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

Author: Mark Fletcher

NSW newsagents ignore the ANF

I am told that only 12 NSW newsagents voted in the election of their director to represent the state on the ANF Board. If this number or something close to it is right then to relevance of the association has been judged by newsagents. Marking a vote on a ballot and posting this is the most passive engagement one could have with an association. It challenges the ANF claim to represent newsagents.

The ANF Board could further challenge newsagent perception of its relevance if it does not immediately hold another election given that the result is a draw. To leave the choice of NSW Director to the Board would alienate NSW newsagents and key ANF staff who are shell-shocked at the performance of the organisation over the last few months. However, it does not matter since the organisation is of little relevance and does not represent newsagents despite what it may think.

UPDATE (28/11): Common sense has prevailed and the ANF has advised that the election will be recalled with a result expected prior to Christmas.

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Newsagency challenges

Monster moves on CareerOne

US online ad giant is taking over half of the News Ltd Career One online employment business.  This is interesting.  I suspect the deal has been struck to strengthen the Career One brand against the market dominator Seek.  Paid Content has more details on the deal.  Newsagent interest in this has to be around the migration of print ads online.

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Media disruption

Economic stimulus bypasses the engine

The Federal Government’s focus at the top and bottom ends of the economy in the face of the current economic challenges misses an opportunity to work on small business efficiency and sustainability.

While giving pensioners and others in need $10 billion cash to spend will help is important, I would like to see money invested in businesses.  Just as farmers need to invest in drought-proofing their properties, we need to invest in recession proofing our businesses.   The burst from the $10 billion will not focus business owner attention on sustained change in their businesses.

Big project infrastructure spending is good too but it does not focus in more important infrastructure – business efficiency, particularly small business where the majority of Australians work.

I would prefer to see the Federal Government introduce an investment allowance for and rapid depreciation of appropriate capital expenditure – expenditure which improves business efficiency.  This would be far more useful for the Australian economy than yet another multi billion dollar handout to the auto industry.

I would also prefer to see the government make real and immediate progress on cutting business paperwork so that we can cut real operational costs, fixing the broadband mess once and for all so that we can become competitive in online based business and in communication,

At the newsagency level, I would like to see the government fund research into the impact of deregulation on newsagents and their families.  I suspect that such research will show that contracts which newsagents signed at the time of deregulation have made their businesses worse off today than in 1999.  This is a government matter because the government drove the deregulation agenda.  Newsagents need to be able to charge a fair fee for the service they offer.

Finally, I would like to see the Government stop competing with the private sector – get out of retail, sell off the 860 government owned post offices or get the post office out of looking more and more like a newsagency.

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Newsagency challenges

Christmas display sells magazines

fhn_christmas.JPGThis very basic looking retired card unit filled with Christmas themed magazines and placed at front of our shop next to the main lottery counter requires topping up daily.  It is working a treat!  As new Christmas-themed magazines arrive, we add them to the mix.  I like that we have popular titles such as Better Homes and Gardens, Real Living, Notebook and Family Circle covered as well as a range of niche imported titles covering paper craft, card making, cooking and home decorating.  The stand, basic as it is, speaks volumes about the depth of our magazine range.

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magazines

Responding to growth in DIY magazines

handymanmag.JPGI read recently (cannot recall where) that DIY and handyman magazines are travelling well right now. I checked our numbers and saw that this is a healthy segment for us. Handyman from Reader’s Digest is one of those magazines selling particularly well. We are promoting it at one of our counters this week as our Magazine of the Week. A good tip for product placement back in the magazine fixturing is to have all handyman / DIY titles in a column, blocked together. Too often this not the case and sales are lost as a result.

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magazine distribution

Check phonecard terms

Some phonecard companies recently changed their terms, effectively increasing costs for customers.  One introduced a surcharge of 69 cents once a call passes three minutes, another introduced an 80 cent disconnection fee and another introduced a daily service fee.  There are other changes beyond these.  The per minute cost is just part of the equation.  My point is that newsagents are relied upon to have up to date product knowledge.  Unless we get out and research all phone card companies we cannot know.

