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

Author: Mark Fletcher

Coles school sports promotion rip-off

The Coles school sports promotion is a rip-off in my view.  According to a recent report in The Australian (Sept. 5 pg 8), shoppers need to spend $700 to earn enough points for a school to get a $3 (RRP) skipping rope.

I’d have parents from a nearby school spending less than $500 in one of my newsagencies in a year yet I happily give them products worth $50 for free when they ask.  This makes my small newsagency more valuable to the school than Coles.  Plus I don’t demand they shop with me.  I want that to occur naturally as it is more likely to stick if it does.

Indeed in each of my newsagencies we give a significantly higher percentage of revenue to community groups than Coles appears to with this promotion.

Why should I be surprised that small businesses do more for local schools and clubs than one of our giant supermarkets?  I’m not.  I think that the Coles campaign in purely profit driven and 100% cynical.  It sucks that shoppers buy in and think good on your Coles for doing this.

I don’t spend any money advertising the $50 I give the school either.  It frustrates me the tens and maybe hundreds of thousands of dollars is being spent advertising the promotion.  This should be given to the schools and not media outlets.  Coles should rely on word of mouth – if they were serious about helping as much as possible.

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Ethics

Promoting Sesame Street products

We are promoting activity books from Five Mile Press at the front of the newsagency (ideal for school holidays) including Sesame Street titles.  Shoppers who pass this then pass a Sesame Street plush display – the brilliant and highly successful Sesame Street Lamppost from Jasnor.  Locating the two items close together like this helps drive sales of both.

Regulars here would know that I love well-known brands.  Branded products are easier for us to sell.  Sure cheap China product may have a better margin but it’s not as good today as a year ago and will only get worse.  I’d rather have the brand focused traffic than cheap-ass shoppers looking for cheap China product for the long term health of my newsagency.

Sesame Street is one of those brands – easy to sell and it supports a healthy margin.

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Book retailing

Grouping Italian food magazines helps drive sales

By grouping the three Italian food titles as we have done in the photo we are more likely to achieve sales of two or more of the titles.  We regularly go through or magazine department looking carefully ad adjacencies, trying to make them more relevant to our shoppers.  The result is an above average increase in magazine sales, making the time spent worth it.  I do this work myself.  It is not a task newsagents should delegate unless they are not the magazine specialist in their newsagency.

With more than 30 regular food titles, grouping them by region and or cuisine makes sense.  We even adjust when there are magazines which devote an issue to a category which is located away from the usual place for this title.

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magazines

Promoting Marie Claire magazine

We are promoting the latest issue of Marie Claire magazine with excellent positioning in the usual location for this title as well as co-location with this display opposite the women’s weeklies titles – the highest traffic stopping point in our magazine department.   This is a new promotional space we created a few weeks ago and it is working a treat for us.

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magazines

Transitioning magazines from print to digital

“My goal in life is to find a way to transition from [selling subscriptions] to selling access to a branded experience,” Sauerberg said. “Not just changing the price, but redefining the product in a way that creates a branded experience.”

This is Bob Sauerberg, president of Condé Nast speaking at the 2011 American Magazine Conference and as quoted in a report published by ADWEEK.

The US marketplace is far more dependent on subscriptions than Australia.  This is a reason they are approaching tablet computers differently to here, at the moment.

The best short / medium term opportunity Australian magazine publishers have to stem declining sales and even grow in some areas in newsagents.

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magazines

Extraordinary response from newsagents to benchmark study

I have received the best response yet to a request for newsagent sales data – to my request earlier this week of the Q3 newsagency sales benchmark study.  In three days I have received more sales data than I would usually get in ten days.  This suggest considerable interest in the outcome of this particular study.

Please follow the link above for details in participating.  The result will be a health check on sales across various categories in the newsagency channel.

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Newsagency opportunities

Is a capital city newspaper planning to stop home deliveries?

Two sources have suggested to me that a capital city newspaper in Australia will announce the end of newspaper home deliveries before the end of this year.

I am not sure it is as simple as the rumor put to me however.

Both Fairfax and News know that such a move would damage newspaper home delivery across the country.  I suspect that if there is to be an announcement, and remember this is only a rumor, it will be that the current arrangements, maybe of in house publisher managed direct to subscriber home delivery, are replaced with a completely different model.

What gives this rumor credence if moves I have heard being made by the publisher involved, moves which suggest they are about to cut back.

Why publish a rumor?  Sometimes airing a possibility heightens debate which can help turn around a decision.

