative.

Creating and running a coupon campaign can be easy and specific to your business. It could be a way of presenting your business as offering better value than what shoppers think.

Now, watch the Extreme Couponing TV show promotion.  Yeah, it’s crazy … but it also gives you ideas.

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marketing

Sunday newsagency management tip: get your backup checked

No matter how daily backups are taken – yes, daily as anything less than daily is poor business management – get them checked every six months or so by your newsagency software company.  This should be a free service.

There are newsagents in Queensland right now who do not have access to current data either because there were not backing up daily or they had not had their backup checked to ensure the backup was completing.

Losing business data can affect your tax situation, your own financial situation and or what you could sell the business for if you decide to sell.

Contact your software company and arrange to have your backup checked.

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Management tip

Terrific sales result from How It Works

We sought out How It Works, a terrific magazine from the UK, as part of the expansion of our magazine range. With the regular magazine came allocation of the annual. We received four copies and sold three in four weeks.  That’s $59.85 of additional revenue.

I am often challenged by newsagents on how they (we) can increase revenue from magazines. Here is one example. Chase titles, expand the range to suit those who shop with you.

We are using the various versions of How It Works and sister titles to make our newsagency more interesting to people who like shows on TV like Mythbusters. It’s a title that sits well next to Smith Journal, as well. We’re happy with sales so far.

Magazine publishers need to understand that the magazine push model makes it hard for newsagents like us who want to expand range.

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magazines

IT failure at Newsagent owned Ancol stationery business lets newsagents down

The computer system running the Ancol business in South Australia has been inoperative this week. The newsagent who shares the information explained the impact:

Orders are being manually picked and are taking and extra couple of days to come thru, and then there are no electronic invoices.

My understanding is that communication from Ancol has been poor, leaving newsagents to chase information, spending more time away from running their own businesses.

The issue is, apparently to do with a server.  Professional IT infrastructure managements that a systems such as this has built-in redundancy, better serving customers in times of failure of almost any size.

For Ancol’s customers to be without their usually good computer services this week is dreadful for them and a blight on the leadership of Ancol.

I hope that newsagents in South Australia make their voices heard to those leading the co-operative.

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Newsagency management

Gift Fair opportunity in Melbourne this weekend

The Reed Gift Fair in Melbourne this weekend is a boutique affair, very small compared to the major gift fairs this year in Melbourne and Sydney. However, it is a fair well worth attending by Victorian newsagents.  I have seen the exhibitor list and it is good – there will be plenty of opportunities for newsagents.

As the first fair of the year, this Melbourne event is a good opportunity to get in early on trends and opportunities with some key suppliers.

If you get to the fair, pass through to the accompanying jewellery fair and see some opportunities in that space for newsagents. It’s the first time the two have been together like this. It’s an opportunity to embrace.

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Newsagency management

The relevance of the Lego brand

All around is, in some old businesses, we and see lessons of maintaining and even growing relevance. Lego is one such brand. The company itself continues to innovate. more important, it partners with others to innovate.  From the retail examples I have shared here of innovative retail stores to new products, Lego is as relevant today – to new kids and to the nostalgia shopper.

Check out a video about a Lego pancake making machine. It’s fascinating on a range of levels from what it actually does to showing off how Lego is more than building bricks.

My takeaways are don’t be bound by your original business plan or the expectation of the majority about who you are and what you do.

It’s Saturday morning and time for breakfast. I wish I has one of these up and running right now.

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Fun

Refreshing the women’s health and fitness magazine display

We have adjusted the display of women’s health titles, ensuring well selling and promoted brands get good positioning. What you see in the photo and beyond is part of our regular magazine placement work.

I do this myself as it’s something to think about away from the daily work of putting magazines and taking titles off for return. It requires consideration of data and the focus of the business. It’s work that helps drive year on year growth of magazine sales.

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magazines

A learning opportunity for newsagents in Bevilles restructure?

The retail jeweller space is experiencing tough times beyond the challenges of retail. They are being hit hard by online businesses at the low end and by high operating costs at the high, designer, end. The last twelve months have seen significant structural change – closures, consolidations and significant business direction change.

Yesterday, Jeweller Magazine reported news of an ‘alliance’ (partial takeover maybe) between Tara Jewels of India and the Bevilles group. The result will be more store closures.

What is interesting about this news is that it is another significant vertical alliance in the retail jeweller space.  We have not seen this type of vertical alliance in the newsagency channel but I think it is only a matter of time.  here are some details from the Jeweller Magazine report:

In a media statement, Bevilles CEO Michelle Stanton said, “This strategic alliance will provide Bevilles with a wide range of product, sourcing and operational efficiencies as well as a more enhanced IT infrastructure.

“It allows Bevilles to have direct relationships with diamond site holders and remove several steps from the product sourcing process which benefits will flow through to our customers,” she said.

Note – they are cutting out the middleman, maybe several in the process from manufacture to store. This is evidenced further in the report:

The supplier notification also outlined new shipping and payment details to begin next month adding, “From 4 February 2013, all suppliers will be required to ship orders directly to the Indian jeweller’s Hong Kong office for consolidation and transhipment to Bevilles.”

The Indian company, which was established in 2006, conducts a vertical business model operating in both the manufacturing and retail channels. Currently, it has 30 retail stores in India and has quickly expanded its jewellery manufacturing and retail business to include a presence across five continents and more than 20 countries.

There are plenty of products newsagents sell that we get through local wholesalers.  Smart groups of newsagents able to leverage volume in a disciplined way could do a Bevilles and cut out one or two middlemen, depending on the route products take from manufacturer to retailer. The savings from such better sourcing could increase margin on some products dramatically.

Bevilles is well positioned to make such a move because of their structure.  For the majority of independent newsagents today this is not an option. But it will happen. Retail competition, cost pressures and other challenges will force it to happen.

These are retail trends we need to understand and consider as retailers as they reflect the broader changes in retail beyond those specific to our channel.

Footnote: some will know that my newsagency software company also serves over 300 jewellers. Bevilles is not and has never been a customer.

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Newsagency challenges
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