I am aware of the changes because of my commercial involvement with the people behind the Aussie Phonecard.

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Customer Service

The MX habit well established

I watched the distribution of MX, the free daily newspaper from News Ltd in Sydney late today.  Most people walk up to collect the paper – it is sought after.  It is fascinating watching this from a newsagents perspective.  I bet that half the newsagents in Australia don’t know about the MX success on the Eastern Seaboard. Good on News Ltd, MX is an excellent success story.

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Newspapers

VANA spins its new marketing group

VANA has announced its Future Project to its members. This is the new marketing group I blogged about three days ago although VANA is at pains to point out that this is not a marketing group. The announcement reads differently to the pitch given to newsagents who have attended a briefing.

VANA’s announcement points to compliance as a key driver of the project. Newsagents who want to focus on compliance have options already available in the form of newsXpress, Nextra, Supanews and, to a lesser extent, Newspower. The first three have franchise agreements which act as the mechanism for compliance. What VANA is doing is going into competition with these groups using newsagent funds. If they were a good association I would not mind so much but they are not. They have failed their members on many fronts over the last year.

This project has less to do with compliance and more to do with VANA hatred of GNS. This motivation is one reason the project is likely to fail for all but a select group of newsagents. If the association was concerned about serving all members then their future project would have been structured in a way that it was relevant to all newsagents from the outset.

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Newsagency challenges

Update on Fairfax Rural newspaper offer

The team from the Ballarat Courier driving the Border Mail and other newspaper offers I blogged about last night have contacted me and I have talked through the problems with the original plan.  I have put them on to the software experts to discuss details of how a subs offer covering two titles could be made to work.  The discussions have been fruitful and I am encouraged that the publisher representatives have committed to creating an offer which is fair and easy to manage for newsagents.  There will be more discussions on the mechanics tomorrow.

I note that VANA has sent out a bulletin tonight saying they are in discussion over the problems with the plan.  It is a pity these discussions did not occur when VANA representatives were consulted during the formation of the offer.  VANA is not appropriately skills to discuss the mechanics of subscription offers.  This has, for years, been best managed by those in control of the software newsagents use.

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Newsagency challenges

Selling Collectors magazine

fhn_collectors.JPGCollectors magazine sells better from its position next to mainstream TV titles than in the collectibles segment of our magazine display.  This is a function of eyeballs.  More eyeballs see the title in the TV section than its more traditional home.  Co-locating like this helps us drive sales valuable outcomes for various special interest titles.  While there is a risk that customers will not go looking for the title and thereby miss others in this segment, there is also an opportunity to get sales to people who would not look for the title.  The ABC Collectors show is popular with our demographic and this is what started us promoting the title in our busiest aisle.

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magazines

Delicious double issue hurts newsagents

fhn_delicious.JPGThe latest issue of Delicious magazine arrived today. It is double issue. The publisher sent double stock. A smarter move would have been to send the usual supply today and top up supply in four weeks. Instead, by sending double the quantity today, the supplier saves money and newsagents stump up cash four weeks earlier. Smart sales based replenishment would be the best solution for newsagents. This technology is available today for publishers who want to support newsagents to remain magazine specialists.

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magazines

Coverage on Tattersalls issues

molotto.JPGThis week’s Melbourne Observer newspaper runs the newsagent perspective on the Tattersalls story on the front page.  It is excellent coverage, especially on the move by Tattersalls to place their products in 7-Eleven outlets.  The story looks at this move balanced against continued restrictions by Tattersalls as to how we can use the space vacated by their now defunct instant scratch ticket products.  I will be interested to see if the State Government finally looks at this issue.  They created many of the problems here and have left small businesses to carry the cost.

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Lotteries

Convoluted newspaper marketing a sign of the times?

Starting sometime this week The Border Mail will be running some adverts that invite new 6 day subscribers. This offer entails the offering of The Sunday Age free with this subscription.