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newspaper home delivery

ASIC, the reserve bank and the federal government failed Australians on EFTPOS issue

Where is the federal government on the EFTPOS fees issue?  Nowhere.

Where is ASIC on the issue?  Nowhere.  I would have thought that ASIC could pursue ePAL for misleading conduct.  The still could I guess.  Will they?  Probably not.

Where is the Reserve Bank, the organisation which created the situation? Nowhere.

The federal government – especially Nick Sherry Small Business Minister and Wayne Swan Treasurer – has let retailers down.  They have ignored us.  When we wrote, they replied with noise and no substance.

The opposition was a little better but not much.

No, it was up to Aldi, a foreign owned supermarket group to fight the fight which government or its agencies ought to have taken on … representing small business retailers like newsagents.

Thanks to the Aldi action we now have some banks retreating and saying they will not increase fees for now.  We need to keep this pressure on … on the banks, on ePAL and on the politicians.

Who thought that putting the big banks plus Coles and Woolworths in charge of managing EFTPOS and setting fees was a good idea?

If Nick Sherry really cares about small business he would engage on this issue and actually do something.  Instead he spends his time making speeches telling retailers what he thinks they are doing wrong.

The Opposition would garner significant small business support if they came up with  an alternative plan on the issue of EFTPOS fees.  Rather than trying to kill the government, they could show alternative leadership on this issue.  It’s ripe for them to make a move and show that they can create positive plans.

All in all retailers have been let down by everyone except for the work of Aldi.

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EFTPOS fees

Another Groupon magazine subscription offer

It is disappointing to see Time magazine being offered for 73% off for a one year subscription with a Groupon deal.  While only 8 have signed up so far, the deal has quite some time to run.

Discounting a products this much must discount it in the eyes of the consumers.  Do the publishers want to indicate their the content in Time magazine is worth that little per issue?  I thought this was a premium title.

I understand the place that discounted subscriptions play in the magazine sales model … but 73% off?

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magazine distribution

Promoting Dirt Action magazine

We are promoting the latest issue of Dirt Action magazine with best-position placement with trail / motor bike magazines as well as a feature co-location aisle end display.  This is the 150th issue of the magazine and on offer for one lucky customer buying the title is a $15,000 Yamaha Race Replica bike.  These are good reasons to give Dirt Action some time in the spotlight … which is just what we are doing with our placement and display.

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magazines

Promoting school holiday opportunities

We put together a display promoting products just for school holiday shoppers and it worked a treat.  Craft items, toys, kites, games, party supplies, Halloween items … they all work as part of the school holiday opportunity.  This promotion is deliberately not about price … as the marketing collateral indicates.  No, it’s about letting parents know that we have a range of products which can help families through the school holiday period.  The collateral we are using connects beautifully with the opportunity.

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newsagency marketing

Newsagents need to embrace multi channel marketing

Grant Harrod, CEO of Salmat, writing in the Australian Financial Review on Monday called on retailers to use multiple channels when promoting to consumers.

While much has been made of the rise of online retailing and explosion of new media, the reality is that people have diverse media habits and purchasing preference.

I agree with this and most of what Harrod has to say.

Newsagents are competing in a tough retail marketplace in tough economic conditions.  We cannot rely on what we have always done to drive traffic.  Just one or two campaigns a year are not enough.

No, we need a consistently delivered multi-channel approach if we are to have any hope of competing with the major retailers which offer what we sell.

In my own newsagencies I embrace the multifaceted newsXpress marketing: catalogues delivered to homes every six to eight weeks, commercial TV advertising, commercial print media advertising, monthly customer newsletter, a fresh flyer out the front of the businesses every month, in-store radio, a social media campaign, a local online yellow pages like campaign and a word of mouth driven campaign.

I see this mix as the bare minimum for any newsagency group.  I like the diversity as it means that the business is not relying on one activity to drive new shopper traffic.

For individual newsagents there is a challenge as the costs can be prohibitive.  That said, there are some options which could fit into a single store budget, especially in regional and rural areas.

Now more than ever we need to market our businesses and do this via more channels than we used to in the past. Changing times demand we change our approach to so much of what we do, including marketing.

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marketing

A tax break to help businesses to restructure?

The Sunday Age yesterday had a report about a report to be presented at this week’s Tax Summit calling for government assistance in the from of tax breaks for businesses facing restructure as a result of a strong dollar and or other challenges.

If there is even a hint of such support I would expect newsagents to be at the front of the line with their hand out and arguing that any such assistance should be retrospective given what the government took away in 1999 in the name of competition.

Outside of the federal government facilitated restructure of newspaper and magazine distribution in 1999, newsagents are in the middle of an even more comprehensive restructure.  In fact, it is three restructures: an overall retail restructure, the shopping centre restructure and the print media restructure.

Newsagents could use more than a tax break.  They could use help in dealing with landlords on financial and permitted use terms.  They could use help in dealing with magazine distributors on achieving equitable magazine supply terms.  They could use help in dealing with newspaper publishers on achieving fair compensation for newspaper home delivery.

I doubt that the push from Ernst and Young and others for a tax break to help businesses undergoing restructure.  But in case it does, newsagents need to be ready.

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Newsagency challenges

Kicking up the Halloween display

I love team members who take initiative.  I was sent this photo over the weekend of our new Halloween display while I was away from the shop.

While the old Halloween display looked good and was working 9(selling), this new display has the drama and fun of Halloween … live and on show in-store.  Talk about retail theatre.  I love it.  I love Halloween because we get to have fun and the newsagency itself gets to have fun.

While the supermarkets and so-called discount shops sell Halloween products, that is all they do.  We engage and have fun with the season with our customers.  It’s a great season for us to show off our point of difference.

This display will evolve as we get closer to the big day.

PS. we are cheaper that other outlets and we have a terrific margin.

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visual merchandising

Promoting Australian Traveller magazine

Regulars here would know that I like Australian Traveller magazine.  It responds well to good placement, hence our placement of the new issue last week such that the full cover can be seen and in a location more frequented by female shoppers – this makes sense since more women make travel decisions than men.  In addition to placement in an ideal regular location, we will give this issue a run with a co-location for a week or two in a high-traffic location.

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magazines

Q3 newsagency sales benchmark study announced

I invite newsagents to participate in my next newsagency sales benchmark study – covering the third quarter of 2011.  For ease of data analysis and consistency of reporting, participation is open to the more than 1,760 newsagents who use the Tower Systems newsagency software.  I hope to get between 100 and 130 participating again.

  1. Please run your Monthly Sales Comparison report  This is my favourite report in the software).  On the left, select July 1 2011 through September 30, 2011.  On the right select July 1 2010 through September 30, 2010.
  2. Check that the dates are right.
  3. Tick the category box.
  4. Do not tick any box about suppliers.
  5. Once the report is on the screen, save it as a PDF.
  6. Please email the report to mark@towersystems.com.au.

Thanks in advance for participating in what has become an anticipated benchmark study.  The results are useful in comparing your newsagency with others.  They also give us a health check on the channel overall.  I ensure that the dataset includes a good cross section of newsagencies.

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Newsagency benchmark

MasterCard blames retailers for fees

In a submission to the reserve bank, MasterCard says that some retailers are gouging on fees they charge shoppers for using their MasterCard.  The Australian has the story today.

While I am not concerned if the reserve Bank does introduce a cap on what we can charge for the use of a MasterCard or Visa card, it galls me that MasterCard takes a swipe at us without talking about they fees they charge retailers.

Losing margin is this tight retail marketplace is a cost any business would want to avoid.  MasterCard should look at what it charges retailers before pointing the finger at us in complaining to the Reserve Bank.  In addition to the margin cost of their fees, there is the administrative cost associated with accounting for this method of payment.

Maybe retailers could fight back with a sales counter based campaign against the MasterCard submission.

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EFTPOS fees

ALDI challenges banks on EFTPOS fees

Aldi released a media announcement on Saturday keeping up pressure on the banks over EFTPOS fees. Here is the full announcement:

ALDI calls for proof that banks’ internal costs will increase due to changes to EFTPOS interchange model

ALDI is today calling for Australian banks to prove their net costs are increasing as a result of changes to EFTPOS interchange fees.

Steven Bigg, ALDI Managing Director Finance and Administration says ALDI believes the overall increase in net costs to the banking industry is minimal and is calling for greater transparency of any unjustified cost increase to retailers.

“Any investigation will show the banks will increase their revenue to the tune of tens of millions of dollars each year at the expense of retailers, if all the Major Banks adopt a similar stance to those banks that have already advised their retailers in writing as to the magnitude of the fee increase,” he says.

“We also see the potential for adverse effects on competition due to inconsistencies in how these charges are being applied to retailers, in what is already  acknowledged as one of the most concentrated grocery retail sectors in the world.