This offer only pertains to new subscribers. If however one of your existing clients would like to take up the offer, they can. To do this they must pay up all existing monies with you and then pre pay 8 weeks.

So I guess that this is sort of a bonus for you. All monies paid up and pre pay. Anyway this is how we anticipate it will work.

This is the opening of a letter sent by the folks at The Border Mail to newsagents yesterday. Just as Christmas is kicking in and newsagencies have their busiest time of the year, this Fairfax owned newspaper publisher wants more time to manage a complex offer:

Customers who order The Border Mail home delivered for six days a week can include delivery of The Sunday Age at no extra cost

Existing customers who want this offer must settle any outstanding amounts on their current subscription and restart as a new customer on the new offer

The new offer requires payment in advance of eight weeks.

The letter goes on to detail the mechanics of the offer. The record keeping requirements are ridiculous. Even the paytment process is a mess. While the letter says that newsagents will be paid fifty cents for each Sunday Age delivered, it then describes a process which is messy and difficult to verify. If my understanding of the letter is right, newsagents are financial backers of this offer, they are taking a cut to support the campaign.

To give newsagents confidence that they really know what they are doing and to respect newsagent time, the letter has this under the heading of when:

First delivery to commence as soon as they start rolling in.

When I first read the letter I thought it was a practical joke. Checking shows it to be authentic. It makes me wonder if we are entering a twilight zone of offers.

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Newsagency challenges

Elvis for Christmas

elvischristmas.JPGThe latest part for the Elvis partwork is appropriately Christmas themed. We are using this as an opportunity to pitch it as a gift idea for the season. The calendar and CD are a good-value gift priced at $19.95. It is good to find Christmas gift ideas in regular products we carry to extend the Christmas gift range we have brought in.

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Calendars

Losing money, guaranteed

tickdr.JPGWe decided to early return Dr John Tickell’s book, How to put $3,000 in your pocket guaranteed. We received ten, sold one and had one stolen. The good doctor is giving the book away at his website. While our stock is supposed to stay for another two months, we will not sell any more.

If this book had been supplied on the basis of us being paid for our real-estate and labour it would not have been distributed through the newsagency channel. Equally, if it had been supplied on the basis of us paying only for scanned sales it would not have been distributed through.

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magazine distribution

Selling safe online transactions

vcard.JPGThe Vcard is a good product to sell to customers who need to use a credit card online. It is a Visa backed virtual debit card. Your customer chooses how much to load, up to $1,000. This is safer for them to use for online purchases than a credit card. If the number is stolen the amount taken is capped by the limit on the card whereas a stolen credit card can be maxed out to the full credit limit and even beyond.

We are finding good business selling the Vcard by pitching the security message. This is an easy sell given the new stories about identity theft. We sell a range of products around the security pitch – shredders, document wallets, lottery registration cards. While from diverse categories, the pitch of risk is the same.

Vcard is sold through a range of platforms including the Tower Systems eziPass software.

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retail

Industry spin on Universal Magazines

mediaweek_uni.JPGThe latest issue of Mediaweek, self labelled “media industry bible”, reports on page 6 about my blog post about the performance of Universal Magazines titles. The story calls what I wrote “gripes”. It calls the comment posted by a representative of Universal a “response”. Language is everything here. Mediaweek, through its choice of words, belittles my legitimate and documented complaints and sides with the publisher. Mediaweek would have known from other comments posted here that plenty of newsagents agree with my assessment. Had they called, I could have shared cash-flow, sell through and other data which refutes the claims made by Universal Magazines. I could have challenged the claim that 78% of Universal titles are either monthly or bi-monthly and explained that a title with n on sale greater than 30 days is a cash killer for newsagencies.

What really gets to me is the bold face repeat in Mediaweek of the Universal claim that they are the most proactive publisher in pursuing efficiency. This is nonsense – unless you call recycling stock which does not sell through newsagencies on a repeat cycle until it is sold, lost or stolen efficient. Universal expects newsagents to pay for the freight to ship this dead stock which does not sell around and around. Sure, this is the magazine supply model I signed on for. Times have changed. Publishers have an obligation to be better citizens. I have an obligation to be efficient and profitable. I can be neither with Universal titles in my shop.