“In light of the Federal Court’s judgement that consumers and retailers have been misled, we believe the decision to change the interchange fee structure should be further reviewed in an open and transparent manner, and the changes placed on hold until this review has taken place.”

ALDI has now made a decision NOT to place any surcharge on EFTPOS transactions within its stores.

As I have noted already, it is terrific for small business retailers like newsagents to have Aldi making the running on this issue as they are more likely to get media coverage than us.

For the record, we will not be introducing EFTPOS fees in any of my newsagencies.  We use Tyro broadband Eftpos and appreciate their helpful position on the new fees.  This will help us keep our costs down.

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EFTPOS fees

ACP trialling Sunday on-sale of magazines

As some comments on a recent blog post indicate, ACP Magazines will trial Sunday on-sale of its titles in Newcastle and the ACT.  The trial will commence next Sunday, October 9.  The data from the fixed-period trial will help ACP determine if this is an initiative they could benefit from elsewhere.

The trial will see newsagents, supermarkets, c-stores and petrol outlets receive stock for a Sunday on-sale.  Majors like Big W will not receive stock.

While there are some operational challenges, the trial is an opportunity – especially for shopping centre based newsagents where you are like to see shoppers on a Sunday who you would not see during the week.

Newsagents in high street situations could find that they lose sales as a result.  This will be reflected in data from the trial and should help guide any decisions following the trial.

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magazine distribution

Promoting Pink magazine with AWW

In addition to robust promotion of The Australian Women’s Weekly, we are promoting the annual Pink magazine which is on the back of the current issue of AWW.

We have promoted these as two separate titles in the past with success. I’d encourage all newsagents to do this.

AWW is also on the Pink display to make the connection in the minds of our shoppers.

We will keep promoting Pink for another full week.  There is no doubt that it helps sales of AWW.

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magazines

New Kindle Fire to push tablet market even further

The new Kindle Fire announced last week by Amazon will undoubtedly push the tablet market to new places.  This new device and the almost disposable price of the more traditional Kindle further opens this rapidly growing distribution channel for publishers of print content.

It is vitally important that newsagents are aware of these development when negotiating leases and shop fits.  Given that each is a five-year investment, we need to be committing to what key parts of our businesses will look like in five years.

Flexibility on all fronts is vital.

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Media disruption

Pricing error on Courier Mail challenges newsagents

The Courier Mail newspaper in Queensland yesterday was priced at $1.10 instead of the usual $2.00 for the Saturday edition.  Newsagents had to reprice the newspaper otherwise shoppers could challenge them to sell it at the lower price according to consumer regulations.

While these things do happen from time to time, I know from what several newsagents told me that it was frustrating having to deal with this on a bust Saturday morning when senior people are less likely to be in.

It made the TV news last night in Queensland as well.

The challenge for newsagents is considerable, not only in their own retail sales but in what they supplied to sub agents.  What if they did not provide incorrect pricing advice to a supermarket, for example?  Who is responsible in this situation?

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Newsagency challenges

Another sad day for Australian newspapers

Picked up The Sydney Morning Herald on Friday and was disappointed to see the masthead of this once great newspaper partially obscured by another post-it type stuck on ad.  I feel for the editorial professionals when their advertising colleagues treat them in this way.

Bucks over content … it’s a commentary on the challenges of the print newspaper.

I understand that newspaper publishing companies are businesses and that they need to be profitable.  Chasing revenue by covering your brand does not make any sense to me, especially with a stuck on ad which readers don’t like.

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newspaper masthead desecration

Aldi vs ePAL coverage

There has been considerable media coverage on the Aldi court case against ePAL over the last 24 hours.  Here is just some:  Inside retailing; The Australian; Smartoffice; ABC, AM on ABC radio and ABC news last night.

Also good to see the story in The Australian with news that the Commonwealth Bank will not be passing on fee increases at the moment.

Kudos to Aldi for their court action and in getting this topic onto the news desk.

Today, the world changed for Eftpos fees.  ePAL’s new pricing regime is in place and this means retailers like us could pay more.  Already some banks have made moves.  While we don’t know where it ends up, banks being banks I think that we have a fair idea what will happen.

I and some other newsagents are continuing to lobby politicians on this.  They have the ability to control ePAL through the Reserve Bank.  Unfortunately, all politicians appear to be prepared to do at the moment is to regurgitate ePAL spin on the Eftpos fee changes.  So much for their support for small business.

This is issue has been an excellent opportunity for politicians to put their words of support for small business into action.  We have been profoundly let down.

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EFTPOS fees
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