It is not easy to cancel the Universal titles from my shop. I have made the request but it is now being put to the publisher. My letter should lead to immediate cancellation.

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magazine distribution

More on the new VANA marketing group

Further to my post about VANA starting a new marketing group for newsagents, VANA has two Newspower shares. This makes their move to create competition for the newsagents owned Newspower even more curious. On a personal note, VANA has let me know how they feel by removing me from their Christmas party list. It is childish behaviour which started VANA down this read years ago in a dispute with GNS.

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newsagency marketing

More on the 7-Eleven Tattersalls deal

Further to my post yesterday about Tattersalls’ deal with 7-Eleven to sell lottery tickets, I have been to three 7-Eleven outlets this morning.  I can see the appeal.  In addition to usually being well located, these stores are open excellent hours, cover popular convenience focused product categories, are well lit, offer a cheerful service and are consistent across the stores.  Hang on, some of these are our assets – good convenient location, cheerful service.

The folks behind 7-Eleven have done a good job driving discipline behind their brand.  Suppliers like this.  They like that they can sign one contract and have it apply to a network of stores.  I have been told by three suppliers recently that this is what they like about 7-Eleven.

7-Eleven declared their intention against newsagents more than ten years ago in their successful efforts to break the ACCC authorisation for newsagents around newspaper and magazine overturned. Magazine publishers moved as did some of our customers.

We let 7-Eleven win ten years ago thanks to appalling leadership representing newsagents.  That loss was compounded by their being no plan B.

The Tattersalls / 7-Eleven decision announced yesterday would not have been a surprise to those representing newsagents.  I doung that they have a plan B – leaving newsagents to develop their own response.

Here are some ways newsagents could respond to this news:

  • Fight for a fair magazine supply model.  Publishers and distributors cannot give one retail channel more control over supply than another as is the case today.   7-Eleven has considerably more control over its magazine range than newsagents and they leverage this well.   We need to set our terms and have the guts to adhere to these.
  • Challenge Tattersalls over their dedicated area.  I am not aware of any newsagent mounting a legal challenge on this.  If we bound together and funded a well considered challenge maybe we could free up some of this golden mile real-estate in our stores for other products.
  • Challenge Australia Post.  Their government owned stores directly attack newsagents.  If we do not fight they will get magazines and newspapers and, maybe, lotteries.
  • Start making business decisions.  Too often I see newsagents spending too much time reacting to supplier requests (demands).  We need to spend more time being entrepreneurial.  From product ranging to marketing more of us need to exert control over our businesses.
  • Stand for something.  The most successful newsagents I talk with are those who energetically pursue a point of difference for their business.  It could be stationery, gifts, cards, ink, business services, flowers – just about anything.  With so many retailers selling everything newsagents sell we have to create our own unique position.
  • Compete.  Take on 7-Eleven if you have one nearby.  They do not have a monopoly on convenience retail.  If Australian coffee shops can take on Starbucks and win newsagents can take on 7-Eleven.
  • Lift our game.   The worst looking newsagents pull us down.  While we cannot strip them of their shingle we can separate them from us.  This can be done by the marketing groups being stronger in their disciplines.  Smart newsagents will join groups that are focused on discipline.
  • Lift our game (part 2).  This point is basic and practical and based on newsagencies I have seen in the last week: remove posters from the window, put working lights in the shop, un-clutter the counter, have good value impulse lines near the counter, get rid of stock which has not sold in six months and get staff looking decent.  None of this should have to be pitched but it does.

There are plenty of other responses. This list is designed to prompt ideas.  The key is that this announcement from Tattersalls must cause us to take some action. You can’t make money from being a passive victim.

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Lotteries

Another bad Universal Magazines story

I have heard about another Victorian newsagency losing money from a Universal Magazines title.

This newsagent’s story is to do with the reissue of Contemporary Home Design Annual. Vol.7 No 1: On the initial issue, the store sold 40% of the stock. This was early 2008. The reissue is bagged with a back issue – Vol 6 No3 which was initially issued July 07. The original of this issue sold 35% of allocation in this newsagency. The back issue was returned from a newsagent in Central West NSW.

Achieving a 35-40% sell through, maintained over two years, represents oversupply. Based on a $3.00 cost per bundle returned, this business is paying $6-$9 to return remaining copies on each issue – only to have the returned product sent back again in a double pack. What a waste of fuel and an abuse of the returns funded by newsagents.

Besides the cash-flow, labour and real-estate impost on newsagents, there is a huge cost to the environment of this practice. Magazines being returned burn fuel. When they come back they are in plastic bags and sent burning more fuel. There is no good news for the environment in this story.

On the free copy with a current issue practice, advertisers in Universal Magazines titles need to ask what numbers are used for sales data given the reissue policy. I would have thought that you could not reasonably count the free copy of an old issue sent with the current issue as sold stock.

Instead of paying their lawyers to chase me and this blog, Universal Magazines could have achieved more by talking directly with everyday newsagents.

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magazine distribution

Promoting Christmas bags and wrap

frank_bags.JPGMarket research shows that while newsagents have around 37% of greeting card sales in Australia, we account for only 21% of packaging (wrap, bags and boxes). The newsagents doing well in packaging are those who actively promote the wrap category. Current best practice is to locate the cards and wrap department at the front of the shop. Unfortunately older shopfits being what they are, relocating a department is a challenge. At our Frankston newsagency, where we our shopfit will not be done until next year, we have created a display of some of our Christmas themed bags on an aisle end near our counter usually reserved for magazines.

While magazine publishers may be disappointed that we are taking prime space for another category of product, the time of the year dictates we make every inch of expensive retail space work for us.

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giftwrap

Gifts for teachers

teachergift.JPGWith school classes drawing to a close for the year, now is a good time to feature gifts for teachers. This day to a page desk calendar is at the high end of such gifts we have. There are photo frames, fridge magnets, journals, key rings – plenty of gifts for teachers from which to choose. Our experience is that parents often buy gifts for their kids to give to teachers so it makes sense that we cater to this market in newsagencies. While the end of the school year is no back to school season for us, most items sold are at a considerably better margin.

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Gifts

Tatts moves into 7-Eleven

Tattersalls has advised its Victorian outlets this afternoon that it about to sign an agreement which will see its lottery products sold in 7-Eleven stores. This is a blow for Tattersalls outlets and is sure to be felt at the cash register. Tattersalls says that they are targeting new customers in the convenience channel. The move by magazine and newspaper publishers into convenience means that this channel is seeing more and more traditional newsagency customers every week. It is a stretch for Tattersalls to say these are new customers.

The 7-Eleven move is based on technology like the Tattersalls / Bill Express integration where lottery tickets are sold using non Tattersalls hardware.  I would be curious to find out if this is an outcome from the interest 7-Eleven expressed in purchasing Bill Express when the company appointed Administrators earlier this year.

The move demonstrates that Tattersalls understands competition yet the company continues to refuse newsagents and other Tattersalls outlets to use the now useless Tattersalls scratch ticket bays.

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Lotteries

Selling out AWW Christmas cookbook

frank_xma_dec08.JPGWe are close to selling out of the Australian Women’s Weekly Christmas Cookbook from this prime position at the counter at our Frankston store. Sherie’s brilliant display draws attention without interfering with counter flow.

The AWW brand makes the cookbook an easy purchase.  You can see customers – they are at the counter with their items, notice this and buy the cookbook without a second thought.

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magazines

Grazia prize giveaway

fhn_graznov08.JPGWe are pitching Grazia at the counter at Forest Hill this week. The $1 million in prizes up for grabs makes it ideal for the impulse offer. It certainly meets the criteria we have set for this counter space. Grazia is still finding its feet with our customers so regular promotion in different locations in the store in important.  This counter location has an excellent track record in finding customers for titles which otherwise sell slowly in their regular location.

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magazines
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